xbrli:pureiso4217:DKK296903592022-01-012022-12-31cmn:ConsolidatedMember296903592022-01-012022-12-311cmn:ConsolidatedMember296903592022-01-012022-12-311cmn:ConsolidatedMember296903592021-01-012021-12-31cmn:ConsolidatedMember296903592022-01-012022-12-31296903592021-01-012021-12-31296903592022-01-012022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember296903592021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember296903592021-01-012021-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember296903592021-01-012021-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember296903592022-01-012022-12-31fsa:RetainedEarningsMember296903592022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMember296903592022-01-012022-12-31fsa:ProposedDividendRecognisedInEquityMember296903592021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMember296903592022-01-012022-12-31fsa:RetainedEarningsMember296903592021-01-012021-12-31fsa:RetainedEarningsMember296903592022-12-31cmn:ConsolidatedMember296903592021-12-31cmn:ConsolidatedMember296903592022-12-31296903592021-12-31296903592022-01-01cmn:ConsolidatedMember296903592021-01-01cmn:ConsolidatedMember296903592022-01-01fsa:ContributedCapitalMembercmn:ConsolidatedMember296903592022-01-01fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember296903592022-01-01fsa:RetainedEarningsMembercmn:ConsolidatedMember296903592022-01-01fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember296903592022-01-01fsa:EquityAttributableToParentMembercmn:ConsolidatedMember296903592022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember296903592022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember296903592022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember296903592022-12-31fsa:ProposedDividendRecognisedInEquityMembercmn:ConsolidatedMember296903592022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember296903592022-01-01fsa:MinorityInterestsMembercmn:ConsolidatedMember296903592022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember296903592022-01-01fsa:ContributedCapitalMember296903592022-01-01fsa:ReserveForNetRevaluationAccordingToEquityMethodMember296903592022-01-01fsa:RetainedEarningsMember296903592022-01-01fsa:ProposedDividendRecognisedInEquityMember296903592022-01-01296903592022-12-31fsa:ContributedCapitalMember296903592022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember296903592022-12-31fsa:RetainedEarningsMember296903592022-12-31fsa:ProposedDividendRecognisedInEquityMember296903592022-01-012022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember296903592022-01-012022-12-31fsa:ContributedCapitalMember296903592022-01-012022-12-312cmn:ConsolidatedMember296903592022-01-012022-12-313cmn:ConsolidatedMember296903592021-01-012021-12-312cmn:ConsolidatedMember296903592021-01-012021-12-313cmn:ConsolidatedMember296903592022-01-012022-12-31fsa:ShorttermDeferredIncomeMembercmn:ConsolidatedMemberGrundlag for konklusionKonklusion2023-06-302023-06-3033963556Deloitte Statsautoriseret RevisionspartnerselskabRevisionspåtegningRegnskabsklasse C, mellemstor virksomhed2021-12-312021-01-0133963556Weidekampsgade 6Deloitte Statsautoriseret Revisionspartnerselskab2300 København S2022-12-312022-01-01HFUNK ApS29690359ÅrsrapportEsbjerg67018DokkenRudersdalHolte2840true<br /><br />7FredsvejThe Executive Board has today considered and approved the annual report of HFUNK ApS for the financial year 01.01.2022 - 31.12.2022. The annual report is presented in accordance with the Danish Financial Statements Act.In my opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2022 - 31.12.2022.I believe that the management commentary contains a fair review of the affairs and conditions referred to therein.I recommend the annual report for adoption at the Annual General Meeting.HolteHenrik MouTo the shareholder of HFUNK ApSWe have audited the consolidated financial statements and the parent financial statements of HFUNK ApS for the financial year 01.01.2022 - 31.12.2022, which comprise the income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for the Group as well as the Parent, and the consolidated cash flow statement. The consolidated financial statements and the parent financial statements are prepared in accordance with the Danish Financial Statements Act. ​ ​In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2022 - 31.12.2022 in accordance with the Danish Financial Statements Act.We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further ​described in the "Auditor’s responsibilities for the audit of the consolidated financial statements and the parent financial statements" section of this auditor’s report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines ​is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, ​whether due to fraud or error. ​ ​In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group's and the Entity’s ability to continue ​as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going ​concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate ​the Entity or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent financial statements as a whole are ​free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ​our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted ​in accordance with ISAs and the additional requirements applicable in Denmark 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 consolidated financial statements and parent financial statements. ​ ​As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, ​we exercise professional judgement and maintain professional scepticism throughout the audit. We also:<br />Identify and assess the risks of material misstatement of the consolidated financial statements and the parent financial statements, whether due to ​fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence ​that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a ​material misstatement resulting from fraud is higher than for one resulting from error, as fraud may ​involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. <br />Obtain an understanding of internal control relevant to the audit 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 Group's and the Entity’s internal control. <br />Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates ​and related disclosures made by Management. <br />Conclude on the appropriateness of Management’s use of the going concern basis of accounting in ​preparing the consolidated financial statements and the parent financial statements, and, based on the audit evidence obtained, whether a material ​uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to ​draw attention in our auditor’s report to the related disclosures in the consolidated financial statements and the parent financial statements or, if such ​disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence ​obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the ​Entity to cease to continue as a going concern. <br />Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures ​in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and ​events in a manner that gives a true and fair view.<br />We communicate with those charged with governance regarding, among other matters, the planned scope ​and timing of the audit and significant audit findings, including any significant deficiencies in internal control ​that we identify during our audit.Management is responsible for the management commentary. ​ ​Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, and we do not express ​any form of assurance conclusion thereon. ​ ​In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management ​commentary and, in doing so, consider whether the management commentary is materially inconsistent with ​the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. ​Moreover, it is our responsibility to consider whether the management commentary provides the information ​required under the Danish Financial Statements Act.<br />Based on the work we have performed, we conclude that the management commentary is in accordance with ​the consolidated financial statements and the parent financial statements and has been prepared in accordance with the requirements of the Danish Financial ​Statements Act. We did not identify any material misstatement of the management commentary.Contrary to the Danish Companies Act, the Entity has granted a loan to an owner, for which Management may be held liable.EsbjergMikael Grosbølmne33707State Authorised Public AccountantFinancial highlights2022 DKK'0002021 DKK'0002020 DKK'0002019 DKK'0002018 DKK'000Key figuresRevenue234,139195,429174,048168,026133,286Gross profit/loss149,202116,560130,420124,36089,981Operating profit/loss(16,138)(3,859)8792,669-488Net financials4,026(5,568)(3,200)(1,869)(1,516)Profit/loss for the year(6,800)2,1174,44813,267(2,993)Balance sheet total121,558137,516127,083119,82451,987Investments in property, plant and equipment2,3473,9988,98315,652529Equity62,90271,00162,38959,340668Equity excl. minority interests60,21868,34162,03957,058(1,299)Cash flows from investing activities40,364(3,204)(10,579)(64,387)(3,126)Cash flows from financing activities(12,306)12,2702,35851,244(1,890)RatiosGross margin (%)63.7259.6474.9374.0167.51Net margin (%)(2.90)1.082.567.90(2.25)Equity ratio (%)49.5449.7048.8247.62(2.50)Financial highlights are defined and calculated in accordance with the current version of "Recommendations & Ratios" issued by the CFA Society Denmark.Gross margin (%) :​Gross profit/loss * 100 ​RevenueNet margin (%) : Profit/loss for the year * 100 ​RevenueEquity ratio (%) :​Equity excl. minority interests * 100 ​Balance sheet totalPrimary activitiesHFUNK ApS' primary activity is to act as mother company for INSCALE. INSCALE support domestic and international business clients’ strategy through providing dedicated software development teams and -resources. INSCALE always builds through a strategic partnership with our clients. All the teams work from one of our offshore development locations. INSCALE manages and advises on the remote software development process between the client and INSCALE’s offshore development location. In providing services to the client, the team works on application development and maintenance of the client’s core software solutions. In doing so, the team will be a strategic resource pool for clients’ on-going software development efforts. The collaboration and the partnership between INSCALE and the Client are a long-term relationship to give team members the best opportunity to acquire in depth knowledge of client’s business and software solutions, so INSCALE enables our clients to leverage on our engagement model for their business excellence. By adopting INSCALE’s approach to building dedicated software development teams, our clients can extend their reach beyond their location into a wider pool of offshore developers and close technology gaps within their existing software development resources. INSCALE is a player in the international market, where we all focus a huge need for software developers, as IT is fundamentally for many business’ all over the world. INSCALE has a solution for this and believe that our footprint in the sector is powerful and has been consistent for many years and this will continue. Development in activities and financesINSCALE has experienced solid growth internationally in recent years. Many clients in 10 countries have experienced this long-term partnership with a great success. INSCALE has experienced a positive 20% growth in revenue in 2022 and reached total revenues of 234 MDKK. This revenue growth was in line with expectations and with the outlook from the previous annual report. However, costs have also increased in 2022 as the world comes out of the COVID 19 pandemic. The loss for the year is affected by some one-off cost items and the ongoing war in Ukraine has continued to impact our operations in that country. The profit before tax is positively affected by adjustment of fair value on other investments and negatively affected by other provisions and extraordinary writedowns on other receivables.Profit/loss for the year in relation to expected developmentsThe 20% growth in revenue was in line with expectations. The profit for the year was lower than expected.OutlookWe expect to continue with our revenue growth rate of +20% in 2023. A profit before tax between zero and +5 mio. DKK in 2023 is expected for the INSCALE Group. Income from investments in associates is expected to be around 3 mio. DKK in 2023.Events after the balance sheet dateIn February 2023, Inscale A/S acquired 100% of the shares of Inscale Macedonia DOOEL Skopje, EMBS from Henrik Mou for the purchase price of MKD 78.7 million (approximately DKK 9.5 million). Going forward, the results of Inscale Macedonia DOOEL Skopje, EMBS are to be consolidated into the consolidated financial statements as from 8 February 2023, the date of acquisition. 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of loan to owners and managementChanges of short term bank debt-1283093019182670-123059251226980623331564637786134100701107691371 Staff costs2022 DKK2021 DKKWages and salaries129,864,18799,152,682Pension costs8,458,958422,525Other social security costs8,796,63213,099,360Other staff costs322,6191,289,709147,442,396113,964,276Average number of full-time employees452367Remuneration to the executive board has not been disclosed in accordance with section 98b (3) of the Danish Financial Statements Act.45236702 Depreciation, amortisation and impairment losses2022 DKK2021 DKKAmortisation of intangible assets1,642,5411,106,973Depreciation on property, plant and equipment5,225,3635,362,214Profit/loss from sale of intangible assets and property, plant and equipment30,104(14,714)6,898,0086,454,4733 Writedowns of current assets exceeding ordinary writedownsWritedowns exceeding ordinary writedowns relates to writedowns on other receivables.1 Writedowns of current assets exceeding ordinary writedownsWritedowns exceeding ordinary writedowns relates to writedowns on other receivables.4 Other financial income2022 DKK2021 DKKOther interest income587,6420Exchange rate adjustments6,157,7082,910,9616,745,3502,910,9612 Other financial income2022 DKK2021 DKKFinancial income from group enterprises90,216667,869Other interest income521,5060611,722667,8695 Other financial expenses2022 DKK2021 DKKOther interest expenses484,371542,786Exchange rate adjustments5,594,4424,116,651Fair value adjustments18,8980Other financial expenses526,8883,819,6546,624,5998,479,0912022 DKK2021 DKKOther interest expenses484,371542,786Exchange rate adjustments5,594,4424,116,651Fair value adjustments18,8980Other financial expenses526,8883,819,6546,624,5998,479,0916 Tax on profit/loss for the year2022 DKK2021 DKKCurrent tax2,454,6691,807,000Change in deferred tax262,35751,6842,717,0261,858,6847 Proposed distribution of profit/loss2022 DKK2021 DKKOrdinary dividend for the financial year2,819,0140Retained earnings(7,656,988)6,405,164Minority interests' share of profit/loss(1,962,057)(4,288,480)(6,800,031)2,116,6843 Proposed distribution of profit and loss2022 DKK2021 DKKOrdinary dividend for the financial year2,819,0140Retained earnings(7,656,988)6,405,164(4,837,974)6,405,1648 Intangible assetsCompleted development projects DKKCost beginning of year7,526,215Additions1,479,295Cost end of year9,005,510Amortisation and impairment losses beginning of year(1,921,762)Amortisation for the year(1,642,541)Amortisation and impairment losses end of year(3,564,303)Carrying amount end of year5,441,207Completed development projects DKKCost beginning of year7,526,215Additions1,479,295Cost end of year9,005,510Amortisation and impairment losses beginning of year(1,921,762)Amortisation for the year(1,642,541)Amortisation and impairment losses end of year(3,564,303)Carrying amount end of year5,441,2079 Development projectsThe groups development projects relate to the development and improvement of the Inscale ERP System. Development project assets are measured at net cost value, and is impairment tested on a yearly basis.10 Property, plant and equipmentOther fixtures and fittings, tools and equipment DKKCost beginning of year39,653,284Exchange rate adjustments(519,805)Additions2,347,173Disposals(548,362)Cost end of year40,932,290Depreciation and impairment losses beginning of year(17,975,335)Exchange rate adjustments517,594Depreciation for the year(5,225,363)Reversal regarding disposals433,299Depreciation and impairment losses end of year(22,249,805)Carrying amount end of year18,682,485Recognised assets not owned by Entity283,82311 Financial assetsInvestments in associates DKKOther investments DKKDeposits DKKOther receivables DKKCost beginning of year45,883,8102,614,2691,422,4050Additions001,728,048493,118Disposals00(327,160)0Cost end of year45,883,8102,614,2692,823,293493,118Revaluations beginning of year33,054,774000Exchange rate adjustments(508,852)000Adjustments on equity376,850000Share of profit/loss for the year8,028,883000Dividend(46,000,000)000Fair value adjustments03,904,87400Revaluations end of year(5,048,345)3,904,87400Carrying amount end of year40,835,4656,519,1432,823,293493,118The budget used in DCF Valuation is based on financial performance in pre COVID-19 years and financial information for Q1 2023. The number of periods is 5. The growth rate of free cash flow is 5% and the perpetual growth rate is 2%. NPV is calculated with a WACC of 12%. The enterprise value is adjusted for net debt and a normalisation of net working capital of DKK 0.6M. AssociatesRegistered inOwnership ​​%Mou Holding A/SVirum, Denmark33,334 Financial assetsInvestments in group enterprises DKKInvestments in associates DKKOther investments DKKCost beginning of year15,860,60045,883,81019,143Additions4,987,39900Cost end of year20,847,99945,883,81019,143Revaluations beginning of year033,054,7740Exchange rate adjustments0(508,852)0Adjustments on equity0376,8500Share of profit/loss for the year08,028,8830Dividend0(46,000,000)0Revaluations end of year0(5,048,345)0Impairment losses beginning of year(13,426,720)00Exchange rate adjustments(560,568)00Adjustments on equity(2,592,128)00Share of profit/loss for the year(1,813,692)00Impairment losses end of year(18,393,108)00Carrying amount end of year2,454,89140,835,46519,143A specification of investments in subsidiaries is evident from the notes to the consolidated financial statements.Other investements are measured at fair value according to the groups accounting policy. Other investments held by the parent can not be measured reliably at fair value. These investments are measured at the lower of cost and net realisable value. Investments in associatesRegistered inCorporate formOwnership ​%Mou Holding A/SVirum, DenmarkA/S33,3312 Deferred tax ​Changes during the year2022 DKK2021 DKKBeginning of year262,357314,041Recognised in the income statement(262,357)(51,684)End of year0262,357The capitalized tax assets consists only of tax losses from the groups malaysian subsidiary. 13 Receivables from owners and managementBoard of Directors DKKReceivables1,170,849Interest rate (%)9,555 Receivables from owners and managementBoard of Directors DKKReceivables1,170,849Interest rate (%)9,5514 PrepaymentsPrepayments consist of insurance, subscription fees, etc. in respect of subsequent financial years.15 Other provisions Others provisons relate to a provision for a dispute with the Tax Authorities. Management has estimated the most likely resultat of the dispute, but the final settlement may be highter or lower16 Non-current liabilities other than provisionsDue within 12 months 2022 DKKDue within 12 ​months 2021 DKKDue after more than 12 months 2022 DKKBank loans1,051,2321,024,9231,063,827Lease liabilities51,150265,5190Debt to other credit institutions527,2141,733,19853,672Other payables7,000,0007,000,00008,629,59610,023,6401,117,499The Group has no long-term debt that is due more than 5 years from the balance sheet date.6 Non-current liabilities other than provisionsDue within 12 months 2022 DKKDue within 12 ​months 2021 DKKOther payables7,000,0007,000,0007,000,0007,000,000The Company has no long-term debt that is due more than 5 years from the balance sheet date. 17 Deferred incomeReceived rent reduction and other income for recognition in subsequent financial years.18 Changes in working capital2022 DKK2021 DKKIncrease/decrease in receivables(10,159,529)(8,195,171)Increase/decrease in trade payables etc.405,4948,122,085Other changes(1,165,010)630,859(10,919,045)557,77319 Fair value informationOther investments DKKFair value end of year 6,519,143Unrealised fair value adjustments recognised in the income statement 3,904,87420 Unrecognised rental and lease commitments2022 DKK2021 DKKTotal liabilities under rental or lease agreements until maturity 17,629,33828,027,99721 Contingent liabilitiesThe entity participates in a Danish joint taxation arrangement in which HFUNK ApS serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Entity is therefore liable for income taxes etc for the jointly taxed entities, and for obligations, if any, relating to the withholding of tax on interest, royalties and dividend for these entities.8 Contingent liabilitiesThe Entity serves as the administration company in a Danish joint taxation arrangement. According to the joint taxation provisions of the Danish Corporation Tax Act, the Entity is therefore liable for income taxes etc. for the jointly taxed entities, and also for obligations, if any, relating to the withholding of tax on interest, royalties and dividends for these entities.22 Non-arm’s length related party transactionsOnly non-arm's length related party transactions are disclosed in the annual report.​ No such transactions were conducted during the financial year.11 Non-arm’s length related party transactionsOnly non-arm's length related party transactions are disclosed in the annual report.​ No such transactions were conducted during the financial year.23 SubsidiariesRegistered inCorporate ​formOwnership ​​%Inscale Holding ApS (Hold 32,89% of Inscale A/S)DenmarkApS52.50Inscale A/SDenmarkA/S30.76Inscale Asia (owned 100% by Inscale A/S)MalaysiaSDN Bhd100Inscale Facilitation (owned 100% by Inscale A/S)MalaysiaSDN Bhd100Inscale Portugal (owned 100% by Inscale A/S)PortugalLtd.100Inscale QT Ukraine (owned 100% by Inscale A/S)UkraineLLC100Inscale Ukraine (owned 100% by Inscale A/S)UkraineLtd.100The parent owns 48,06% of the shares in Inscale A/S (30,76% directly owned and 17,40% indirectly owned through 52,50% ownership in Inscale Holding ApS). By exercising controlling influence in Inscale Holding ApS, the parent indirectly holds more than 50% of the voting rights in Inscale A/S (30,76% directly controlled and 32,8% indirectly controlled through Inscale Holding ApS). 4199-13530-1813692-380659124548912433880101250209187501962805423441453-234414530-460000004600000009 Assets charged and collateralCollateral provided for group enterprisesThe Entity has guaranteed Inscale A/S’ debt with Nykredit. Bank loans amount to DKK 6.2M. 10 Related parties with controlling interestHenrik Mou, Holte, Denmark (100% owner of HFUNK ApS)This annual report has been presented in accordance with the provisions of the Danish Financial Statements Act governing reporting class C enterprises (medium) with addition of a few provisions governing reporting class C enterprises (large).Changes in accounting policiesThe Group and the Parent have changed their accounting policies with regard to other fixed asset investments. Management has decided to change the measuring of other investemnts from cost price to fair value as this reflects a true and fair view of the actual value of the investment. For the Group, the change in accounting policies has led to an increase in other investments of DKK 3.905K. Consequently, for the Group, the total effect of the change in accounting policies is an increase in this year’s pretax profit by DKK 3.905K. There is no tax effect. The Group’s balance sheet total increases by DKK 3.905K, while its equity increases by DKK 3.905K at 31.12.2022. For the Parent, the change in accounting policies has led to an increase in investments in group enterprises of DKK 1.875K. Consequently, for the Parent, the total effect of the change in accounting policies is an increase in this year’s pretax profit or loss by DKK 1.875K. There is no tax effect. The Parent’s balance sheet total increases by DKK 1.875K, while its equity increases by DKK 1.875K at 31.12.2022. The comparative figures have not been restated following the change in accounting policies, as the fair value can not be measured reliably retroactively. Apart from the areas mentioned above, the annual report has been presented applying the accounting policies consistently with last year.Recognition and measurementAssets are recognised in the balance sheet when it is probable as a result of a prior event that future economic ​benefits will flow to the Entity, and the value of the asset can be measured reliably. ​ ​Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a ​result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the ​value of the liability can be measured reliably. ​ ​On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial ​recognition is effected as described below for each financial statement item. ​ ​Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm ​or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and ​measurement. ​ ​Income is recognised in the income statement when earned, whereas costs are recognised by the amounts ​attributable to this financial year. <br />Consolidated financial statementsThe consolidated financial statements comprise the Parent and the group enterprises (subsidiaries) that are controlled by the Parent. Control is achieved by the Parent, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence. Enterprises in which the Group, directly or indirectly, holds between 20% and 50% of the voting rights and exercises significant, but not controlling, influence are regarded as associates.<br />Basis of consolidationThe consolidated financial statements are prepared on the basis of the financial statements of the Parent and its subsidiaries. The consolidated financial statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits and losses on transactions between the consolidated enterprises are eliminated. The financial statements used for consolidation have been prepared applying the Group’s accounting policies. Subsidiaries’ financial statement items are recognised in full in the consolidated financial statements. Minority interests’ pro rata shares of the profit/loss and the net assets are disclosed as separate items in Management's proposal for the distribution of net profit/loss and equity, respectively. Investments in subsidiaries are offset at the pro rata share of such subsidiaries’ net assets at the acquisition date, with net assets having been calculated at fair value.Foreign currency translationOn initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated using the exchange rate at the balance sheet date. Exchange differences that arise between the rate at the transaction date and the rate in effect at the payment date, or the rate at the balance sheet date, are recognised in the income statement as financial income or financial expenses. Property, plant and equipment, intangible assets, inventories and other non-monetary assets that have been purchased in foreign currencies are translated using historical rates. ​ ​When recognising foreign subsidiaries and associates that are independent entities, the income statements ​are translated at average exchange rates for the months that do not significantly deviate from the rates at the transaction date. Balance sheet items are translated using the exchange rates at the balance sheet date. Goodwill ​is considered belonging to the independent foreign entity and is translated using the exchange rate at the balance sheet date. Exchange differences arising out of the translation of foreign subsidiaries’ equity at the beginning of the year at the balance sheet date exchange rates and out of the translation of income statements from average rates to the exchange rates at the balance sheet date are recognised directly in the translation reserve in equity. ​ ​Exchange adjustments of outstanding accounts with independent foreign subsidiaries, which are considered ​part of the total investment in the subsidiary in question, are recognised directly in the translation reserve in equity.When recognising foreign subsidiaries that are integral entities, monetary assets and liabilities are translated using the exchange rates at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rate at the time of acquisition or the time of any subsequent revaluation or writedown. The items of the ​income statement are translated at the average rates of the months; however, items deriving from non-monetary ​assets and liabilities are translated using the historical rates applicable to the relevant non-monetary items.Gross profit or lossGross profit or loss comprises revenue, own work capitalised, other operating income and other external expenses.RevenueRevenue from the sale of services is recognised in the income statement when delivery is made to the buyer. Revenue is recognised net of VAT, duties and sales discounts and is measured at fair value of the consideration fixed.Own work capitalisedOwn work capitalised comprises staff costs and other costs incurred in the financial year and recognised in ​cost for proprietary intangible assets.Other operating incomeOther operating income comprises income of a secondary nature as viewed in relation to the Entity’s primary ​activities.Cost of salesCost of sales comprises costs related to sale of services. Other external expensesOther external expenses include expenses relating to the Entity’s ordinary activities, including expenses for ​premises, stationery and office supplies, marketing costs, etc. This item also includes writedowns of ​receivables recognised in current assets.Staff costsStaff costs comprise wages and salaries, and social security contributions, pension contributions, etc . for entity staff.Depreciation, amortisation and impairment lossesDepreciation, amortisation and impairment losses relating to property, plant and equipment and intangible ​assets comprise depreciation, amortisation and impairment losses for the financial year, and gains and ​losses from the sale of intangible assets and property, plant and equipment.Writedowns of current assets exceeding ordinary writedownsWritedowns of current assets exceeding ordinary writedowns are those on receivables and other ​current assets that differ from ordinary writedowns of these items.Income from investments in group enterprisesIncome from investments in group enterprises comprises the pro rata share of the individual enterprises’ profit/loss after full elimination of intra-group profits or losses. <br />Income from investments in associatesIncome from investments in associates comprises the pro rata share of the individual associates’ profit/loss after pro rata elimination of intra-group profits or losses. Income from other fixed asset investments Income from other fixed asset investments comprise gains in the form of fair value adjustments on fixed asset investments which are not investments in group enterprises or associatesOther financial incomeOther financial income comprises interest income, net capital or exchange gains on securities, payables and transactions in foreign currencies, amortisation of financial assets, and tax relief under the Danish Tax Prepayment Scheme etc. Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies, amortisation of financial liabilities, and tax surcharge under the Danish Tax Prepayment Scheme etc.Tax on profit/loss for the yearTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the ​income statement by the portion attributable to the profit for the year and recognised directly in equity by the portion attributable to entries directly in equity.The Parent is jointly taxed with all of its Danish group enterprises. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax losses).Intellectual property rights etc.Intellectual property rights etc. comprise development projects completed. Development projects on clearly defined and identifiable products and processes, for which the technical rate of utilisation, adequate resources and a potential future market or development opportunity in the enterprise can be established, and where the intention is to manufacture, market or apply the product or process in question, are recognised as intangible assets. Other development costs are recognised as costs in the income statement as incurred. When recognising development projects as intangible assets, an amount equalling the costs incurred less deferred tax is taken to equity under reserve for development costs that is reduced as the development projects are amortised and written down. The cost of development projects comprises costs such as salaries and amortisation that are directly and indirectly attributable to the development projects. Completed development projects are amortised on a straight-line basis using their estimated useful lives which are determined based on a specific assessment of each development project. If the useful life cannot be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual propertyrights, the maximum period of amortisation is the remaining duration of the relevant rights. The amortisationperiods used are 5 years. ​ ​Intellectual property rights etc. are written down to the lower of recoverable amount and carrying amount.Property, plant and equipmentOther fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses. ​​ ​​Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of the ​asset until the time when it is ready to be put into operation. For assets held under finance ​leases, cost is the lower of the asset’s fair value and present value of future lease payments. ​ ​​ ​The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line depreciation is made on the basis of the following estimated useful lives of the assets:Useful life Other fixtures and fittings, tools and equipment3-5 years​Estimated useful lives and residual values are reassessed annually. ​ ​Items of property, plant and equipment are written down to the lower of recoverable amount and carrying ​amount.Investments in group enterprisesInvestments in group enterprises are recognised and measured in the parent financial statements according to the equity method. This means that investments are measured at the pro rata share of the enterprises’ equity value. ​ ​Group enterprises with negative equity value are measured at DKK 0. Any receivables from these enterprises ​are written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive obligation to cover the liabilities of the relevant enterprise, and it is probable that such obligation will involve a loss, a provision is recognised that is measured at present value of the costs necessary to settle the obligations at ​the balance sheet date. ​ ​Upon distribution of profit or loss, net revaluation of investments in group enterprises is transferred to reserve for net revaluation according to the equity method in equity. ​Investments in group enterprises are written down to the lower of recoverable amount and carrying amount.Investments in associatesInvestments in associates are recognised and measured according to the equity method. This ​means that investments are measured at the pro rata share of the associates’ equity value. ​Associates with negative equity value are measured at DKK 0. Any receivables from these associates are ​written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive ​obligation to cover the liabilities of the relevant associate, and it is probable that such obligation will involve ​a loss, a provision is recognised that is measured at present value of the costs necessary to settle the ​obligations at the balance sheet date. ​ ​Upon distribution of profit or loss, net revaluation of investments in associates is transferred to reserve for ​net revaluation according to the equity method in equity. ​ ​Investments in associates are written down to the lower of recoverable amount and carrying amount. Investments in associates fall within the definitions of both participating interests and associates, yet in these consolidated financial statements they have been presented as investments in associates because this designation reflects more accurately the Group’s involvement in the relevant entities. ReceivablesReceivables are measured at amortised cost, usually equalling nominal value, less writedowns for bad and ​doubtful debts.Other investmentsOther investments comprise unlisted equity investments measured at fair value. The measuring is based on fair value within the IFRS 13 fair value hierarchy level 3. The valuation technique used is the income approach under the IPEV guidelines. Fair value is calculated with unobservable inputs using the discounted cash flows valuation technique. Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount and the tax-based value of assets and liabilities, for which the tax-based value is calculated based on the planned use of each asset. However, no deferred tax is recognised for amortisation of goodwill disallowed for tax purposes and temporary differences arising at the date of acquisition that do not result from a business combination and that do not have any effect on profit or loss or on taxable income. ​ ​Deferred tax assets, including the tax base of tax loss carryforwards, are recognised in the balance sheet at ​their estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets.Tax payable or receivableCurrent tax payable or receivable is recognised in the balance sheet, stated as tax computed on this year's ​taxable income, adjusted for prepaid tax.PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at ​cost.CashCash comprises cash in hand and bank deposits.DividendDividend is recognised as a liability at the time of adoption at the general meeting. Proposed dividend for ​the financial year is disclosed as a separate item in equity. Extraordinary dividend adopted in the financial ​year is recognised directly in equity when distributed and disclosed as a separate item in Management's ​proposal for distribution of profit/loss.Minority interestsOn initial recognition, minority interests are measured at the minority interests’ share of the acquiree’s net assets measured at fair value. No goodwill related to the minority interests’ equity interests in the acquiree is recognised.Other provisionsOther provisions comprise anticipated costs of ligitations. Other provisions are recognised and measured as the best estimate of the expenses required to settle the liabilities at the balance sheet date. Provisions that are estimated to mature more than one year after the balance sheet date are measured at their discounted value.Lease liabilitiesLease liabilities relating to assets held under finance leases are recognised in the balance sheet as liabilities other than provisions, and, at the time of inception of the lease, measured at the present value of future lease payments. Subsequent to initial recognition, lease liabilities are measured at amortised cost. The difference between present value and nominal amount of the lease payments is recognised in the income statement as a financial expense over the term of the leases.Other financial liabilitiesOther financial liabilities are measured at amortised cost, which usually corresponds to nominal value.Prepayments received from customersPrepayments received from customers comprise amounts received from customers prior to delivery of the ​goods agreed or completion of the service agreed.Deferred incomeDeferred income comprises income received for recognition in subsequent financial years. Deferred income ​is measured at cost.Cash flow statementThe cash flow statement shows cash flows from operating, investing and financing activities, and cash ​and cash equivalents at the beginning and the end of the financial year. ​ ​Cash flows from operating activities are presented using the indirect method and calculated as the operating ​profit/loss adjusted for non-cash operating items, working capital changes, and financial income, financial expenses and income tax paid. ​ ​Cash flows from investing activities comprise payments in connection with acquisition and divestment of ​ enterprises, activities and fixed asset investments, and purchase, development, improvement and sale, ​etc. of intangible assets and property, plant and equipment. ​ ​Cash flows from financing activities comprise changes in the size or composition of the contributed capital ​and related costs, and the raising of loans, repayments of interest-bearing debt, including lease liabilities, purchase of treasury shares and payment of dividend. ​ ​Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less short- term bank loans. The cash flow statement shows cash flows from operating, investing and financing activities, and cash ​and cash equivalents at the beginning and the end of the financial year. ​ ​Cash flows from operating activities are presented using the indirect method and calculated as the operating ​profit/loss adjusted for non-cash operating items, working capital changes, and financial income, financial expenses and income tax paid. ​ ​Cash flows from investing activities comprise payments in connection with acquisition and divestment of ​ enterprises, activities and fixed asset investments, and purchase, development, improvement and sale, ​etc. of intangible assets and property, plant and equipment. ​ ​Cash flows from financing activities comprise changes in the size or composition of the contributed capital ​and related costs, and the raising of loans, repayments of interest-bearing debt, including lease liabilities, purchase of treasury shares and payment of dividend. ​ ​Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less short- term bank loans. 2023-06-30Henrik Mou