Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Dirch Passers Allé 36 Postboks 250, 2000 Frederiksberg 2023-01-01 2023-12-31 2022-01-01 2022-12-31 11783376 EET Group A/S Bregnerødvej 133D 3460 Birkerød 1987-12-21 Rudersdal 45821919 www.eetgroup.com EY Godkendt Revisionspartnerselskab 30700228 Dirch Passers Allé 36 2000 Frederiksberg 2024-06-26 Jan Holmetoft Iversen Regnskabsklasse C, stor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2024-06-26 2024-06-26 CaseWare Working Papers Birkerød Jan Holmetoft Iversen CEO Søren Drewsen Chair Pernilla Aadal Lund Jan Holmetoft Iversen Copenhagen Ole Becker Christian Carlsbæk State Authorised Public Accountant mne33732 State Authorised Public Accountant mne50651 2927822000 2363644000 2145749000 199023000 153468000 143442000 33173000 10367000 7269000 63251000 101766000 117667000 -5465000 -8252000 138024000 94703000 46290000 1426786000 1289860000 841178000 666023000 622931000 Fixed assets Fixed assets Fixed assets Fixed assets Fixed assets 755731000 721974000 852460000 758413000 618213000 Non-fixed assets Non-fixed assets Non-fixed assets Non-fixed assets Non-fixed assets 1693638000 1424436000 1241144000 56654000 3946000 7149000 2198000 1118000 1001000 1001000 1001000 1001000 1001000 Share capital Share capital Share capital Share capital Share capital 684555000 575010000 485895000 39105000 25377000 34164000 2750000 2750000 Provisions Provisions Provisions Provisions Provisions 544531000 505534000 346280000 338740000 333083000 Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions 794385000 681146000 628639000 507936000 419416000 Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions 5.2 6.2 6.8 6.5 6.7 36.9 39.8 40.4 40.4 39.1 200 188 187 3000 0 33000 2024 14000 36000 0 3039139000 3127425000 2821810000 2888931000 59203000 44215000 158126000 194279000 176428000 210056000 23919000 16459000 -42221000 -32236000 58058000 100068000 41671000 23633000 36478000 21935000 21030000 69530000 -3983000 4155000 25013000 65375000 30694000 26004000 0 0 30694000 26004000 59729000 19850000 59729000 19850000 1219186000 796364000 105472000 440010000 11705000 7632000 1336363000 1244006000 1426786000 1289860000 253581000 317331000 253581000 317331000 3057000 4896000 131851000 247017000 12889000 4886000 11542000 3186000 6743000 5821000 166082000 265806000 336068000 138837000 755731000 721974000 2182517000 2011834000 1001000 1001000 8586000 -30428000 794909000 829204000 804496000 799777000 39105000 25377000 39105000 25377000 222843000 94613000 35675000 9076000 286013000 401845000 544531000 505534000 119246000 118984000 395998000 325274000 236458000 194380000 12856000 6756000 29827000 35752000 794385000 681146000 1338916000 1186680000 2182517000 2011834000 1001000 1900000 681654000 0 0 -80069000 0 65375000 0 30428000 12756000 0 -1900000 175000000 1001000 -30428000 829204000 0 25013000 16193000 0 0 0 36487000 0 22821000 -22821000 1001000 8586000 794909000 143472000 189608000 10646000 9574000 1675000 1668000 20635000 9206000 176428000 210056000 243 221 27009000 23505000 14662000 128000 28178000 17250000 1483000 1156000 6817000 3529000 4021000 6481000 -8004000 -2326000 25013000 65375000 56412000 16838000 14304000 0 9449000 0 61267000 16838000 30408000 16838000 9614000 0 -9449000 0 30573000 16838000 30694000 0 48328000 56654000 104982000 28478000 16775000 45253000 59729000 1290946000 470438000 7632000 216426000 0 4073000 142860000 334538000 0 142860000 0 0 1507372000 135900000 11705000 -494582000 -30428000 0 -36487000 0 0 100954000 0 60659000 0 283178000 0 0 -288186000 -30428000 0 1219186000 105472000 11705000 EET Danmark A/S Denmark 100 EET Norge AS Norway 100 EET Sverige AB Sweden 100 EET Finland OY Finland 100 EET France SAS France 100 EET Italy S.R.L Italy 100 ETT Spain SA Spain 100 EET Nederland B.V. Holland 100 EET UK Ltd United Kingdom 100 EET Ireland Ltd. Ireland 100 EET Schweiz GmbH Switzerland 100 EET Germany GmbH Germany 100 EET Österreich GmbH Austria 100 EET Polska Z o.o Poland 100 EET Czech s r.o Czech Republic 100 Lothar Finance Egypt Egypt 100 EET International A/S Denmark 100 Sandberg A/S Denmark 100 EET Retail ApS Denmark 100 Oprema Ltd. United Kingdom 100 1 500000 500000 1 180000 180000 1 20000 20000 2 180000 180000 4 120000 120000 1 1000 1000 -4886000 -2560000 -1046000 1129000 -9493000 -5432000 -2350000 -583000 222843000 0 222843000 0 35675000 0 35675000 0 286013000 0 286013000 0 4569000 6890000 20300000 23352000 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of EET Group A/S for the financial year 1 January - 31 December 2023. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023 and of the results of the Company's operations for the financial year 1 January - 31 December 2023. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholder of EET Group A/S We have audited the financial statements of EET Group A/S for the financial year 1 January - 31 December 2023, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023 and of the results of the Company's operations for the financial year 1 January - 31 December 2023 in accordance with the Danish Financial Statements Act. We conducted our audit in accordance with International Standards on Auditing (ISAs) and the 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 financial statements" section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company 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. Management is responsible for the preparation of 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 financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to whether the 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 the 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: Identify and assess the risks of material misstatement of the 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. 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 Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the 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 Company'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 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 Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. 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's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. The quantitative disclosures on the gender composition of management are provided under a separate heading in the Management’s review below. The financial ratios stated under "Financial highlights" have been calculated as follows: Operating profit/loss Profit/loss before net financials +/- Other operating income and other operating expenses Gross margin Gross profit/loss x 100 Revenue Equity ratio Equity, year-end x 100 Total equity and liabilities, year-end The objective of EET Group A/S is to invest in companies carrying on activities within development, sale, marketing and distribution of IT technology products in Europe. EET Group A/S is the parent company of the Group’s sales subsidiaries under the names EET, Oprema and Sandberg. EET Group A/S is a part of the EET group of companies and has EET A/S as its parent company. Group consolidated financial statements are included in the financial statements for EET A/S. The ultimate owners of EET Group A/S are the Executive Board of the group and other key personnel of the group. The ownership is exercised through the investment companies EET Group Holdings ApS and Mgt Holdco ApS. EET’s ambition is to be the preferred and most efficient value-added IT distributor in the European market with the strongest assortment and the deepest know-how within our lines of business. EET markets more than 1,100 trademarks and more than 1.1 million item numbers spread across 6 primary product areas all focusing on the following product areas: Professional Audio Video equipment & Digital Signage products IT components and supplies for computers, servers, storage, mobile devices and printers Network solutions and products Video surveillance and security products Consumer electronics Point of Sale (POS) & Auto ID equipment The income statement for 2023 shows a profit of DKK 25,013 thousand against a profit of DKK 65,375 thousand last year, and the balance sheet at 31 December 2023 shows equity of DKK 804,496 thousand. 2023 was a tough year for the IT hardware industry in general. Worldwide sales of PC’s – a main driver of demand for many of EET’s products - dropped to the lowest level since 2006 according to Gartner. The main PC-manufacturers reported between 5% and 20% negative growth in the numbers of PC shipments in 2023 compared to 2022. Other sectors such as Point of Sales equipment were also severely hit having dominant manufacturers reporting between 20% and 33% revenue decline for 2023. Only product area not affected was the Surveillance & Security market where EET’s revenue grew more than 13% compared to last year of which ~8% was derived from organic growth. Despite the solid foundation of EET, being locally represented in most of EU, serving +33.000 customers across Europe and offering a very broad range of products, EET was also affected by the general negative market conditions in 2023. Nevertheless, after careful consideration it was decided to continue and follow the strategic plans and therefore decisions to both to invest in a new central warehouse & logistics centre situated in Denmark and to acquire 3 entities in 2023 were followed through. In April 2023, the Group acquired the shares of the Belgian company Tridis B.V. a dedicated distributor of IT accessories, security products and network components in Belgium and Luxembourg, to further strengthen and accelerate growth in the Benelux region. Thereby, EET Belgium was founded with Tridis as the basis and with existing business in Belgium, until then serviced from EET Netherlands, being transferred to the new legal entity. In May 2023, one month after the Tridis acquisition, EET acquired the Danish based spare parts distributor Convena Group A/S that had activities in several countries across Europe. In July 2023 took over the Portuguese surveillance distributor Nauta SA which now operates as EET Portugal within the group. In October 2023 the Group entered a lease for a new warehouse location in Greve, south of Copenhagen in Denmark that more than triples the current warehouse capacity. In addition, it was also decided to invest more than 10M€ in new advanced warehouse systems at the new location The final implementation and relocation to the new site successfully took place during Easter in March 2024. The result for 2023 is impacted of both investments made and by the tough market condition that were present. Total revenues for 2023 amounts to DKK 3.0 billion DKK compared to DKK 3.1 billion in 2022, i.e. in the low end of the expected range, however product profit contracted by DKK 21 million to DKK 217 million due to changes in product mix. The net result after tax amounts to DKK DKK 25.0 million and is affected by approximately DKK 59.0 million in restructuring costs related to acquisitions made in 2023 and DKK 7.0 million in impairment related to write-off of warehouse equipment that is not expected to be used in the new warehouse location after the relocation has taken place. The results are below the expected result before taxes of DKK 150-200 million however considered acceptable taking the difficult market conditions that were present in 2023 into account. The company’s equity as of 31 December 2023 amounted to DKK 804 million, corresponding to a solvency ratio of 36.8% Capital resources EET Group A/S' capital is divided into 1.001.000 shares of a nominal value of DKK 1. The Board of Directors proposes to the annual general meeting that no dividend should be declared in respect of the financial year 2023 and that the consolidated profit should be transferred to retained earnings. On 31 December 2023, the EET Group’s capital resources totalled DKK 448 million, including cash and unused credit facilities. General As a result of its operations and financing, the Group is exposed to financial risks, including market risks (currency, interest rate and credit risks), which may affect the Group's results of operations and financial position. The Group's risks are managed centrally in the Group's finance function in accordance with the principles adopted and set out by the Board of Directors. It is the Group's policy not to engage in active speculation in financial risks. Thus, the Group's financial management is aimed at managing the financial risks directly attributable to the Group's operations and financing. Currency risks The Group's foreign entities are not immediately affected by exchange rate fluctuations, as income and costs are settled in local currencies. Activities carried out by Danish group entities are affected by exchange rate fluctuations, as part of the sales and goods purchased are settled in foreign currencies, whereas costs, including wages and salaries, are settled in Danish kroner. Moreover, the Group is affected by changes in exchange rates, as the foreign subsidiaries' results at year end are translated into Euro based on average exchange rates. The Group's currency risks are primarily hedged by means of distribution of income and costs in the same currency and by means of derivative financial instruments. In accordance with policies adopted by the Board of Directors, risks related to recognised financial assets and liabilities are hedged whenever possible. Interest rate risks As of 31 December 2023, EET Group A/S had interest-bearing debt totalling DKK 378 million. The company's results will be affected by any change in interest rates. Credit risks The Group has no significant risks relating to one individual customer or business partner. The Group's policy in respect of credit risks implies that all major customers and other business partners are credit-rated and insured (if possible) on an ongoing basis. The statutory report on corporate responsibility, cf. Danish FSA §99a is present in EET Group’ ESG report, which can be accessed through the following link: http://esg.eetgroup.com/ Data ethics EET Group has not implemented a Data Ethics policy for 2023. The majority of the EET Group’s business takes place in the business-to-business segment, and the involvement of personal data is therefore limited. EET has not implemented any technologies that would give rise to concerns regarding data ethics in relation to personal data. The protection of individuals’ fundamental rights and freedoms is achieved through compliance with existing data protection laws, especially the requirements relating to data minimization, transparency and security. The use of non-personal data within the Group does not involve any technologies that would give rise to ethical concerns. The first level of management includes Board of directors and members of the executive board. The other level of management level includes persons with managerial responsibility, who refer directly to the first level of management. Supreme governing body Board of directors The Company aims to have a Board of Directors that can perform its duties in terms of strategy, management and control in an efficient manner. The Company will seek to appoint candidates with the best profiles and qualifications, as this is considered essential to the Company. In this connection, gender is considered when appointing candidates to the Board of Directors. However, recruitment criteria such as professional qualifications, industry experience, educational background, etc., are also considered, as it is essential that all members of the Board of Directors possess the necessary competences. In 2023, the Board of Directors consists of 3 members, having the gender distribution being 0 female (0%) and 3 males (100%), hence the target of 1 female and 2 males was not met in 2023. As no changes were made to the Board composition in the current financial year, the existing members, selected based on their extensive experience, expertise, and alignment with the company's strategic needs, remained unchanged. EET Group A/S has a target figure of the underrepresented gender distribution to be 33% in 2024. Subsequently to 31 December 2023, there has been a change in the Board of Directors leading to a composition of the board of 1 female and 2 males. The current gender composition of the Board of Directors appointed by the annual general meeting is 1 female and 2 males meaning that the target has been met at the annual general meeting in 2024. Other levels of management EET Group A/S’ other levels of management consist of 14 members. The current gender composition is 36% females and 64% males. No further events have occurred after the balance sheet date to this date which could influence the evaluation of these financial statements. 2023 was an exceptional year with very tough market conditions. The Group will in 2024 continue to focus on expansion both through acquisitions and through strengthening of the product portfolio and for 2024 a gradual return to ‘normality’ and previous year’s result levels is expected. Revenue is expected to be in the range of DKK 3.1-3.3 billion. Result before taxes is expected to be in the range of DKK 70-80 million. The annual report of EET Group A/S for 2023 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities. With reference to section 112(1) of the Danish Financial Statements Act, the Company has not prepared consolidated financial statements. The financial statements of EET Group A/S and its group entities are included in the consolidated financial statements of EET A/S and EET Group Holdings ApS. The accounting policies used in the preparation of the financial statements are consistent with those of last year. With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement has been prepared. The Company's cash flows are reflected in the consolidated cash flow statement for the company EET A/S and EET Group Holdings ApS. Assets are recognized in the balance sheet when it is probable that future economic benefits will flow to the Company and the value of the asset can be measured reliably. Liabilities are recognized in the balance sheet when it is probable that future financial resources will flow out of the Company and the value of the liability can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Measurement of assets and liabilities after initial recognition is effected as described below for each item. Anticipated risks, profits 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 recognized in the income statement when earned. Furthermore, costs incurred to achieve earnings for the year are recognized in the income statement, including depreciation/amortisation, impairment losses and provisions as well as reversal of entries as a result of changed accounting estimates, which were formerly recognized in the income statement. Intra-group business combinations For vertical and downstream intra-group mergers the group method is applied for the combination of the entities. Thereby, the entities are combined at the revaluation value recognised in the consolidated financial statements or which would have been recognised in the consolidated financial statements for the parent company included in the merger. The group method is applied as if the entities had been combined from the date when the parent company acquired the equity investments in the entities included in the merger, and therefore, the comparative figures were restated. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. On initial recognition, derivative financial instruments are recognised at cost in the balance sheet and are subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are presented as separate items in the balance sheet. Fair value adjustments of derivative financial instruments designated as and qualifying for recognition as a hedge of the fair value of a recognised asset or liability are recognised in the income statement along with changes in the fair value of the hedged asset or liability. Fair value adjustments of derivative financial instruments designated and qualifying as hedging of future assets or liabilities are recognised as separate items in the balance sheet and in the hedging reserve under equity. If the forecast transaction results in the recognition of assets or liabilities, amounts previously recognised in equity are transferred to the cost of the asset or liability, respectively. If the forecast transaction results in income or expenses, amounts previously recognised in equity are transferred to the income statement in the period in which the hedged item affects the income statement. Fair value adjustments of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement on an ongoing basis. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income from the sale of goods for resale and finished goods is recognised in revenue when the most significant rewards and risks have been transferred to the buyer and provided the income can be measured reliably and payment is expected to be received. The date of the transfer of the most significant rewards and risks is based on standardised terms of delivery based on Incoterms® 2010. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. Cost of sales includes the cost of goods used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. The basis of amortisation, which is calculated as cost less any residual value, is amortised on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Acquired intangible assets 3-5 years Goodwill 5-20 years Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of intangible assets and property, plant and equipment are recognised in the income statement in Amortisation/depreciation and impairment/gains on intangible assets and property, plant and equipment. Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. Fixtures and fittings, other plant and equipment 3-10 years Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In group entities, the full elimination of internal profit and loss is carried out without regard to ownership shares. In associates, only proportional elimination of profit and loss is carried out, taking into account ownership shares. Financial income and expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest income and expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. The entity is jointly taxed with other group entities. The total Danish income tax charge is allocated between profit/loss-making Danish entities in proportion to their taxable income (full absorption). Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge according to the rates applicable to interest surcharges to the management company. On initial recognition, goodwill is recognised and measured as the difference between cost of the enterprise acquired and the fair value of the assets, liabilities and contingent liabilities acquired. Goodwill is amortised on a straight-line basis over its estimated useful life, which is fixed based on the experience gained by Management for each business area. The amortisation period is usually 5 years; however, it may be up to 20 years for strategically acquired enterprises with a strong market position and a long-term earnings profile if the longer armortisation period is considered to better reflect the Company's benefit from the relevant resources. The carrying amount of goodwill is assessed on a regular basis and written down to the recoverable amount if the carrying amount exceeds the estimated future net income from the enterprise or activity to which the goodwill is related. Other intangible assets include acquired intangible rights, including software licences. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Equity investments in group entities and associates are measured according to the equity method. On initial recognition, equity investments in group entities and associates are measured at cost, i.e. plus transaction costs. The cost is allocated in accordance with the acquisition method; see the accounting policies regarding business combinations. The cost is adjusted by shares of profit/loss after tax calculated in accordance with the Group's accounting policies less or plus unrealised intra-group gains/losses. Identified increases in value and goodwill, if any, compared to the underlying entity's net asset value are amortised in accordance with the accounting policies for the assets and liabilities to which they can be attributed. Negative goodwill is recognised in the income statement. Dividend received is deduced from the carrying amount. Equity investments in group entities and associates measured at net asset value are subject to impairment test requirements if there is any indication of impairment. Loans considered as part of the investments are currency adjusted on equity directly. The carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. The net realisable value of inventories is calculated as the sales amount less costs of completion and expenses required to effect the sale and is determined taking into account marketability, obsolescence and development in the expected selling price. Goods for resale are measured at cost, which comprises the cost of acquisition plus delivery costs as well as other expenses directly attributable to the acquisition. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprise cash. Given the nature of the Group's cash pool arrangement, cash pool balances are not considered cash, but are recognised under "Receivables from group entities". Hedging reserve The hedging reserve comprises the cumulative net change in the fair value of hedging transactions that qualify for recognition as a cash flow hedge and where the hedged transaction has not yet been realised. The reserve is dissolved when the hedged transaction is realised, if the hedged cash flows are no longer expected to be realised or if the hedging relationship is no longer effective. The reserve does not represent a limitation under company law and may therefore be negative. Proposed dividends Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Provisions are recognised when the company has a current legal or constructive obligation and include warranty provisions and earn-out payments. Provisions are recognised on the basis of best estimates. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. Joint taxation contributions payable or receivables are recognised in the balance sheet as amounts owed by or to affiliated companies Payables to credit institutions Payables to credit institutions are initially measured at the proceeds received net of transaction costs incurred. On subsequent recognition, payables to credit institutions are measured at amortised cost, using the effective interest rate method. Borrowing costs, including capital losses, are recognised as financing costs in the income statement over the term of the loan. Other payables Other payables are measured at net realisable value. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. No events have occurred after the balance sheet date to this date which could influence the evaluation of these financial statements. Breakdown of revenue by business segment: Sale of IT technology products 2,871,491 2,965,510 Group charges 167,648 161,915 3,039,139 3,127,425 Breakdown of revenue by geographical segment: Nordic 1,541,095 1,665,548 Rest of Europe 1,497,984 1,460,765 Rest of world 60 1,112 3,039,139 3,127,425 Audit fees are not disclosed with reference to section 96(3) of the Danish Financial Statements Act. The fee is specified in the consolidated financial statements for EET A/S. Remuneration to the Executive Board and Board of Directors amount to DKK 7,165 thousand including pension cost of DKK 0 thousand. The company has in 2022 held cost to transaction bonus of total DKK 49,877 thousand. Note 21 provides more details on security for loans, etc. as regards property, plant and equipment. Depreciations in the income statement include gain on sale of DKK 0 thousand (2022: DKK 0 thousand). The carrying amount of investments in subsidiaries includes goodwill of DKK 463,631 thousand (2022: DKK 303,722 thousand). Prepayments include accrual of expenses relating to subsequent financial years, including insurance policies, licenses and other prepayments. The shares have not been divided into classes and no shares have special rights. The Company's share capital has remained DKK 1,001 thousand over the past 5 years. Adjustment in the year of deferred tax include DKK 8,003 thousand recognised in the income statement (2022: DKK 2,326 thousand) and DKK 0 thousand recognised in equity (2022: DKK 0 thousand). Long-term debt to the parent company of DKK 222,843 thousand is only expected to be fully repaid as part of a future sale of EET A/S, which is not expected within one year but before 5 year. At 31 December 2023, the company's capital resources totaled DKK 448 million, including cash unused credit facilities in the Company and its subsidiaries. Rent and Lease agreements (operationel leasing) with a remaining maximum term of 120 months have been entered into. Total rent & leasing liabilities amount to approx. DKK 149,764 thousand (2022: DKK 9,873 thousand) The Company is jointly taxed with other Danish subsidiaries within the EET Group. The Company hasjoint and several unlimited liability for Danish corporation taxes and withholding taxes on dividends,interest and royalties in the joint taxation. Any subsequent corrections of the consolidated taxableincome and withholding taxes, etc. could lead to an increased liability for the Company. The Company is party to a number of pending tax audits. In Management's opinion, apart from thereceivables and payables recognised in the statement of financial position, the outcome of these taxaudits is not expected to affect the Company's financial position. The Company is jointly and severally liable for the EET Group's bank loan, which nominally amounts to DKK 2,759 million (EUR 370 million) at December 31, 2023. Shares in affiliated companies are provided as collateral for bank debt. Parties exercising control Related party Domicile Basis for control EET Holdings A/S Bregnerødvej 133 D, 3460 Birkerød Parent Mgt Holding ApS Bregnerødvej 133 D, 3460 Birkerød Ultimate parent Information about consolidated financial statements Parent Domicile EET A/S Bregnerødvej 133 D, 3460 Birkerød Related party transactions EET Group A/S was engaged in the below related party transactions: DKK'000 2023 2022 Sales to group enterprises 2,867,786 2,946,598 Management fees and group charges 167,648 161,916 Interest income, group entities 27,009 23,505 Interest expenses, group entities 28,178 17,250 Receivables from group enterprises, non current 105,472 440,010 Receivables from group enterprises,current 131,851 247,017 Payables from group enterprises, non current 222,843 94,613 Payables from group enterprises, current 236,458 194,380 Dividends received 100,954 88,205 In 2022 EET Group A/S sold EET Norway AS to a newly establised holding company EET Norway HoldCo AS. The sale results in a gain of DKK 451,542 thousand, which is deferred and will only be recognised in the income statement when an external sale is made of EET Norway HoldCo AS is made. This had no cash impact. In 2023 write-down of the investment in EET Norway HoldCo AS was made and a reversal of the gain of DKK 115,833 thousand was recognised to off-set the impairment. Remission of debt of DKK 60,000 thousand related to EET Danmark A/S is recognised in equity. Remuneration of the Board of Directors, Executive Board and key management personnel is disclosed in note 5. EET Group A/S has entered into an agreement for a cash pool arrangement with the bank, where EET Group A/S is the account holder and other entities within the cashpool are sub-account holders. The terms signed in the cash pool arrangement grant the bank the right to offset debits and credits against each other, whereby it is solely the net balance of the total cash pool accounts that constitutes EET Group A/S's outstanding balance with the bank. EET Group A/S' accounts to other entities in the cashpool arrangement are recorded under debt to group enterprises or receivable to group enterprises depending on the net amount. Ownership The following shareholders are registered in the Company's register of shareholders as holding minimum 5% of the votes or minimum 5% of the share capital: Name Domicile EET Holdings A/S Bregnerødvej 133 D, 3460 Birkerød 11783376 2023-01-01 2023-12-31 11783376 2023-01-01 11783376 2022-12-31 11783376 2023-12-31 11783376 2022-01-01 11783376 2023-01-01 2023-12-31 1 11783376 2023-01-01 2023-12-31 2 11783376 2023-01-01 2023-12-31 3 11783376 2023-12-31 1 11783376 2023-12-31 2 11783376 2023-12-31 3 11783376 2023-12-31 4 11783376 2023-01-01 2023-12-31 1 11783376 2023-01-01 2023-12-31 2 11783376 2023-01-01 2023-12-31 1 11783376 2023-01-01 e:GoodwillMember 11783376 2023-01-01 e:AcquiredIntangibleAssetsMember 11783376 2023-01-01 2023-12-31 e:AcquiredIntangibleAssetsMember 11783376 2023-12-31 e:AcquiredIntangibleAssetsMember 11783376 2023-01-01 2023-12-31 e:GoodwillMember 11783376 2023-12-31 e:GoodwillMember 11783376 2023-12-31 e:ReceivablesFromOwnersAndManagementMember 11783376 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