Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Skibbroen 16 6200 Aabenraa 2023-01-01 2023-12-31 2022-01-01 2022-12-31 33059787 Sourzing A/S Sdr. Ringvej 42 6000 Kolding 2010-07-01 Kolding 53737700 Sourzing.com Kreditbanken A/S EY Godkendt Revisionspartnerselskab 30700228 Skibbroen 16 6200 Aabenraa 2024-06-28 Søren Kavin Regnskabsklasse B Erklæring om udvidet gennemgang Grundlag for konklusion Konklusion true true 2024-06-28 2024-06-28 CaseWare Working Papers Kolding Michael Holm Hynkemejer Søren Kavin Chairman Annemette Vestergaard Thomsen Ole Mikkelsen Michael Holm Hynkemejer Mike Sand Thanning Aabenraa Jon Midtgaard State Authorised Public Accountant mne28657 3939693 4010172 3818436 4645144 347709 365269 -226452 -1000241 -2238915 -592905 134127 627295 500916 262784 -2832156 -1228635 -115227 -120472 -2716929 -1108163 -491481 -13613 -119400 -130316 -2106048 -964234 376996 530572 104804 196274 481800 726846 67083 86588 36978 57106 104061 143694 0 499156 0 499156 585861 1369696 665621 659669 76307 34108 741928 693777 2030859 1204353 2234853 2637841 396927 281700 213228 2001808 148100 189335 5023967 6315037 13789 16161 5779684 7024975 6365545 8394671 500000 500000 0 491481 294058 413458 -5515 -169890 -1513554 592494 -725011 1827543 389664 714670 78639 179433 468303 894103 3546743 3179610 72143 0 861228 782924 0 499156 8901 0 2032444 1110540 100794 100795 6622253 5673025 7090556 6567128 6365545 8394671 500000 491481 413458 -169890 592494 -491481 -119400 0 -2106048 0 0 -164375 0 500000 0 294058 -5515 -1513554 3525359 4287672 251337 271232 13696 18240 28044 68000 3818436 4645144 6 8 118673 107224 15454 520071 -115227 -120472 776672 348013 24669 0 801341 348013 246100 151739 178245 91470 424345 243209 376996 104804 476292 180656 38361 0 53085 0 461568 180656 389704 123550 57866 20128 53085 0 394485 143678 67083 36978 7675 430 7245 491481 164375 498725 -2238915 -2074539 -7245 0 Sourzing ltd. Hong Kong 100 -5637974 -2238908 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Sourzing 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 shareholders of Sourzing A/S We have conducted an extended review of the financial statements of Sourzing 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. Based on the work we have performed, 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 extended review in accordance with the Danish Business Authority's standard on extended review for Small entities and FSR - Danish Auditors' standard on extended review of financial statements prepared in accordance with the Danish Financial Statements Act. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the extended review of the financial statements" section. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. 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 that 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 responsibility is to express a conclusion on the financial statements. This requires that we plan and perform procedures to obtain limited assurance for our conclusion on the financial statements and perform specifically required supplementary procedures to obtain additional assurance for our conclusion. An extended review comprises procedures that primarily consist of making enquiries of Management and others within the Company, as appropriate, analytical procedures and the specifically required supplementary procedures as well as evaluation of the evidence obtained. The procedures performed in an extended review are less than those performed in an audit, and accordingly, we do not express an audit opinion on the financial statements. Management is responsible for the Management's review. Our conclusion 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 extended review 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 extended review, 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 company's main activities consist of designing, developing and producing packaging and retail display solutions for brand customers. The income statement for 2023 shows a loss of DKK 2,716,929 against a loss of DKK 1,108,163 last year, and the balance sheet at 31 December 2023 shows a negative equity of DKK 725,011. The result for the year is considered unsatisfactory and is a result of a difficult market situation and cost savings implemented without full year effect. Sourzing A/S has implemented cost savings that will have full year effect in 2024. Also, the market shows signs of recovery. The budget for 2024, that was approved by the Supervisory Board back in December 2023, shows a minor positive result before tax for financial year 2024. The unaudited results for the period January - May 2024 have been realised significantly above budget for the period. In addition, incoming orders shows an increasing trend above budget. Based hereon, management expects positive profit before tax in financial year 2024 above budget, currently estimated at DKK 1,000 - 2,000 thousand. The current credit lines at bank are expected to be sufficient to handle the planned activities for 2024. Also, we expect current credit lines to be maintained based on the current outlook for the Company. On this basis we prepared the annual report on a going concern basis. Loss of share capital: Equity at 31 December 2023 amounts to DKK -725 thousand. Thus, the Company has lost its share capital. Management expects that the share capital can be re-established by earnings in 2024. Exchange adjustment relates to the exchange rate conversion of group entities in foreign currency. The annual report of Sourzing A/S for 2023 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to reporting class B entities and elective choice of certain provisions applying to reporting class C entities. Pursuant to section 110(1) of the Danish Financial Statements Act, the Company has not prepared consolidated financial statements. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Reporting currency The financial statements are presented in Danish kroner (DKK). On initial recognition, transactions denominated in foreign currencies are translated at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and at 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. Foreign group entities Foreign subsidiaries are considered separate entities. Items in such entities' income statements are translated at an average exchange rate for the month, and balance sheet items are translated at closing rates. Foreign exchange differences arising on translation of the opening equity of foreign subsidiaries to closing rates and on translation of the income statements from average exchange rates to closing rates are taken directly to equity. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income from the sale of goods for resale 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. 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. The items revenue, cost of sales, other operating income and external expenses have been aggregated into one item in the income statement called gross profit in accordance with section 32 of the Danish Financial Statements Act. Other operating income comprise items of a secondary nature relative to the Company's core activities, including gains on the sale of fixed assets. 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/depreciation, which is calculated as cost less any residual value, is amortised/depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Completed development projects 4-5 years Acquired intangible assets 3-5 years Other fixtures and fittings, tools and equipment 2-5 years Leasehold improvements 3-10 years The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In subsidiaries, the full elimination of internal profit and loss is carried out without regard to 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. Intangible assets include acquired intangible rights, including software licences. Intangible assets are measured at cost less accumulated amortisation and impairment losses. Development costs comprise expenses, salaries and amortisation directly or indirectly attributable to development activities. Development projects that are clearly defined and identifiable, where the technical feasibility, sufficient resources and a potential future market or development opportunities areidentifiable and where the Company intends to produce, market or use the project, are recognised as intangible assets provided that the cost can be measured reliably and that there is sufficient assurance that future earnings can cover production costs, selling costs and administrative expenses and development costs. Other development costs are recognised in the income statement as incurred. Development costs that are recognised in the balance sheet are measured at cost less accumulated amortisation and impairment losses. On completion of a development project, development costs are amortised on a straight-line basis over the estimated useful life. The amortisation period is usually 4-5 years. 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. On initial recognition, investments in subsidiaries are measured at cost and subsequently at the proportionate share of the enterprises' net asset values calculated in accordance with the parent company's accounting policies less or plus any residual value of positive or negative goodwill determined in accordance with the acquisition method. Subsidiaries with a negative net asset value are measured at DKK 0 (nil), and any amounts owed by such enterprises are written down by the parent company's share of the net asset value if the amount owed is deemed irrecoverable. If the negative net asset value exceeds the amounts owed, the remaining amount is recognised under provisions if the parent company has a legal or a constructive obligation to cover the enterprise's deficit. Net revaluations of investments in subsidiaries are transferred to the net revaluation reserve according to the equity method in so far as the carrying amount exceeds the acquisition cost. On initial recognition, equity investments in subsidiaries are measured at cost, i.e. plus transaction costs. The cost is allocated in accordance with the acquisition method. 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 subsidiaries measured at net asset value are subject to impairment test requirements if there is any indication of impairment. 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. 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 and costs necessary 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 costs 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 indication that a receivable or a group of receivables is impaired. If there is objective indication that an individual receivable has been impaired, write-down is made on an individual basis. Receivables with no objective indication of individual impairment are tested for objective indication of impairment on a portfolio basis. The objective indicators used for portfolios are determined based on historical loss experience. Write-downs are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash and cash equivalents comprise cash and short-term marketable securities which are subject to an insignificant risk of changes in value. Reserve for net revaluation according to the equity method The net revaluation reserve according to the equity method includes net revaluations of investments in subsidiaries relative to cost. The reserve can be eliminated in case of losses, realisation of investments or a change in accounting estimates. The reserve cannot be recognised at a negative amount. Reserve for development costs The reserve for development costs comprises recognised development costs. The reserve cannot be used to distribute dividend or cover losses. The reserve will be reduced or dissolved if the recognised development costs are amortised or are no longer part of the Company's operations by a transfer directly to the distributable reserves under equity. Translation reserve The translation reserve comprises the share of foreign exchange differences arising on translation of financial statements of entities that have a functional currency other than DKK, foreign exchange adjustments of assets and liabilities considered part of the Company's net investments in such entities and foreign exchange adjustments regarding hedging transactions that hedge the Company's net investments in such entities. The reserve is dissolved on the sale of foreign entities or if the conditions for effective hedging no longer exist. When equity investments in subsidiaries in the parent company financial statements are subject to the limitation requirement in the net revaluation reserve according to the equity method, foreign exchange adjustments will be included in this equity reserve instead. The Company has chosen IAS 39 as interpretation for liabilities. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. In subsequent periods, the financial liabilities are measured at amortised cost, corresponding to the capitalised value using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Other liabilities are measured at net realisable value. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. Of the total carrying amount, negative net assets in group entities, DKK 5,637,974 have been set off against receivables. All shares carry equal rights. The Company's share capital has remained DKK 500,000 over the past 5 years. Deferred tax primarily relates to timing differences in respect of intangible assets, property, plant and equipment and tax loss carried forward. The Company has entered into rent agreements and operating leases at the following amounts: Remaining term for 6 months with an average, yearly payment of DKK 260 thousand, totalling DKK 130 thousand. As security for the Company's debt to banks, tDKK 3,547, the Company has provided security or other collateral in its assets for a total amount of tDKK 2,500. 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