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01.10.2021 - 30.09.2022.We believe that the management commentary contains a fair review of the affairs and conditions referred to therein.We recommend the annual report for adoption at the Annual General Meeting.AarhusRune Haack Quist HoveTorben Skovbjerg LarsenAnders TyrrestrupMorten Nødgaard AlbækLars Dige KnudsenSusanne OdgaardTorben Skovbjerg LarsenAnders StrangeTo the shareholders of AART Architects A/SWe have audited the consolidated financial statements and the parent financial statements of AART Architects A/S for the financial year 01.10.2021 - 30.09.2022, 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 30.09.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.10.2021 - 30.09.2022 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.AarhusLars AndersenKasper Vestergaard Jessenmne34506mne42784State Authorised Public AccountantState Authorised Public AccountantFinancial highlights2021/22
DKK'0002020/21
DKK'0002019/20
DKK'0002018/19
DKK'0002017/18
DKK'000Key figuresRevenue239,216146,970121,808148,310147,179Gross profit/loss161,883103,74088,45392,61488,206Operating profit/loss7,3739,3184,8675,19610,449Earnings before interests, tax, depreciations and amortisations (EBITDA)11,99312,4327,6928,56512,754Net financials(1,738)(42)(494)(1,095)(302)Earnings before tax (EBT)5,6359,2754,3734,10110,147Profit/loss for the year3,4547,2433,5252,8417,296Profit for the year excl
.
minority interests2,8276,8453,4392,8417,296Balance sheet total136,24372,83763,14485,12284,266Investments in property, plant and equipment5,8303,0806061,7632,262Equity31,31028,01621,86320,21720,074Equity excl. minority interests29,11227,18221,44320,21720,074RatiosGross margin (%)67.6770.5972.6262.4559.93EBIT margin (%)3.086.344.003.507.10Net margin (%)1.444.932.891.924.96Equity ratio (%)21.3737.3233.9623.7523.82Financial 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
RevenueEBIT margin (%):
Operating profit/loss
* 100
RevenueNet margin (%)
:
Profit/loss for the year * 100
RevenueEquity ratio (%)
:Equity excl. minority interests * 100
Balance sheet totalPrimary activitiesAs one of the leading independent and most significant architectural advisors in Scandinavia, the AART group has had a positive financial year, both in terms of revenue and results. Despite the increasingly uncertain market situation, there has been an exceptional level of activity in all markets, resulting in the highest revenue in our group history.
One of the absolute main events of the year is the acquisition of Mangor & Nagel in mid-April 2022, which in the current financial year alone has meant a contribution of well over 50 million in revenue.
The acquisition is proceeding successfully and has been positively received both among employees and customers. The integration activities are progressing as planned and even a little faster than expected.
At the start of the year, AART Designers also became part of the group, and now constitutes an independent subsidiary in the organization.
During the first three quarters of the financial year, we have experienced a high level of activity in both the public and private sectors, however, to a lesser extent in Norway. The fourth quarter has been more challenging in several of our locations due to a slightly more uncertain market situation.
Despite this, the acquisition of new projects and contracts has been relatively high.
The AART group now has around 320 employees on six different locations in Scandinavia, after necessary redundancies in the autumn due to the market situation.
The financial year has been characterized by several large new investments. Relocation of the offices in Oslo, Stockholm, and Copenhagen to larger premises and not least the acquisition of Mangor and Nagel have resulted in extraordinary expenses.
In addition, a wide range of new strategic initiatives have been launched with the aim of strengthening our organisation (e.g., in digitalisation, leadership education, LCA calculations and DGNB certifications and impact-based advice). Initiatives that we are beginning to reap the rewards of.
During the lockdown period the previous year, we launched an updated version of our strategy, titled ‘Fast forward / Reinforcing impact’, in which we set out even more ambitious strategic goals. The overall vision in the new strategy is to position AART as the leading Scandinavian advisor in impact-based architecture – and, moreover, as one of the leading independent architectural advisors in an industry marked by consolidation, not least in terms of international engineering companies’ acquisitions of architecture firms.
Our mission is to redefine architecture by influencing the worlds view upon the effects of architecture. We want to channel our clients’ visions of measurable and discernible architectural solutions and to move organisations and communities in a direction that is more enriching and sustainable. We do this by prioritising ‘impact’ before ‘form’ in our architectural approach. Thus, in our updated strategy our vision is to position AART as the leading Scandinavian advisor and a thought leader within impact-based architecture.
We believe that we have a solid foundation to further develop our business based on our updated strategy, offices in Aarhus, Copenhagen, Roskilde, Frederikssund, Oslo and Stockholm, more than three million square metres under development, and a full range of architectural services. Furthermore, in addition to building design we have launched new areas of architectural expertise within planning, landscape architecture and strategic space-planning.
Development in activities and financesOverall, we have maintained a strong financial position with a revenue of just over 239 million, corresponding to an increase of approx. 60% compared to last year, and at the same time we have delivered a satisfying result in the year despite the expenses incurred related to relocation of offices and acquisition of Mangor & Nagel. Positive results have been delivered in all subsidiaries giving a result of 5,6 mDKK before tax for the group.
Intellectual capital resources
As one of the leading independent architectural advisors in Scandinavia, our most important asset is our employees who deliver on impact-based, architectural advisory every day. For this reason, we keep a sharp focus on monitoring, evaluating, and developing employee motivation and satisfaction. The same way as we measure the impact of architecture, we also measure the impact of our working environment through a holistic employee survey each quarter. Over time our ambition is to become the most meaningful architectural workplace in Scandinavia – and thus be able to retain and attract the brightest minds in the industry, thereby strengthening our intellectual capital resources. With respect to this goal, we have signed the Gender Diversity Pledge of the DI (The Confederation of Danish Industry), emphasising our commitment to improve gender diversity in the Danish labour market, giving talented people the best chance to fulfil their personal career ambitions, regardless of gender.
Another important asset is our specialist teams, which cover all branches of architecture including building typologies, building transformation, large-scale planning, space-planning, landscape architecture, sustainability, and architectural impact. In terms of architectural impact, we offer a unique value proposition, deeply rooted in our strategy and across our architectural services – and thus a distinctive capital resource in the industry. To achieve this impact-based value proposition, we have further developed and launched the EffektkompasTM as a strategic tool to navigate through all phases of a project – with the aim of translating our clients’ visions into architecture with measurable and discernible impact. With the EffektkompasTM, we thus help our clients to define an impact-based objective within their building project, to translate their objective into impactful architecture and, finally, to follow up after the commissioning of the building to document its social, economic and environmental impact in terms of the original vision.
To sum up, we have worked purposefully and persistently to translate our strategy into intellectual capital resources that support our independent and impact-based position in the Scandinavian architecture industry. With our employees, specialist teams and wide range of services deeply rooted in our impact-based strategy – exemplified by the EffektkompasTM – we have grown our intellectual capital resources so that we stand out more than ever before in the industry.
Research and development activities
In the last year, we have strengthened our research and development activities. As the first architecture firm in Scandinavia, we established an impact-team in 2018 leading to new appointments as well as new strategic, research-based partnerships. Today we are collaborating with universities in Aalborg, Aarhus and Copenhagen to increase our knowledge of how architecture can create sustainable impact – in the broadest sense of the term.
Heading up the business PhD project ‘Catalyst’, we are exploring how architecture can become a catalyst for social and socio-economic value creation. The project is a collaboration with the Design and Media Technology Department of AAU and the UCPH Department of Food and Resource Economics. Heading a second business PhD project, ‘Social Commissioning’, we are exploring ways of strengthening the social lifecycle of buildings by focusing on the continuous interaction between people and buildings. This project is being carried out in collaboration with AU ENG and BUILD. Finally, we have recently finished a third business PhD project, ‘Revalue’, exploring the social impact of the energy renovation of buildings. This project is a collaboration with Aarhus University and includes leading players from the building industry. There are strong synergies between all three PhD projects, which will support AART as a key player in creating and documenting the impact of architecture from social, economic, and environmental perspectives.
Particular risks
During the last three years we have seen the unpredictable nature of major world crises – COVID-19, the war in Ukraine, the energy crisis, inflation, and the continued high construction costs.
The nature of the crises and the market consequences thereof are still considered to be a significant risk for the coming financial year, as we have seen how quickly the market reacts, to both negative and positive news. In addition, we notice a general increased level of conflict between the parties in the construction industry and, as a result, more cases with legal repercussions. The supply of competent labor has improved slightly, which may make it easier to fill positions in the future. We continue to carry out thorough risk assessments to be as prepared as possible.
Profit/loss for the year in relation to expected developmentsGoing into the fiscal year we expected a result in level with last year. However, the market situation and the acquisition of Mangor & Nagel fundamentally changed the prerequisites of the expectations for the year, and thus we are satisfied with the result of 5,6 mDKK before tax. OutlookWe look into next year with some excitement, where we expect greater uncertainty in a number of segments and markets in Scandinavia. Our position with an even stronger portfolio, several local offices in all three countries and broad competences within several professional areas and segments, gives us the best starting point to further improve our position during the year. We are ready to meet the demands within private and public construction in the Scandinavian welfare societies.
During the year, we will present a new edition of 'Redefining ArchitectureTM', which will unfold the possibilities of the strengthened and larger company.
We will continuously concentrate on upholding our independent position in the industry as well as positioning ourselves as the leading Scandinavian advisor and thought leader within impact-based architecture. Furthermore, we will concentrate on being perceived as the most desirable architectural workplace in Scandinavia. Events after the balance sheet dateNo events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report. 23921606814697044477333226432303901121776122425161882842103740054-1121776-122425149889902913079963500003125004619495311434473734459317714-1471776-43492541202519432121504802365741046498556874563499092754612669000662728521813322032770-158406-218000345365872426915774062250000282740662625222500000577406684528562625239740628274066845285-571251462899202250000225000005774066845285269262747145853269262747145853609514436588103808053592256475949401803512452671288233234940015253912791510387381828136246292803740487917372760411397751262928037404879176436468347019321193633555120779154702519761185310669680652664496991091971869574263101344522827484699495314336731433673567403801102698966822588599831344522838510136242863728374956427255941326427500000500000500000500000263615532668191316336025104961052250000022500000291115532718191321988748344723131042728016385500000266819130271819138344725000002636155322500002911155321988742801638529111553271819135000001618580810496105027181913500000100255281633602522500001632796465258095000000168279646525809183250000183250000034633261832500034633261832500003675000036750000559755520999015502110033195608821559019660025103736933096912000111040207202471083307298627282127507451239734125697794723483197516836006141445148810447238295301351610061414451413624286372837495642725594132642700011092681109268000-325512-325512-450000-4500000-450000-450000-4500000-4477660-447766-45606-4933720-44776600-44776646194953114344-446543-11283675115463971148383412025194321-2150480-236574-1456823-36462828351119-2540152-3756368-3080005789612774286Acquisition of new companies etc.-25452250-5511981-23057192839138-48458710425703-450000-1800000MinoritiesRepayments of short-term bank loans-325512163973497654209990127221427420015561280-41038700-136495699495314336731 Staff costs2021/22
DKK2020/21
DKKWages and salaries126,048,53975,364,676Pension costs13,501,6868,965,482Other social security costs6,343,0444,721,722Other staff costs3,996,6332,256,116149,889,90291,307,996Average number of full-time employees213130Remuneration
of manage- ment
2021/22
DKKRemuneration
of manage- ment
2020/21
DKKExecutive Board2,541,4632,410,756Board of Directors350,000312,5002,891,4632,723,2561 Staff costs2021/22
DKK2020/21
DKKWages and salaries350,000312,500350,000312,500Average number of full-time employees0021313000Remuneration
of manage- ment
2021/22
DKKRemuneration
of manage- ment
2020/21
DKKExecutive Board2,541,4632,410,756Board of Directors350,000312,5002,891,4632,723,256254146324107563500003125002 Depreciation, amortisation and impairment losses2021/22
DKK2020/21
DKKAmortisation of intangible assets2,037,3671,128,293Depreciation on property, plant and equipment2,582,1281,986,0514,619,4953,114,3443 Tax on profit/loss for the year2021/22
DKK2020/21
DKKCurrent tax755,2751,278,671Change in deferred tax1,301,463754,099Adjustment concerning previous years124,59402,181,3322,032,7703 Tax on profit/loss for the year2021/22
DKK2020/21
DKKChange in deferred tax(283,000)(218,000)Adjustment concerning previous years124,5940(158,406)(218,000)4 Proposed distribution of profit/loss2021/22
DKK2020/21
DKKOrdinary dividend for the financial year2,250,0000Retained earnings577,4066,845,285Minority interests' share of profit/loss626,252397,4063,453,6587,242,6914 Proposed distribution of profit and loss2021/22
DKK2020/21
DKKOrdinary dividend for the financial year2,250,0000Retained earnings577,4066,845,2852,827,4066,845,2855 Intangible assetsGoodwill
DKKCost beginning of year12,014,834Additions21,817,789Cost end of year33,832,623Amortisation and impairment losses beginning of year(4,868,982)Amortisation for the year(2,037,367)Amortisation and impairment losses end of year(6,906,349)Carrying amount end of year26,926,274Goodwill
DKKCost beginning of year12,014,834Additions21,817,789Cost end of year33,832,623Amortisation and impairment losses beginning of year(4,868,982)Amortisation for the year(2,037,367)Amortisation and impairment losses end of year(6,906,349)Carrying amount end of year26,926,2746 Property, plant and equipmentOther fixtures and fittings, tools and equipment
DKKLeasehold improvements
DKKCost beginning of year8,465,7401,117,305Addition through business combinations etc1,757,600315,685Additions3,658,94997,420Disposals(714,267)(75,345)Cost end of year13,168,0221,455,065Depreciation and impairment losses beginning of year(4,806,930)(758,080)Depreciation for the year(2,265,948)(316,180)Depreciation and impairment losses end of year(7,072,878)(1,074,260)Carrying amount end of year6,095,144380,8057 Financial assetsOther investments
DKKDeposits
DKKOther receivables
DKKCost beginning of year170,0001,525,3910Addition through business combinations etc0692,4540Additions0131,555279,151Cost end of year170,0002,349,400279,151Revaluations beginning of year1,118,23300Impairment losses for the year(42,966)00Revaluations end of year1,075,26700Carrying amount end of year1,245,2672,349,400279,1515 Financial assetsInvestments in group enterprises
DKKCost beginning of year24,302,109Addition through business combinations etc28,600,400Cost end of year52,902,509Revaluations beginning of year16,185,808Exchange rate adjustments(447,766)Amortisation of goodwill(2,037,367)Share of profit/loss for the year7,224,641Dividend(10,899,788)Revaluations end of year10,025,528Carrying amount end of year62,928,037The carrying amount of the group goodwill is DKK 26,926 k (2021: DKK 7,146 k).
A specification of investments in subsidiaries is evident from the notes to the consolidated financial statements.8 Contract work in progress2021/22
DKK2020/21
DKKContract work in progress258,693,649136,315,169Progress billings(248,151,853)(131,194,390)Transferred to liabilities other than provisions8,821,559019,363,3555,120,7799 PrepaymentsCosts incurred relating to the subsequent financial year. 7 PrepaymentsCosts incurred relating to the subsequent financial year.10 Deferred tax2021/22
DKK2020/21
DKKProperty, plant and equipment(462,274)(365,000)Receivables22,742,3899,887,809Tax losses carried forward(5,952,151)(2,997,000)Deferred tax16,327,9646,525,809
Changes during the year2021/22
DKK2020/21
DKKBeginning of year6,525,8095,777,354Recognised in the income statement1,301,463748,455Addition through business combinations etc8,494,9350Exchange rate adjustments5,7570End of year16,327,9646,525,80910 Deferred tax11 Other provisions The company is part in individual cases which have not yet been completed.12 Non-current liabilities other than provisionsDue within 12
months
2021/22
DKKDue after
more than 12
months
2021/22
DKKBank loans3,675,00018,325,0003,675,00018,325,000Due after 5 years: 0 DKK8 Non-current liabilities other than provisionsDue within 12
months
2021/22
DKKDue after
more than 12
months
2021/22
DKKBank loans3,675,00018,325,0003,675,00018,325,000Due after 5 years: 0 DKK13 Changes in working capital2021/22
DKK2020/21
DKKIncrease/decrease in inventories8,8960Increase/decrease in receivables6,636,780(14,007,044)Increase/decrease in trade payables etc.(7,092,219)2,723,369(446,543)(11,283,675)14 Unrecognised rental and lease commitments2021/22
DKK2020/21
DKKTotal liabilities under rental or lease agreements until maturity 29,476,77527,693,84615 Assets charged and collateralBank loans are secured by way of a deposited mortgage deed registered to the mortgagor on plant of DKK
15,000k nominal (2021: DKK 10,000k)
The carrying amount of mortgaged properties is DKK 26.458 k (2021: 32.398 k).10 Assets charged and collateralInvestments in the one group enterprise is provided as security for the Parent’s bank debt.
The carrying amount of investments in group enterprise is DKK 10.026 k (2021: DKK 16,185k)
Guarantees are provided for the debt in AART Architects AB and AART Architects NO AS.16 Non-arm’s length related party transactionsTransactions with related parties are only disclosed in the annual report if they are not on arm’s length terms.
Transactions between AART Architects A/S and related parties are on arm’s length terms.11 Non-arm’s length related party transactionsTransactions with related parties are only disclosed in the annual report if they are not on arm’s length terms.
Transactions between AART Architects A/S and related parties are on arm’s length terms.17 SubsidiariesRegistered inCorporate
formOwnership
%AART Architects DK A/SAarhusA/S100.00AART Architects ABSwedenAB76.00AART Architects NO ASNorwayAS100.00AART Designers ApSAarhusApS75.00Mangor & Nagel A/SFrederikssundA/S90.005187274761908462928037404879178880006050004310002224841002552816185808600512814098389111040202 Other financial expenses2021/22
DKK2020/21
DKKFinancial expenses from group enterprises388,927556,663Other interest expenses651,264211Exchange rate adjustments6,30701,046,498556,874<br />2021/22
DKK2020/21
DKKFinancial expenses from group enterprises388,927556,663Other interest expenses651,264211Exchange rate adjustments6,30701,046,498556,8746 Deferred tax
Changes during the year2021/22
DKK2020/21
DKKBeginning of year605,000387,000Recognised in the income statement283,000218,000End of year888,000605,000Deferred tax assets Deferred tax relates to liabilities other than provisions and tax losses carried forward.9 Contingent liabilitiesThe Entity participates in a Danish joint taxation arrangement with AART Architects A/S serving as the administration
company and therefore jointly and severally liable with its jointly taxed companies for the total
income tax from the finansial year 2012 and from 1 July 2012 also for obligations, if any, to with-hold tax in
interest, royalities and dividends for the jointly taxed companies. The total net liability to SKAT appears from
the finansiel statements of AART Architects A/S.This annual report has been prepared in accordance with the provisions of the Danish Financial Statements Act
governing reporting class C enterprises (medium).The accounting policies applied to these consolidated financial statements and parent financial statements are consistent with those applied last year.falseRecognition 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.
<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.
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.
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 classified
directly as equity.
Exchange adjustments of outstanding accounts with independent foreign subsidiaries, which are considered
part of the total investment in the subsidiary in question, are classified directly as 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.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.
Contract work in progress is included in revenue based on the stage of completion so that revenue corresponds
to the selling price of the work performed in the financial year (the percentage-of-completion
method).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 salaries and wages as well as 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, as well as gains and
losses from the sale of intangible assets as well as property, plant and equipment.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 internal profits or losses.Other financial incomeOther financial income comprises interest income on receivables from group enterprises, exchange gains on securities, payables
and tax relief under the Danish
Tax Prepayment Scheme etc.Other financial expensesOther financial expenses comprise interest expenses on payables to group enterprises,
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 subsidiaries. Current Danish income tax is allocated among
the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax
losses).GoodwillGoodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions.
Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience
gained by Management for each business area. For other amounts of goodwill, useful life has been determined
based on an assessment of whether the enterprises are strategically acquired enterprises with a strong market
position and a long-term earnings profile and whether the amount of goodwill includes intangible resources
of a temporary nature that cannot be separated and recognised as separate assets. Useful lives are
reassessed annually. The amortisation periods used are 10 years.
Goodwill is 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.
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
YearsOther fixtures and fittings, tools and equipment3-5 yearsLeasehold improvements5-10 yearsEstimated 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 enterprisesIn the parent financial statements, investments in group enterprises are recognised and measured according
to the equity method. This means that investments are measured at the pro rata share of the enterprises'
equity value plus unamortised goodwill and plus or minus unrealised intra-group profits and losses.
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 under equity.
Goodwill is the positive difference between cost and fair value of assets and liabilities arising from acquisitions.
Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience
gained by Management for each business area. Useful life has been determined based on an assessment of
whether the enterprises are strategically acquired enterprises with a strong market position and a long-term
earnings profile and whether the amount of goodwill includes intangible resources of a temporary nature that
cannot be separated and recognised as separate assets. Useful lives are reassessed annually. The amortisation
periods used are 10 years.
Investments in group enterprises are written down to the lower of recoverable amount and carrying amount.ReceivablesReceivables are measured at amortised cost, usually equalling nominal value, less writedowns for bad and
doubtful debts.Other investmentsOther investments comprise listed securities which are measured at fair value (market price) at the balance
sheet date and unlisted investments measured at the lower of cost and net realisable value.Contract work in progressContract work in progress is measured at the selling price of the work carried out at the balance sheet date.
The selling price is measured based on the stage of completion and the total estimated income from the
individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total
budgeted consumption of resources.
If the selling price of a project in progress cannot be made up reliably, it is measured at the lower of costs
incurred and net realisable value.
Each contract in progress is recognised in the balance sheet under receivables or liabilities other than provisions,
depending on whether the net value, calculated as the selling price less prepayments received, is
positive or negative.
Costs of sales work and of securing contracts as well as financecosts are recognised in the income statement
as incurred.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.
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 loss on contract work in progress, decided and published restructuring, etc.
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.
Once it is probable that total costs will exceed total income from a contract in progress, provision is made
for the total loss estimated to result from the relevant contract.Operating leasesLease payments on operating leases are recognised on a straight-line basis in the income statement over
the
term of the lease.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.Cash flow statementThe cash flow statement shows cash flows from operating, investing and financing activities as well as 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 income taxes paid.
Cash flows from investing activities comprise purchase, development and sale etc of property, plant and equipment.
Cash flows from financing activities comprise changes in the related costs as well as the instalments on interest-bearing
debt, deposits on sales of minorities, and payment of dividend.
Cash and cash equivalents comprise cash less short-term bank loans.The cash flow statement shows cash flows from operating, investing and financing activities as well as 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 income taxes paid.
Cash flows from investing activities comprise purchase, development and sale etc of property, plant and equipment.
Cash flows from financing activities comprise changes in the related costs as well as the instalments on interest-bearing
debt, deposits on sales of minorities, and payment of dividend.
Cash and cash equivalents comprise cash less short-term bank loans.2023-01-31Rune Haack Quist Hove