Årsrapport33771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 Hellerup2016-02-012015-02-012017-01-312016-01-3121707007Sigma Designs Denmark ApSEmdrupvej28B2100København Ø1999-05-11KøbenhavnPricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab33771231Strandvejen442900HellerupDanmark2017-06-14Anders LavesenRegnskabsklasse B1RevisionspåtegningKøbenhavn2017-06-14Niels Thybo JohansenThinh Quy TranChairmanNiels Thybo JohansenElias Nadim NaderKøbenhavn2017-06-14København2017-06-14PricewaterhouseCoopersNiels Henrik B. MikkelsenState Authorised Public AccountantJames LiangState Authorised Public Accountant1999400017359000146240001276300043970003308000973000128800040200038000070004300013680001625000001368000162500013680001625000790000880000286000200000107600010800006970001172000697000117200017730002252000149970001296400058600042600052700040700016110000137970002364000245200018474000162490002024700018501000339000033900003390000339000013257000118890001664700015279000390000529000440000215000277000024780003600000322200036000003222000202470001850100033900001188900013680003390000132570001293500010736000219000245000131540001098100011939100037900001000110000700060000150000220007000430001317000214000182000150000-95000-700014040003570004370001400026300057000-86000061400071000790000286000The Executive and Supervisory Boards have today considered and adopted the Annual Report of Sigma Designs Denmark ApS for the financial year 1 February 2016 - 31 January 2017.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 at 31 January 2017 of the Company and of the results of the Company operations for 2016/17.In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review.We recommend that the Annual Report be adopted at the Annual General Meeting.To the Shareholder of Sigma Designs Denmark ApSIn our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 January 2017 and of the results of the Company operations for the financial year 1 February 2016 - 31 January 2017 in accordance with the Danish Financial Statements Act. We have audited the Financial Statements of Sigma Designs Denmark ApS for the financial year 1 February 2016 - 31 January 2017, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies (”financial statements”). 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 are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management is responsible for Management’s Review. Our opinion on the financial statements does not cover 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 Management’s Review and, in doing so, consider whether 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 Management’s Review provides the information required under the Danish Financials Statements Act. Based on the work we have performed, in our view, 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 in Management’s Review. 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 about 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 these financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism 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 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. Main activity Sigma Designs Denmark ApS is a Danish-American company which is active in the home control and energy management market. The Company is supporting the sales and marketing activities for a Z-Wave TM Technology which is developed by its sister company – Sigma Designs Technology Denmark ApS. The Z-Wave TM technology enables low cost, highly reliable wireless communication between devices such as power outlets, light switches, sensors and alarms, thermostats, AV equipment (TV, Radio, etc), door locks and other similar devices on a layered and interoperable platform. The Z-Wave TM Technology provides system integrators access to over 1700 products complying with the same standard and with guaranteed interoperability which we believe creates an attractive ecosystem. This makes the Z-Wave TM Technology unique in the home control and energy management market, and a prime candidate to be selected by new service providers entering this emerging space. Because the International Telecommunication Union, or ITU, has developed a new sub 1GHz narrow band wireless standard which is largely based on Z-Wave TM Technology and defines backwards compatibility to the Z-Wave TM standard, and because of the large ecosystem of products based on the Z-Wave TM standard, we believe the Z-Wave TM products will be one of the preferred solutions for telecommunication and multi-service operators. The Company has established strong customer relationships worldwide with many OEM and ODM which develop Z-Wave TM based products such as power outlets and switches, temperature control devices, garage door openers, RF remote controls and residential gateways. The Company also works closely with telecommunications carriers to understand their needs in advance of its customer’s product development cycle. We intend to leverage our existing position with our partners and customers to identify and secure new market opportunities. Currently, the Company does not sell products directly to customers, but provides Sales and Customer Support Services for its holding company - Sigma Designs Technology Singapore Pte Ltd. The holding company will reimburse the Company for the operation expenses incurred at a cost plus 5% basis. Development in the year The income statement of the Company for 2016/17 shows a profit of TDKK 1,368, and at 31 January 2017 the balance sheet of the Company shows equity of TDKK 16,647. Subsequent events No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date.Contingent liabilities The Danish group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Company’s liability. The Company has lease commitments regarding the Company's former premises in Copenhagen of DKK 253k as of 31 January 2017 (31 January 2016: DKK 1,263k). The lease contract is irrevocable until April 30 2017. The Company has lease commitments regarding the Company's present premises of DKK 5.4 mio. (31 January 2016: DKK 6.8) As of 31 January 2017, the company has an unrecognized tax asset of DKK 18.5 mio. (31 January 2016: DKK 18.7 mio.)Basis Controlling interest Sigma Designs Technology Singapore PTE. LTD. Main owner Ownership The following shareholder is recorded in the Company's register of shareholders as holding at least 5% of the votes or at least 5% of the share capital: Sigma Design Technology Singapore PTE. LTD. No.8 Marina Boulevard, #05-02, Marina Bay Financial Centre, Tower 1, Singapore 018981. The Company's ultimative parent company is Sigma Designs Inc. The consolidated financial statements of Sigma Designs Inc can be obtained at Sigma Designs Inc, 47467 Fremont Boulevard, Fremont, CA 94538.The Annual Report of Sigma Designs Denmark ApS for 2016/17 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to enterprises of reporting class B as well as selected rules applying to reporting class C. The accounting policies applied remain unchanged from last year. Financial Statements for 2016/17 are presented in TDKK.Revenues are recognised in the income statement as earned. Furthermore, value adjustments of financial assets and liabilities measured at fair value or amortised cost are recognised. Moreover, all expenses incurred to achieve the earnings for the year are recognised in the income statement,including depreciation, amortisation, impairment losses and provisions as well as reversals due to charged accounting estimates of amounts that have previosly been recognised in the oncome statement. Assets are recognised in the balance sheet when it is probable that future economic benefits attributable to the asset will flow to the Company, and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow out of the Company, and the value of the liability can be measured reliably. Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Recognition and measurement take into account predictable losses and risks occurring before the presentation of the Annual Report which confirm or invalidate affairs and conditions existing at the balance sheet date.Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the rates at the time when the receivable or the debt arose are recognised in financial income and expenses in the income statement. Fixed assets acquired in foreign currencies are measured at the transaction date rates.With reference to section 32 of the Danish Financial Statements Act, revenue has not been disclosed in the Annual Report.Revenue regards commission income. Income in the form of commission is recognized in net sales when costs from which commission is received are incurred.Distribution expenses comprise expenses such as salaries to sales and distribution staff, advertising and marketing expenses, expenses for operating vehicles, amortisation and depreciation, etc.Administrative expenses comprise expenses for Management, administrative staff, office expenses, amortisation and depreciation, etc.Financial income and expenses comprise interest, financial expenses in respect of finance leases, realised and unrealised exchange adjustments, price adjustment of securities as well as extra payments and repayment under the on-account taxation scheme.Tax for the year consists of current tax for the year and changes in deferred tax for the year. The tax attributable to the profit for the year is recognised in the income statement, whereas the tax attributable to equity transactions is recognised directly in equity.Property, plant and equipment are measured at cost less accumulated depreciation and less any accumulated impairment losses. Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the asset is ready for use. Depreciation based on cost reduced by any residual value is calculated on a straight-line basis over the expected useful lives of the assets, which are: Other fixtures and fittings, tools and equipment 3-5 years Leasehold improvements 3-5 years Depreciation period and residual value are reassessed annually. Assets costing less than DKK 7,000 are expensed in the year of acquisition.The carrying amounts of intangible assets and property, plant and equipment are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation. If so, the asset is written down to its lower recoverable amount.Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which corresponds to nominal value less provisions for bad debts. Provisions for bad debts are determined on the basis of an individual assessment of each receivable, and in respect of trade receivables, a general provision is also made based on the Company’s experience from previous years.Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest.Deferred income tax is measured using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes on the basis of the intended use of the asset and settlement of the liability, respectively. Deferred tax assets, including the tax base of tax loss carry-forwards, are measured at the value at which the asset is expected to be realised, either by elimination in tax on future earnings or by set-off against deferred tax liabilities within the same legal tax entity. Deferred tax is measured on the basis of the tax rules and tax rates that will be effective under the legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. Any changes in deferred tax due to changes to tax rates are recognised in the income statement.Other debts are measured at amortised cost, substantially corresponding to nominal value.217070072016-02-01e:ContributedCapitalMember217070072017-01-31e:ContributedCapitalMember217070072016-02-01e:RetainedEarningsMember217070072016-02-012017-01-31e:RetainedEarningsMember217070072017-01-31e:RetainedEarningsMember217070072016-02-012017-01-31217070072016-02-012017-01-311217070072016-02-012017-01-312217070072016-02-012017-01-313217070072016-02-012017-01-311217070072015-02-012016-01-31217070072016-01-31217070072017-01-31217070072016-02-012017-01-31e:RetainedEarningsMember217070072015-02-012016-01-31e:RetainedEarningsMember217070072016-02-01e:FixturesFittingsToolsAndEquipmentMember217070072016-02-012017-01-31e:FixturesFittingsToolsAndEquipmentMember217070072017-01-31e:FixturesFittingsToolsAndEquipmentMember217070072016-02-01e:LeaseholdImprovementsMember217070072016-02-012017-01-31e:LeaseholdImprovementsMember217070072017-01-31e:LeaseholdImprovementsMember217070072016-02-012017-01-311217070072016-02-012017-01-312iso4217:DKKxbrli:pure