xbrli:pureiso4217:DKK192287462016-01-012016-12-31192287462016-01-012016-12-311192287462016-01-012016-12-311192287462016-01-012016-12-312192287462016-01-012016-12-311192287462016-01-012016-12-312192287462016-01-012016-12-313192287462016-01-012016-12-314192287462016-01-012016-12-315192287462016-01-012016-12-316192287462016-01-012016-12-31cmn:PreviousYearMember192287462016-01-012016-12-31cmn:TwoYearsAgoMember192287462016-01-012016-12-31cmn:ThreeYearsAgoMember192287462016-01-012016-12-31cmn:FourYearsAgoMember192287462015-01-012015-12-31192287462016-01-012016-12-31196192287462016-01-012016-12-31cmn:PreviousYearMember196192287462016-01-012016-12-31cmn:TwoYearsAgoMember196192287462016-01-012016-12-31cmn:ThreeYearsAgoMember196192287462016-01-012016-12-31cmn:FourYearsAgoMember196192287462016-01-012016-12-31176192287462016-01-012016-12-31cmn:PreviousYearMember176192287462016-01-012016-12-31cmn:TwoYearsAgoMember176192287462016-01-012016-12-31cmn:ThreeYearsAgoMember176192287462016-01-012016-12-31cmn:FourYearsAgoMember176192287462016-01-012016-12-31177192287462016-01-012016-12-31cmn:PreviousYearMember177192287462016-01-012016-12-31cmn:TwoYearsAgoMember177192287462016-01-012016-12-31cmn:ThreeYearsAgoMember177192287462016-01-012016-12-31cmn:FourYearsAgoMember177192287462016-01-012016-12-31178192287462016-01-012016-12-31cmn:PreviousYearMember178192287462016-01-012016-12-31cmn:TwoYearsAgoMember178192287462016-01-012016-12-31cmn:ThreeYearsAgoMember178192287462016-01-012016-12-31cmn:FourYearsAgoMember178192287462016-01-012016-12-31174192287462016-01-012016-12-31cmn:PreviousYearMember174192287462016-01-012016-12-31cmn:TwoYearsAgoMember174192287462016-01-012016-12-31cmn:ThreeYearsAgoMember174192287462016-01-012016-12-31cmn:FourYearsAgoMember174192287462016-01-012016-12-31175192287462016-01-012016-12-31cmn:PreviousYearMember175192287462016-01-012016-12-31cmn:TwoYearsAgoMember175192287462016-01-012016-12-31cmn:ThreeYearsAgoMember175192287462016-01-012016-12-31cmn:FourYearsAgoMember175192287462016-01-012016-12-31fsa:RetainedEarningsMember192287462015-01-012015-12-31fsa:RetainedEarningsMember192287462015-01-012015-12-31fsa:ContributedCapitalMember192287462015-01-012015-12-31fsa:RetainedEarningsMember192287462015-01-012015-12-31fsa:ProposedDividendRecognisedInEquityMember192287462016-01-012016-12-31fsa:RetainedEarningsMember192287462016-01-012016-12-31fsa:ProposedDividendRecognisedInEquityMember192287462016-12-31192287462016-12-31cmn:PreviousYearMember192287462016-12-31cmn:TwoYearsAgoMember192287462016-12-31cmn:ThreeYearsAgoMember192287462016-12-31cmn:FourYearsAgoMember192287462015-12-31192287462015-01-01fsa:ContributedCapitalMember192287462015-01-01fsa:RetainedEarningsMember192287462015-01-01fsa:ProposedDividendRecognisedInEquityMember192287462015-01-01192287462015-12-31fsa:ContributedCapitalMember192287462015-12-31fsa:RetainedEarningsMember192287462015-12-31fsa:ProposedDividendRecognisedInEquityMember192287462016-01-01fsa:ContributedCapitalMember192287462016-01-01fsa:RetainedEarningsMember192287462016-01-01fsa:ProposedDividendRecognisedInEquityMember192287462016-01-01192287462016-12-31fsa:ContributedCapitalMember192287462016-12-31fsa:RetainedEarningsMember192287462016-12-31fsa:ProposedDividendRecognisedInEquityMemberAnnual reportAuditor's report on audited financial statementstruefalsetruetruetruetrue2016-01-012016-12-312015-01-012015-12-312017-03-222017-03-222017-03-22Ballerup2017-03-22CopenhagenNiels JacobsenAnders Vad DonsState Authorised Public Accountant33963556DeloitteWeidekampsgade62300København SDanmarkDK+453610203033963556DeloitteWeidekampsgade 62300 København SReporting class C, large enterprisefalse19228746Sennheiser Communications A/SIndustriparken27DK-2750BallerupDanmarkDK+4556180000+4556180099www.sennheisercommunications.comJeppe Johan Dalberg-LarsenAndreas BachCEOCEOAndreas SennheiserNiels JacobsenPeter ClaussenDaniel SennheiserArne Boye NielsenSøren NielsenChairmanThe Board of Directors and Executive Board have today considered and approved the annual report of Sennheiser Communications A/S for the financial year 1 January to 31 December 2016. The annual report is presented in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the Company's financial position at 31 December 2016 and results as well as its cash flow for the financial year 1 January to December 31 2016. 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.To the shareholders of Sennheiser Communications A/SWe have audited the financial statements of Sennheiser Communications A/S for the financial year 01.01.2016 - 31.12.2016, which comprise the income statement, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant 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 Entity’s financial position at 31-12-2016 and of the results of its operations and cash flows for the financial year 01.01.2016 - 31.12.2016 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 financial statements section of this auditor’s report. We are independent of the Entity in accordance with the International Ethics Standards Board of 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 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 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 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 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 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 Entity’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 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 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 Entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures in the notes, 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 commentary. Our opinion on the 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 financial statements, our responsibility is to read the management commentary and, in doing so, consider whether the management commentary is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. 5 Moreover, it is our responsibility to consider whether the management commentary provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the management commentary is in accordance with the 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.Primary activities Sennheiser Communications A/S develops and sells lightweight headsets for telecommunication and multimedia use.Development in activities and finances Net Sales have increased 13% to DKK 749m in 2016 from DKK 665m in 2015. Management considers the development in earnings for 2016 to be satisfactory. Result for 2016 slightly better than expressed by the management in the 2015 Annual report due to higher than expected Net Sales.Particular risks There are no specific uncertainties or unusual circumstances with regard to the annual report for 2016, and the Company is not exposed to any special risks besides the normal risks of the business.Intellectual capital resources The Company’s continued competitive position is preconditioned by an extensive knowledge as well as a wide spectrum of competencies within the Company's areas of activity. The Company's products are manufactured in interaction with different experts, each with a thorough knowledge of their specific field and, at the same time, with an understanding of other fields and of the whole. Considerable resources are invested in communication and knowledge sharing, including with group enterprises, with the purpose of utilising competencies across the organisation. Development activities In 2016, the Company paid development costs in the amount of DKK 106.723 thousand compared to DKK 90.360 thousand in 2015.Corporate Social Responsibility With reference to the William Demant Holding A/S' statement for corporate social responsibility according to Danish Financial Statements Act section 99a sub-clause 6 UN Global Compact Progress Report 2016 Note: The report is located at http://www.demant.com/media/#media-documents under the Responsibility tab.Outlook The objective for 2017 is a continued investment in the business for future expansion of the Company’s activities with earnings short of 2016, due to continued investments.The annual report has been presented in accordance with the provisions of the Danish Financial Statements Act governing reporting class C enterprises (large). The accounting policies applied for this annual report are consistent with those applied last year.Recognition and measurement Assets 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 Company, and the value of the assets can be measured reliably. Liabilities are recognised in the balance sheet when the Company 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 Company, and the value of the liabilities 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. Foreign currency Foreign currency transactions are translated applying the exchange rate at the transaction date. Monetary items, e.g. receivables and payables denominated in foreign currencies, are translated into Danish kroner using the exchange rate at the balance sheet date. Both realised and unrealised exchange adjustments are recognised in the income statement under gross profit or as financial income or financial expenses. Property, plant and equipment, inventories and other non-monetary assets that have been purchased in foreign currencies are translated using historical rates.Revenue Revenue from the sale of manufactured goods and goods for resale is recognised in the income statement when delivery is made and risk has passed to the buyer. Revenue is recognised net of VAT, duties and sales discounts and is measured at fair value of the consideration fixed.Production costs Production costs comprises direct and indirect costs incurred to earn revenue, including cost of goods sold and depreciation on production tools.Development costs Development costs include costs of development projects that do not meet the criteria for recognition in the balance sheet, as well as amortisation of any recognised development projects. It is the Company's assessment that the product development taking place in the Company does not enable a meaningful segregation between development of new products and further development of existing products for which reason development costs are charged to the income statement.Distribution costs Distribution costs comprise costs incurred for staff training, customer support, sales, marketing, distribution as well as depreciation and amortisation.Administrative expenses Administrative expenses comprise expenses incurred for the administrative staff, including stationery and office supplies, IT as well as depreciation and amortisation.Financial income and expenses These items comprise interest income and expenses.Income taxes Tax 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 on equity by the portion attributable to entries directly on equity. Deferred tax is recognised on all temporary differences between the carrying amount and tax-based value of assets and liabilities, for which the tax-based value of assets is calculated based on the planned use of each asset. Deferred tax assets, including the tax base of tax loss carry forwards, 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.Property, plant and equipment Property, plant and equipment are measured at cost. 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.<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Accounting policies, continued</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>10</td></tr></table>Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The basis of depreciation is cost less estimated residual value after the end of useful life.<table class="richtext-table"><thead><tr><th><th><th><th><th><th></tr></thead><body><tr><td>Plant and machinery</td><td></td><td></td><td></td><td></td><td>3-5 years</td></tr><tr><td>Other fixtures and fittings, etc.</td><td></td><td></td><td></td><td></td><td>3-5 years</td></tr><tr><td>IT hardware and software</td><td></td><td></td><td></td><td></td><td>3 years</td></tr><tr><td>Leasehold improvements</td><td></td><td></td><td></td><td></td><td>5 years</td></tr></table>Property, plant and equipment are written down to the lower of the recoverable amount and carrying amount. Scrap value is set to 0 for all tangible assets and is reassessed annually.Inventories Inventories are measured at the lower of cost using the FIFO method, and net realisable value. Obsolete and slow-moving items have been written down to net realisable value. The net realisable value of inventories is calculated as the estimated selling price less completion costs and costs incurred to execute sale.Receivables Receivables are measured at amortised cost, usually corresponding to nominal value less provisions for expected losses.Prepayments Prepayments comprise incurred costs relating to subsequent financial year. Prepayments are measured at cost.Cash Cash compresses cash in hand and bank depositsDividend Dividend is recognized as a liability at the time of adoption at the general meeting. The proposed dividend for the financial year is disclosed as a separate item in equity.Provision for guarantee commitments Provision for guarantee commitments comprises commitments to remedy defects and deficiencies within the guarantee period. Provision for guarantee commitments are recognised and measured at nominal value based on previous years’ experience.Liabilities Other liabilities are measured at amortised cost which usually corresponds to nominal value.Cash flow statement The cash flow statement is presented using the indirect method and shows cash flows from operating, investing and financing activities as well as the Company’s cash and cash equivalents at the beginning and the end of the financial year. Cash flows from operating activities are 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 payments in connection with acquisition, development, improvement and sale, etc. of intangible assets and property, plant and equipment. Cash flows from financing activities comprise changes in the size or composition of the Company’s share capital and related costs as well as the raising of loans. Cash and cash equivalents comprise cash less short-term bank debt.Financial highlights Financial highlights are defined and calculated in accordance with "Recommendations & Ratios 2010" issued by the Danish Society of Financial Analysts. Return on assets: Operating profit/loss x 100 Average operating assets Return on equity Net profit/loss for the year x 100 Average equity Working capital ratio Current assets x 100 Short-term liabilities Equity ratio Equity x 100 Balance sheet total Operating assets are defined as the balance sheet total minus cash and interest-bearing assets (including shares).749231000665035000572768000495772000359188000665035000Production costsProduction costsProduction costsProduction costsProduction costsInventoriesInventoriesInventoriesInventoriesInventoriesTrade receivablesTrade receivablesTrade receivablesTrade receivablesTrade receivablesOperating assetsOperating assetsOperating assetsOperating assetsOperating assetsReturn on assetsReturn on assetsReturn on assetsReturn on assetsReturn on assetsWorking capital ratioWorking capital ratioWorking capital ratioWorking capital ratioWorking capital ratio4289320003762560002940940002430500001820100004720100026269000269100009849000548150004970002520005490000148350002536550002030300001517670007270200011682000032029900028877900027867400025272200017717800028877900013211800012577100015398800013219600082834000125771000-318000-170000-98000-108000-550001027620009576700011658800099043000620480009576700057762000407670000807670001500000057762000450000001459970005823500012046800063880000648370005823500020000004680001180000001204680002000000412350001500000020000004123500015000000582350002000000989970004500000028282200021124400022326500012867800012310700021124400010733000707600076500001137800050330000.5790.7071.3671.3940.7872.0811.3282.1711.9162.0691.0061.0721.2651.5390.9020.5160.2760.5410.4960.527-428932000-37625600010672300090360000-68330000-58787000-13128000-1386100022000210003400001910001318000001256010002903800029834000450000001500000004000000024200002420000132550001015000026530002734000263200034060001854000016290000124000124000136600015220001490000164600020272000179360004970002520001450870001230170002501000036110000340420001987000151400018618200015882500029167000821400026255000019330800020000002000000989970004123500010644000742800010644000742800053580004155200085496000614700001016100012384000019770002516600028198000126181000145581000126181000145581000282822000211244000011800000011800000015000000150000004000000040000000842800082690003216000-1389000-20932000641000-24856000-533660001877100080720002200021000-340000-191000-33359000-2709100083068000607370003480000107330007076000160000163000-10921000-691300015000000158000000-15000000-15800000057147000-104176000-333380007083800023809000-33338000Net Sales<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Denmark</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>1.202</td><td></td><td>1.009</td></tr><tr><td>Germany</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>728.157</td><td></td><td>554.283</td></tr><tr><td>Other</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>19.872</td><td></td><td>109.743</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>749.231</td><td></td><td>665.035</td></tr></table>Staff costs<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Salaries and wages</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>100.689</td><td></td><td>84.232</td></tr><tr><td>Social security costs</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>1.950</td><td></td><td>1.519</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>102.639</td><td></td><td>85.751</td></tr></table><table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Total remuneration for Executive & Supervisory Boards</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>4.077</td><td></td><td>4.060</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average number of full-time employees</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>173</td><td></td><td>149</td></tr></table>Part of management remuneration is held in another group company Board of directions do not received any remunerationFees to Auditors<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Audit fees Deloitte</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>112</td><td></td><td>112</td></tr><tr><td>Tax Services Deloitte</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>7</td><td></td><td>7</td></tr><tr><td>Other fees Deloitte</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>79</td><td></td><td>30</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>198</td><td></td><td>149</td></tr></table>Tax on profit for the year<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Current tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>28.882</td><td></td><td>29.296</td></tr><tr><td>Change in deferred tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>156</td><td></td><td>432</td></tr><tr><td>Adjustment concerning previous years</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>0</td><td></td><td>106</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>29.038</td><td></td><td>29.834</td></tr></table><table class="richtext-table"><thead><tr><th><th><th><th><th></tr></thead><body><tr><td>Software</td><td></td><td>Intellectual Property rights</td><td></td><td>Total</td></tr><tr><td>DKK'000</td><td></td><td>DKK'000</td><td></td><td>DKK'000</td></tr></table>Intangible assets<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Cost at 1 January 2016</td><td></td><td></td><td></td><td></td><td></td><td>492</td><td></td><td>9.292</td><td></td><td>9.784</td></tr><tr><td>Reclassification</td><td></td><td></td><td></td><td></td><td></td><td>348</td><td></td><td></td><td></td><td>348</td></tr><tr><td>Cost at 31 December 2016</td><td></td><td></td><td></td><td></td><td></td><td>840</td><td></td><td>9.292</td><td></td><td>10.132</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Amortisation at 1 January 2016</td><td></td><td></td><td></td><td></td><td></td><td>492</td><td></td><td>9.292</td><td></td><td>9.784</td></tr><tr><td>Additions</td><td></td><td></td><td></td><td></td><td></td><td>106</td><td></td><td>0</td><td></td><td>106</td></tr><tr><td>Amortisation at 31 December 2016</td><td></td><td></td><td></td><td></td><td></td><td>598</td><td></td><td>9.292</td><td></td><td>9.890</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Carrying amount at 31 December 2016</td><td></td><td></td><td></td><td></td><td></td><td>242</td><td></td><td>0</td><td></td><td>242</td></tr></table><table class="richtext-table"><thead><tr><th><th><th><th><th><th><th></tr></thead><body><tr><td> Other fixtures, etc.</td><td></td><td> Leasehold improvements</td><td></td><td>Prepayments on property, plant and equipment</td><td></td><td> Total</td></tr><tr><td>DKK'000</td><td></td><td>DKK'000</td><td></td><td>DKK'000</td><td></td><td>DKK'000</td></tr></table>Property, plant and equipment<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Cost at 1 January 2016</td><td></td><td></td><td></td><td>69.690</td><td></td><td>3.774</td><td></td><td>3.406</td><td></td><td>76.870</td></tr><tr><td>Additions</td><td></td><td></td><td></td><td>3.214</td><td></td><td>469</td><td></td><td>7.398</td><td></td><td>11.081</td></tr><tr><td>Reclassification</td><td></td><td></td><td></td><td>7.824</td><td></td><td>0</td><td></td><td>-8.172</td><td></td><td>-348</td></tr><tr><td>Disposals</td><td></td><td></td><td></td><td>-372</td><td></td><td>0</td><td></td><td>0</td><td></td><td>-372</td></tr><tr><td>Cost at 31 December 2016</td><td></td><td></td><td></td><td>80.356</td><td></td><td>4.243</td><td></td><td>2.632</td><td></td><td>87.231</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation at 1 January 2016</td><td></td><td></td><td></td><td>59.540</td><td></td><td>1040</td><td></td><td>0</td><td></td><td>60.580</td></tr><tr><td>Additions</td><td></td><td></td><td></td><td>7.871</td><td></td><td>550</td><td></td><td>0</td><td></td><td>8.421</td></tr><tr><td>Disposals</td><td></td><td></td><td></td><td>-310</td><td></td><td>0</td><td></td><td>0</td><td></td><td>-310</td></tr><tr><td>Depreciation at 31 December 2016</td><td></td><td></td><td></td><td>67.101</td><td></td><td>1.590</td><td></td><td>0</td><td></td><td>68.691</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Carrying amount at 31 December 2016</td><td></td><td></td><td></td><td>13.255</td><td></td><td>2.653</td><td></td><td>2.632</td><td></td><td>18.540</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>Deposit</td><td></td><td>Total</td></tr><tr><td>DKK'000</td><td></td><td>DKK'000</td></tr></table>Other receivables<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Cost at 1 January 2016</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>124</td><td></td><td>124</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost at 31 December 2016</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>124</td><td></td><td>124</td></tr></table><table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>2016</td><td></td><td>2015</td></tr><tr><td>DKK'000</td><td></td><td>DKK'000</td></tr></table><table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Deferred tax assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Intangible assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>53</td><td></td><td>0</td></tr><tr><td>Tangible fixed assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-1.723</td><td></td><td>-1.695</td></tr><tr><td>Other current assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>436</td><td></td><td>459</td></tr><tr><td>Other short term liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-132</td><td></td><td>-286</td></tr><tr><td>Deferred tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-1.366</td><td></td><td>-1.522</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deferred tax - Opening balance</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-1.522</td><td></td><td>-2.241</td></tr><tr><td>Changes in deferred tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>156</td><td></td><td>248</td></tr><tr><td>Correction to prior years deferred tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>0</td><td></td><td>287</td></tr><tr><td>Change of local tax rate</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>0</td><td></td><td>184</td></tr><tr><td>Deferred tax - Closing balance</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-1.366</td><td></td><td>-1.522</td></tr></table>Prepayments Prepayments relates to insurance and licenses.Share capital The share capital consists of 2.000 shares at DKK 1.000. The shares have not been divided into classes. There have been no changes in the share capital in the past 5 financial years.Provision for guarantee commitments Liabilities in respect of guarantee commitments have been calculated based on information on products sold, related rights concerning returns and past experience of products returned in the various markets.<table class="richtext-table"><thead><tr><th><th><th></tr></thead><body><tr><td>2016</td><td></td><td>2015</td></tr><tr><td>DKK'000</td><td></td><td>DKK'000</td></tr></table>Contingent liabilities<table class="richtext-table"><thead><tr><th><th><th><th><th><th><th><th><th><th><th></tr></thead><body><tr><td>Rent and lease commitments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>34.821</td><td></td><td>21.354</td></tr></table>Events after the balance sheet date No events have occurred after the balance sheet date to this date which would influence the evaluation of this annual report.Related parties Related parties with interest are William Demants og Hustru Ida Emilies Fond, Smørum, Denmark and the principal shareholders William Demant Holding A/S, Smørum, Denmark and Sennheiser Global Operations GmbH, Wedemark, Germany. Apart from the employment, there have been no transactions with the Executive board and Board of Directors. Transactions with related parties are conducted on market terms.Ownership The company has registered the following shareholders to hold more than 5% of the voting share capital or of the nominal value of the share capital: • William Demant Holding A/S, Kongebakken 9, 2765 Smørum, Denmark • Sennheiser Global Operations GmbH, Am Labor 1, 30900 Wedemark, Germany Consolidation Sennheiser Communications A/S is included in the consolidated financial statements of William Demant Holding A/S and Sennheiser Global Operations GmbH.