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pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2022-01-01 2021-01-01 2022-12-31 2021-12-31 39143127 Sparrows Denmark ApS Farvervej 1 7600 Struer Struer mail@alphaoffshore.dk PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Hjaltesvej 16 7500 Holstebro Denmark 96 11 18 00 holstebro@pwc.dk 2023-05-16 Mikkel Jensby Lund Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning The Executive Board and Board of Directors have today considered and adopted the Consolidated Financial Statements and Parent Company Financial Statements of Sparrows Denmark ApS for the financial year 1 January - 31 December 2022. The Annual Report is prepared in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements and the Consolidated Financial Statements give a true and fair view of the financial position at 31 December 2022 of the Company and the Group and of the results of the Company and Group operations and of consolidated cash flows for 2022. In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review. We recommend that the Consolidated Financial Statements and Parent Company Financial Statements be adopted at the Annual General Meeting. 2023-05-16 Struer Mikkel Jensby Lund Steward Andrew Allan Mitchell Chairman Charles Edward Topp Neil Austin Johnson Mikkel Jensby Lund To the shareholder of Sparrows Denmark ApS Opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2022 and of the results of the Group’s and the Parent Company’s operations and of consolidated cash flows for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of Sparrows Denmark ApS for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company, as well as consolidated statement of cash flows (”the Financial Statements”). Basis for Opinion 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 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 company 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 Group´s and the Parent 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 Group or the Parent 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 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 Group´s and the Parent 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 Group´s and the Parent 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 Group and the Parent 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. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 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 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 Financial Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Holstebro 2023-05-16 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Poul Spencer Poulsen State Authorised Public Accountant mne23324 Hans Jørgen Andersen State Authorised Public Accountant mne30211 4150000 3460000 -1325000 -1105000 1846000 1492000 7471000 16626000 38555000 42415000 254000 317000 6934000 2692000 -254000 -317000 -7725000 -2322000 192 167 6.2 12.2 10.8 8.2 6.4 5.0 19.4 39.2 26.3 38.4 15.3 9.4 Key activities The key activity of Sparrows Denmark ApS ("the Group") are the supply of engineering personnel and inspection services to the renewable and energy sector, primarily the provision of offshore and onshore wind turbine contract personnel and supervisors, wherever their experience and expertise are needed, anywhere in the world. Development in the year The income statement of the Group for 2022 shows a profit of TEUR 551, and at 31 December 2022 the balance sheet of the Group shows positive equity of TEUR 2,367. The past year and follow-up on development expectations from last year Revenue from core markets and key costumers remained stable and the result of the year is satisfied. Foreign exchange risks Exchange rate fluctuations are external factors that may occur at any time. The foreign exchange risk is mostsignificant in USD and GBP, while the EUR exchange rate risk is regarded as low due to Denmark’s fixed-ratepolicy vis-à-vis the euro. The cash flow and income statement would be negatively impacted if the local currency value in key salesregions depreciated against the Danish krone Targets and expectations for the year ahead The Board believes the Company is well positioned to capitalize on the growing onshore and offshoreRenewables and Energy markets and will continue to expand its service offerings to its existing customerbase, whilst also seeking to expand into new geographies and customers within the same Renewables andEnergy sector. Subsequent events No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. 19967000 21144000 -14000 -14000 15876000 14906000 0 0 1796000 1802000 0 0 2295000 4436000 -14000 -14000 0 0 40000 136000 1200000 1663000 1152000 1538000 1095000 2773000 -1126000 -1416000 544000 989000 -249000 -291000 551000 1784000 -877000 -1125000 0 3000000 4000000 0 -4877000 -4125000 1535000 1842000 0 0 18775000 20027000 0 0 20310000 21869000 0 0 575000 504000 0 0 5000 0 0 0 580000 504000 0 0 118000 76000 0 0 8507000 10477000 0 0 113000 196000 0 0 16190000 13972000 1627000 1579000 37080000 36345000 37362000 37314000 0 0 35735000 35735000 0 0 35735000 35735000 20890000 22373000 35735000 35735000 118000 76000 0 0 276000 1141000 0 0 323000 25000 1144000 802000 0 0 0 0 56000 0 483000 0 0 0 0 777000 29000 71000 0 0 9304000 11910000 1627000 1579000 6768000 1986000 0 0 13000 13000 13000 13000 4000000 0 4000000 0 102000 98000 0 0 102000 98000 0 0 32504000 16344000 32193000 16344000 0 14693000 0 14693000 32504000 31037000 32193000 31037000 37000 25000 0 0 51000 0 0 0 28000 484000 0 484000 0 0 253000 0 13000 13000 13000 13000 -1646000 1803000 889000 5766000 2367000 1816000 4902000 5779000 1235000 1515000 14000 14000 756000 1370000 0 0 2107000 3394000 267000 498000 34611000 34431000 32460000 31535000 37080000 36345000 37362000 37314000 13000 1803000 0 13000 5766000 0 0 -3449000 4000000 0 -4877000 4000000 13000 -1646000 4000000 13000 889000 4000000 551000 1784000 3540000 4403000 1726000 -2854000 5817000 3333000 1200000 73000 4617000 3260000 1052000 576000 3565000 2684000 313000 328000 -313000 -328000 -12000 6000 -16211000 0 14693000 0 0 178000 0 6000000 1530000 -5828000 4782000 -3472000 1986000 5458000 6768000 1986000 6768000 1986000 0 0 No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. 15427000 14481000 0 0 331000 295000 0 0 105000 117000 0 0 13000 13000 0 0 15876000 14906000 0 0 240 218 0 0 Remuneration to the Executive Board has not been disclosed in accordance with section 98 B(3) of the Danish Financial Statements Act. In addition to wages and salaries for the company's employees, wages and salaries also relates to settlementsfor hired contractors. Average number of employees include, in addition to the company's own employees,also the average number of hired contractors for the year. 1559000 1559000 0 0 237000 243000 0 0 0 0 40000 136000 1152000 778000 1152000 778000 0 678000 0 678000 16000 73000 0 0 32000 134000 0 82000 1200000 1663000 1152000 1538000 543000 969000 -249000 -291000 3000 20000 0 0 -2000 0 0 0 544000 989000 -249000 -291000 3070000 25136000 3070000 25136000 1228000 5109000 307000 1252000 1535000 6361000 1535000 18775000 1549000 0 308000 5000 1857000 5000 1045000 0 237000 0 1282000 0 575000 5000 3-10 years 8 years 35735000 35735000 35735000 35735000 ALPHA OFFSHORE SERVICE A/S Struer, Denmark 100 12890 2987 Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions and leases. Deferred tax liabilities at 1 January 98,000 88,000 Amounts recognised in the income statement for the year 19,000 20,000 Amounts recognised in equity for the year -15,000 -10,000 Deferred tax liabilities at 31 December 102,000 98,000 32193000 16344000 32193000 16344000 311000 0 0 0 51000 0 0 0 32555000 16344000 32193000 16344000 0 14693000 0 14693000 0 0 0 0 0 14693000 0 14693000 Payments due within 1 year are recognised in short-term debt. Other debt is recognised in long-term debt. The debt falls due for payment as specified below: 1200000 1663000 1796000 1802000 544000 989000 0 -51000 -42000 -34000 2662000 -2929000 -894000 109000 Charges and security The following assets have been placed as security with bankers: The company has signed a negative pledge clause. Rental and lease obligations Lease obligations under operating leases. Total future lease payments: Within 1 year 73,000 76,000 0 0 Between 1 and 5 years 27,000 104,000 0 0 100,000 180,000 0 0 Obligation for operating leases. Expected fair values at the expiry of contracts 13,000 13,000 0 0 Rental commitments, non- termination period of 3 months 12,000 12,000 0 0 Other contingent liabilities The Group is involved in various contractual relationships as a part of our ordinary course of business. Management is unable to predict the ultimate outcome of these because of their inherent uncertainty. However, management believes that the most probable, ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows. The group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. The total amount of corporation tax payable is disclosed in the Annual Report of Altrad Services A/S., which is the management company of the joint taxation purposes. Moreover, the group companies are jointly and severally liable for Danish withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Company's liability. The Group has issued a payment guarantee towards Norwegian tax authorities of NOK 250.000. Related parties ALTRAD PARTICIPATIONS Ultimate owner Transactions The Company has chosen only to disclose transactions which have not been made on an arm's length basis in accordance with section 98(c)(7) of the Danish Financial Statements Act. Apart from the above, there have been no transactions with the Supervisory Board, the Executive Board, senior officers, significant shareholders, group enterprises or other related parties, except for intercompany transactions and normal management remuneration. The Company is included in the Group Annual Report of the Parent Company of the largest and smallest group: Name Place of registered office ALTRAD PARTICIPATIONS Florensac, France 16 av de la gardie34510 Florensac The Annual Report of Sparrows Denmark ApS for 2022 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C. The accounting policies applied remain unchanged from last year. The Consolidated Financial Statements and the Parent Company Financial Statements for 2022 are presented in TEUR. 1 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 changed accounting estimates of amounts that have previously been recognised in the income 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. Basis of consolidation The Consolidated Financial Statements comprise the Parent Company, Sparrows Denmark ApS, and subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or in which the Parent Company, through share ownership or otherwise, exercises control. Enterprises in which the Group holds between 20% and 50% of the votes and exercises significant influence but not control are classified as associates. On consolidation, items of a uniform nature are combined. Elimination is made of intercompany income and expenses, shareholdings, dividends and accounts as well as of realised and unrealised profits and losses on transactions between the consolidated enterprises. The Parent Company's investments in the consolidated subsidiaries are set off against the Parent Company's share of the net asset value of subsidiaries stated at the time of consolidation. Business combinations Business acquisitions carried through on or after 1 July 2018 Acquisitions of subsidiaries are accounted for using the purchase method under which the identifiable assets and liabilities of the entity acquired are measured at fair value at the time of acquisition. Acquired contingent liabilities are recognised at fair value in the Consolidated Financial Statements to the extent that the value can be measured reliably. The time of acquisition is the time when the Group obtains control of the entity acquired. The cost of the entity acquired is the fair value of the consideration agreed, including consideration contingent on future events. Transaction costs directly attributable to the acquisition of subsidiaries are recognised in the income statement as incurred. Positive differences between the cost of the entity acquired and identifiable assets and liabilities are recognised as goodwill in intangible assets in the balance sheet and are amortised in the income statement on a straight-line basis over their estimated useful lives. Where the differences are negative, they are recognised immediately in the income statement. Where the purchase price allocation is not final, positive and negative differences from acquired subsidiaries due to changes to the recognition and measurement of identifiable net assets may be adjusted for up to 12 months after the time of acquisition. These adjustments are also reflected in the value of goodwill or negative goodwill, including in amortisation already made. Where cost includes contingent consideration, this is measured at fair value at the time of acquisition. Contingent consideration is subsequently measured at fair value. Any value adjustments are recognised in the income statement. In respect of step acquisitions, any previously held investments in the entity acquired are remeasured at fair value at the time of acquisition. The difference between the carrying amount of the investment previously held and the fair value is recognised in the income statement. Business acquisitions carried through before 1 July 2018 Subject to some exemptions, acquisitions carried through before 1 July 2018 are accounted for under the same accounting policies as those applying to business combinations carried through on or after 1 July 2018. The most material exemptions are: Identifiable assets and liabilities of the entity acquired are recognised only if they are probable. Identifiable contingent liabilities of the entity acquired are not recognised in the consolidated balance sheet. Where the purchase price allocation is not final, positive and negative differences due to changes to the recognition and measurement of the acquired net assets may be adjusted until the end of the financial year following the year of acquisition. These adjustments are also reflected in the value of goodwill or negative goodwill, including in amortisation already made. Transaction costs directly attributable to the acquisition of subsidiaries are included as part of cost. After the initial recognition, adjustment of contingent consideration is recognised directly with its counter entry in initial purchase price, thus correcting the value of goodwill or negative goodwill. In respect of step acquisitions, the carrying amount of the existing investments is recognised in cost. Leases in terms of which the Group assumes substantially all the risks and rewards of ownership (finance leases) are recognised in the balance sheet at the lower of the fair value of the leased asset and the net present value of the lease payments computed by applying the interest rate implicit in the lease or an alternative borrowing rate as the discount rate. Assets acquired under finance leases are depreciated and written down for impairment under the same policy as determined for the other fixed assets of the Group. The remaining lease obligation is capitalised and recognised in the balance sheet under debt, and the interest element on the lease payments is charged over the lease term to the income statement. All other leases are considered operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the lease term. Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Gains and losses 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 transaction date rates are recognised in financial income and expenses in the income statement; however, see the section on hedge accounting. Revenue from the sale of goods is recognised when the risks and rewards relating to the goods sold have been transferred to the purchaser, the revenue can be measured reliably and it is probable that the economic benefits relating to the sale will flow to the Group. Contract work in progress (construction contracts) is recognised at the rate of completion, which means that revenue equals the selling price of the work completed for the year (percentage-of-completion method). This method is applied when total revenues and expenses in respect of the contract and the stage of completion at the balance sheet date can be measured reliably, and it is probable that the economic benefits, including payments, will flow to the Group. The stage of completion is determined on the basis of the ratio between the expenses incurred and the total expected expenses of the contract. Services are recognised at the rate of completion of the service to which the contract relates by using the percentage-of-completion method, which means that revenue equals the selling price of the service completed for the year. This method is applied when total revenues and expenses in respect of the service and the stage of completion at the balance sheet date can be measured reliably, and it is probable that the economic benefits, including payments, will flow to the Group. The stage of completion is determined on the basis of the ratio between the expenses incurred and the total expected expenses of the service. Revenue is measured at the consideration received and is recognised exclusive of VAT and net of discounts relating to sales. Expenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve the consolidated revenue for the year. Other external expenses comprise indirect production costs and expenses for premises, sales as well as office expenses, etc. With reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a summary of revenue, other operating income, expenses for raw materials and consumables and other external expenses. Staff costs include wages and salaries as well as payroll expenses Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment. Other operating income and other operating expenses comprise items of a secondary nature to the main activities of the Group, including gains and losses on the sale of intangible assets and property, plant and equipment. Dividends from subsidiaries are recognised as income in the income statement when adopted at the General Meeting of the subsidiary. However, dividends relating to earnings in the subsidiary before it was acquired by the Parent Company are set off against the cost of the subsidiary. Financial income and expenses are recognised in the income statement at the amounts relating to the financial year. 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. The Company is jointly taxed with . The tax effect of the joint taxation is allocated to Danish enterprises in proportion to their taxable incomes. Goodwill acquired is measured at cost less accumulated amortisation. Goodwill is amortised on a straight-line basis over its useful life, which is assessed at 20 year. Patents and licences are measured at the lower of cost less accumulated amortisation and recoverable amount. Patents are amortised over the remaining patent period, and licences are amortised over the licence period; however not exceeding 10 year. 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. Interest expenses on loans contracted directly for financing the construction of property, plant and equipment are recognised in cost over the construction period. 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 3-10 years Leasehold improvements The fixed assets’ residual values are determined at nil. 8 years Depreciation period and residual value are reassessed annually. The carrying amounts of intangible assets and property, plant and equipment and investments 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. Investments in subsidiaries are measured at cost. Where cost exceeds the recoverable amount, write-down is made to this lower value. Inventories are measured at the lower of cost under the FIFO method and net realisable value. The net realisable value of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with deduction of selling expenses and costs of completion. The net realisable value is determined allowing for marketability, obsolescence and development in expected selling price. The cost of raw materials and consumables equals landed cost. The cost of finished goods and work in progress comprises the cost of raw materials, consumables and direct labour with addition of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour as well as maintenance and depreciation of the machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and management. 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. Contract work in progress is measured at selling price of the work performed calculated on the basis of the stage of completion. The stage of completion is measured by the proportion that the contract expenses incurred to date bear to the estimated total contract expenses. Where it is probable that total contract expenses will exceed total revenues from a contract, the expected loss is recognised as an expense in the income statement. Where the selling price cannot be measured reliably, the selling price is measured at the lower of expenses incurred and net realisable value. Payments received on account are set off against the selling price. The individual contracts are classified as receivables when the net selling price is positive and as liabilities when the net selling price is negative. Expenses relating to sales work and the winning of contracts are recognised in the income statement as incurred. Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Dividend distribution proposed by Management for the year is disclosed as a separate Dividend item. 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 or in equity if the deferred tax relates to items recognised in equity. Current tax liabilities and receivables are recognised in the balance sheet as the expected taxable income for the year adjusted for tax on taxable incomes for prior years and tax paid on account. Extra payments and repayment under the on-account taxation scheme are recognised in the income statement in financial income and expenses. Loans are recognised initially at the proceeds received net of transaction expenses incurred. Subsequently, the loans are measured at amortised cost; the difference between the proceeds and the nominal value is recognised as an interest expense in the income statement over the loan period. Mortgage loans are measured at amortised cost, which for cash loans corresponds to the remaining loan. Amortised cost of debenture loans corresponds to the remaining loan calculated as the underlying cash value of the loan at the date of raising the loan adjusted for depreciation of the price adjustment of the loan made over the term of the loan at the date of raising the loan. Other debts are measured at amortised cost, substantially corresponding to nominal value. The cash flow statement shows the Group’s cash flows for the year broken down by operating, investing and financing activities, changes for the year in cash and cash equivalents as well as the Group’s cash and cash equivalents at the beginning and end of the year. Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working capital and non-cash operating items such as depreciation, amortisation and impairment losses, and provisions. Working capital comprises current assets less short-term debt excluding items included in cash and cash equivalents. Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant and equipment as well as fixed asset investments. Cash flows from financing activities comprise cash flows from the raising and repayment of long-term debt as well as payments to and from shareholders. Cash and cash equivalents comprise ”Cash at bank and in hand”. The cash flow statement cannot be immediately derived from the published financial records. Return on assets Profit before financials x 100 / Total assets at year end Solvency ratio Equity at year end x 100 / Total assets at year end Return on equity Net profit for the year x 100 / Average equity