xbrli:pureiso4217:DKK742188142021-01-012021-12-31742188142021-01-012021-12-311742188142021-01-012021-12-311742188142021-01-012021-12-311742188142021-01-012021-12-312742188142021-01-012021-12-313742188142021-01-012021-12-314742188142021-01-012021-12-315742188142021-01-012021-12-312742188142021-01-012021-12-31742188142020-01-012020-12-31742188142021-01-012021-12-31fsa:RetainedEarningsMember742188142021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMember742188142021-01-012021-12-31fsa:ProposedDividendRecognisedInEquityMember742188142020-01-012020-12-31fsa:ProposedDividendRecognisedInEquityMember742188142021-01-012021-12-31fsa:RetainedEarningsMember742188142020-01-012020-12-31fsa:RetainedEarningsMember742188142021-12-31742188142020-12-31742188142021-01-01fsa:ContributedCapitalMember742188142021-01-01fsa:RetainedEarningsMember742188142021-01-01fsa:ProposedDividendRecognisedInEquityMember742188142021-01-01742188142021-12-31fsa:ContributedCapitalMember742188142021-12-31fsa:RetainedEarningsMember742188142021-12-31fsa:ProposedDividendRecognisedInEquityMember742188142021-01-012021-12-31fsa:ShorttermDeferredIncomeMemberGrundlag for konklusionKonklusionRegnskabsklasse C, stor virksomhed339635562020-01-012020-12-31Aarhus C80002City Tower, VærkmestergadeDeloitte Statsautoriseret RevisionspartnerselskabOdenseOdense N5270Revisionspåtegning2021-12-312021-01-01<br />33<br />31SmedebakkenITW GSE ApS7421881474218814Odensen NSmedebakken 31ITW GSE ApSÅrsrapportThe Board of Directors and the Executive Board have today considered and approved the annual report of ITW GSE ApS for the financial year 01.01.2021 - 31.12.2021.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 Entity’s financial position at 31.12.2021 and of the results of its operations for the financial year 01.01.2021 - 31.12.2021.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.Odense2022-03-08Henrik OlssonChief Executive OfficerBirgit AndersenHenrik OlssonLars StormRasmus Bøgh JørgensenManoela Pereira FryChairmanTo the shareholder of ITW GSE ApSWe have audited the financial statements of ITW GSE ApS for the financial year 01.01.2021 - 31.12.2021, which comprise the income statement, balance sheet, statement of changes in equity 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 31.12.2021 and of the results of its operations for the financial year 01.01.2021 - 31.12.2021 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 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 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:<br />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. <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 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 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. <br />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.<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 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. 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 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.Aarhus2022-03-08Henrik VedelMikael Møllermne10052mne47835State Authorised Public AccountantState Authorised Public AccountantFinancial highlights2021 DKK'0002020 DKK'0002019 DKK'0002018 DKK'0002017 DKK'000Key figuresRevenue374,518304,598480,657434,139414,689Gross profit/loss118,61292,160150,412133,393126,356Operating profit/loss67,01541,96590,59275,65277,798Net financials(334)(1,141)(305)(74)(2,340)Profit/loss for the year52,96532,33069,82358,79458,637Total assets201,648171,915188,543205,772216,996Investments in property, plant and equipment138751402461,001Equity156,758138,793151,463171,640162,846RatiosGross margin (%)31.6730.2631.2930.7330.47EBIT margin (%)17.8913.7818.8517.4318.76Return on equity (%)35.8422.2843.2235.1515,91Equity ratio (%)77.7480.7380.3383.4175.05Financial 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 RevenueReturn on equity (%) :Profit/loss for the year * 100 Average equityEquity ratio (%) :Equity * 100 Total assetsPrimary activitiesThe Company’s primary activities consisted of production and sale of electro-mechanical products to Denmark and as well as other countries. Development in activities and finances The year has, as expected, been marked by a gradual return to normalcy following the Covid pandemic. This has led to increasing activity and an improved result at a level that management considers satisfactory Profit/loss for the year in relation to expected developmentsManagement considers profit/loss for the year satisfactory in view of the special circumstances.OutlookManagement expects for 2022 a stable level of activity and a operating profit between 60 and 65 mio. DKKKnowledge resourcesITW GSE’s vision is to be regarded, on all markets, as a reliable and professional supplier of optimised GPU and PCA equipment with a unique design, which ensures 100% customer satisfaction in all applications. ITW GSE’s vision is to be regarded on our domestic market, the European market, as a market leader within supply of Ground Support Equipment (GSE). ITW GSE will supply the most environmentally friendly, most reliable and most costefficient GSE systems available to the aviation industry. To live up to the above visions, it is necessary to retain employees with high educational skills within effect electronics and to strengthen the Company’s marketing resources. Foreign branchesThe Company has a branch office in Dubai and a Sales Office in Singapore.Statutory report on corporate social responsibilityITW GSE wants to do business in a responsible and sustainable way. The CSR policy is based on the areas that the Danish Financial Statements Act prescribes in relation to the Company's statutory report on corporate social responsibility. The CSR policy sets a common standard and guideline for employees in their daily work within the most relevant business areas: Social Responsibility, Business Ethics, Work Environment and Human Rights. ITW GSE is part of the Illinois Tool Work Inc. The policy can be read in full length at www.itw-csr.com. Corporate social responsibility ITW GSE’s primary activities is as described on page 3, production and sale of electro-mechanical products to Denmark and as well as other countries. The business model is comprised of three elements, 80/20 business processes, customer-focused innovation as well as a decentralized entrepreneurial culture. The three tools help us keep focus on our core processes. When using these three elements on our CSR, our 80/20 allows us to focus on areas where we have the most impact. It is our clear objective to develop products that solve our customers’ problems with focus on sustainable and environmentally friendly solutions. Our decentralized entrepreneurial culture is driven with the purpose of maximizing the positive influence on humans and environment and the local community of which we are a part. Social conditions and employee relations ITW GSE strives to comply with laws and regulations concerning employee safety and health and often surpass the rules to ensure ’Living well at ITW’. ’Living well’ means a life with a work-life balance. ​ ​A more physically active day ​ITW GSE offers their employees the opportunity to go exercising for 30 minutes during working hours and thus meets the Danish Health Authority’s recommendations. ITW GSE would like to take good care of its employees. Therefore, we have bicycle helmets for all company bikes. The bicycle helmets are placed on a bicycle shelf for all ITW GSE's company bikes, so they are ready when employees need a bike. Moreover, ITW GSE lends sea kayaks and the necessary equipment to its employees. It is our assessment that also in 2022, we will continue to maintain a high level in this area. ​Talent development and diversity It is ITW GSE’s objective to attract and retain talents and to ensure that the labor force, as a rule, reflects society in terms of gender, race and religion. We have observed, however, that the educations and competencies required by our products and industry are educations that primarily appeal to men. Therefore, the number of men versus women at ITW GSE differs significantly from the societal distribution. ITW GSE has focus on diversity, and whenever new employees are hired, we consider whether we can improve the present gender composition as we believe that an equal gender distribution will have a positive impact on our work environment. ​ Top management ITW GSE has set a target of a minimum of 30% female board members, excluding the board members elected by the employees. Today, the Board of Directors consists of 1 man and 2 women, and the share of women is thus 67%, and the target has been met. ​Other management positions The Company’s present management consists of 8 men and 1 woman, and female representation thus amounts to 11%. It is the Company’s target over time that women should account for at least 30% of management positions. In 2021, we have focused on supporting gender equality and diversity in the labor market through the Company’s employee composition. For future recruitments, we will ensure that among the last candidates, both women and men are represented. We will ensure equal treatment of all employees without the distinction of gender, age, ethnicity, religion, disability and sexual orientation. Risk ITW GSE assesses that the primary risks related to social responsibility are that the employees act in violation of the Company’s values and policies in the area. This is prevented for example through communication of the Group’s values in internal communication and training activities for employees. ​ ​Anti-corruption and bribery ITW GSE strives to demonstrate ethical behavior and always appear fair and honest when doing business and always within the framework of the law, in whichever country business is performed. This is set out in ITW’s Principles of Conduct which includes the group policies. The ITW Group organizes a learning session for their employees on morality and ethics every year, and also in 2021. On this background, executives as well as employees of ITW GSE have a strong basis for meeting the Group’s ethical guidelines. We have not found any violations regarding anti-corruption and bribery in 2021. Also in this area is ITW GSE continually updating its guidelines to match the development, and ITW GSE will therefore always meet the latest international provisions in this area. ​ ​Supply chain ​ITW GSE ApS’ quality system is certified according to the ISO 9001:2015 standard. ITW examines its supply chain and enters into agreements with suppliers who ensure that their employees have a good and safe work environment. Furthermore, ITW GSE meets the Dodd-Frank Act. ​ ​Risk ITW GSE assesses the primary risks related to any use of suppliers that do not comply with national and internationally recognized standards and legislation. ITW has prepared a formal Principles of Conduct, which contains the Group’s policy in this area. Environment and sustainability ITW GSE is working in the daily production as well as through product development to improve our products with a view to improving environmental and climate sustainability. Each day, the aviation industry is met with increasing requirements to become cleaner and greener. True to our culture, ITW GSE naturally takes on the responsibility by developing and supplying cleaner, more reliable and more cost-efficient systems which meet our customers’ needs. Therefore, we have developed the ITW GSE 7400, a battery-driven power supply (GPU), which has resulted in a very low emission of harmful pollutants, but also considerable environmental savings compared to conventional diesel-driven power supplies. The production of ITW GSE 7400 has been successfully launched. The ITW GSE 7400 GPU is definitely a step towards a cleaner and greener future. In the last year the company has launched two more ITW GSE 7400 GPU products both for the very large wide body aircraft as well as for smaller regional aircraft. That way the Company today have a full Ground Power Supply product family of the ITW GSE products covering the Ground Power Supply needs of all commercial aircraft. ITW GSE 7400 reduces CO2, NOx, has zero noise, and decreases electrical infrastructure reliance. Replacing just one diesel GPU with one battery driven GPU would correspond to emission savings of approx. 190,000 lbs. of CO2, which again corresponds to 80 households or 50 cars or 100 acres of forest. In the coming years, ITW GSE’s product development will also focus on the development of products aimed at reducing fossil fuels and a general reduction of the environmental impact. ​ ​Risk ​ITW GSE believes that the primary risks related to the environment and climate relate to the Company’s energy consumption and use of materials. ITW GSE focuses on energy optimization initiatives and choice of materials and follows up on focus area. At the same time, the Company’s vision is to supply the most environmentally friendly, reliable and cost-efficient GSE systems available to the aviation industry. Socially responsible investments ​ITW GSE recognizes the UN Global Compact and the UN's six principles of responsible investment. The purpose of ITW GSE's investments is to ensure the highest possible return in the long term, taking into account the risk and a number of environmental, social and management issues. ​ ​Human rights ITW GSE ApS recognizes the United Nation’s (UN) convention on human rights and the abolition of child labor. ​ ​Risk ITW GSE does not believe that the Company has significant risks in relation to human rights violations. At present, the Company has no separate written policy in the area, but respect for human rights is an integrated part of the policies as described above, including ethics and supply chain. The Company operates in Denmark and follows the Danish law in this area. No infringements have been detected in this area.Statutory report on data ethics policyAs the Company, apart from personal data for its own employees, does not process or store personal data, no actual data ethics policy has been drawn up. The Company has implemented guidelines to ensure that its employees are at any time familiar with and comply with all legislative provisions in relation to GDPR.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.374517535304598479081464819422959216421660861675586490362901186123579216022950788676493841128083978108866701528441965231164736049902511410606668099540824171137157818494611529652143232956079652144500000045000000350000007965214-267044018754102194456316534332622219194425270783165973197929331659731979293535791745063711608789514520437466642579631215271992472335338081736398234218205596383575977692696883987717228210822483726260139301460692164865815820881812758553319629055416740895420164847117191532580000008000000103757960957927464500000035000000156757960138792746800000095792746350000001387927468000000103757960450000001181201949322118120194932217403470213434041638128534652162194300198563613547544128617013612799725205437093103217325743709310321732572016484711719153250-35000000-350000001 Events after the balance sheet dateNo events have occured after the balance sheet date to this date which would influence the evaluation of this annual report.2 Revenue2021 DKK2020 DKKEurope101,458,673103,742,459Middle East and Africa132,239,38268,501,518Asia81,230,42482,974,529North and South America59,589,05649,379,973Total revenue by geographical market374,517,535304,598,479Line-powered323,566,160247,326,690Engine-driven9,294,57616,152,064Spare parts41,656,79941,119,725Total revenue by activity 374,517,535304,598,4793 Other operating incomeOther operating income consists of compensation for fixed costs.4 Fees to the auditor appointed by the Annual General Meeting2021 DKK2020 DKKStatutory audit services183,000166,000183,000166,0005 Staff costs2021 DKK2020 DKKWages and salaries46,756,45845,306,427Pension costs3,369,7023,478,541Other social security costs662,516599,14450,788,67649,384,112Average number of full-time employees6675Special incentive programmesThe companys Executive Board participates in ITWs central incentime programme. In pursuance of section 98B (3) of the Danish Financial Statements Act, remuneration to the Board Of Directors and Executive Board is not divided. This note includes expenses for temps and temporary assistane, but is not reflected in the number of employees. 6675The companys Executive Board participates in ITWs central incentime programme. In pursuance of section 98B (3) of the Danish Financial Statements Act, remuneration to the Board Of Directors and Executive Board is not divided. This note includes expenses for temps and temporary assistane, but is not reflected in the number of employees. 6 Depreciation, amortisation and impairment losses2021 DKK2020 DKKDepreciation of property, plant and equipment992,326817,739Profit/loss from sale of intangible assets and property, plant and equipment(183,929)(6,853)808,397810,8867 Tax on profit/loss for the year2021 DKK2020 DKKCurrent tax14,668,6078,985,636Change in deferred tax(1,186,680)(491,025)Adjustment concerning previous years233,854013,715,7818,494,6118 Proposed distribution of profit and loss2021 DKK2020 DKKOrdinary dividend for the financial year45,000,00035,000,000Retained earnings 7,965,214(2,670,440) 52,965,21432,329,5609 Property, plant and equipmentLand and buildings DKKOther fixtures and fittings, tools and equipment DKKCost beginning of year15,101,5075,186,567Additions0138,220Disposals0(664,000)Cost end of year15,101,5074,660,787Revaluations beginning of year504,6310Revaluations end of year504,6310Depreciation and impairment losses beginning of year(13,411,681)(4,853,944)Reversal of impairment losses0642,889Depreciation for the year(319,047)(133,197)Depreciation and impairment losses end of year(13,730,728)(4,344,252)Carrying amount end of year1,875,410316,53510 Financial assetsDeferred tax DKKCost beginning of year1,979,293Additions1,186,680Cost end of year3,165,973Carrying amount end of year3,165,973<br />Deferred tax DKKCost beginning of year1,979,293Additions1,186,680Cost end of year3,165,973Carrying amount end of year3,165,97311 Deferred tax 2021 DKK2020 DKKFinancial assets3,165,9731,979,293Deferred tax3,165,9731,979,293 Changes during the year2021 DKKBeginning of year1,979,293Recognised in the income statement1,186,680End of year3,165,973The deferred tax asset related to temporary differences between the carrying amount and tax-based value of fixed assets and inventories.12 Receivables from group enterprisesThe Company participates together with other Danish Group enterprises in a cash pool arrangement in which another company is liable as a sole contracting party towards the bank. Receivables and payables in relation to the cash pool arrangement are recognised as intercompany receivables and payables, respectively. At 31 December 2021, the item receivables from group enterprises includes an amount of DKK 63m.13 PrepaymentsPrepayments consist of prepaid rent, insurance, and other cost.14 Share capitalThe share capital consists of 5.000 shares at DKK 1,000 and 50 shares at DKK 60.000. The shares have not been divided into classes. 15 Other provisionsOther provision primarily comprise provision for claims.16 Deferred incomeDeferred income consists of accrued revenue.17 Unrecognised rental and lease commitments2021 DKK2020 DKKLiabilities under rental or lease agreements until maturity in total1,234,3851,029,64318 Contingent liabilitiesThe Entity participates in a Danish joint taxation arrangement where ITW Denmark ApS serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Entity is therefore liable for income taxes etc for the jointly taxed entities.19 Assets charged and collateralThe company has provided guarantees of DKK 1,181,201m for tender work, work in progress and work performed.20 Related parties with controlling interestThe following related parties have a controlling interest in ITW GSE ApS ITW Denmark ApS, Silkeborg, Denmark, Principal shareholder. Illinois Tool Works Inc., Chicago, USA, Ultimate Parent21 Non-arm’s length related party transactionsOnly related party transactions not conducted on an arm’s length basis are disclosed in the annual report.​ No such transactions have been conducted in the financial year.22 Group relationsName and registered office of the Parent preparing consolidated financial statements for the smallest group: Illinois Tool Works Inc., Chicago, USA The foreign consolidated accounts can be obtained by contacting Illinois Tools Works Inc.This 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 to these 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.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. Property, plant and equipment, intangible assets, inventories and other non-monetary assets that have been purchased in foreign currencies are translated using historical rates.RevenueRevenue 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.Other operating incomeOther operating income comprises income of a secondary nature as viewed in relation to the Entity’s primary activities.Cost of salesCosts of raw materials and consumables comprise the consumption of raw materials and consumables for the financial year after adjustment of changes in inventories of these goods from the beginning to the end of the year. This item may include wastage and ordinary write-downs of the relevant inventories. 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, and social security contributions, pension contributions, etc for entity staff.Depreciation, amortisation and impairment lossesDepreciation, amortisation and impairment losses relating to property, plant and equipment comprise depreciation, amortisation and impairment losses for the financial year, and gains and losses from the sale of plant and equipment.Other financial incomeOther financial income comprises dividends etc received on other investments, interest income, including interest income on receivables from group enterprises, net capital or exchange gains on securities, payables and transactions in foreign currencies, amortisation of financial assets, and tax relief under the Danish Tax Prepayment Scheme etc.Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies, amortisation of financial liabilities, 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 Company is jointly taxed with all Danish group companies. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with refund concerning tax losses).Property, plant and equipmentLand and buildings, plant and machinery, and other fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses. Land is not depreciated. 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. For self-constructed assets, cost comprises direct and indirect costs of materials, components, subsuppliers and labour costs. 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:Buildings33 yearsOther fixtures and fittings, tools and equipment5-10 yearsCars5-10 yearsComputer equipment1-3 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.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.InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value. Cost consists of purchase price plus delivery costs. Cost of manufactured goods and work in progress consists of costs of raw materials, consumables, direct labour costs and indirect production costs. Indirect production costs comprise indirect materials and labour costs, costs of maintenance of, depreciation of and impairment losses relating to machinery, factory buildings and equipment used in the manufacturing process, and costs of factory administration and management. Finance costs are not included in cost. The net realisable value of inventories is calculated as the estimated selling price less completion costs and costs incurred to execute sale.ReceivablesReceivables are measured at amortised cost, usually equalling nominal value less writedowns for bad and doubtful debts.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.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.Other provisionsOther provisions comprise anticipated costs of non-recourse guarantee commitments, returns, 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. Non-recourse guarantee commitments comprise commitments to remedy defects and deficiencies within the guarantee period.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.Deferred incomeDeferred income comprises income received for recognition in subsequent financial years. Deferred income is measured at cost.Cash flow statementIn pursuance of section 86 of the Danish Financial Statements Act, the preparation of cash flow statement is excluded, as it contained in the cash flow statement for the ultimate parent company Illinois Tool Works Inc., Illinois, USA. 2022-03-08Birgit Andersen