28964080 2022-12-31 28964080 2021-12-31 28964080 2020-12-31 28964080 2024-12-31 28964080 2023-12-31 28964080 2024-01-01 fsa:ContributedCapitalMember 28964080 2024-01-01 fsa:ReserveForDevelopmentExpenditureMember 28964080 2024-01-01 fsa:RetainedEarningsMember 28964080 2024-01-01 fsa:ProposedDividendRecognisedInEquityMember 28964080 2024-12-31 fsa:ContributedCapitalMember 28964080 2024-12-31 fsa:ReserveForDevelopmentExpenditureMember 28964080 2024-12-31 fsa:RetainedEarningsMember 28964080 2024-12-31 fsa:ProposedDividendRecognisedInEquityMember 28964080 2024-01-01 fsa:CompletedDevelopmentProjectsMember 28964080 2024-01-01 fsa:AcquiredLicencesMember 28964080 2024-12-31 fsa:CompletedDevelopmentProjectsMember 28964080 2024-12-31 fsa:AcquiredLicencesMember 28964080 2024-01-01 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2024-01-01 fsa:LeaseholdImprovementsMember 28964080 2024-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2024-12-31 fsa:LeaseholdImprovementsMember 28964080 2024-12-31 fsa:LongtermLeaseCommitmentsMember 28964080 2023-12-31 fsa:LongtermLeaseCommitmentsMember 28964080 2024-01-01 2024-12-31 28964080 2024-01-01 2024-12-31 1 28964080 2024-01-01 2024-12-31 memberOfBoardIdentifier_executive_board_1 28964080 2024-01-01 2024-12-31 memberOfBoardIdentifier_executive_board_2 28964080 2024-01-01 2024-12-31 memberOfBoardIdentifier_board_of_director_1 28964080 2024-01-01 2024-12-31 memberOfBoardIdentifier_board_of_director_2 28964080 2024-01-01 2024-12-31 2 28964080 2022-01-01 2022-12-31 28964080 2021-01-01 2021-12-31 28964080 2020-01-01 2020-12-31 28964080 2023-01-01 2023-12-31 28964080 2024-01-01 2024-12-31 fsa:ContributedCapitalMember 28964080 2024-01-01 2024-12-31 fsa:ReserveForDevelopmentExpenditureMember 28964080 2024-01-01 2024-12-31 fsa:RetainedEarningsMember 28964080 2024-01-01 2024-12-31 fsa:ProposedDividendRecognisedInEquityMember 28964080 2024-01-01 2024-12-31 fsa:ManagementMember 28964080 2024-01-01 2024-12-31 fsa:BoardOfDirectorsMember 28964080 2024-01-01 2024-12-31 fsa:CompletedDevelopmentProjectsMember 28964080 2024-01-01 2024-12-31 fsa:AcquiredLicencesMember 28964080 2024-01-01 2024-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2024-01-01 2024-12-31 fsa:LeaseholdImprovementsMember iso4217:DKK pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2024-01-01 2023-01-01 2024-12-31 2023-12-31 28964080 2care4 ApS Stenhuggervej 12 6710 Esbjerg V Esbjerg +45 75152900 www.2care4.dk 2005-08-05 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Esbjerg Brygge 28, 2. 6700 Esbjerg Denmark 76 12 45 00 esbjerg@pwc.dk 2025-04-08 Thomas Hjarsbæk Rasmussen Regnskabsklasse C, stor virksomhed Revisionspåtegning The Executive Board and Board of Directors have today considered and adopted the Annual Report of 2care4 ApS for the financial year 1 January - 31 December 2024. The Annual Report is prepared in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements give a true and fair view of the financial position at 31 December 2024 of the Company and of the results of the Company operations for 2024. In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review. We recommend that the Annual Report be adopted at the Annual General Meeting. 2025-04-08 Esbjerg V Ulrik Ernst Rasmussen CEO Thomas Hjarsbæk Rasmussen CFO Henrik Bisgaard Jensen Toke Værndal To the shareholder of 2care4 ApS Opinion In our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2024 and of the results of the Company´s operations for the financial year 1 January - 31 December 2024 in accordance with the Danish Financial Statements Act. We have audited the Financial Statements of 2care4 ApS for the financial year 1 January - 31 December 2024, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies (”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 Company 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 Company´s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional 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 Company´s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company´s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 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. Esbjerg 2025-04-08 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Palle H. Jensen State Authorised Public Accountant mne32115 Stefan Dracea State Authorised Public Accountant mne42827 1163569000 830050000 864398000 124167000 53312000 85236000 52476000 -23300000 9453000 -9168000 -3582000 -4211000 33669000 -21272000 4072000 441791000 382321000 331137000 5031000 3053000 698000 2429000 2429000 75136000 41467000 62739000 110 108 118 0.111 0.135 0.107 0.064 0.099 0.033 0.063 0.045 -0.028 0.011 0.077 0.169 0.119 -0.061 0.029 0.189 0.234 0.17 0.108 0.189 0.199 0.543 0.577 -0.408 0.13 *Business model*The business model of the 2care4 Aps includes the development, in-licensing, production, import, export, distribution and sales of medical products. The main activities relate to parallel import of medical products and Generics. The parallel imported products are purchased throughout Europe, which are then repacked and sold in the Scandinavian markets and Germany. All activities are under strict surveillance and in compliance with GMP guidelines. The Company is represented in the Nordic countries, Germany and in Poland. It currently employs over 350 people of whom approximately 150 work out of the headquarters in Esbjerg, Denmark. The company complies with all relevant legislation related to Corporate Social Responsibility, and generally strives to minimize the negative impacts of the Company’s activities as much as possible. *Risk analysis*Risk is defined as the potential negative effect that can be experienced by the business or any of the 2care4 ApS´s stakeholders. Risk is seen as a combination between impact and likelihood of any given subject. *Repacking*When purchasing medical products for parallel import, the 2care4 ApS buys from wholesalers within the EU. There is no contact with the original producer as such, and therefore, the 2care4 ApS has no influence on the production phase at all. As regards the 2care4’s generic business, we are in constant dialogue with our partners to ensure that they are in compliance with all local legislation and rules. 2care4 ApS have developed a CSR policy in 2020 which elaborates on anti-corruption, human rights, social and employee conditions, environment, climate and energy consumption. For further explanation please find link to our CSR policy, https://www.epaper.dk/mss2care4/csrpolicy/csr-2care4-policy/The CSR policy have been communicated to our suppliers & business partners. *Anti-corruption*The 2care4 Group has a zero tolerance towards corruption, and when marketing products towards pharmacies in the Nordics and DE, the guidelines of AME (Affordable Medicines Europe), MFE (Medicines for Europe) and of ENLI (Etisk Nævn for Lægemiddel Industrien) are applied and complied with in detail. Due to the fact that we see a lower risk of corruption among our partners due to being located in countries that have a high score on our CPI index, we have chosen to draw up a policy in 2020 regarding bribery and anti-corruption. In 2024, we have had 0 cases of bribery and anti-corruption. Going forward, we will continue to closely monitor anti-corruption risk. We have implemented a whistle-blower setup as an additional preventive measure in this area. *Human rights*2care4 ApS’s potential risk of influencing social conditions and human rights is in general estimated to be limited, mainly due to the strictly regulated business environment in which the Company operates, even though we see a risk based on lack of transparency regarding the working environment on the sites of suppliers which is out of our control. We strive to comply with all current and future legislation and guidelines in relation to human rights etc. both internally as well as externally, which is something that we also expect from our current and future partners. We do not see a need for further proactive work in to this area since we are already doing what is possible to stay compliant in this important area. We have no knowledge of breach in any way internally for both PI and Generics or externally via our business partners. As a further initiative to support this we created a CSR policy in 2020, which have zero tolerance in violating human rights for us and all suppliers and business partners. In 2024, we have had 0 cases of violation of human rights. *Social and employee conditions*A healthy and safe work environment is very important for the 2care4 ApS. Therefore, we commit to ensure that our employees have the right working environment. We consider accidents among within our workforce as one of the biggest risks and therefore we have a zero-accident target for our internal production sites. In 2024, there has been in total 4 accidents in the production area. The accidents have been registered and mitigating actions have been implemented to avoid similar future cases.Besides our CSR policy, employee conditions are described in the Employee Handbook which is distributed to all new employees in advance of first working day. The Employee Handbook is available to all employees in 2care4 ApS´s quality system which contain all quality standards. The content of the Employee Handbook includes History of the company, practical information, employee rights, the role of HR and governance of general working environment.2care4 ApS does a yearly satisfaction survey which measures employee satisfaction- and motivation on several parameters. The survey is followed by action-plans on both overall company level and department level with the purpose of improving identified weaknesses and maintain areas which has positive impact on employee satisfaction and motivation. The satisfaction survey in 2024 showed an overall Engagement score of 80 which is considered to be satisfactory. The result of the survey is presented at Board of Directors meeting in February the following year.The survey will be performed on an annual basis going forward. *Environment and energy consumption*The energy consumption and general environmental footprint from the 2care4 Group’s PI activities are very limited and has limited impact on the surrounding environment. Waste in our operations is one of our largest impacts and thus it is of great importance for 2care4 Group that we work to minimize work generation. We constantly work to improve recycling and number of resources we can reuse to generate as little waste as possible. Since the medical products are purchased as commodities, the Company has little opportunity to assess and evaluate impacts on the environment in the supply chain. This given that there is no contact with the original producer as such and, therefore, the Company has no influence on the production phase. In our opinion, we as a Company comply with current legislation in the area, and we are in dialogue with our business partners concerning compliance with local legislation at the locations in the world where the Compnay´s products are manufactured. In 2024, we have had 0 cases of violation of legislation in the area.The CSR policy (see link below), includes the Company´s policy on Environment and Climate. Since the policy was established in 2020 the following initiatives have concretely been implemented; optimized waste disposal, change to LED lightning and electricity consumption based on 100% sustainable energy.https://www.epaper.dk/mss2care4/csrpolicy/csr-2care4-policy/Going forward, 2care4 will ongoingly update the CSR policy to optimise the energy consumption and environmental footprint.To support monitoring compliance of the corporate social responsibility, 2care4 implemented a Whistle-blower setup in 2023 which can be accessed both by employees and external stakeholders. Key activities The company's main activities are sales of Parallel Imported medicine and Generic medicine products. Development in the year The income statement of the Company for 2024 shows a profit of DKKm 20,3 and at 31 December 2024 the balance sheet of the Company shows a positive equity of DKKm 100. **The past year and follow-up on development expectations from last year**The profit level for 2024 was expected to be in line with 2023 level and therefore the result is not considered satisfactory and is below the expectations for 2024. For the Parallel Import business, the market dynamic in 2024 has had a negative impact on the business performance across main markets. **Targets and expectations for the year ahead**For the financial year 2025 the Management expect an increasing activity of 5%-10% level and net profit level of DKK 40-50 mio. General risk When launching new products, the company is very dependent on the processing time partly with the healthcare authorities in the countries where the products are sold and partly with the central European registration authority, EMA, in Amsterdam. In a number of countries, the processing time still remains long, which limits a fast introduction of both new parallel imported goods and Generics. Financial risks The company is exposed to fluctuations in interest rate levels and foreign exchange rates. Control of the financial risks and cash flows of the company is conducted from the headquarters of the Group. The company pursues a low risk profile within this area. Equivalently, a tight control of the credit policy is implemented. Thus, the company only has a very limited risk towards customers or co-operators. The majority of sales are legally enforced through consolidated pharmaceutical wholesalers. Research and development In general, 2care4 is increasing focus and investment in product development is expected to generate more revenue for the company within few years. Data ethics The internal guidelines regarding data ethics in 2care4 ApS is focused on protection of personal data for the employees. The guideline contains description of which personal data the Company is storing and how the data is protected during and beyond employment with the company. The internal guidelines are available for all employees in the company´s system containing all quality standards (D4) and introduction and formal consent of having understood the guidelines are mandatory for all new employees.Overall, the general protection of data in the Company is taken very seriously. The majority of data is embedded in the various data systems in the Company which are being monitored real time for data breaches and general access to data network is protected with two-factor user approval. Uncertainty relating to recognition and measurement There has been no uncertainty regarding recognition and measurement in the Annual Report. Subsequent events No events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report. The internal guidelines regarding data ethics in 2care4 ApS is focused on protection of personal data for the employees. The guideline contains description of which personal data the Company is storing and how the data is protected during and beyond employment with the company. The internal guidelines are available for all employees in the company´s system containing all quality standards (D4) and introduction and formal consent of having understood the guidelines are mandatory for all new employees.Overall, the general protection of data in the Company is taken very seriously. The majority of data is embedded in the various data systems in the Company which are being monitored real time for data breaches and general access to data network is protected with two-factor user approval. 1230471000 1205653000 22214000 19201000 1078288000 1026046000 38120000 36390000 136277000 162418000 85209000 78643000 10466000 8398000 40602000 75377000 7725000 5548000 22159000 18152000 26168000 62773000 5821000 13924000 20347000 48849000 0 25000000 20347000 23849000 18758000 11222000 11188000 8325000 29946000 19547000 4473000 1928000 2973000 2984000 7446000 4912000 37392000 24459000 230844000 194804000 123128000 156077000 122526000 64958000 2528000 2447000 0 583000 1429000 2157000 249611000 226222000 11248000 1224000 491703000 422250000 529095000 446709000 125000 125000 14632000 8754000 85325000 70856000 0 25000000 100082000 104735000 2769000 0 14633000 17927000 17402000 17927000 1073000 295000 1073000 295000 318195000 140516000 158000 130000 30994000 38214000 35499000 100023000 2453000 12249000 23239000 32620000 410538000 323752000 411611000 324047000 529095000 446709000 125000 8754000 70856000 25000000 0 0 0 -25000000 0 0 20347000 0 0 5878000 -5878000 0 125000 14632000 85325000 0 No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. Geographical segments Denmark 784858000 845051000 EU 304326000 205472000 Other world 141287000 155130000 Total 1230471000 1205653000 Business segments Human 1230471000 1205653000 Total 1230471000 1205653000 73699000 70026000 6699000 5033000 1378000 1180000 3433000 2404000 85209000 78643000 2632000 1437000 4069000 4531000 158 131 7906000 6937000 2016000 1289000 10466000 8398000 Gain and loss on disposal 544000 172000 5728000 4815000 27000 0 1970000 733000 7725000 5548000 3928000 4887000 18231000 13265000 22159000 18152000 2468000 12249000 3353000 1668000 0 7000 5821000 13924000 13381000 67037000 9454000 9316000 0 2268000 22835000 74085000 2159000 58712000 1918000 5988000 0 1803000 4077000 62897000 18758000 11188000 Completed development projectsCompleted development projects include development and registration of pharmaceutical products for humans. Each product has a 3-5 year depreciation period, starting from when the product is launched in the market. The management has not established any indication for impairment of the current book value of the assets. 9174000 7215000 4150000 881000 966000 0 12358000 8096000 7246000 4231000 1124000 892000 485000 0 7885000 5123000 4473000 2973000 1426000 0 83614000 83617000 5399000 2559000 111574000 66128000 30257000 42500000 230844000 194804000 Prepayments consist of prepaid expenses. Deferred tax liabilities at 1 January -583000 -2251000 Amounts recognised in the income statement for the year 3352000 1668000 Deferred tax liabilities at 31 December 2769000 -583000 The recognized provision amounts to kDKK 14,633 (2023: kDKK 17,927) to cover the estimated reimbursement of price reductions to customers and to cover items at customers and profit on goods that probably will be returned according to cooperation agreements. The provision is recognized based on previous experience regarding the extend of these liabilities. Other provisions 14633000 17927000 14633000 17927000 The provisions are expected to mature as follows: Within 1 year -14633000 -17927000 After 5 years 0 0 14633000 17927000 0 0 1073000 295000 1073000 295000 158000 130000 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: Lease obligations Derivative financial instruments contracts in the form of forward exchange contracts have been concluded. At the balance sheet date, the fair value of derivative financial instruments amounts to: Liabilities 538000 2508000 The company has entered a currency forward contract to hedge future cashflow in Swedish kroner, totalling kSEK 142,100, Norwegian kroner, totalling kNOK 50,000, Euro, totalling kEUR 5.936 and Danish kroner, totalling kDKK 15,712 for January 2025. Compared to the forward exchange rates the contract hold a negative value of kDKK 538 The hedging does not meet the accounting criterias for hedging and the loss is therefore booked in the income statement under Other payables. Value adjustment, income statement Fair value at Forward exchange contracts 1970000 538000 Charges and security The following assets have been placed as security with bankers: As collateral for bank loans kDKK 326.658, the company has issued af floating company charge at nominalvalue kDKK 150,000 including the following assets, which on the 31st of december 2024 amounts to kDKK.Trade receivables 123128000 156077000 Inventories 230844000 194804000 Fixture and fittings, tools and equipment (excl. finance leasing) 6020000 4415000 Intangible assets 29946000 19547000 Rental and lease obligations The following assets have been placed as security for rent obligations for a period of 6 months. 1880000 1634000 Other contingent liabilities 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 2care4 Group ApS, 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. Basis Controlling interest 2care4 Group ApS, Esbjerg Parent company Other related parties Henrik Bisgaard Jensen, Esbjerg Member of the Board of Directors Toke Værnedal, Esbjerg Member of the Board of Directors Ulrik Ernst Rasmussen Executive Board Thomas Hjarsbæk Rasmussen Executive Board 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)(6) of the Danish Financial Statements Act. Consolidated Financial Statements The Company is included in the Group Annual Report of the Parent Company of the largest and smallest group: Name Place of registered office 2care4 Group ApS Stenhuggervej 12, 6710 Esbjerg V The company has, in accordance with Section 96, subsection 3, number 2 of the Annual Accounts Act, omitted to disclose the fee to the auditor elected by the general meeting. The Annual Report of 2care4 ApS for 2024 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to large enterprises of reporting class C. The accounting policies applied remain unchanged from last year. The Financial Statements for 2024 are presented in TDKK. true With reference to section 86(4) of the Danish Financial Statements Act and to the cash flow statement included in the consolidated financial statements of , the Company has not prepared a cash flow statement. 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. Leases in terms of which the Company 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 Company. 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. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of future cash flows, the value adjustments are recognised directly in equity. Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the rates at the time when the receivable or the debt arose are recognised in financial income and expenses in the income statement. Fixed assets acquired in foreign currencies are measured at the transaction date rates. Derivative financial instruments are initially recognised in the balance sheet at cost and are subsequently remeasured at their fair values. Positive and negative fair values of derivative financial instruments are classified as ”Other receivables” and ”Other payables”, respectively. Changes in the fair values of derivative financial instruments are recognised in the income statement unless the derivative financial instrument is designated and qualify as 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 Company. 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 revenue for the year. Other external expenses comprise expenses for premises, sales as well as office expenses, etc. Staff costs include wages and salaries including compensated absence and pensions as well as other social security contributions etc. made to the entity's employees. Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment. 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 deferred tax for the year. The tax attributable to the profit for 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 2care4 Group ApS. The tax effect of the joint taxation with the subsidiaries is allocated to enterprises showing profits or losses in proportion to their taxable incomes (full allocation with credit for tax losses). Intellectual property rights etc comprise development projects completed and in progress with related intellectual property rights and acquired intellectual property rights.Development projects on clearly defined and identifiable products and processes, for which the technical rate of utilisation, adequate resources and a potential future market or development opportunity in the enterprise can be established, and where the intention is to manufacture, market or apply the product or process in question, are recognised as intangible assets. Other development costs are recognised as costs in the income statement as incurred. When recognising development projects as intangible assets, anamount equalling the costs incurred is taken to equity under Reserve for development costs that is reduced as the development projects are amortised and written down. The cost of development projects comprises costs such as salaries and amortisation that are directly attributable to the development projects. Completed development projects are amortised on a straight-line basis using their estimated useful lives which are determined based on a specific assessment of each development project. If the useful life cannot be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual property rights, the maximum period of amortisation is the remaining duration of the relevant rights. The amortisation periods used are 5 years. Intellectual property rights acquired are measured at cost less accumulated amortisation. Patents are amortised over their remaining duration, and licences are amortised over the term of the agreement, but not more than 20 years. Intellectual property rights etc are written down to the lower of recoverable amount and carrying amount. 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 5 years The residual values are estimated at the following percentage of the cost: Other fixtures and fittings, tools and equipment 7 % Leasehold improvements 0 % The residual value of other fixed assets is determined at nil. 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. 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 goods for resale, 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. 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. Provisions are recognised when - in consequence of an event occurred before or on the balance sheet date - the Company has a legal or constructive obligation and it is probable that economic benefits must be given up to settle the obligation. 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 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. Debts are measured at amortised cost, substantially corresponding to nominal value. Gross margin Gross profit x 100 / Revenue Profit margin Profit/loss of primary operations x 100 / Revenue Return on assets Profit/loss of primary operations 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