Årsrapport35382879ALBJERG, Statsautoriseret RevisionspartnerselskabRingager, 4C, 2. th.2605, Brøndby2020-01-012020-12-312021-01-012021-12-3121594873KNUD E. HANSEN A/S, Naval ArchitectsClaessensvej13000Helsingør, Denmark1999-01-01BNP ParibasALBJERG, Statsautoriseret Revisionspartnerselskab35382879Lissen Fagerlin Hammerstatsautoriseret revisormne27747Ringager4C, 2. th.2605BrøndbyDanmark38284284info@albjerg.dk2022-06-24Hendrik Kornel van ProoijenRegnskabsklasse C, mellemstor virksomhedRevisionspåtegningRevisorgruppen DanmarkkapitalejerneBrøndby2022-06-24Helsingør2022-06-24Grundlag for konklusionKonklusion46925563362921633773190128991472446427044584326135434975367246071142231147936592438311283080014397601140628-110304631228567-886144300-396606-203977118597901859790528858466179483243523354797749-11496642534697-11424568345077-5232822600119746452672-11444314308696-11444314452672-11444314-396606-2039771705302-94045432173752597292173752597290158402015840221737541813121737541813112989901533984791368840305129899015339847913688403050054197885541622005419788554162215163651952115642853168000582764735417254646268352371675189239106495337784391064953377848774363476378900405748564614260361634268142603616309236969157016003032528297139023708692123486246018622901292460186229012847258085301216114600703428619859188906718118883577143035491471523193349946042805286628945066351733885614524713363546295200601600601600601600601600005443042583964800169553207204-79857-354514-79857-35451436697663361064-1942829-26857884191509360815041915093608150350000000350000000034312570343125735000000343125735000000343125774140530454867414053045486394589516210964029185153462050167113970642411442142542260614280067345411072113360977959589213114720082684620713279827284235454647200830277464482798273185480250663517338856145247133635462952308696-1144431419741631873216-131626338512420-10879774-1058678342879394601-11222653-1453279-4822616683-11270879-1436596850457434523-850457-4345230222378523076142113447310-11000000350000000119238581879054-197478793518118882053384274657-2494311889067181188818890671811888420536084301347434141635351457731605685164851812104641216197983411118126982876362637446427044584326135434975367246071465548166914714655481669147868855572300662284452458272856322987922377342374162377225288584661794832435233542382538238253828721128721133210033210023376492337649212280921228092808492808492833842833842120274212027421737521737516810501681050168105016810501522648152264815840215840216810501681050562450738631247847607689407504334462664462666025657416729140905233022819-651940701054483208-130104-1301044726667337592312989907913685649056488564905648854851347936501274770-411597-396606-20397705363298548513454197885541622Knud E. Hansen (UK) Ltd.London, United Kingdom100Knud E. Hansen Australia PTY Ltd.Perth, Australia100Knud E. Hansen USA, Inc.Ft. Lauderdale, USA100Knud E. Hansen Greece Ltd.Piraeus, Greece100Marine Hvac design SLCadiz, Spain100-82636077-88696502-82636077-88696502601600601600601600601600601600601600601600601600005839648787941900-396606-203977100544304258396480020720400-37651-20258900169553-354514-354514-354514570832746570274657-411597-79857-354514-79857-35451433610643361064-2685782-44838323087020742953179804436697663361064-1942829-268578812862071479365342879446179345077-52328-91967689099833-3965865-587413Today, the Board of Directors and the Managing Director have approved the annual report of KNUD E. HANSEN A/S, Naval Architects for the financial year 2021. The annual report has been prepared in accordance with the Danish Financial Statements Act. We consider the chosen accounting policy to be appropriate, and 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 2021, and of the results of the Group and the Company's operations as well as the consolidated cash flows for the financial year 1 January – 31 December 2021. Further, in our opinion, the Management's review gives a true and fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the Annual General Meeting. Finn Wollesen PetersenHendrik Kornel van ProoijenChristian Günckel DamsgaardHendrik Jelle GrunstraEmile Huibertus PootWe have audited the consolidated financial statements and the parent company financial statements of KNUD E. HANSEN A/S, Naval Architects for the financial year 1 January to 31 December 2021, which comprise income statement, balance sheet, statement of changes in equity, notes and a summary of significant accounting policies for both the Group and the Parent Company, as well as consolidated statement of cash flows. The consolidated financial statements and the parent company financial statements are prepared under the Danish Financial Statements Act. 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 2021, and of the results of the Group and the Company's operations as well as the consolidated cash flows for the financial year 1 January - 31 December 2021 in accordance with the Danish Financial Statements Act. 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 Consolidated Financial Statements and the Parent Company 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 consolidated financial statements and parent company financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements and the parent company 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 consolidated financial statements and the parent company financial statements unless Management either intends to liquidate the Group or 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 consolidated financial statements and the parent company 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 consolidated financial statements and parent company financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements and the parent company 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 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 consolidated financial statements and the parent company 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 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 consolidated financial statements and the parent company 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 Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the consolidated financial statements and the parent company financial statements, including the disclosures, and whether the consolidated financial statements and the parent company 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. Statement on Management’s Review Management is responsible for Management’s Review. Our opinion on the consolidated financial statements and the parent company 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 consolidated financial statements and the parent company financial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the consolidated financial statements and the parent company 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, we conclude that Management’s Review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of Management’s Review. 58221000497760002283000-955100056600004106000Egen tekst herEgen tekst herEgen tekst herEgen tekst herEgen tekst her39140002689000-343000-466000-442000-531000654000-1149700034720002158000Egen tekst herEgen tekst herEgen tekst herEgen tekst herEgen tekst her309000-1144400021470001558000Egen tekst herEgen tekst herEgen tekst herEgen tekst herEgen tekst her1516000195200030320003070000Egen tekst herEgen tekst herEgen tekst herEgen tekst herEgen tekst her49147000319330004135600045281000Egen tekst herEgen tekst herEgen tekst herEgen tekst herEgen tekst her443880004835100085000043400057300037100044640002048000877417.8-173.6101.4131.4428.4118.9106.897.8LikviditetsgradLikviditetsgradLikviditetsgradLikviditetsgradLikviditetsgrad8.310.610.14.27.9-283.566143.6The key figures appearing from the survey have been calculated as follows: Return on equity investment Operating profit or loss (EBIT) x 100 / Average invested capital Invested capital Operational intangible and tangible assets and net working capital Acid test ratio Current assets x 100 / Short term liabilities other than provisions Solvency ratio Equity less non-controlling interests, closing balance x 100 / Total assets, closing balance Return on equity *Profit x 100 / Average equity exclusive of non-controlling interests The principal activities of the group The Company carries on Consulting, Engineering & Design activities within the Marine & Offshore segments. KNUD E. HANSEN A/S was established on November 1, 1937. Development in activities and financial matters The gross profit for the year totals DKK 37.732 thousand against DKK 28.991 thousand last year. Income from ordinary activities after tax totals DKK 309 thousand against a loss of DKK -11.444 thousand last year. The result did not meet the budget expectations due to the impact of the closing down in respect of the Covid-19 Pandemic. However due to the Covid-19 Pandemic the result is considered satisfying. The equity amounts to DKK 4.192 thousand at 31 december 2021. Year 2021 started as slow year for KNUD E. HANSEN due to lack of order intake in all segments. This changed medio 2021 with orders in Offshore Wind where the company has a leading world-wide position as designer. Futhermore we had secured projects that created the basis for new large orders. KNUD E. HANSEN has grown to approx. 100 employees world-wide with nine offices serving our clients around the clock. Even with the Covid-19 situation we decided to keep the staff and the resources have been utilized to develop designs in Offshore Wind and in future fuels and that decision has created business for us both short and long term. The Group did receive Covid 19- compensation amounting to DKK 6.217 Thousand during the year. Reference is made to note 1 for more details. Accounting estimates The Companys activites with Engineering and Design implies ongoing accounting estimates with normal uncertainty in the estimates during the projecct lifetime due to the nature of the projects. The Company and the Group has recognised a deferred tax asset DKK 1.426 thousand, which is expected to be used within the nex 3-5 years. The value of the asset is conditioned by future positive earnings. Reference is made to note 14 for more details. Knowledge resources KNUD E. HANSEN A/S' success is based on the competences and commitment of our employees. It is essential for us to offer a challenging and stimulating working enviroment, where investments are made on a continual basis to develop, maintain and attract the best talents in the business, by offering a flexible, informal, challenging and stimulating career path. Recruiting is international. Outlook Based on the projects under negotiation, expectations for 2022 are positive. We expect a pre-tax income of DKK 3 million for 2022 and an equity in the range of DKK 7 million per 31 December 2022. Events occurring after the end of the financial year No events have occured after the balance sheet date which could significantly affect the Company's financial position. Branches abroad KNUD E. HANSEN A/S, Naval Architects has a branch named KNUD E. HANSEN A/S, Naval Architects Filial Færøerne. The branch is located in Tórshavn in the Faroe Island. 1. Special items Special items for the year are specified below, indicating where they are recognised in the income statement. Group Parent 2021 2020 2021 2020 Income: Covid-19 compensation 6.217.446 3.284.592 4.998.779 2.580.122 6.217.446 3.284.592 4.998.779 2.580.122 Special items are recognised in the following items in the financial statements: Other operating income 6.217.446 3.284.592 4.998.779 2.580.122 Profit of special items, net 6.217.446 3.284.592 4.998.779 2.580.122 Group Parent 31/12 2021 31/12 2020 31/12 2021 31/12 2020 14. Deferred tax assets Deferred tax assets 1 January 2021 1.634.268 1.630.923 1.630.923 1.630.923 Deferred tax of the results for the year -208.232 3.345 -204.887 0 1.426.036 1.634.268 1.426.036 1.630.923 Group The group has a total deferred tax asset at a carrying amount of DKK 7.323 thousand of which DKK 1.426 thousand is recognised, which is expected utilized within a foreseeable future. Parent company The parent company has a total deferred tax asset at a carrying amount of DKK 7.323 thousand of which DKK 1.426 thousand is recognised, which is expected utilized within a foreseeable future. 18. Collateral Group The group has not provided any security or other collateral in assets at 31 December 2021. Parent company The parent Company has not provided any security or other collateral in assets at 31 December 2021. 19. Contingencies Contingent liabilities, Group and Parent company 31/12 2021 DKK in thousands Rent and lease liabilities 24.413 Total contingent liabilities 24.413 Rent and lease liabilities primarily relate to contracts which are non-cancellable until 2021-2031. Included in the amount above the parent company acts as guarantor in regard to the agreemeent for a lease in London between Knud E. Hansen (UK) Ltd. and the landlord and is therefore liable for rent obligations at a total amount of DKK 44 thousand. Joint taxation The parent company is jointly taxed with its parent, KEH Naval Architects Holding ApS, company reg. no 34690855 as administration company. The company is subject to the Danish scheme of joint taxation and unlimitedly, jointly, and severally liable, along with the other jointly taxed companies, for the total corporation tax. Any subsequent adjustments of corporate taxes or withholding tax, etc., may result in changes in the company's liabilities. 20. Related parties Keh Naval Architects Holding ApS, Helsingør, Denmark (direct parent) Participating interest Damen Shipyard Group NV, Curacao, Curacao (Ultimate parent) Participating interest Transactions The company and group have the following related party transactions (in DKK Thousand): Group Parent 2021 2020 2021 2020 Revenue 902 4.411 902 4.411 Interest -230 -228 -230 -228 Receivables from group entities 8.774 476 8.774 476 Payables to group entities 50 11.397 50 11.397 Long term debt, group entity 35.000 0 35.000 0 In accordance with section 98C, subsection (3) of the Danish Financial Statement Act, Knud E. Hansen A/S Naval Architects, has not presented the related party transactions with wholly owned subsidiaries. Information about remuneration to management appears from note 2, "Staff costs" Consolidated financial statements The company is included in the consolidated financial statements of Damen Shipyard Group NV, Curacao, Curacao. The consolidated financial statements are available at the Chamber of Commerce in The Netherlands. The annual report for KNUD E. HANSEN A/S, Naval Architects has been presented in accordance with the Danish Financial Statements Act regulations concerning reporting class C enterprises (medium sized enterprises). The accounting policies are unchanged from last year, and the annual report is presented in DKK. Foreign currency translation Transactions in foreign currency are translated by using the exchange rate prevailing at the date of the transaction. Differences in the rate of exchange arising between the rate at the date of transaction and the rate at the date of payment are recognised in the profit and loss account as an item under net financials. Receivables, payables, and other foreign currency monetary items are translated using the closing rate. The difference between the closing rate and the rate at the time of the occurrence or initial recognition in the latest financial statements of the receivable or payable is recognised in the income statement under financial income and expenses. Group enterprises abroad, are considered separate entities. Items in such entities income statements are translated at an average exchange rate for the month, and balance sheet items are translated at closing rates. Foreign exchange differences arising on translation of the opening equity of foreign subsidiaries to closing rates and on translation of the income statements from average exchange rates to closing rates are taken directly to equity. Gross profit With reference to section 32 of the Danish Financial Statements Act, the items 'Revenue', 'Cost of sales', 'Other external expenses' and 'Other operating income' are consolidated into one item designated 'Gross margin'. Revenue Revenue is recognised in the income statement if delivery and passing of risk to the buyer have taken place before the end of the year and if the income can be determined reliably and inflow is anticipated. Recognition of revenue is exclusive of VAT and taxes and less any discounts relating directly to sales. Contract work in progress concerning construction contracts is recognised in the revenue concurrently with the production process. Thus, the revenue corresponds to the selling price of the total yearly production (the production method). The revenue is recognised when the total income and costs of the contract and the stage of completion on the reporting date can be reliably validated and it is deemed probable that the financial benefits will flow to the company. When the results of a contract cannot be reliably validated, the revenue is recognised solely on a cost basis to the extent that it seems probable that the costs will be recovered. Licence and royalty income is recognised in accordance with the contents of the agreement. Cost of sales Cost of sales comprises costs concerning purchase of materials and consumables less discounts and changes in inventories. Other external expenses Other external expences comprise expenses incurred for sales, advertising, administration, premises, loss on receivables, and operational leasing costs. Depreciation, amortisation, and writedown for impairment Depreciation, amortisation, and writedown for impairment comprise depreciation on, amortisation of, and writedown for impairment of intangible and tangible assets, respectively. Financial income and expenses Financial income and expenses are recognised in the income statement with the amounts concerning the financial year. Financial income and expenses comprise interest income and expenses, realised and unrealised capital gains and losses relating to securities, debt and transactions in foreign currency, amortisation of financial assets and liabilities as well as surcharges and reimbursements under the advance tax scheme, etc. Results from investments in subsidiaries After full elimination of intercompany profit or loss, the equity investment in the individual subsidiaries are recognised in the income statement of the parent as a proportional share of the subsidiaries' post-tax profit or loss. Tax on net profit or loss for the year Tax for the year comprises the current income tax for the year and changes in deferred tax and is recognised in the income statement with the share attributable to the net profit or loss for the year and directly in equity with the share attributable to entries directly in equity. The parent and the Danish group enterprises are subject to Danish rules on compulsory joint taxation of Danish group enterprises. The current Danish income tax is allocated among the jointly taxed companies proportional to their respective taxable income (full allocation with reimbursement of tax losses). Property, plant, intangible assets and equipment Property, plant, intangible assets and equipment are measured at cost less accrued depreciation and writedown for impairment. The depreciable amount is cost less any expected residual value after the end of the useful life of the asset. The amortisation period and the residual value are determined at the acquisition date and reassessed annually. If the residual value exceeds the carrying amount, the depreciation is discontinued. If the amortisation period or the residual value is changed, the effect on amortisation will, in future, be recognised as a change in the accounting estimates. The cost comprises acquisition cost and costs directly associated with the acquisition until the time when the asset is ready for use. The cost of a total asset is divided into separate components. These components are depreciated separately, the useful lives of each individual components differing, and the individual component representing a material part of the total cost. Depreciation is done on a straight-line basis according to an assessment of the expected useful life: Buildings Useful life 3 years Plant and machinery Useful life 3 years Other fixtures and fittings, tools and equipment Useful life 3-5 years Minor assets with an expected useful life of less than 1 year are recognised as costs in the income statement in the year of acquisition. Profit or loss derived from the disposal of property, intangible assets, and equipment is measured as the difference between the sales price less selling costs and the carrying amount at the date of disposal. Profit or loss is recognised in the income statement as other operating income or other operating expenses. Investments in subsidiaries Investments in subsidiaries are recognised and measured by applying the equity method. The equity method is used as a method of consolidation. Investments in subsidiaries are recognised in the statement of financial position at the proportionate share of the enterprise's equity value. This value is calculated in accordance with the parent's accounting policies with deductions or additions of unrealised intercompany gains and losses as well as with additions or deductions of the remaining value of positive or negative goodwill calculated in accordance with the acquisition method. Negative goodwill is recognised in the income statement at the time of acquisition of the equity investment. If the negative goodwill relates to contingent liabilities acquired, negative goodwill is not recognised until the contingent liabilities have been settled or lapsed. Investments in subsidiaries with a negative equity value are measured at DKK 0, and any accounts receivable from these enterprises are written down to the extent that the account receivable is uncollectible. To the extent that the parent has a legal or constructive obligation to cover an negative balance that exceeds the account receivable, the remaining amount is recognised under provisions. To the extent the equity exceeds the cost, the net revaluation of equity investments in subsidiaries transferred to the reserve under equity for net revaluation according to the equity method. Dividends from subsidiaries expected to be adopted before the approval of this annual report are not subject to a limitation of the revaluation reserve. The reserve is adjusted by other equity movements in subsidiaries. Receivables Receivables are measured at amortised cost, which usually corresponds to nominal value. In order to meet expected losses, impairment takes place at the net realisable value. The company has chosen to use IAS 39 as a basis for interpretation when recognising impairment of financial assets, which means that impairments must be made to offset losses where an objective indication is deemed to have occurred that an account receivable or a portfolio of accounts receivable is impaired.If an objective indication shows that an individual account receivable has been impaired, an impairment takes place at individual level. Prepayments Prepayments recognised under assets comprise incurred costs concerning the following financial year. Equity Reserve for net revaluation according to the equity method The reserve for net revaluation according to the equity method comprises net revaluation of equity investments in subsidiaries, associates and equity interests proportional to cost. The reserve may be eliminated in the event of losses, realisation of equity investments, or changes in the accounting estimates. The reserve cannot be recognised by a negative amount. Reserve for development costs The reserve for development costs comprises recognised development costs less related deferred tax liabilities. The reserve cannot be used as dividends or for covering losses. The reserve is reduced or dissolved if the recognised development costs are amortised or abandoned. This is done by direct transfer to the distributable reserves of the equity. Translation reserve The translation reserve comprises the share of foreign exchange differences arising on translation of financial statements of entities that have a functional currency other than DKK, foreign exchange adjustments of assets and liabilities considered part of the Company's net investments in such entities and foreign exchange adjustments regarding hedging transactions that hedge the Company's net investments in such entities. The reserve is dissolved on the sale of foreign entities or if the conditions for effective hedging no longer exist. When equity investments in subsidiaries and associates in the parent company financial statements are subject to the limitation requirement in the net revaluation reserve according to the equity method, foreign exchange adjustments will be included in this equity reserve instead. Income tax and deferred tax Current tax liabilities and current tax receivable are recognised in the statement of financial position as calculated tax on the taxable income for the year, adjusted for tax of previous years' taxable income and for tax paid on account. The company is jointly taxed with consolidated Danish companies. The current corporate income tax is distributed between the jointly taxed companies in proportion to their taxable income and with full distribution with reimbursement as to tax losses. The jointly taxed companies are comprised by the Danish tax prepayment scheme. Joint taxation contributions payable and receivable are recognised in the statement of financial position as ”Income tax receivable” or “Income tax payable”. According to the rules of joint taxation, KNUD E. HANSEN A/S, Naval Architects is unlimitedly, jointly, and severally liable to pay the Danish tax authorities the total income tax, including withholding tax on interest, royalties, and dividends, arising from the jointly taxed group of companies. Deferred tax is measured on the basis of temporary differences in assets and liabilities with a focus on the statement of financial position. Deferred tax is measured at net realisable value. Adjustments take place in relation to deferred tax concerning elimination of unrealised intercompany gains and losses. Deferred tax is measured based on the tax rules and tax rates applying under the legislation prevailing in the respective countries on the reporting date when the deferred tax is expected to be released as current tax. Changes in deferred tax due to changed tax rates are recognised in the income statement, except for items included directly in the equity. Deferred tax assets, including the tax value of tax losses allowed for carryforward, are recognised at the value at which they are expected to be realisable, either by settlement against tax of future earnings or by set-off in deferred tax liabilities within the same legal tax unit. Any deferred net tax assets are measured at net realisable value. Liabilities other than provisions Financial liabilities other than provisions related to borrowings are recognised at the received proceeds less transaction costs incurred. In subsequent periods, the financial liabilities are recognised at amortised cost, corresponding to the capitalised value when using the effective interest rate. The difference between the proceeds and the nominal value is recognised in the income statement during the term of the loan. Other liabilities concerning payables to suppliers, group enterprises, and other payables are measured at amortised cost which usually corresponds to the nominal value. Intangible assets Development projects, patents, and licences Development costs comprise salaries, wages, and amortisation directly attributable to development activities. Patents and licenses are measured at cost less accrued amortisation and writedowns for impairment. Patents are amortised on a straightline basis over the remaining patent period and licenses are amortised over the contract period, however, for 3 years. Clearly defined and identifiable development projects are recognised as intangible assets provided that they are proven to be technically practicable, that sufficient resources and a potential market or development opportunity exist, and insofar as the intention is to produce, market or utilise the project. It is, however, a condition that the cost can be reliably calculated and that a sufficiently high degree of certainty indicates that future earnings will cover the costs of production, sales, and administration. Other development costs are recognised in the income statement concurrently with their realisation. Profit and loss from the sale of development projects, patents, and licenses are measured as the difference between the sales price less sales costs and the carrying amount at the time of sale. Profit or loss are recognised in the income statement as other operating income or other operating expenses, respectively. 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