Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2023-01-01 2023-12-31 2022-01-01 2022-12-31 42199788 P-Sinful 2021 A/S Malmøgade 3 2100 København Ø 2021-03-01 København EY Godkendt Revisionspartnerselskab 30700228 Værkmestergade 25 8100 Aarhus C Danmark +45 73 23 30 00 2024-06-18 René Lyngs Houmøller Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2024-06-18 2024-06-18 CaseWare Working Papers Copenhagen Jan Johan Kühl Rune Gornitzka Chairman Jan Johan Kühl Henrik Bonnerup Aarhus Claus Hammer-Pedersen Jonas Busk State Authorised Public Accountant mne21334 State Authorised Public Accountant mne42771 280235000 15265000 -2895000 31822000 Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) -14958000 -58230000 -37287000 -20522000 -34879000 834753000 -6169000 -2835000 -360000 352310000 -11675000 -682819000 742082000 19238000 -24988000 47588000 Total cash flows Total cash flows Total cash flows Total cash flows Total cash flows 21.6 19.1 23 -7.7 -9.2 -1.8 252.9 220.6 236.2 Current ratio Current ratio Current ratio Current ratio Current ratio 17.7 21.2 23.2 -44 -29.2 -10.2 107 368120000 363568000 0 0 198586000 193906000 0 0 -7031000 -4448000 0 0 96900000 104501000 26000 33000 79665000 69609000 -26000 -33000 64400000 72497000 0 0 72428000 70591000 0 0 0 7000 0 0 -57163000 -73486000 -26000 -33000 0 0 -64001000 -52101000 685000 145000 10000 0 58915000 37432000 3000 8000 -115393000 -110773000 -64020000 -52142000 178000 -16532000 9000 -9000 -115571000 -94241000 -64029000 -52133000 51542000 42108000 -94241000 16589000 0 0 0 1751000 2468000 0 0 2947000 11788000 0 0 309486000 334580000 0 0 260135000 295608000 0 0 1517000 8319000 0 0 592425000 652763000 0 0 1654000 1640000 0 0 248000 435000 0 0 7281000 0 0 0 0 1854000 0 0 9183000 3929000 0 0 0 0 126823000 163116000 1969000 2025000 0 0 1969000 2025000 126823000 163116000 603577000 658717000 126823000 163116000 67888000 81986000 0 0 67888000 81986000 0 0 4856000 4790000 0 0 0 0 0 9000 921000 1818000 0 0 1711000 1389000 0 0 7488000 7997000 0 9000 41837000 22600000 639000 657000 117213000 112583000 639000 666000 720790000 771300000 127462000 163782000 22711000 22422000 22711000 22422000 0 0 0 0 104730000 141340000 104730000 141340000 102134000 131936000 0 0 229575000 295698000 127441000 163762000 67302000 67124000 0 0 67302000 67124000 0 0 58443000 55135000 0 0 319125000 302307000 0 0 377568000 357442000 0 0 1236000 979000 0 0 24218000 28192000 21000 20000 20891000 21865000 0 0 46345000 51036000 21000 20000 423913000 408478000 21000 20000 720790000 771300000 127462000 163782000 22189000 171188000 158933000 0 0 -3455000 233000 23074000 17693000 -52133000 -42108000 0 -789000 873000 22422000 141340000 131936000 0 0 -318000 289000 28630000 21081000 -64029000 -51542000 0 -1211000 977000 22711000 104730000 127441000 102134000 22189000 0 171188000 233000 23074000 -52101000 -32000 52890000 -52890000 0 -789000 0 22422000 0 141340000 289000 28630000 -64001000 -28000 65212000 -65212000 0 -1211000 0 22711000 0 104730000 -115571000 -94241000 123805000 91353000 9973000 -16392000 18207000 -19280000 685000 145000 38790000 28724000 0 2449000 -19898000 -50308000 5822000 9473000 4492000 2835000 -10314000 -12308000 318000 3455000 50000000 41000000 -232000 83000 49450000 37628000 19238000 -24988000 22600000 47588000 41838000 22600000 58336000 67099000 0 0 4346000 3607000 0 0 1718000 1791000 0 0 64400000 72497000 0 0 132 154 0 0 3248000 1729000 0 0 500000 725000 0 0 3748000 2454000 0 0 178000 -16534000 9000 -9000 0 2000 0 0 -64001000 -52101000 -28000 -32000 0 3011000 26522000 376403000 354730000 8319000 0 0 0 0 0 11176000 17978000 0 0 0 0 -17978000 17978000 3011000 26522000 376403000 354730000 1517000 0 543000 14734000 41823000 59122000 0 1389000 717000 8841000 25094000 35473000 0 1389000 1260000 23575000 66917000 94595000 0 16589000 1751000 2947000 309486000 260135000 1517000 3345000 1126000 0 1854000 742000 0 5427000 0 0 0 1854000 -1854000 4087000 1126000 7281000 0 1705000 691000 0 0 728000 187000 0 2433000 878000 0 0 1654000 248000 7281000 0 2025000 56000 1969000 1969000 234251000 28919000 263170000 -71135000 -64001000 -1211000 126823000 Sinful HoldCo A/S Højberg, Denmark 55.39 Sinful BidCo A/S Højberg, Denmark 55.39 Sinful ApS Højberg, Denmark 55.39 1121109691 A 11211000 11211000 554775930 B1 5548000 5548000 554775930 B2 5548000 5548000 5778916 B3 58000 58000 5778916 B4 58000 58000 22189000 504000 233000 21685000 22422000 22189000 67124000 83658000 -9000 0 67302000 67124000 0 69606000 78573000 0 0 -303000 -287000 0 0 -830000 -758000 0 0 -1171000 -10404000 0 -9000 58443000 0 58443000 58443000 319125000 0 319125000 319125000 72428000 70591000 0 -7000 -685000 -145000 -58915000 -37432000 178000 -16532000 -7031000 0 -14098000 17476000 247000 -1853000 3976000 -4085000 -396000 -1148000 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of P-Sinful 2021 A/S for the financial year 1 January - 31 December 2023. The annual report is prepared in accordance with 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 Company at 31 December 2023 and of the results of the Group's and the Company's operations and of the consolidated cash flows for the financial year 1 January - 31 December 2023. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of P-Sinful 2021 A/S We have audited the consolidated financial statements and the parent company financial statements of P-Sinful 2021 A/S for the financial year 1 January - 31 December 2023, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies, for the Group and the Parent Company, and a consolidated cash flow statement. The consolidated financial statements and the parent company financial statements are prepared in accordance with 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 2023, and of the results of the Group's and Parent Company's operations as well as the consolidated cash flows for the financial year 1 January - 31 December 2023 in accordance with the Danish Financial Statements Act. 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" (herinafter collectively referred to as "the financial statements") section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence 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. Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to 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 the financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Management is responsible for the Management's review. Our opinion on the financial statements does not cover the 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 the Management's review and, in doing so, consider whether the 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 the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the 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 of the Management's review. The financial ratios stated under "Financial highlights" have been calculated as follows: Operating profit/loss Profit/loss before net financials +/- Other operating income and other operating expenses Gross margin Gross profit/loss x 100 Revenue Return on assets Profit/loss from operating activites x 100 Average assets Current ratio Current assets x 100 Current liabilities Equity ratio Equity excl. non-controlling interests, year-end x 100 Total equity and liabilities, year-end Return on equity Profit/loss for the year after tax excl. non-controlling interests x 100 Average equity excl. non-controlling interests The Group’s activities are the continued development and operation of the webshop “Sinful” across multiple markets as well as the continued development of the optimal assortment including Branded and Private Label products under its own brands. In 2023, the group reported a revenue of DKK 368.1 million against DKK 363.6 million last year. The income statement for 2023 shows a loss of DKK 115.6 million against DKK 94.2 million last year, and the balance sheet of 31 December 2022 shows an equity of DKK 229.6 million. Management considers the group's financial performance for 2023 unsatisfactory. In 2022 financial statement management expected revenue to increase up to 10% and profit before interest and tax up to DKK 10 million. In 2023 revenue has increased by 1.3% compared to 2022 to DKK 368.1 million, which is in line with the management expectations. Profit before interest and tax increased to DKK 11.9 million, which is slightly above management's expectations from last year, which mainly is due to increased focus on profitability. The loss for the year ended below Management’s expectations. The decrease is heavily affected by the increase in financial expenses during the year. Recognition and measurement uncertainties During the financial year, the group carried out impairment tests regarding investments in group entities / Intangible assets. The impairment test did not give rise to impairment of the accounting values. Impairment tests are always associated with uncertainty, including management's expectations for the company's budget for the coming years, growth rate during the terminal period and discount factor. If the assumptions used develop negatively, there may be a need to make write-downs in the coming financial year. Non-financial matters P-Sinful 2021 A/S was established in 2021 by Polaris Private Equity, and the Group successfully acquired the majority of Sinful ApS. Polaris is a leading Nordic private equity company investing in mid-sized companies with the objective to invest in strong companies with great potential and grow them substantially in partnership with Management and the Board. With effect from the financial year 2023, the company has transitioned from large reporting class C to medium-sized reporting class C due to the new increased size limits in the Danish Financial Statements Act. Special risks Operational risks The company’s most significant operational risk is associated with its strong brand position in the Nordic countries. To maintain a strong brand position, it is essential for the company to constantly be leading developments and trends in sex toys. Foreign currency risks The company has significant exposure to DKK, NOK, SEK, GBP, EUR, and USD. Management considers the company’s risk of fluctuations in foreign currency to be moderate. Management has established a foreign currency policy and continuously monitors the current and potential risks. Capital structure and resources The P-Sinful 2021 A/S share capital is divided into share classes. Management regularly assesses whether Sinful has a capital structure that corresponds to the Company’s need for the financing of working capital. Together with the Group’s owners and Board of Directors, the Executive Board assesses the combination of equity and loans from shareholders and external financing on a recurring basis. Management maintains an ongoing dialogue with the Group’s most important lenders and shareholders, who show a high level of confidence in the Group. Management assesses that the Group’s current capital structure and resources are adequate and sufficient to carry through the activities planned for the financial year 2023. The group’s current loan agreement with credit institution is valid until 30 June 2025, where interest will be attributed to the principal amount of the loan. Management expects the company's loan terms will be renegotiated in the autumn of 2024 to ensure a long-term sustainable capital structure. Reporting guidelines of Active Owners The Sinful Group is partly owned by private equity and follows certain reporting guidelines issued by the Danish Venture Capital and Private Equity Association. You may find the guidelines here www.aktiveejere.dk. Shareholder information The Company’s shares are owned by Polaris Private Equity V K/S (99%) and other investors (1%). The Company requires accountability from suppliers and wants to make sure that suppliers areworking within the same ethical guidelines and good business practices as the company. To ensurethese terms are kept, the Company continuously works to get suppliers to sign a trade agreement,which, among other things, must meet the ethical standards of The Business Social ComplianceInitiative. Therefore, the company's products must meet EU standards for consumer goods and must thereforenot contain hazardous materials. Employees in numbers Employees constitute the most important asset of Sinful, which makes it important to ensure the required technical and human skills. During the year, Sinful has therefore held several courses e.g. in connection to onboarding, development and employee retention. At management level, training in being a leader has been provided. By the end of 2023 the number of employees within the group has decreased with 79 headcounts to 149, compared to 2022, where the number of employees were 228, compared to 205 by the end of 2021. All employees are currently employed in Denmark. No events materially affecting the Group's and the Group's financial position have occurred subsequent to the financial year-end. The Group’s revenue for 2024 is expected to decrease by 10-20% due to difficult market conditions. Recognized income from investments in Sinful ApS is negatively affected by amortization of goodwill and other amortization related to fair value adjustments of identifiable assets in connection with the acquisition of Sinful ApS. Management expects a profit before interest and tax from Sinful ApS in the range of DKK -2 to 10 million as a result of lower revenue. The annual report of P-Sinful 2021 A/S for 2023 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to medium-sized reporting class C entities. With effect from the financial year 2023, the company has transitioned from large reporting class C to medium-sized reporting class C due to the new increased size limits in the Danish Financial Statements Act. This has not affected the company's accounting policies for recognition and measurement of assets and liabilities, but has only resulted in changed presentation and disclosure requirements. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Reporting currency The financial statements are presented in Danish kroner (DKK'000). Control The consolidated financial statements comprise the Parent Company and group entities controlled by the Parent Company. Control means a parent company’s power to direct a group entity’s financial and operating policy decisions. Besides the above power, the parent company should also be able to yield a return from its investment. In assessing if the parent company controls an entity, de facto control is taken into consideration as well. The existence of potential voting rights which may currently be exercised or converted into additional voting rights is considered when assessing if an entity can become empowered to direct another entity’s financial and operating decisions. Preparation of consolidated financial statements The consolidated financial statements are prepared as a consolidation of the parent company's and the individual group entities' financial statements, which are prepared according to the group's accounting policies. On consolidation, intra-group income and expenses, shareholdings, intra-group balances and dividends, and realised and unrealised gains on intra-group transactions are eliminated. Unrealised gains on transactions with associates are eliminated in proportion to the group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains if they do not reflect impairment. In the consolidated financial statements, the accounting items of group entities are recognised in full. Non-controlling interests' share of the profit/loss for the year and of the equity of group entities which are not wholly-owned are included in the group's profit/loss and equity, respectively, but are disclosed separately. Acquisitions and disposals of non-controlling interests which are still controlled are recognised directly in equity as a transaction between shareholders. On initial recognition, non-controlling interests are measured at the fair value of the non-controlling interests' equity interest. Recently acquired entities are recognised in the consolidated financial statements from the date of acquisition. Entities sold or otherwise disposed of are recognised up to the date of disposal. Comparative figures are not restated to reflect newly acquired entities. Discontinued operations are presented separately, see below. The date of acquisition is the date when the group actually obtains control of the acquiree. The acquisition method is applied to the acquisition of new entities of which the group obtains control. The acquirees’ identifiable assets, liabilities and contingent liabilities are measured at fair value at the date of acquisition. Identifiable intangible assets are recognised if they are separable or arise from a contractual right. Deferred tax related to the revaluations is recognised. Positive differences (goodwill) between, on the one hand, the consideration for the acquiree, the value of non-controlling interests in the acquired entity and the fair value of any previously acquired equity investments and, on the other hand, the fair value of the assets, liabilities and contingent liabilities acquired are recognised as goodwill under “Intangible assets”. Goodwill is amortised on a straight-line basis in the income statement based on an individual assessment of the economic life of the asset. Negative differences (negative goodwill) are recognised in the income statement at the date of acquisition. Upon acquisition, goodwill is allocated to the cash-generating units, which subsequently form the basis for impairment testing. Goodwill and fair value adjustments in connection with the acquisition of a foreign entity with a functional currency different from the presentation currency used in the consolidated financial statements are accounted for as assets and liabilities belonging to the foreign entity and are, on initial recognition, translated into the foreign entity's functional currency using the exchange rate at the transaction date. The consideration paid for an entity consists of the fair value of the agreed consideration in the form of assets transferred, liabilities assumed and equity instruments issued. If part of the consideration is contingent on future events or compliance with agreed terms, such part of the consideration is recognised at fair value at the date of acquisition. Subsequent adjustments of contingent considerations are recognised in the income statement. Expenses incurred to acquire entities are recognised in the income statement in the year in which they are incurred. Where, at the date of acquisition, the identification or measurement of acquired assets, liabilities or contingent liabilities or the determination of the consideration is associated with uncertainty, initial recognition will take place on the basis of provisional amounts. If it turns out subsequently that the identification or measurement of the consideration transferred, acquired assets, liabilities or contingent liabilities was incorrect on initial recognition, the statement will be adjusted retrospectively, including goodwill, until 12 months after the acquisition, and comparative figures will be restated. Hereafter, any adjustments are recognised as misstatements. Gains or losses from disposal of group entities which result in loss of control are calculated as the difference between, on the one hand, the fair value of the selling price less selling expenses and, on the other hand, the carrying amount of net assets. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income from the sale of goods for resale and finished goods, is recognised in revenue when the most significant rewards and risks have been transferred to the buyer and provided the income can be measured reliably and payment is expected to be received. The date of the transfer of the most significant rewards and risks is based on standardised terms of delivery based on Incoterms® 2020. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. Cost of sales includes the cost of goods used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. The basis of amortisation/depreciation, which is calculated as cost less any residual value, is amortised/depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Completed development projects 5 years Acquired rights and other assets 3-10 years Customer relationships 3 years Patents and brand 15 years Goodwill 10 years Fixtures and fittings, other plant and equipment 3-5 years Leasehold improvements 3-5 years The residual value amounts to DKK 0. Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. Other operating expenses comprise items of a secondary nature relative to the Company's core activities, including losses on the sale of fixed assets. The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In group entities, the full elimination of internal profit and loss is carried out without regard to ownership shares. The proportionate share of the individual group entities' profit/loss after tax after full elimination of internal gains/losses are recognised in the parent company's income statement. Financial income and expenses are recognised in the income statement at the amounts that relate to the financial reporting period. The items comprise interest income and expenses, e.g. from group entities, exchange gains and losses and service charge offset against recived payments from card companies. The parent company is covered by the Danish rules on mandatory joint taxation of the Group's Danish group entities. Group entities are included in the joint taxation arrangement from the date at which they are included in the consolidated financial statements and up to the date when they are no longer consolidated. The parent company acts as management company for the joint taxation arrangement and consequently settles all corporate income tax payments with the tax authorities. On payment of joint taxation contributions, the Danish corporate income tax charge is allocated between the jointly taxed entities in proportion to their taxable income. Entities with tax losses receive joint taxation contributions from entities that have been able to use the tax losses to reduce their own taxable income. Tax for the year, which comprises the current income tax charge, joint taxation contributions and deferred tax adjustments, including adjustments arising from changes in tax rates, is recognised in the income statement as regards the portion that relates to the profit/loss for the year and directly in equity as regards the portion that relates to entries directly in equity. Goodwill is amortised over the expected economic life of the asset, measured by reference to Management’s experience in the individual business segments. Goodwill is amortised on a straight-line basis over the amortisation period. Other intangible assets include customer relationships, patents and brand and other acquired intangible rights, including domain. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. Development costs comprise expenses, salaries and amortisation directly or indirectly attributable to development activities. Development projects that are clearly defined and identifiable, where the technical feasibility, sufficient resources and a potential future market or development opportunities areidentifiable and where the Company intends to produce, market or use the project, are recognised as intangible assets provided that the cost can be measured reliably and that there is sufficient assurance that future earnings can cover production costs, selling costs and administrative expenses and development costs. Other development costs are recognised in the income statement as incurred. Development costs that are recognised in the balance sheet are measured at cost less accumulated amortisation and impairment losses. On completion of a development project, development costs are amortised on a straight-line basis over the estimated useful life. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. The Company has chosen IAS 17 as interpretation for classification and recognition of leases. Leases that do not transfer substantially all the risks and rewards incident to the ownership to the Company are classified as operating leases. Payments relating to operating leases and any other rent agreements are recognised in the income statement over the term of the lease. The Company's aggregate liabilities relating to operating leases and other rent agreements are disclosed under "Contingent liabilities". Equity investments in subsidiaries are measured according to the equity method, where the consolidation method has been choosen. Equity investments in joint ventures are also measured according to the equity method in the consolidated financial statements. On initial recognition, equity investments in group entities are measured at cost, i.e. plus transaction costs. The cost is allocated in accordance with the acquisition method; see the accounting policies regarding business combinations. The cost is adjusted by shares of profit/loss after tax calculated in accordance with the Group's accounting policies less or plus unrealised intra-group gains/losses. Identified increases in value and goodwill, if any, compared to the underlying entity's net asset value are amortised in accordance with the accounting policies for the assets and liabilities to which they can be attributed. Dividend received is deduced from the carrying amount. Equity investments in group entities measured at net asset value are subject to impairment test requirements if there is any indication of impairment. The carrying amount of intangible assets, property, plant and equipment and investments in group entities is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. The net realisable value of inventories is calculated as the sales amount less costs of completion and expenses required to effect the sale and is determined taking into account marketability, obsolescence and development in the expected selling price. Goods for resale are measured at cost, which comprises the cost of acquisition plus delivery costs as well as other expenses directly attributable to the acquisition. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprise cash and short term securities which are readily convertible into cash and subject only to minor risks of changes in value. Reserve for net revaluation according to the equity method The net revaluation reserve according to the equity method includes net revaluations of investments in group entities and associates relative to cost. The reserve can be eliminated in case of losses, realisation of investments or a change in accounting estimates. The reserve cannot be recognised at a negative amount. The Company has chosen IAS 39 as interpretation for liabilities. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at net realisable value. Prepayments received from customers, recognized under liabilities, relates to prepayments received that relate to revenue subsequent to the financial year, including payments received from sold gift cards. The cash flow statement shows the Company's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year. Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital and paid corporate income tax. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities and of intangible assets, property, plant and equipment and investments. Cash flows from financing activities comprise changes in the size or composition of the Company's share capital and related expenses as well as raising of loans, repayment of interest bearing debt and payment of dividends to shareholders. Cash and cash equivalents comprise cash, short term bank loans and short term securities which are readily convertible into cash and which are subject only to insignificant risks of changes in value. During the financial year, the group carried out impairment tests regarding investments in group entities / Intangible assets. The impairment test did not give rise to impairment of the accounting values. Impairment tests are always associated with uncertainty, including management's expectations for the company's budget for the coming years, growth rate during the terminal period and discount factor. If the assumptions used develop negatively, there may be a need to make write-downs in the coming financial year. The group’s current loan agreement with credit institution is valid until 30 June 2025, where interest will be attributed to the principal amount of the loan. Management expects the company's loan terms will be renegotiated in the autumn of 2024 to ensure a long-term sustainable capital structure. No events materially affecting the Group's and the Company's financial position have occurred subsequent to the financial year-end. The parent company did not pay any remuneration to Management during the financial year. Completed development projects Completed development projects includes development of IT projects, which will be a part of the futureoperation in the company, and will through the expected efficiency add future earnings. Intangible assets under development Intangible assets under development includes development of IT projects, which will be a part of the future operation in the group, and will through the expected efficiency add future earnings. The company has tax loss carry-forwards which is recognised in the balance sheet under deffered tax assets.  Prepayments include accrual of expenses relating to subsequent financial years, including rent,insurance policies, etc. Each A and B1 share carries one voting right and each B2, B3 and B4 share carries ten voting rights. Other rent and lease liabilities: Group Parent company DKK'000 2023 2022 2023 2022 Rent and lease liabilities 5,030 8,434 0 0 Group Rent and lease includes a rent obligation totalling DKK 4,908 thousand in interminable rent agreements with remaining contract terms of 16 months, respectively and a lease obligation totalling DKK 122 thousand with a remaining contract term of 14 months. As management company, the Company is jointly taxed with other Danish group entities. The Company has joint and several liability with other jointly taxed group entities for payment of income taxes for the income year 2021 and withholding taxes falling due for payment on or after 1 May 2021 in the group of jointly taxed entities. As security for the Group's debt to other credit institutions, totalling DKK 325,179 thousand, the Company Sinful BidCo A/S has provided security in the shares in Sinful ApS, which is fullly consolidated into the consolidated financial statements. A company charge of DKK 10,000 thousand secured upon various intellectual property rights, unsecured claims and fixtures and fittings, tools and equipment at a carrying amount of DKK 102,033 thousand has been provided as collateral for the Company’s balance with its bank. The Company had no amount payable to its bank at 31 December 2023. The Parent Company has not placed any assets or other as security for loans at 31 December 2023. Parties exercising control Related party Domicile Basis for control Polaris Private Equity V K/S Copenhagen Shares Related party transactions DKK'000 2023 Group Interest expenses, group entities and other related parties 3,351 Payables, other related parties 58,443 Received capital increase 50,000 Parent Company Received capital increase 28,919 Given capital increase 28,919 Information on the remuneration to management Information on the remuneration to Management appears from note 5, "Staff costs". 42199788 2023-01-01 2023-12-31 d:ConsolidatedMember 42199788 2023-01-01 2023-12-31 42199788 2023-01-01 42199788 2022-01-01 2022-12-31 42199788 2022-12-31 42199788 2023-12-31 42199788 2022-01-01 42199788 2023-01-01 2023-12-31 d:ConsolidatedMember 1 42199788 2023-01-01 2023-12-31 d:ConsolidatedMember 2 42199788 2023-01-01 2023-12-31 d:ConsolidatedMember 3 42199788 2023-12-31 d:ConsolidatedMember 1 42199788 2023-12-31 d:ConsolidatedMember 2 42199788 2023-12-31 d:ConsolidatedMember 3 42199788 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