xbrli:pureiso4217:DKK323487342019-01-012019-12-311323487342019-01-012019-12-31323487342019-01-012019-12-311323487342019-01-012019-12-311323487342019-01-012019-12-311323487342019-01-012019-12-312323487342019-01-012019-12-313323487342019-01-012019-12-31323487342018-01-012018-12-31323487342019-01-012019-12-31fsa:RetainedEarningsMember323487342019-01-012019-12-31fsa:RetainedEarningsMember323487342018-01-012018-12-31fsa:RetainedEarningsMember323487342019-12-31323487342018-12-31323487342019-01-01fsa:ContributedCapitalMember323487342019-01-01fsa:ReserveForDevelopmentExpenditureMember323487342019-01-01fsa:RetainedEarningsMember323487342019-01-01323487342019-12-31fsa:ContributedCapitalMember323487342019-12-31fsa:ReserveForDevelopmentExpenditureMember323487342019-12-31fsa:RetainedEarningsMember323487342019-01-012019-12-31fsa:ReserveForDevelopmentExpenditureMemberRegnskabsklasse C, mellemstor virksomhed339635562018-01-012018-12-31Kolding60004Egtved AlléDeloitte Statsautoriseret RevisionspartnerselskabSønderborgSønderborg6400Revisionspåtegning2019-12-312019-01-01<br /><br />2FynsgadeBetter Energy Solutions A/S32348734339635560900 København CWeidekampsgade 6, Postboks 1600Deloitte Statsautoriseret RevisionspartnerselskabÅrsrapportThe Board of Directors and the Executive Board have today considered and approved the annual report of Better Energy Solutions A/S for the financial year 01.01.2019 - 31.12.2019.The annual report is presented in accordance with the Danish Financial Statements Act.In our opinion, the financial statements give a true and fair view of the entity’s financial position at 31.12.2019 and of the results of its operations for the financial year 01.01.2019 - 31.12.2019.We believe that the management commentary contains a fair review of the affairs and conditions referred to therein.We recommend the annual report for adoption at the annual general meeting.Sønderborg2020-04-15Mikkel Dau JacobsenDirectorRasmus Lildholdt KjærHo Kei AuAnnette Egede NylanderChairman of the boardBoard memberBoard memberTo the shareholders of Better Energy Solutions A/SWe have audited the financial statements of Better Energy Solutions A/S for the financial year 01.01.2019 - 31.12.2019, which comprise the income statement, balance sheet, statement of changes in equity and ​notes, including a summary of significant accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. ​ ​In our opinion, the financial statements give a true and fair view of the Entity’s financial position at 31.12.2019 and of the results of its operations for the financial year 01.01.2019 - 31.12.2019 in accordance with the Danish Financial Statements Act.We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor’s responsibilities for the audit of the financial statements" section of this auditor’s report. We are independent of the Entity in accordance with the International Ethics Standards Board of Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Entity’s ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:<br />Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. <br />Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control. <br />Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.<br />Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern. <br />Evaluate the overall presentation, structure and content of the financial statements, including the disclosures in the notes, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.<br />We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.Management is responsible for the management commentary. Our opinion on the financial statements does not cover the management commentary, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the management commentary and, in doing so, consider whether the management commentary is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the management commentary provides the information required under the Danish Financial Statements Act.<br />Based on the work we have performed, we conclude that the management commentary is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of the management commentary. Kolding2020-04-15Lars Ørum Nielsenmne26771State Authorised Public AccountantFinancial highlights2019 DKK'0002018 DKK'0002017 DKK'0002016 DKK'0002015 DKK'000Key figuresGross profit/loss46,40683,6229,6695,3035,404Operating profit/loss39,62273,8835,807806255Net financials2,923(867)(71)(79)(193)Profit/loss for the year33,21156,9284,50656738Total assets331,388130,23814,9935,8383,360Investments in property, plant and equipment3,9923,6582,671106259Equity94,51561,3057,3762,8702,303RatiosReturn on equity (%)42.63165.7887.9621.921.66Equity ratio (%)28.5247.0749.2049.1668.54Financial highlights are defined and calculated in accordance with the current version of "Recommendations & Ratios" issued by the CFA Society Denmark.Return on equity (%) : Profit/loss for the year * 100 Average equityEquity ratio (%) : Equity * 100 Total assetsPrimary activitiesThe company's activity comprises to conduct business with engineering, procurement and construction of solar parks and related activities.Development in activities and financesThe profit after tax for the year amounts to DKK 33,211k. The management considers the results to be satisfactory.Uncertainty relating to recognition and measurementWe refer to note 11.OutlookLooking ahead, we will follow a focused and consistent strategic agenda to help us retain our strong market leadership in the renewable energy sector. Thus, we will continue to pursue our 2019 goals. In 2020, we will continue to drive new renewable energy capacity in Northern Europe and the Nord Pool power markets. Our focus markets will continue to be Denmark and Poland. To accelerate the green transition in these markets, we will focus on large-scale solar energy capacity where we can make the greatest difference in terms of impact and affordable prices. This next step in our evolution to a large-scale independent power producer with a long-term view of operational assets will require that we change the focus of our EPC products. Despite high demand, these services will only be offered to selected strategic partners from 2020 and will serve our own pipeline. We will continue to form partnerships and strengthen relationships with our stakeholders in the critical areas of technology, land, grid, PPAs and capital to ensure effective operations and scale. We expect our revenue and result for 2020 to remain on approximately the same level as 2019. We will continue to hold onto more power plant assets as part of our growth strategy to build up annual recurring revenues from the sale of electricity from solar power plants. Particular risksFunding and liquidity We are an innovative group in a high-growth stage, and as our group expands internationally, we must continue to raise debt and equity capital for activities and access liquid capital. Sufficient capital and liquidity management ensure a healthy financial foundation and successful business operations. Strong growth requires additional funding in the form of corporate debt, equity and non-recourse project debt. We would miss or delay market or project opportunities if it does not have access to the right amount of capital on acceptable terms at the right time. Delayed projects result in delayed income from the projects, and this in turn affects cash flow. To increase our opportunities and reduce risk, we use partner¬ships and strong collaboration to set payment agreements with suppliers and funders. Capital needs must be met throughout the entire renewable asset life cycle of development, construction and operation. Increasingly, investors are interested in creating new funding collaborations earlier in the project development process. This creates new op¬portunities and added value creation for both parties. In project finance, any financial capital that is required will be repaid from the revenues of the project. Thus, project finance requires positive cash flow and increasing the certainty of cash flows is an underlying goal. We mitigate liquidity risk by strictly controlling and monitoring cash flow, improving project technologies and revenue. The Finance & Strategy business section ensures that we continuously maintain a balance between strategic growth, profitability and liquidity. Finance & Strategy continuously coordinates the composition and timing of financial resources, instruments, products and portfolios to match capital needs. Innovative and integrated capital management mitigates financial risks. Exchange rates We operate internationally and imports a number of components that are paid in foreign currencies. We also receive revenues from the sale of electricity generated by solar power plants in which the sale of electricity is in a different currency than the location of the solar plants. Through these operations, we are exposed to the variation in currency exchange rates, which can be both negative and positive. Interest rates Large renewable energy projects are capital intensive. The majority of capital raised through project finance is debt, making interest payments a significant expense and an important factor in the cost of renewable energy. We minimise variable rate debt and focus more on fixed interest rates to mitigate interest rate risk. Debt is often expensive in rapidly developing markets. Partnering with international development funds, our own capital, and equity partners decrease the need for expensive debt. Human capital risk We are highly dependent on recruitment and retention of talent. Our operations require specific skills and expertise, and achieving our growth strategy requires people with matching values and mindset. The right organisation is vital to our current and future success. There is a risk that we may have difficulty hiring the required human capital without diluting the level of talent, and a risk that we may not retain our experienced specialists after using resources to develop them. Intellectual capital resourcesWe are proud of our accomplishments in the industry, but it is our people who define us and our people who make the difference. We are a group of talented, mission-driven individuals who are eager to collaborate in order to find new pathways and better solutions. Our people fit together like pieces in a puzzle to form the bigger picture. Everyone has a special function, and together we create the difference that makes us so unique. We look for the best and the brightest, but the key to making an impact is not just having the right skills. Each person who joins us has a unique contribution to make, both personally and professionally. Not everyone needs to be a bold entrepreneur. While growing our operations, we look for talents with functional expertise and capacity to scale. Getting better as we get bigger As a high-growth company, we know that our processes of selecting, developing and retaining talent are more critical than ever. Recruitment strategy and clear and consistent onboarding processes, a new health and safety (H&S) organisation, development courses, benefits, expanded healthcare and pension plans were some of the focus areas in 2019. Major IT projects were also kick-started at the end of the year. We work firsthand with all aspects of a renewable energy plant life cycle – legally, technically and financially. We work with communities, government, industry, financial institutions, investors and businesses. We design, develop, engineer, finance, construct, own and operate renewable energy assets and sell electricity. It comes naturally that we create job opportunities for people from diverse backgrounds and disciplines. For us to be considered industry leaders, we must build our organisation with people who are knowledgeable and well respected in their fields of work. In 2019, we were joined by many strong industry profiles within land surveying, grid commissioning, mergers and acquisitions, finance, corporate law and commercial development who will help scale up our operations. We continue to welcome international talents and new faces who are diverse in age, gender, culture and educational background.Environmental performanceBetter Energy Solutions A/S is part of the reporting presented for the Better Energy Group. Reference is made to the Consolidated Financial Statements 2019 for Better Energy A/S, CVR-no.: 31865883. Research and development activitiesBetter Energy Solutions A/S is part of the reporting presented for the Better Energy Group. Reference is made to the Consolidated Financial Statements 2019 for Better Energy A/S, CVR-no.: 31865883.Events after the balance sheet datePlease refer to note 1. No other events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report.46406364836222386784770973878939621594738834498982114166866059413883651425442957301648493333981608821633210897569282683321089733210897569282681518620015186200846613948659011151935139328296180746259183006378637863786378111430726265561678266497483415678266497483415187794066527458138146255370783217899145365097429892507768010169917023617628111647121816242399174033202453291239720363313884011302375974000004000001184523092930950609045769451547361304576400000060904576613045764000001184523929309501701187181694421701187181694423469426368133539532103864747368133521635620874019833061107011817061406443801124009103221326886278706910679659911283216592434805298896821599631057082244219861057607635793313884011302375971184523-118452301 Events after the balance sheet dateThe Executive Board believes that in the short term, the coronavirus (COVID-19) will not have a material adverse effect on Better Energy Solutions A/S. Initiated solar projects are proceeding according to plan at the time of financial reporting, but it cannot be excluded that certain projects will be delayed in 2020 due to circumstances such as the partial closure of workplaces due to COVID-19. At present, it is not possible to assess whether COVID-19 will have a negative effect on Better Energy Solutions A/S in the medium term. We are driving the transition to renewable energy sources and the Executive Board is of the opinion that even after COVID-19, there will still be a need for significant investments in the green transition. However, the framework for and the speed of future investments will depend on how much financial damage will be caused to the overall economy by COVID-19. At the time of presentation of the 2019 financial statements, there is considerable uncertainty about the impact of COVID-19. 2 Staff costs2019 DKK2018 DKKWages and salaries10,943,2307,323,056Pension costs904,6020Other social security costs165,4630Other staff costs863,303012,876,5987,323,056Staff costs classified as assets(11,088,358)01,788,2407,323,056Average number of full-time employees1912Referring to section 98B (3) of the Danish Financial Statement Act, management remuneration is not shown.19123 Depreciation, amortisation and impairment losses2019 DKK2018 DKKDepreciation of property, plant and equipment502,350332,538Profit/loss from sale of intangible assets and property, plant and equipment50,5370552,887332,5384 Other financial expenses2019 DKK2018 DKKFinancial expenses from group enterprises1,675,58293,092Other interest expenses512,898634,775Exchange rate adjustments3,819,08030,206Other financial expenses51,853125,5786,059,413883,651<br />2019 DKK2018 DKKFinancial expenses from group enterprises1,675,58293,092Other interest expenses512,898634,775Exchange rate adjustments3,819,08030,206Other financial expenses51,853125,5786,059,413883,6515 Tax on profit/loss for the year2019 DKK2018 DKKCurrent tax599,1127,989,802Change in deferred tax8,766,6478,098,414Adjustment concerning previous years(32,361)09,333,39816,088,2166 Proposed distribution of profit and loss2019 DKK2018 DKKRetained earnings 33,210,89756,928,268 33,210,89756,928,2687 Intangible assetsDevelopment projects in progress DKKAdditions1,518,620Cost end of year1,518,620Carrying amount end of year1,518,6208 Development projectsDevelopment projects are related to development of new smart systems on a large scale in real-world conditions.9 Property, plant and equipmentLand and buildings DKKOther fixtures and fittings, tools and equipment DKKCost beginning of year4,889,3932,071,658Additions3,698,775293,003Disposals0(146,550)Cost end of year8,588,1682,218,111Depreciation and impairment losses beginning of year(23,492)(678,376)Depreciation for the year(98,537)(403,813)Reversal regarding disposals016,013Depreciation and impairment losses end of year(122,029)(1,066,176)Carrying amount end of year8,466,1391,151,93510 Financial assetsInvestments in group enterprises DKKAdditions415,000Disposals(415,000)Cost end of year0Carrying amount end of year0<br />Investments in group enterprises DKKAdditions415,000Disposals(415,000)Cost end of year0Carrying amount end of year011 Contract work in progress2019 DKK2018 DKKContract work in progress124,081,81737,078,321Transferred to liabilities other than provisions14,064,4380138,146,25537,078,321Key accounting estimate and judgement of contract work in progress Measurement of contract work in progress are based on stage of completion of the individual projects combined with the knowledge of the remaining completion of the contract, hereunder the outcome of future changes to the project. The evaluation of the state of completion and total economy, hereunder possible changes, carried out by the project management together with the Executive Board on a project by project basis. The evaluation of future possible changes is based on the knowledge obtained on the single projects and accumulated knowledge from other projects completed by the company. The company also recieve advice from external advisors and uses this knowledge in the evaluation of the stage of completion. Estimates attached to the future development of the projects and the remaining work to be done is depends on a number of factors and can change in progress of the completion of project. The actual result can therefore deviate significantly from the expected result. 12 PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at ​cost.13 Deferred tax2019 DKK2018 DKKIntangible assets334,0960Property, plant and equipment161,738103,213Receivables16,531,2578,157,231Liabilities other than provisions(15,220)(15,220)Other deductible temporary differences0(75,782)Deferred tax17,011,8718,169,442 Changes during the year2019 DKKBeginning of year8,169,442Recognised in the income statement8,766,647Other adjustments75,782End of year17,011,871<br />13 Deferred tax14 Non-current liabilities other than provisionsDue within 12 months 2019 DKKDue within 12 months 2018 DKKDue after more than 12 months 2019 DKKOutstanding after 5 years 2019 DKKDebt to other credit institutions216,356208,7403,469,4262,267,186Other payables00395,3210216,356208,7403,864,7472,267,18615 Unrecognised rental and lease commitments2019 DKK2018 DKKLiabilities under rental or lease agreements until maturity in total1,849,6802,220,13016 Contingent liabilitiesBetter Energy Solutions A/S has issued guarantees to the purchaser of solar systems sold in 2018 and 2019. The guarantees cover technical, legal and financial conditions related to the delivered solar system. The guarantees will mainly expire 24 months after closing of the sale of the project. The component guarantees are mainly covered back to back. ​ ​The entity participates in a Danish joint taxation arrangement where Better Energy A/S serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the entity is therefore liable for income taxes etc for the jointly taxed entities, and for obligations, if any, relating to the withholding of tax on interest, royalties and dividend for the jointly taxed entities. The jointly taxed entities' total known net liability under the joint taxation arrangement is disclosed in the administration company's financial statements. 17 Assets charged and collateralDebt to other credit insitutions is secured by way of a deposited mortgage deed on properties. The nom. value of the deed is DKK 4,000k. The carrying amount of mortgaged properties is DKK 8,466k. The entity’s bank has provided construction gurantees in the amount 5,534k DKK as of December 31, 2019. DKK 3,000k of the cash has been pledged as collateral for grid connections.Collateral provided for group enterprisesThe entity has guaranteed group enterprises’ debt with Proventus Capital Partners IV AB, Proventus Capital Partners IV B AB and Proventus Capital Partners IV C KB. The guarantee amounts to EUR 39.1 million 31.12.2019.18 Related parties with controlling interestBetter Energy A/S, Frederiksberg own all the shares in the company.19 Transactions with related partiesRelated party transactions in 2019 consist of the below mentioned transactions. Better Energy Management A/S As part of the ordinary cause of business, Better Energy Solutions A/S has paid fees of DKK 41.5 million to Better Energy Management A/S. The fees are related to assistance in connection with the construction of solar parks. Better Energy Solutions A/S has paid fees of DKK 3.2 million for administrative services to Better Energy Management A/S. Financial income and expenses, and balances Financial income and expenses, and receivables and debt to Group enterprises are disclosed in the income statement and balance sheet. 20 Group relationsName and registered office of the parent preparing consolidated financial statements for the smallest group: Better Energy A/S, Frederiksberg.This annual report has been prepared in accordance with the provisions of the Danish Financial Statements Act governing reporting class C enterprises (medium).The accounting policies applied to these financial statements are consistent with those applied last year.falseConsolidated financial statementsReferring to section 112(1) of the Danish Financial Statements Act, no consolidated financial statements have been prepared.Changes in accounting policiesIn previous years the statement of profit or loss was presented on basis of the principle of costs by category. Management have assessed that presentation on basis of function is more relevant in light of the business. Comparative figures are adjusted accordingly. The change to presentation did not have any effect on the result for the year or equity. Recognition and measurementAssets are recognised in the balance sheet when it is probable as a result of a prior event that future economic benefits will flow to the entity, and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when the entity has a legal or constructive obligation as a result of a prior event, and it is probable that future economic benefits will flow out of the entity, and the value of the liability can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial recognition is effected as described below for each financial statement item. Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and measurement. Income is recognised in the income statement when earned, whereas costs are recognised by the amounts attributable to this financial year.Gross profit or lossGross profit or loss comprises revenue, production costs and other operating income.RevenueRevenue comprises of divestment of solar systems and power plants and sales of service. Contract works for solar systems and power plants are divided in separate performance obligations to the extent that they are considered distinct, i.e. the customer can benefit from the good or service on its own separately from other promises in the contract. This will from contract to contract include an assessment of the following phases, when applicable: • Development • Engineering • Infrastructure • Procurement • Construction The total contract price is then allocated on each identified performance obligation based on their relative stand-alone selling price. Revenue from performance obligations under construction contracts with a high degree of individual adjustment, i.e. they create an asset with no alternative use, is recognised as revenue over time from the time an unconditional binding agreement with the customer has been obtained and provided that an enforceable right to payment for work performed at any time has been secured. The revenue therefore corresponds to the sales price of work performed during the year (the percentage of completion method). When the outcome of a construction contract cannot be estimated reliably, the revenue is recognised only to the extent that costs incurred are likely to be recoverable. Revenue from divestments of solar plants that are not sold prior to their completion is recognised in the income statement when control over the electricity or the solar plants has been transferred to the buyer being at the point the the electricity or the solar plants are delivered to the customer and it is probably that the income will be received. Revenue from services that include asset management is recognised concurrently with the supply of those services. Revenue is measured at the amount the company expects to be entitled to receive excluding VAT and taxes charged on behalf of third parties. All discounts granted are recognised in the revenue. Key accounting estimate and judgement on recognition and measurement of revenue Judgement is performed when determining whether a contract for divestment of solar plants involves one or more performance obligations. This is based on an assessment of whether each performance obligation is distinct, i.e. whether the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. the good or service is capable of being distinct) and the promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. the promise to transfer the good or service is distinct within the context of the contract). ​Judgements are made when determining whether a project or service is recognised over time by applying the stage of completion method or at a point in time when control is transferred to the customer. This includes an assessment of whether the project or service have an alternative use to the company, i.e. can the specific project or service be redirected to another customer, and the company has an enforceable right to payment throughout the contractual term based on an analyses of the contract wording, legal entitlement and profit estimates. Production costsProduction: Production costs comprise expenses incurred to earn revenue for the financial year. Production costs comprise direct and indirect costs for raw materials and consumables, wages and salaries, rent and lease, and amortisation, depreciation and impairment losses relating to intangible assets and property, plant and equipment included in the production process. In addition, the item includes ordinary write-down of inventories.Cost of salesCost of sales comprises goods consumed in the financial year measured at cost, adjusted for ordinary inventory writedowns.Administrative expensesAdministrative expenses comprise expenses incurred for the entity’s administrative functions, including wages and salaries for administrative staff and Management, stationery and office supplies, and amortisation, depreciation and impairment losses relating to intangible assets and property, plant and equipment used for administration of the entity.Other financial incomeOther financial income comprises interest income on receivables from group enterprises, net capital or exchange gains on securities, payables and transactions in foreign currencies, amortisation of financial assets as well as tax relief under the Danish Tax Prepayment Scheme etc.Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies, amortisation of financial liabilities as well as tax surcharge under the Danish Tax Prepayment Scheme etc.Tax on profit/loss for the yearTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the income statement by the portion attributable to the profit for the year and recognised directly in equity by the portion attributable to entries directly in equity.The entity is jointly taxed with all Danish group enterprises. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax losses).Intellectual property rights etcIntellectual property rights etc comprise development projects in progress with related intellectual property rights, acquired intellectual property rights and prepayments for intangible assets.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, an amount equalling the costs incurred less deferred tax 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 and indirectly attributable to the development projects. ​ ​Indirect production costs in the form of indirectly attributable staff costs and amortisation of intangible assets and depreciation of property, plant and equipment used in the development process are recognised in cost based on time spent on each project.​ ​Intellectual property rights etc are written down to the lower of recoverable amount and carrying amount.Property, plant and equipmentLand and buildings, plant and machinery as well as other fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses. Land is not depreciated. Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of the asset until the time when it is ready to be put into operation. The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line depreciation is made on the basis of the following estimated useful lives of the assets: Buildings50 yearsOther fixtures and fittings, tools and equipment3-10 yearsEstimated useful lives and residual values are reassessed annually. Items of property, plant and equipment are written down to the lower of recoverable amount and carrying amount.Investments in group enterprisesInvestments in group enterprises are recognised and measured according to the equity method. This means that investments are measured at the pro rata share of the enterprises’ equity value Group enterprises with negative equity value are measured at DKK 0. Any receivables from these enterprises are written down to net realisable value based on a specific assessment. If the parent has a legal or constructive obligation to cover the liabilities of the relevant enterprise, and it is probable that such obligation will involve a loss, a provision is recognised that is measured at present value of the costs necessary to settle the obligations at the balance sheet date. Upon distribution of profit or loss, net revaluation of investments in group enterprises is transferred to reserve for net revaluation according to the equity method in equity. Investments in group enterprises are written down to the lower of recoverable amount and carrying amount.InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value. Cost consists of purchase price plus delivery costs. Cost of manufactured goods and work in progress consists of costs of raw materials, consumables, direct labour costs and indirect production costs. Indirect production costs comprise indirect materials and labour costs, costs of maintenance of, depreciation of and impairment losses relating to machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and management. Finance costs are not included in cost. The net realisable value of inventories is calculated as the estimated selling price less completion costs and costs incurred to execute sale. ReceivablesReceivables are measured at amortised cost, usually equalling nominal value less writedowns for bad and doubtful debts.Contract work in progressContract work in progress is measured at the selling price of the work carried out at the balance sheet date. The selling price is measured based on the stage of completion and the total estimated income from the individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total budgeted consumption of resources. An expected loss is recognised when it is deemed probable that the total contract cost will exceed the total revenue from individual contracts. The expected loss is recognised immediately as a cos and a provision. If the selling price of a project in progress cannot be made up reliably, it is measured at the lower of costs incurred and net realisable value. Each contract in progress is recognised in the balance sheet under receivables or liabilities other than provisions, depending on whether the net value, calculated as the selling price less prepayments received, is positive or negative. Costs of sales work and of securing contracts as well as finance costs are recognised in the income statement as incurred. PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at cost.CashCash comprises cash in hand and bank deposits.Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount and the tax-based value of assets and liabilities, for which the tax-based value is calculated based on the planned use of each liability. Deferred tax relating to retaxation of previously deducted losses in foreign subsidiaries is recognised on the basis of an actual assessment of the purpose of each subsidiary.Operating leasesLease payments on operating leases are recognised on a straight-line basis in the income statement over the term of the lease.Other financial liabilitiesOther financial liabilities are measured at amortised cost, which usually corresponds to nominal value.Prepayments received from customersPrepayments received from customers comprise amounts received from customers prior to delivery of the goods agreed or completion of the service agreed.Joint taxation contributions payable or receivableCurrent joint taxation contributions receivable or joint taxation contributions payable are recognised in the balance sheet, calculated as tax computed on the taxable income of the year, which has been adjusted for prepaid tax. For tax losses, joint taxation contributions receivable are only recognised if such losses are expected to be used under the joint taxation arrangement.Cash flow statementReffering to section 86 (4) of the Danish Company Act, no cash flow statement has been prepared. 2020-04-28Ho Kei Au