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87000000 269000000 489000000 60000000 111000000 119000000 -8000000 -14000000 -30000000 -24000000 -12000000 -10000000 -6000000 -23000000 -6000000 -76000000 -91000000 -118000000 86000000 46000000 21000000 -3000000 374 354 444 552 551 0.41 0.47 0.28 0.33 0.44 0.19 0.23 -0.04 0.06 0.17 0.17 0.21 -0.65 -0.02 0.02 0.32 0.37 -0.71 -0.02 0.01 0.60 0.51 0.24 0.35 0.40 0.47 0.84 -1.12 -0.09 0 THE BUSINESS PLATFORM - THE BRAND HOUSE5 Swedish stores, while 13 Danish stores, 7 Norwegian PWT Group is a leading Nordic brand house within and 5 Swedish stores are franchises. Wagner primarily men’s fashion – operating in both the B2B, B2C and D2C sells the Group’s own brands.markets. PERFORMANCE IN THE FINANCIALYEAR PWT Brands is offering distinctive brands with a full UNDER REVIEWproduct range within menswear. PWT Brands develops, produces and sells a wide range of strong brandsB2C offline has impacted the results for 2022 positive-ly. After COVID-19, revenue rose markedly.• Lindbergh• BisonB2B revenue has also increased due to greater activity • Junk de Luxeof B2B customers. B2B sales to online customers have • Morganrisen further during the year, forming a bigger part of • Jacks Sportswear intl. the business.Which are sold to +700 independent retailers in 27 The B2C online business has likewise had a successful countries, as well as to Tøjeksperten & Wagner.year – with good performance.PWT Group’s two retail chains are operated under sep-The Group’s EBITDA was DKK 154 million in 2022, arate names and focus on different target groups. The which is satisfactory and on a par with 2021. Correct-strategy also sets out to further optimize management ed for special items the Group’s EBITDA was higher in and back-ofce functions handling procurement, mar-2022 compared to 2021.keting and administration in order to capitalise on syn-ergies and obtain economies of scale.Total revenue increased to DKK 794 million in 2022 from DKK 668 million in 2021.Tøjeksperten is the largest menswear omni-channel retailer in Denmark with 114 stores across the coun-A gross margin of 40.8% was realised, and is a result of try, of which 54 are owned by the Group, while 60 are a low markdown and a high share of revenue generated franchises. Tøjeksperten focusses on quality clothing through own channels.to fashion-conscious men of all ages and sells both its own and external brands.Prot for the year was DKK 115 million.Wagner is a Scandinavian menswear omni-channel re-Investments related to expanding inventories, in-tailer, which has 21 stores in Denmark, 7 in Norway and creased receivables and distribution of DKK 45 million 10 in Sweden. Of these, the Group owns 8 Danish and resulted in a negative cash flow of DKK 118 million in PWT GROUP A/STØJEKSPERTENWAGNER PWT BRANDS100%100%100%100%PWT PWT PWT WAGNER GERMANYSWEDEN AB* NORWAY ASCHINA APSGMBH*100% Wagner Birsta AB100% Wagner Karlstad AB2022. Net cash and cash equivalents at 31 December EVENTS AFTER THE BALANCE SHEET DATE2022 constituted DKK 52 million, which is considered No material events have occurred after the balance satisfactory. sheet date.The Company has changed its accounting policy for in-OUTLOOKvestments in subsidiaries in the nancial year. Invest-The outlook for 2023 is challenging. The markets are ments in subsidiaries in the Annual Report for 2022 are difcult and therefore, we expect both revenue and recognized and measured under the equity method, gross margins to be put under pressure. Moreover, the whereas investments in subsidiaries previously were level of expenses is expected to rise. Naturally, the out-measured at cost in the Annual Report.look will depend on parameters impacting consumer behaviour and disposable amounts.OPERATIONAL OPTIMISATIONThe ongoing efforts to optimise PWT Group’s business These include:and constantly improve our customers’ experience with • The war in Ukraine and the impact on the economy.the Group’s brands and retail chains continued in 2022 • Very high inflation rates and increased production and included:costs, cost of raw materials and energy prices.• Signicantly higher interests rates.• Increased focus on the product mix and merchan-• General uncertainty related to the customers’ -dising on- and offline.nancial circumstances. • Continued investments in the Group’s online sales, including B2C, D2C, B2B and omni-channel sales.In general, 2023 is expected to be a challenging year, • Continued optimisation of retail focussing on secur-possibly affected by the above uncertain conditions. ing earnings in each store, renewing the stores and Prot before tax (EBT) is expected to be 20 - 40 % low-building bigger stores in attractive locations.er than in 2022. PWT Group has strengthened its nancial position sig-nomic trends in Europe from where most of the Group nicantly in the past two years. The high earnings have revenue is derived. Management regularly keeps track been spent on consolidating the company, repaying all of realised and forecast market development to adjust debts and achieving a very high solvency ratio. As a re-costs and activities.sult, PWT is quite condent about the future and has built a healthy and stable nancial foundation. In Management’s view, the notably strong market posi-tion diversies and reduces operating risks to a certain RISK MANAGEMENTdegree.Risk management is an integrated part of the manageri-FINANCIAL RISKSal process in PWT Group to limit uncertainties and risks in relation to the nancial and strategic targets dened The Group manages its nancial risks centrally as well for the Group. As part of the annual update and ap-as coordinates liquidity management and funding. To-proval of the strategy, Management assesses relevant gether with the Board of Directors, Management annu-business risks. For the purpose of the risk assessment, ally assesses the Group’s most important risks and, by Management considers, when required, the policy on way of regular monthly reporting, reports on aspects currency risks adopted by the Board of Directors.which may materially affect the Group’s activities and risks. The corporate policy is not to engage in specula-The Executive Board is responsible for ensuring that tion in nancial risks.risks are continuously identied, assessed and ac-INTERNAL CONTROL AND RISK MANAGEMENT counted for in order to reduce any nancial implications SYSTEMS FOR FINANCIAL REPORTING PURPOSESand probability of such risks becoming a reality.The Board of Directors and the Executive Board are OPERATING RISKSoverall responsible for risk management and internal The Group’s primary operating risks relate to the controls in the Group for nancial reporting purposes.Group’s ability to maintain a market share on the Danish The organisational structure and internal guidelines market for menswear.make up the control environment together with legisla-The Group operates primarily within trading, which is tion and other rules applying to the Group. The Group’s sensitive to market fluctuations, as socioeconomic de-organisational structure and staff numbers are ad-velopments and private spending impact revenue and dressed at board meetings. In relation to the nancial earnings. PWT Group is particularly affected by eco-reporting process, Management pays special attention to the following internal controls, supporting a satisfac-tory nancial reporting process• Credit rating of debtors• Assessment of the valuation of USD positions• Assessment of accruals and valuation of inventoriesPWT Group has established a Group reporting process comprising monthly reporting in the form of budget fol-low-up, performance assessment and compliance with dened targets.On the basis of the Group reporting and reporting on other selected areas, four board meetings are held each year at which the reporting received is discussed and assessed.Moreover, key employees from the Group participate in the board meetings at which they describe and account for the risks and controls within their areas of respon-sibility.CAPITAL RESOURCESManagement regularly assesses the appropriateness of the Group’s capital resources.Based on net cash and cash equivalents of DKK 52 mil-lion at 31 December 2022 and the credit facilities made available by Spar Nord, the cash resources are expec- ted to be sufcient in 2023.FOCUS AREA 1RESPONSIBLEWORKING CONDITIONS IN THE SUPPLY CHAINIt is of utmost importance that tex-we can continue the ongoing work on improvements. tiles are produced at factories with Bearing in mind the challenges of COVID-19, the Group decent working conditions. As the has not been able to uphold as a continuously follow-up Group does not own any of the faci-process as normally. Audits have been canceled or im-lities, many resources are spent on possible to conduct due to imposed restrictions during following up with suppliers on their the pandemic.work on adhering to the Code of Conduct.PWT Group expects the situation to normalize and con-It is a fact that some production countries represent tinues the regular follow-up procedures in collabora-considerable risks of unsafe working conditions and tion with its suppliers.challenged labour rights. At the same time, the textile industry creates millions of jobs, and the Group does not see it as an option to cut out countries from the 4%sourcing loop. Instead, focus is on contributing to im-provement, through the supply chain management, and 2%through participation in national and international ini-tiatives. Due to the situation in Myanmar though, the Group has 44%decided to stop its activities until the situation changes.AMFORI BSCI50%PWT Group has been a member of the amfori since 2013 and has used the amfori BSCI as the main social certication system for suppliers. Suppliers are expec-ted to work with the amfori BSCI (or other system as SEDEX,or SA8000), and in cases where a factory has not yet initiated the BSCI process, they are expected to join within reasonably time. Suppliers are audited annu-ally by third-party auditors, and audit reports are used Good (A+B+SA8000)to promote dialogue on necessary improvements. Acceptable (C + SEDEX)In 2021, the amfori moved the BSCI to a new platform, and joined the BSCI and BEPI systems. This “relocation” Non-acceptable (D+E)process as well as understanding the new interface has required a lot of support work towards the suppliers. Now suppliers are well migrated to the platform, and Audit expired/ audit in progressTHE INTERNATIONAL ACCORD FOR HEALTH Sustainability Council (RSC) (formerly known as the Bangladesh Accord program). That means 1) enga-AND SAFETY IN THE TEXTILE AND GARMENT ging with the Inspection Programme, 2) improving re, INDUSTRYbuilding and electrical safety based on inspection n-PWT Group has been a signatory member of the Accord dings, 3) participating in the extensive training, and 4) since 2013. As the latest Transition Accord expired on engaging in remediation dialogues based on the RSC 31 May 2021, the Group followed the negotiations for grievance mechanism. a new agreement closely, and on 1 September 2021, PWT Group signed The International Accord for Health Currently, the Group has ten active Bangladeshi fac-and Safety in the Textile and Garment Industry. The tories in the initiative with an average progress rate of new Accord builds on the 2013 and 2018 principles, 90%. All of the ten active factories are participating in and as a signatory, the Group commits to the health the Accord’s safety committee training.and safety work already undertaken in Bangladesh, and to the expansion of additional countryspe- cic In December 2022 it was announced that the program health and safety programs. will be expanded to Pakistan. PWT Group will follow the implementation of the program closely.As such, the Group continues to require all active Bangladeshi suppliers to work actively with the RMG FOCUS AREA 2MORE SUSTAINABLE PRODUCTION METHODS AND MATERIALSPWT Group is aware that it has a sub-Another considerable impact, when talking about pac-stantial environmental footprint and kaging consumption and waste, is the packaging mate-is committed to reducing this by con-rial used during transportation of our products, such as tinuously improving internal proces-poly bags, tissue paper, and carbon boxes. The Group is ses and supporting suppliers on their continuously looking into how to reduce and/or replace journey towards more environmen-existing packaging materials with more sustainable ma-tal-friendly production methods. terials. In general, this is about revalidating old routines and processes, and the Group is committed to going with MORE SUSTAINABLE PRODUCTSsmarter and better solutions, when such make sense on The most sustainable garments are quality products all parameters. that will last for many years. PWT Group has worked in CLIMATE REPORTINGrecent years to reduce the number of styles and gain a better quality and durability for each garment. Until now, PWT Group is measuring its carbon footprint through the Group has reached a 63% reduction of styles. an online reporting system provided by Cemasys. The reporting system follows the GHG Protocol and ISO Material production accounts for 93.4% of the Groups 14064, and the aim is to map the Group’s emissions and GHG emissions, based on this year’s climate report. track the progress on reducing GHG emissions through-Therefore, in order to reduce the Group’s environmental out the business. footprint, it is essential to look at how to shift from con-ventional materials and production processes to ones This year’s climate report shows a total emission of that leave a smaller footprint. 19,166 tons CO2e, with material production accounting for 93.4%, transportation for 3.9%, electricity for 2.0% For this purpose, designers and purchasers are working and company cars for 0.7% of the total emissions. with suppliers on nding more sustainable materials and production methods. The approach is to cooperate with 2021 was a year with reduced sales activities in the rst suppliers on nding the best solution that makes sense two to three months throughout the business due to on all parameters. This intensied focus has resulted COVID-19. 2022, on the other hand, has been a year of in several initiatives, such as implementation of organ-normal activity. ic cotton, Better Cotton, recycled polyester, and better denim production.Returning to normal activity in 2022 has led to more use of company cars and an increase in fuel consumption by PACKAGING13% compared to 2021.Since 2019, all bags and gift boxes have been replaced with ones made out of recycled materials. The Group is In recent years, the Group has invested in replacing light proud to cooperate with Plastic Change, the Danish en-sources with LED lightning in all stores and at Head of-vironmental organisation that works to break the expo-ce. This has resulted in a signicant reduction in elec-nential growth of plastic pollution. As of 1 January 2020, tricity consumption of 53% from 2019 to 2022. Going all prot originating from the sale of bags and gift boxes forward the Group will investigate implementing other is donated directly to Plastic Change. energy-saving activities.Due to an increased purchase of products in 2022 has leather from animals bred for the food industry, that led to an increase in tCO2e, however we see a down-mulesing is not accepted, and that live plucking of birds ward trend in tCO2e per kilo material of 5.4%. This is is unacceptable.due to increased purchasing of more climate-friendly INTRODUCTION OF AMFORI BEPI materials such as organic cotton and recycled mate-PROGRAM FOR SUPPLIERSrials. It is essential to look at the production methods In the beginning of 2022, the Group was challenged by throughout the supply chain. This is a challenging delays in deliveries. This meant that shipments had to area as many suppliers lack resources and knowledge be transported by air. on the subject. However, the Group wants to support them in this process and push for sustainable changes. This has resulted in an increase in CO2 emissions from PWT Group has started engaging strategic suppliers on our transport.The full climate report is available on the amfori BEPI (Business Environmental Performance page 32. Ini tiative) programme. Through the BEPI program, sup-pliers are asked to report on their energy consumption, NO HARMFUL CHEMICALSwaste management, chemicals, etc., and then work on PWT Group is aware of the risk of using harmful chem-improving their environmental performance level with-icals during production, and the Group is actively wor - in priority areas. king to avoid them, for the sake of both local biodiver-WASTE MANAGEMENTsity and the environment and the health of the people working in production. PWT Group focus on handling waste very carefully. The goal is to recycle as much waste as possible.PWT Group has certied a range of pro ducts to the OEKO-TEX® Standard 100. This process was com-By implementing targeted waste sorting at PWT Head-pleted during the spring of 2021. The aim is to expand quarter and Warehouse, will ensure that a large part of the range of certied products as we get sup pliers on the waste is recycled. In 2023, the Group will start col-board with this, during the coming years. lecting data on waste, so that the effect of the efforts can be monitored in our climate accounting.The Group has set up a Restricted Substances List (RSL) in collaboration with Bureau Veritas. The RSL At the end of 2022, the Group has run a pilot project re-applies to all garments and accessories manufactured garding the sorting and recycling of textile waste with for PWT Group. All suppliers must sign this document NewRetex. By using robot technology NewRetex sort before starting production. The RSL is based on the and processes discarded textiles. This means that the Regulation (EC) No. 1907/2006 of the European Parlia-textiles are sorted by quality and color which improves ment, also known as the REACH regulation, and is up-recyclability. dated on a regular basis. For each sales season, styles are picked out for testing at local BV labs, based on a The project resulted in 80% of the textiles that was sent risk assessment. Occasionally, random tests are per-to NewRetex being recyclable. The Group have entered formed at the warehouse in Denmark in order to avoid into a collaboration with NewRetex so that in the future golden samples.it will send textile waste for recycling through them.Suppliers receive support on their chemical mana- By sorting and making sure most of the waste is recy-gement systems, through online webinars and local cled, we take care of the climate by reducing Co2 emis-trainings through third parties (e.g. amfori).sions and the need for virgin materials.ANIMAL WELFARE POLICYAll relevant suppliers are required to sign and com-ply with the Group’s Animal Welfare Policy. It states, among other things, that PWT Group only accepts DATA ETHICS (SECTION 99D)During the year, PWT continued its work to ensure that data processing and use of data comply with the high-est data ethics standards. The focal point has been the protection of our customers’ personal information and ensuring that our use of data complies with applicable legislation and rules.PWT has implemented stronger security measures to protect against data loss and unauthorised access to the company’s databases. Moreover, PWT has provided employees with data ethics and data security training to ensure that everyone in the organisation understands the importance of protecting personal information.Procedures for data processing have been reviewed, and it has been ensured that our use of data is restrict-ed to the purpose for which customers have consented and that our data use is proportionate to the purpose. PWT has also made sure that our customers have been informed about how data is used and how they can con-trol their data.At present, however, the extent of data analysis based on algorithms is not of such a nature that an actual data ethics policy is deemed necessary. CORPORATE SOCIALRESPONSIBILITYINTERNAL PROCESSESPWT Group is committed to reducing its negative im-pacts and increase the positive impacts on basic prin-PWT Group sets the same requirements to itself as to ciples for social, environmental and economic sustain-its suppliers:ability. It is a long journey, and the Group continuously • adopt policiesimproves policies and procedures in order to be able to • conduct regular risk assessmentsidentify and manage risks throughout the business and • draw up action plans to manage identied risks and the supply chain. For a description of The Group’s busi-challengesness model, please see page 7 and 12.• communicate about actions and results• enable access to remedy through a legitimate The Group has developed a 2021-2025 CSR Strategy, grievance mechanismfocussing on four strategic CSR areas:This is a process which requires both time and resourc-1. Responsible working conditions in the supply chaines, and the Group is continuously improving its due dili-2. More sustainable production methods and mate- gence procedures.rials3. More sustainable cotton in our productsIn order to implement the CSR Strategy throughout 4. Engagement in national and international initiatives the company, CSR is integrated into all departments, and organisationssuch as Design, Purchase, Sales, Marketing, and Retail, through info meetings, communication material, etc. On These priorities encompass where PWT Group sees the a quarterly basis, CSR meetings are held with the man-biggest risks but also where it may contribute positive-agement group. ly towards the UN Development Goals. In the following paragraphs, each area of the strategy will be described.A grievance mechanism has been set up on the Group’s website, which ensures that stakeholders can report POLICIES any concern relating to PWT Group anonymously. Until PWT Group’s sustainability work is based on the UN now, no grie vances have been received.Global Compact’s ten principles and follows the ap-proach set forth in the OECD Guidelines for Multinational PWT Group wishes to combat corruption and bribery Enterprises and the UN Guiding Principles on Business and seeks to promote openness and transparency. PWT and Human Rights (UNGP’s). The Group’s CSR Policy Group has established an Anti-Corruption Policy, which refers to internationally endorsed principles for sus-is based on the UN Convention against Corruption and tainable development, such as the International Bill of signed by the top management. It is included in the Em-Human Rights, including core ILO labour rights, the Rio ployee Handbook and Supplier Manual. Together with Declaration and the UN Convention against Corruption.the policy, a ‘Facilitation and Hospitality Register’ has CSR STRATEGY 2021-2025Managing our own business Managing our supply chainPoliciesBill of Human RightsILO Fundamental Principles and Rights at workThe Rio Declaration on Environment and DevelopmentUN Convention against CorruptionUN Guiding Principles on Business & Human RightsOECD Guidelines for Multinational Enterprisesbeen set up in which employees register gifts. The pol-icy is communicated internally and the facilitation and hospitality register is monitored on an annual basis as well. During 2022, ve items were registered on the Fa-cilitation and Hospitality List. The Group will continue to keep awareness on this subject. GENDER DIVERSITY IN BOARD OF DIRECTORS AND MANAGEMENT (SECTION 99B) Currently, the Board of Directors consists of 40 % wo-men, and the Board continues to strive to nd suitable female candidates when recruiting board members.PWT is committed to build a workforce through the en-tire company, that is represented equally by both gen-ders across both the management team and other ma-nagerial positions. However, due to the fact that PWT is a menswear company there is an average of 79% male and 21% female employees throughout the Group. At the management level the average is 88% male m a-nagers and 12% female managers in 2022. The staff policies and HR processes are directed at retaining qualied female employees by addressing the work/life balance in order to create a desirable working en-vironment as well as supporting personal development through performance reviews, feedback and leadership training.PWT have a special focus on the gender distribution in the individual departments when recrui ting, just as PWT have focused on this in our student recruitment.Furthermore, the policy for the Management Team em-phasises diversity in the broadest sense and lays down the principle always to hire the most qualied person, regardless of gender, age, nationality, sexual orienta-tion or religious beliefs. PWT will continue to work to-ward increasing diversity throughout the organisation as well as in management levels.RISK ASSESSMENTOn an annual basis, the Group conducts a risk assess-ment, including action plans. Next page is the latest version. HUMAN- AND LABOUR RIGHTSRelevant policies: CSR Policy Commitment, Code of Conduct, Restricted Chemicals List (RSL)Risks in our own Risks in our Action planbusinesssupply chainRisk of occupational A working environment committee continuously assesses the working hazards and injuriesenvironment and makes recommendations for improvements. Risk of overtime Regular overtime is a common challenge for the industry, but the Group is work on a regular continuously working to prevent excessive overtime. The team managers basisare constantly improving working processes in order to ensure a more efcient flow and hence avoid excessive overtime.Health of employeesAll employees are covered by a health insurance which includes eg. minor operations, psychological treatments, and is a supplement to the public health service. A health insurance ensures quick investigation, treatment and helps our employees to get well and return to work.The Group conduct rst aid trainings with CPR in collaboration with Falck. Once a year all employees will be offered trainings. For all our store assistant trainees attending rst aid trainings will be mandatory.In addition, a debrillator has been installed at the main ofce.Unsafe Suppliers to PWT Group must provide safe working conditions for their working employees.conditionsAs a member of the amfori BSCI the Group expects its suppliers to en-sure safe working conditions by complying with amfori requirements and being part of the audit program. As a signatory member of the International Accord for Health and Saftey in the Textile and Garment Industry, the Group is supporting safer pro-duction buildings for suppliers in Bangladesh. It is a requirement to all suppliers that they can provide valid permets of building safety. Excessive PWT Group works to ensure that its own buying practices does not working hourscontribute to excessive working hours. Orders are placed well in ad-vance, and the Group ensures that changes are not made shortly before deadlines. The Group assesses suppliers’ practices; overtime should be voluntary and limited, management should develop a contingency plan and is encouraged to set up electronic time systems, etc.Lack of Suppliers’ ability to ensure the health of their employees is assessed ensuring the on an ongoing basis. Indicators include proper sanitary facilities, clean health of drinking water, medical staff, regular health check-ups, access to medi-workerscine, proper conditions for pregnant employees, etc. Whenever possible, the Group promote and invite suppliers to relevant trainings, such as the OSH course in Dhaka where participating factories were instructed by Danish OSH experts.HUMAN- AND LABOUR RIGHTSRelevant policies: CSR Policy Commitment, Code of Conduct, Restricted Chemicals List (RSL)Risks in our own Risks in our Action planbusinesssupply chainUnfair PWT Group does not own factories and cannot manage salaries paid to remunerationsuppliers’ workers. However, the Group does negotiate realistic prices in order not to contribute to unfair remuneration. PWT Group requires that all suppliers comply with national regulation, and the Group assesses suppliers’ ability to support workers nancially in other ways, e.g. by providing free transportation, low-cost canteens, and kiosks with low-cost provisions.Discrimination Suppliers’ ability to provide equal rights and payment for everyone is assessed on an ongoing basis. Indicators include recruitment and salary procedures, respectful behavior from managers towards workers, etc.Precarious Production facilities should keep proper records of contracts and em-employment ployee ID, and have proper notice and leave procedures in place in order and bonded to avoid precarious employment. PWT Group focuses on questioning the labouruse of piece-rated employees and probation workers, which can be a method to keep wages down.Freedom of PWT Group assesses suppliers’ respect for worker associations and association trade unions as well as their ability to include workers in decision-ma-and collective king. The Group stresses to suppliers that safety or WP committees can bargainingbe very valuable and support suppliers in establishing good committee practices. Through the Accord, all Bangladeshi suppliers are required to establish Health and Safety committees, and they receive training on their rights and responsibilities in regard to committee practices. Child labour In general, this issue has improved among suppliers. However, the and the lack of Group still considers child labour as a substantial risk within the supply protection of chain. The Group became a member of amfori BSCI in 2013, an initiative young workersthat works to improve working conditions on factories. Factories are audited on yearly basis and preventing child labour is an essential issue. However, the Group still considers child labour as a substantial risk within the supply chain.ENVIRONMENT AND CLIMATERelevant policies: CSR Policy Commitment, Code of Conduct, Restricted Chemicals List (RSL), Animal Welfare PolicyRisks in our own Risks in our Action planbusinesssupply chainCO2-emissionsSince 2020, PWT Group is working with the Cemasys system to calculate and monitor CO2 emissions in a structured way, based on the GHG Proto-col. Please read more in the section “More sustainable production methods and materials”. Use of textile PWT Group is reducing the number of styles and focusing on quality over materialsquantity. Through the years, more organic and recycled styles have been introduced as well. Since 2019, the Group has been a member of Better Cotton. In the coming years, more sustainable materials will be introduced.Plastic use, and PWT Group has replaced all packaging materials in the stores with ones packaging in made of recycled materials. Bags are no longer provided for free, and the generalsurplus made from this, is donated to the Danish environmental organisa-tion, Plastic Change. In the coming years, the Group will look into how to reduce the amount of packaging material, such as poly bags, tissue paper, carbon boxes, etc., and how to replace virgin material with recycled ones. TransportPWT Group species to suppliers that the Group prefers sea freight, and that train freight is preferred over airfreight, reducing airfreight to an absolute minimum. Furthermore, all shipments from central inventories are conti-nuously optimized. Textile wasteIn collaboration with extern partner we collect all our textile waste, sort it and make sure most of our textile waste is recycled.Animal welfareAll relevant suppliers are required to sign and comply with the Animal Welfare Policy. It states, among other things, that PWT Group only accepts leather from animals bred for the food industry, that mulesing is not ac-cepted, and that live plucking of birds is a unacceptable practice.Risk of use All suppliers are obliged to comply with the Group’s RSL, which is aligned of harmful with the EU regulation, REACH. Styles from each collection are selected for chemicals, testing at Bureau Veritas, based on a risk assessment. and of insuf-In 2021, PWT Group accomplished to get an OEKO-TEX® certication for a cient chemical range of products. management at production sites.ENVIRONMENT AND CLIMATERelevant policies: CSR Policy Commitment, Code of Conduct, Restricted Chemicals List (RSL), Animal Welfare PolicyRisks in our own Risks in our Action planbusinesssupply chainIn general, In the coming years, the Group will engage with strategic suppliers about poor the amfori BEPI programme, in order to support them in setting up suf-environmental cient policies and processes in regard to environmental management. management This includes looking at chemical handling, waste management, water and at production energy use, etc. facilities.ANTI-CORRUPTIONRelevant policies: CSR Policy Commitment, Code of Conduct, Anti-Corruption PolicyRisks in our own Risks in our Action planbusinesssupply chainSourcing from Together with the policy, a ‘Facilitation and Hospitality Register’ has been countries with set up where employees register gifts. This register is monitored on an high corruption annual basis as well. The aim of this is to increase the awareness level risksinternally. THE SUPPLY CHAINProduction takes place in several countries across the The Group makes use of third-party audit reports, mainly globe. PWT Group does not own any factories but coope-through the amfori BSCI system. Considerable resources rates with a range of suppliers, both directly at production are spent on following up with suppliers on their improve-facilities and via sourcing houses. The top-30 factories rep-ment work. For Bangladesh factories, the Group conti-resent approx. 94% of all orders, and focus is primarily gi-nuously receives and acts upon inspection reports on the ven to these.factories’ building safety, as well as re and electrical safe-ty, through the Accord/RSC.The Group’s Code of Conduct is based on Danish Fashion & Textile’s Code of Conduct and describes the sustainability PWT Group requires all leather suppliers only to use tan-minimum standards set for business partners. neries that are member of the Leather Working Group; an initiative focussing on reducing the consumption of water, PWT Group does not expect suppliers to overcome chal-energy and chemicals. lenges over night, but focuses on their ability and willing-ness to demonstrate continuous improvements. As a part of the collaboration with suppliers and garment factories, facilities are visited regularly.SOURCING COUNTRIESThe top-30 factories account for 94% of annual ordersCHINABANGLADESHOTHER COUNTRIES33%30%11%ORTUGALTURKEYCHINAPAKISTANBANGLADESHPAKISTANTURKEYPORTUGAL12%7%7 % Ole Koch Hansen CEO Claus Back Nielsen CFO Lars Johansson (Chairman) Dorte Eg Signe Trock Hilstrøm Michael Kjær Ole Koch Hansen Aalborg, The Board of Directors and the Executive Board have In our opinion, the Management’s Review includes a today discussed and adopted the Annual Report of fair review of the development in the Group’s and the PWT Group A/S for 2022.Parent Company’s operations and nancial conditions, results for the year, cash flows and nancial position as The Annual Report has been prepared in accordance well as a description of the most signicant risks and with the Danish Financial Statements Act. uncertainty factors that the Company face.It is our opinion that the nancial statements give a We recommend that the Annual General Meeting ap-true and fair view of the Group’s and the Parent Com-prove the Annual Report.pany’s nancial position at 31 December 2022, and of the results of the Group’s and the Parent Company’s operations and cash flows for the nancial year 1 Ja-nuary 2022 - 31 December 2022. TO THE SHAREHOLDER OF PWT GROUP A/S In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the nancial position of the Group and the Parent Company at 31 December 2022, and of the results of the Group’s and the Parent Company’s opera-tions and cash flows for the nancial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act.We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of PWT Group A/S for the nancial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of signicant accounting policies, for both the Group and the Parent Company, as well as statement of cash flows (“nancial statements”). We conducted our audit in accordance with Internation-al Standards on Auditing (ISAs) and the additional re-quirements applicable in Denmark. Our responsibilities under those standards and requirements are further de-scribed in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Inter-national Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fullled our other ethical responsibilities in ac-cordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our opin-ion. Management is responsible for Management’s Review.Our opinion on the nancial 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 nancial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the nancial 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 Financials Statements Act.Based on the work we have performed, in our view, Mana-gement’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement in Ma-nagement’s Review. Management is responsible for the preparation of Con-solidated Financial Statements and Parent Company Fi-nancial Statements that give a true and fair view in ac-cordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error.In preparing the nancial statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, dis-closing, as applicable, matters related to going concern and using the going concern basis of accounting in pre-paring the nancial statements unless Management either intends to liquidate the Group or the Parent Com-pany or to cease operations, or has no realistic alterna-tive but to do so. Our objectives are to obtain reasonable assurance about whether the nancial 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 as-surance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional require-ments applicable in Denmark will always detect a ma-terial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasona-bly be expected to influence the economic decisions of users taken on the basis of these nancial statements.As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Den-mark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstate-ment of the nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit eviden-ce that is sufcient and appropriate to provide a ba-sis for our opinion. The risk of not detecting a ma-terial misstatement resulting from fraud is hig her than for one resulting from error as fraud may in-volve collusion, forgery, intentional omissions, mis-representations, or the override of internal control.• Obtain an understanding of internal control rel-evant to the audit in order to design audit proce-dures 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 poli-cies used and the reasonableness of accounting estimates and related disclosures made by Mana-gement.• Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the nancial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicant 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 audi-tor’s report to the related disclosures in the nancial 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 au-ditor’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 andcontents of the nancial statements, including thedisclosures, and whether the nancial statementsrepresent the underlying transactions and events ina manner that gives a true and fair view.• Obtain sufcient appropriate audit evidence re-garding the nancial information of the entities orbusiness activities within the Group to express anopinion on the Consolidated Financial Statements.We are responsible for the direction, supervision and performance of the group audit. We remain solely re-sponsible for our audit opinion.We communicate with those charged with gover- nance regarding, among other matters, the planned scope and timing of the audit and signicant audit n dings, including any signicant deciencies in internal control that we identify during our audit. Aalborg 33771231 MADS MELDGAARD State Authorised Public Accountant mne24826 RASMUS MELLERGAARD STENSKROG State Authorised Public Accountant mne34161 794180000 667861000 782573000 652448000 331766000 274141000 332581000 271602000 119000 27208000 30000 27207000 138280000 104556000 131229000 99071000 324253000 316372000 318793000 308982000 170392000 160448000 167047000 157409000 97000 0 97000 0 153764000 155924000 151649000 151573000 19084000 17950000 18780000 17839000 134680000 137974000 132869000 133734000 0 0 8119000 4492000 0 0 0 0 7707000 12790000 1004000 8231000 Financial expenses Financial expenses Financial expenses Financial expenses 4740000 11285000 4603000 9016000 137647000 139479000 137389000 137441000 22395000 15350000 22137000 13312000 115252000 124129000 115252000 124129000 20771000 16571000 20771000 16571000 391000 661000 391000 661000 1850000 0 1850000 0 956000 596000 956000 596000 23968000 17828000 23968000 17828000 17096000 11890000 15555000 11545000 14726000 9816000 13033000 9816000 31822000 21706000 28588000 21361000 0 0 8706000 7577000 0 0 0 0 0 0 24824000 36414000 18470000 13476000 18245000 13250000 18470000 13476000 51775000 57241000 74260000 53010000 104331000 96430000 256356000 139072000 254831000 139072000 48473000 39155000 44818000 36761000 3000000 3000000 3000000 3000000 0 793000 0 0 2703000 0 8687000 0 0 2665000 0 2665000 8295000 5658000 4663000 5658000 6120000 7662000 5817000 7600000 68591000 58933000 66985000 55684000 52027000 170170000 49088000 157683000 376974000 368175000 370904000 352439000 451234000 421185000 475235000 448869000 16698000 10394000 16698000 10394000 0 1985000 0 1985000 -2915000 2079000 -2915000 2079000 -888000 -2111000 -888000 -2111000 0 0 511000 0 2287000 9646000 2287000 9646000 182917000 145954000 182406000 145954000 75000000 45000000 75000000 45000000 273099000 212947000 273099000 212947000 7533000 7372000 7533000 7372000 0 0 20297000 29246000 7533000 7372000 27830000 36618000 7007000 8715000 7007000 8715000 0 26000 0 26000 15319000 8343000 15319000 8343000 22326000 17084000 22326000 17084000 0 34343000 0 34343000 55556000 55721000 55340000 55639000 0 0 4769000 2780000 12391000 4542000 12372000 4542000 3737000 0 3737000 0 67369000 79144000 66545000 74884000 9223000 10033000 9217000 10033000 148276000 183783000 151980000 182221000 170602000 200866000 174306000 199304000 451234000 421185000 475235000 448869000 STATEMENT OF CHANGES IN EQUITYCONSOLIDATEDForeignReserve forcurrency Share Share hedging translationOtherRetainedDKK'000capitalPremiumtransactionsreserveReservesearnings Dividend TotalEquity at 1 January 2021 10,040 1,985 -2,775 238 10,000 67,251 0 86,737Prot for the year 0 0 0 -667 0 124,796 0 124,129Exchange rate adjustment 0 0 0 -1,682 0 1,682 0 0Group enterprisesFair value of forward exchange 0 0 2,775 0 0 -2,775 0 0contracts, beginning yearFair value of forward exchange 0 0 2,079 0 0 0 0 2,079contracts, end yearConvertible bonds 354 0 0 0 -354 0 0 0Proposed Dividend 0 0 0 0 0 -45,000 45,000 0Equity at 31 December 2021 10,394 1,985 2,079 -2,111 9,646 145,954 45,000 212,947Equity at 1 January 2022 10,394 1,985 2,079 -2,111 9,646 145,954 45,000 212,947Capital contributions 0 -1,985 0 0 0 1,985 0 0Paid ordinary dividend 0 0 0 0 0 0 -45,000 -45,000Prot for the year 0 0 0 0 0 115,252 0 115,252Exchange rate adjustment Group enterprises 0 0 0 1,223 0 0 0 1,223Fair value of forward exchange contracts, beginning year 0 0 -2,079 0 0 0 0 -2,079Fair value of forward exchange contracts, end year 0 0 -2,915 0 0 0 0 -2,915Convertible bonds 6,304 0 0 0 -7,359 -5,274 0 -6,329Extraordinary dividend 0 0 0 0 0 -30,000 30,000 0Proposed Dividend 0 0 0 0 0 -45,000 45,000 0Equity at 31 December 2022 16,698 0 -2,915 -888 2,287 182,917 75,000 273,099STATEMENT OF CHANGES IN EQUITYPARENT COMPANY ForeignReserve forcurrency Reserve for Share Share hedging translationdevelopment OtherRetainedDKK'000capitalPremiumtransactionsreserveexpensesReservesearnings Dividend TotalEquity at 1 January 2021 10,040 1,985 -2,775 0 0 10,000 98,168 0 117,418Effect of change in 0 0 0 -429 0 0 -28,568 0 -28,997accounting policiesAdjusted equity at 1 January 2021 10,040 1,985 -2,775 -429 0 10,000 69,600 0 88,421Prot for the year 0 0 0 0 0 0 124,129 0 124,129Exchange rate adjustment Group 0 0 0 -1,682 0 0 0 0 -1,682enterprisesFair value of forward exchange 0 0 2,775 0 0 0 -2,775 0 0contracts, beginning yearFair value of forward exchange 0 0 2,079 0 0 0 0 0 2,079contracts, end yearConvertible bonds 354 0 0 0 0 -354 0 0 0Proposed Dividend 0 0 0 0 0 0 -45,000 45,000 0Equity at 31 December 2021 10,394 1,985 2,079 -2,111 0 9,646 145,954 45,000 212,947Equity at 1 January 2022 10,394 1,985 2,079 -2,111 0 9,646 145,954 45,000 212,947Capital contributions 0 -1,985 0 0 0 0 1,985 0 0Paid ordinary dividend 0 0 0 0 0 0 0 -45,000 -45,000Prot for the year 0 0 0 0 0 0 115,252 0 115,252Exchange rate adjustment Group enterprises 0 0 0 1,223 0 0 0 0 1,223Capitalized development expenses 0 0 0 0 511 0 -511 0 0Fair value of forward exchange contracts, beginning year 0 0 -2,079 0 0 0 0 0 -2,079Fair value of forward exchange contracts, end year 0 0 -2,915 0 0 0 0 0 -2,915Convertible bonds 6,304 0 0 0 0 -7,359 -5,274 0 -6,329Extraordinary dividend 0 0 0 0 0 0 -30,000 30,000 0Proposed Dividend 0 0 0 0 0 0 -45,000 45,000 0Equity at 31 December 2022 16,698 0 -2,915 -888 511 2,287 182,406 75,000 273,099 19084000 17950000 18780000 17839000 Income from Group enterprises Income from Group enterprises Income from Group enterprises Income from Group enterprises 0 0 -8119000 -4492000 315000 -524000 303000 -525000 -7707000 -12790000 -1004000 -8231000 4740000 11285000 4603000 9016000 154079000 155400000 151952000 151048000 -13116000 984000 -2376000 4809000 -117284000 30361000 -115759000 30361000 -4404000 -10827000 -1044000 -8302000 19275000 175918000 32772000 177916000 288000 2000 524000 0 -3390000 -9862000 -12600000 -9842000 -10655000 -13459000 -10088000 -10089000 5518000 152599000 10608000 157985000 23658000 12133000 20474000 12133000 13590000 15324000 13590000 15324000 0 0 735000 0 4994000 1599000 4995000 1599000 30000 0 51000 0 -42212000 -29056000 -39743000 -29056000 Free cash flows Free cash flows Free cash flows Free cash flows -36694000 123543000 -29135000 128929000 Change in bank loans Change in bank loans Change in bank loans Change in bank loans -34343000 34343000 -34343000 34343000 Repayment lease debt Repayment lease debt Repayment lease debt Repayment lease debt -26000 -305000 -26000 -305000 Debt composition Debt composition Debt composition Debt composition 0 3635000 0 3635000 Paid debt composition Paid debt composition Paid debt composition Paid debt composition -2080000 -69077000 -2080000 -69077000 Paid subordinated loan Paid subordinated loan Paid subordinated loan Paid subordinated loan 0 -6568000 0 -6568000 6304000 354000 6304000 354000 Convertible bonds Convertible bonds Convertible bonds Convertible bonds -6304000 -354000 -6304000 -354000 Change in intercompany loans Change in intercompany loans Change in intercompany loans Change in intercompany loans 0 0 1989000 2780000 45000000 0 45000000 0 -81449000 -37972000 -79460000 -35192000 -118143000 85571000 -108595000 93737000 84599000 63946000 ACCOUNTING POLICIES Financial reporting basisPWT Group A/S is a limited liability company domiciled in Denmark. The nancial information of the annual report for 2022 comprises both the consolidated nancial statements of PWT Group A/S and its subsidiaries (group) as well as the parent company nancial statements.The annual report of PWT Group A/S for 2022 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to large enterprises of reporting class C. The Board of Directors and the Executive Board have discussed and adopted the annual report of PWT Group A/S. The annual report will be presented for adoption by the shareholders of PWT Group A/S at the annual general meeting on 27 April 2023.Basis of preparationThe consolidated nancial statements and the parent company nancial statements are presented in Danish kroner thousands (DKK ’000), which is the reporting currency of the Group’s activities and the Parent Company’s functional currency. Revenue is recognised in the income statement as earned. Furthermore, value adjustments of nancial assets and liabilities are recognised. Moreover, all expenses incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changes to accounting estimates related to amounts previously recognised in the income statement.Assets are recognised in the balance sheet when it is probable that future economic benets attributable to the asset will flow to the Company, and the value of the asset can be measured reliably.Liabilities are recognised in the balance sheet when it is probable that future economic benets will flow out of the Company, and the value of the liability can be measured reliably.Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below.Certain nancial assets and liabilities are measured at amortised cost, which involves the recognition of a constant effective interest rate over the maturity period. Amortised cost is calculated as original cost less any repayments and with addition/deduction of the cumulative amortisation of any difference between cost and the nominal amount. Recognition and measurement take into account predictable losses and risks occurring before the presentation of the annual report which conrm or invalidate affairs and conditions existing at the balance sheet date. Change in accounting policiesThe Company has changed its accounting policy for investments in subsidiaries in the nancial year. Investments in subsidiaries in the Annual Report for 2022 are recognized and measured under the equity method, whereas investments in subsidiaries previously were measured at cost in the Annual Report. The comparative gures for 2021 have been adjusted accordingly.The accounting policy has been changed as a result of the management’s assessment that it will show a more accurate value of the company’s subsidiaries.The effect of the changed accounting policy has resulted in an increase in prot/loss for the year of DKK 8,119 thousand in 2022 and DKK 4,492 thousand in 2021 for the parent company.Investments in Group enterprises has increased with DKK 1,129 thousand in 2022 and DKK 0 in 2021 for the parent company.Total balance sheet has increased with DKK 1,129 thousand in 2022 and DKK 0 in 2021. Furthermore, provisionsrelating to investment in Group enterprises has increased with DKK 20,297 thousand in 2022 and DKK 29,246 thousand in 2021.The equity for the parent company has decreased with DKK 20,297 thousand in 2022 and with DKK 29,246 thousand in 2021.The change in accounting policies has had no effect on cash flows.Except for the above, the accounting policies applied remain unchanged from last year.CONSOLIDATIONConsolidated nancial statementsThe annual report comprises the Parent Company, PWT Group A/S, and enterprises under the control of the Parent Company. The Parent Company is deemed to exercise control when the Group controls an entity and the Group is exposed to, or has the right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.Associates are entities over which the Group has signicant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.Newly acquired or established enterprises are recognised in the consolidated nancial statements from the time of acquisition. Enterprises that have been sold or wound up are recognised in the consolidated income statement up to the time of disposal. Comparative gures are not adjusted for newly acquired, sold or wound-up enterprises. Investments in subsidiary enterprises are set off by the proportional share of the subsidiary enterprises’ market value of net assets and liabilities at the acquisition date. Positive differences between the acquisition value and market value of acquired and identied assets and liabilities, including a provision for liabilities for restructuring, are recognised as goodwill and amortised in the income statement according to an individual assessment of their useful lives.Consolidation principlesThe consolidated nancial statements are prepared on the basis of the nancial statements of PWT Group A/S and its subsidiaries in which similar nancial statement items are integrated. On consolidation, intra-group income and expenses, shareGroups, dividends, intra-group balances as well as realised and unrealised internal gains and losses on intra-group transactions are eliminated. The annual reports used for preparing the consolidated nancial statements have been recognised in accordance with the accounting policies of the Group.Foreign currency translationOn initial recognition, transactions denominated in currencies different from the individual enterprise’s functional currency are translated at the exchange rates 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 nancial income or nancial expenses.Receivables, payables and other monetary items denominated in foreign currencies are translated at the exchange rates 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 is recognised in the income statement as nancial income or nancial expenses.Upon recognition in the consolidated nancial statements of enterprises with a functional currency different from DKK, the income statements are translated into Danish kroner at an average exchange rates for the year, and balance sheet items are translated at the exchange rates at the balance sheet date. Exchange rate adjustments are recognised in the equity.Derivative nancial instrumentsDerivative nancial instruments are initially recognised at fair value at the settlement date and subsequently measured at fair value at the balance sheet date. Positive and negative fair values of derivative nancial instruments are recognised as a separate balance sheet item.Changes in the fair value of derivative nancial instruments designated as or qualifying for recognition as an effective hedge of future transactions are recognised in equity under retained earnings with respect to the effective portion of the hedges. The ineffective portion is recognised in the income statement. If the hedged transaction results in an asset or a liability, the amount deferred in equity is transferred from equity and recognised in the cost of the asset or the liability, respectively. If the hedged transaction results in an income or an expense, the amount deferred in equity is transferred from equity to the income statement in the period in which the hedged transaction is recognised. The amount is recognised in the same item as the hedged transaction.For derivative nancial instruments not qualifying for treatment as hedging instruments, changes are regularly recognised in the income statement as nancial income and nancial expenses.Segment disclosuresThe segment information has been prepared in accordance with the Group’s accounting policies and is consistent with the Group’s internal procedures for reporting to the Group management and board.Special itemsSpecial items comprise signicant income and expenses of a special nature in relation to the Group’s operating activities, such as costs for extensive structuring of processes and fundamental structural adjustments as well as any disposable gains and losses in connection therewith, which are signicant over time. Special items also include other signicant amounts of a non-recurring nature, which in the management’s assessment are not part of the Group’s primary operations.Special items for the year are specied in note 5, including a description of recognition in the income statement for each item.INCOME STATEMENTRevenueRevenue from the sale of goods for resale and nished goods is recognised in the income statement where delivery and transfer of risk have been made to the buyer by year end, and the income may be measured reliably and is expected to be received. Revenue is measured excluding VAT and duties, less discounts in relation to the sale and less discounts and bonus points relating to loyalty programmes (customer club).B2B:The Group manufactures and sells a range of clothes in the B2B market. Sales are recognised when control of the products has transferred, being when the products are delivered to the B2B. The wholesaler has full discretion over the channel and price at which to sell the products, and there is no unfullled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specic location, the risks of obsolescence and loss have been transferred to the B2B, and either the B2B has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satised. A receivable is recognised when the goods are delivered.A nancing element is not included in net revenue, as payment is made upon delivery or within a short credit period of, typically, 30-60 days.RETAIL:The Group operates a chain of retail stores selling clothes. Revenue from the sale of goods is recognised when a Group entity sells a product to the customer. Payment of the transaction price is due immediately when the customer purchases the clothes and takes delivery in store. It is the Group’s policy to sell its products to the end customer with a right of return. Therefore, a right to the returned goods is recognised for products expected to be returned. Accumulated experience is used to estimate such returns at the time of sale.Bonus points relating to loyalty programmes are recognised in the income statement as a reduction in revenue and liabilities (contract liabilities). The collected bonus points are measured based on the projected utilisation of such points, which is based on historical gures.Cost of goods for resaleTogether with changes in inventories of goods for resale, this item comprises costs incurred to generate revenue. Changes in inventories of goods for resale are recognised as cost of goods for resale.Other external costsOther external costs comprise cost of premises, selling and distribution costs as well as administrative expenses. Supplements to cover marketing costs are recognised as other external costs.Staff costsStaff costs comprise payroll, pensions and other social security costs relating to staff.Other operating income and costsOther operating income and costs comprise items secondary to the primary activities of the enterprises, including gains on disposal of intangible assets and plant and equipment.Income from Group enterprises and associatesThe proportional share of prot for the year is recognized under the item “Share of net prot of subsidiaries” and“Share of net prot of associate” in the income statement.Financial income and expensesFinancial income and expenses comprise interest income and expense, realised and unrealised exchange gains and losses on transactions in foreign currencies, amortisation of nancial assets and liabilities as well as surcharges and refunds under the on-account tax scheme. Financial income and expenses are recognised at the amounts relating to the nancial year.Tax on prot 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 amount that can be attributed to the prot for the year and directly in equity by the amount attributable to entries made directly to equity.The parent and all Danish group enterprises are jointly taxed. The Danish income tax charge is divided among the prot-making and loss-making Danish enterprises by their taxable income (full allocation method). BALANCE SHEETIntangible assetsGOODWILLAcquired goodwill is measured at cost less accumulated amortisation. Goodwill is amortised on a straight-line basis over the expected useful life which is estimated at 20 years. Useful life has been determined taking into account the long-term strategy of establishing a national fashion business. The carrying amount of goodwill is assessed continuously and written down via the income statement in cases where the carrying amount exceeds expected future net income from the enterprise or activity to which the goodwill is related. SOFTWARESoftware is measured at cost less accumulated amortisation and impairment losses. The basis of amortisation is cost.TRADEMARKSTrademarks are measured at cost less accumulated amortisation. The basis of amortisation is cost. The expected useful life is based on the trademark’s marked position.OTHER INTANGIBLE ASSETSOther intangible assets are measured at cost less accumulated amortisation. The basis of amortisation is cost.Any value of lease rights (bracket money) acquired in connection with the purchase of clothing stores is included in other intangible assets. Remuneration for other leasehold rights is amortised on a straight-line basis over the useful life, which is estimated at ten years.Useful lifeGoodwill .......................................................................................................................................................... 20 yearsSoftware ......................................................................................................................................................... 3-5 yearsTrademarks ..................................................................................................................................................5-10 yearsOther intangible assets ...................................................................................................................................10 yearsDevelopment projectsCosts on development projects include wages, depreciation and other costs that can be directly and indirectly attributed to the company’s development activities.Development projects that are clearly dened and identiable, where the degree of technical utilization, sufcient resources and a potential future market or development opportunity in the Group can be demonstrated, and where the intention is to manufacture, market or use the project, are recognized as intangible xed assets if there is sufcient assurance that the capital value of the future earnings can cover production, sales and administration costs as well as the development costs themselves.Development projects that do not meet the criteria for inclusion in the balance sheet are recognized as costs in the income statement as the costs are incurred.Capitalized development costs are measured at cost less accumulated depreciation and write-downs or recoverable amount, if this is lower. An amount corresponding to the recognized development costs is reserved in the item Reserve for development expenses under equity. The reserve is continuously reduced with depreciation and write-downs on the development projects.Capitalized development costs are depreciated from the time of completion on a straight-line basis over the period in which the development work is expected to generate economic benets.Plant and equipmentFixtures and ttings, tools and equipment as well as leasehold improvements (stores) are measured at cost less accumulated depreciation and impairment losses.The basis of depreciation is cost less projected residual value after the end of the useful life.Cost comprises the purchase price and any costs directly attributable to the acquisition until the date on which the asset is available for use.The capitalised value of the lease obligation is recognised as a liability on the balance sheet, and the interest element of the lease payment is recognised as an expense in the income statement. Depreciation is provided on a straight-line basis relying on the following assessment of the assets’ projected useful lives:Useful lifeFixtures and ttings, tools and equipment ................................................................................................... 3-5 yearsLease obligation ............................................................................................................................................ 3-5 yearsLeasehold improvements .............................................................................................................................. 5-7 yearsThe basis of depreciation is stated taking into account the scrap value of the asset and is reduced by impairment losses. The period of depreciation and the scrap value are determined at the date of acquisition and re-assessed annually.Impairment of plant and equipment and intangible assetsThe carrying amounts of intangible assets and plant and equipment are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation. If impairment is needed, the assets are written down to their lower recoverable amount and the amount written off is recognised in the income statement. Lease agreementLease contracts relating to tangible xed assets for which the company bears all material risks and reaps all benets arising from such ownership (nancial leases) are recognised as assets in the balance sheet. At initial recognition, the assets are measured at the calculated cost equal to the lower of fair value and present value of the future lease payments. The interest rate implicit in the lease is used as discounting factor or an approximate value when calculating the present value. Finance lease assets are depreciated similarly to the company’s other tangible xed assets. Operating lease payments are recognised in the income statement on a straight-line basis over the lease term. Investment in subsidiaries and associates Investment in subsidiaries and associates are recognized and measured according to the equity method. The equity method is used as a consolidation method. In the balance sheet, under the item Investments in Group enterprises and Investments in associates, the proportional ownership share of the companies’ accounting net asset value calculated on the basis of the fair value of the identiable net assets at the time of acquisition with deductions or additions of unrealized intra-group prots or losses and with the addition of residual value of any surplus values and goodwill calculated at the time of the acquisition of the companies.The total net revaluation of capital shares in subsidiaries and associated companies is allocated via the allocation of prots to Reserve for net revaluation according to the equity method under equity. The reserve is reduced by dividend distributions to the parent company and regulated by other equity movements in the subsidiaries and associated companies.Subsidiaries and associated companies with a negative net asset value are recognized at DKK 0. If the parent company has a legal or actual obligation to cover the company’s negative balance, a provision for this is recognized.DepositsDeposits comprise rent deposits attributable to the Group’s leaseholds. Deposits are measured at amortised cost.InventoriesInventories are measured at cost on the basis of weighted average prices. In the cases where cost is higher than net realisable value, write-down is made to this lower value. The cost of goods for resale is stated as cost with the addition of delivery costs.The net realisable value of inventories is calculated as the selling price less costs necessary to make the sale and is determined taking into account marketability, obsolescence and development of expected selling price.ReceivablesReceivables are measured at amortised cost, which usually corresponds to nominal value. Write down is made to net realisable value to provide for estimated bad debts. PrepaymentsPrepayments comprise prepaid expenses concerning subsequent nancial years. Prepayments are measured at cost.Tax payable and deferred taxCurrent tax liabilities and current tax receivable are recognised in the balance sheet as the calculated tax on the taxable income for the year, adjusted for tax on the taxable income for previous years and taxes paid on account. Deferred tax is measured on the temporary differences between the carrying amount and the tax value of assets and liabilities.Deferred tax is measured on the basis of tax rules and tax rates that under applicable law will be applicable on the balance sheet date when the deferred tax is expected to be triggered as current tax. ProvisionsProvisions are recognised when, as a result of past events, the Company has a legal or a constructive obligation, and it is probable that there may be outflow of resources embodying economic benets to settle the obligation.Provisions comprise refund liabilities forecast costs arising from leasehold improvements upon relocation and are based on projected costs determined on the basis of the leasehold’s current interior and condition. Provisions with an expected maturity exceeding one year from the balance sheet date are discounted back to net present value.Refund liabilities are measured at net present value of Management’s best estimate of the expenditure required to settle the obligation.Financial liabilities, bank overdrafts, etc.Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. In subsequent periods, the nancial 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.Derivative nancial instruments are measured at fair value, corresponding to market price at the balance sheet date. Other liabilities, which usually comprise trade payables, amounts owed to Group enterprises and other payables, are measured at amortised cost, which usually corresponds to nominal value. Staff obligationsStaff obligations comprise the employees’ rights to paid holidays after the balance sheet date.The Group has only entered into pension arrangements for dened-contribution pension plans under which regular pension contributions are paid to independent pension providers as the contributions are earned. The Group has not taken out any dened-benet pension plans.Staff obligations are recognised as other payables in the balance sheet.Deferred incomeDeferred income comprises payments received regarding income in subsequent years, including mainly gift cards (contract liabilities). Gift cards payable are recognised at estimated value. See note 25.Cash flow statementThe cash flow statement shows the Company’s cash flows from operating, investing and nancing activities for the year, the year’s changes in cash and cash equivalents as well as the Company’s cash and cash equivalents at the beginning and end of the year.Cash flows from operating activities are computed as the result for the year adjusted for non-cash operating items, changes in working capital and corporation tax paid. Working capital comprises current assets less current liabilities other than provisions, excluding items included in cash and cash equivalents. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of enterprises and activities, intangible assets, plant and equipment and investments.Cash flows from nancing activities comprise changes in the size or composition of the share capital and costs relating to the raising of loans, repayment of interest-bearing debt and payment of dividends to shareholders.Cash and cash equivalents comprise cash at bank and in hand.Denition of nancial ratios: EBITDA Earnings before restructuring costs, depreciation, amortisation, interest and taxGross prot/loss x 100Gross marginRevenueOperating prot/loss x 100Operating margin (EBIT margin)RevenueOperating prot/loss x 100Return on invested capitalAverage operating assetsClosing equity x 100Solvency ratioTotal equity and liabilities at year endProt/loss after tax x 100Return on equityAverage equity 368 350 NOTE 2NOTE 3STAFF COSTSCONSOLIDATED PARENT COMPANY DKK'000 2022 2021 2022 2021Payroll148,865 141,238 146,024 138,692Pensions10,799 9,904 10,779 9,882Other social security costs10,728 9,306 10,244 8,835170,392 160,448 167,047 157,409Thereof:Payroll Executive Board4,119 2,870 4,119 2,870Pensions Executive Board111 36 111 36Payroll Board of Directors 900 1,818 900 1,8185,130 4,724 5,130 4,724 NOTE 2SEGMENT DISCLOSURESCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Geographical marketsDenmark 489,562 467,598 489,562 467,598Other markets 304,618 200,263 293,011 184,850Total external revenue 794,180 667,861 782,573 652,448DKK’000Segment revenue431,609 375,022 431,609 375,022Retail DenmarkWholesale Worldwide349,160 281,611 337,553 266,198Other segments 13,411 11,228 13,411 11,228Total external revenue 794,180 667,861 782,573 652,448The Group sells menswear and accessories mainly its own brands but also external brands for the retail business including online sales and its own brands for wholesalers.Other business activities and operating segments that are not reportable have been combined and disclosed as an ‘other segments’ category separately. The sources of the revenue included in the other segments’ category relates to online B2C sales and retail outside Denmark. PWT has two reportable segments selling menswear one through wholesalers worldwide and one through retailers. The Group primarily operates in Denmark and has, to a minor extent, activities in Norway, Sweden and Germany. NOTE 4DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSESCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Owned assets:Software 5,948 3,688 5,948 3,688Trademarks 270 282 270 282Goodwill 80 0 80 0Other intangible assets 190 149 190 149Fixtures and ttings, tools and equipment 6,814 7,515 6,614 7,404Leasehold improvements 5,782 6,316 5,678 6,31619,084 17,950 18,780 17,839 NOTE 5NOTE 2 SPECIAL ITEMSSpecial items comprise cost, which is special due to their size or nature. CONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Cost of salesWrite down of inventories in addition to standard write down 0 9,900 0 9,900due to COVID-190 9,900 0 9,900Other operating incomeGovernment’s COVID-19 relief, payroll compensation 0 14,643 0 14,643Government’s COVID-19 relief, xed cost compensation 0 12,429 0 12,4290 27,072 0 27,072Other nancial incomeDebt composition agreement with bondholders 0 3,979 0 3,979Debt composition agreement, other debt 0 1,904 0 1,904Dividend and write off of intercompany balance with WagNo AS7,129 0 190 07,129 5,883 190 5,883NOTE 7NOTE 7 OTHER FINANCIAL INCOMECONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Interest income, banks 0 1 0 0Interest income, Group enterprises 0 0 297 0Other nancial income 7,707 12,789 707 8,2317,707 12,790 1,004 8,231 NOTE 6OTHER EXTERNAL COSTSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Fees for auditors appointed at the general meetingStatutory audit services522 403 348 327Other assurance engagements81 38 81 38Tax advisory services1,499 550 1,423 535Other services541 1,265 265 996Total fee2,643 2,256 2,117 1,896Distributed as follows:PwC2,371 1,824 2,100 1,694Other rms 272 432 17 2022,643 2,256 2,117 1,896Fee for other services than statutory audit services rendered by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab, to the Group of DKK 1,861 thousand consist mainly of tax advisory services and other services. NOTE 8 FINANCIAL EXPENSESCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Interest expense, banks 721 1,749 721 1,749Interest expense, Group enterprises 0 12 0 12Foreign exchange adjustment 2,459 1,726 3,135 44Other nancial expenses 1,560 7,798 747 7,2114,740 11,285 4,603 9,016 NOTE 9NOTE 2TAXCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Tax on prot/loss for the year from continuing opera-tions is specied as follows:Estimated 22% tax on results before tax-30,282 -30,685 -30,226 -29,922Adjustment of tax in foreign entities in propor--264 1,528 464 765tion to 22%Tax effect of:Adjustment deferred tax of prior years0 -65 0 1,310Non-deductible cost/income6,086 4,913 6,086 4,913Adjustment of unrecognised tax loss carry 0 9,622 0 9,622forwardAdjustment of tax in respect of prior years 2,065 -663 1,539 0-22,395 -15,350 -22,137 -13,312Effective tax rate -16.3% -11.0% -16.1% -9.8%NOTE 23DEFERRED INCOME TAXCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Deferred tax arises from: Intangible assets-236 -69 -236 -69Plant and equipment-60 2,747 -60 2,747Current assets1,225 4,670 1,225 4,670Provisions1,385 425 1,385 425Other liabilities868 -1,777 868 -1,777Adjustmentof deferred tax to carryingvalue-182 -2,996 -182 -2,9963,000 3,000 3,000 3,000 NOTE 10SOFTWARE CONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Opening cost 57,860 42,704 57,763 42,607Additions for the year10,148 15,156 10,148 15,156Disposals for the year -3,671 0 -3,671 0Closing cost 64,337 57,860 64,240 57,763Opening amortisation 41,289 37,601 41,192 37,504Amortisation for the year 5,948 3,688 5,948 3,688Reversed amortisation for the year of disposals -3,671 0 -3,671 0Closing amortisation 43,566 41,289 43,469 41,192Carrying amount 20,771 16,571 20,771 16,571NOTE 11NOTE 2TRADEMARKSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Opening cost 7,366 7,366 7,366 7,366Closing Cost 7,366 7,366 7,366 7,366Opening amortisation 6,705 6,423 6,705 6,423Amortisation for the year 270 282 270 282Closing amortisation 6,975 6,705 6,975 6,705Carrying amount 391 661 391 661 NOTE 13NOTE 2OTHER INTANGIBLE ASSETSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Opening costs1,490 1,490 1,490 1,490Additions for the year550 0 550 0 Closing cost 2,040 1,490 2,040 1,490Opening amortisation 894 745 894 745Amortisation for the year190 149 190 1491,084 894 1,084 894Closing amortisationCarrying amount 956 596 956 596NOTE 15NOTE 2LEASEHOLD IMPROVEMENTSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Opening cost 84,790 79,008 84,316 78,534Additions for the year 10,847 5,782 9,055 5,782Disposals for the year-30,314 0 -29,867 0Closing cost65,323 84,790 63,504 84,316Opening depreciation 74,974 68,619 74,500 68,145Currency translation103 39 89 39Depreciation for the year5,782 6,316 5,678 6,316Reversed depreciation for year on disposals-30,262 0 -29,796 0Closing depreciation50,597 74,974 50,471 74,50014,726 9,816 13,033 9,816Closing carrying amount NOTE 14FIXTURES AND FITTINGS, TOOLS AND EQUIPMENTCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Opening cost 95,361 89,059 94,011 87,709Additions for the year 12,111 6,302 10,719 6,302Disposals for the year-34,734 0 -34,279 0Closing cost72,738 95,361 70,451 94,011Opening depreciation 83,471 75,931 82,466 75,038Currency translation 113 25 115 24 Depreciation for the year6,814 7,515 6,614 7,404Reversed depreciation for the year on disposals-34,756 0 -34,299 0Closing depreciation55,642 83,471 54,896 82,46617,096 11,890 15,555 11,545Closing carrying amountOf which nancial leasing assets 0 34 0 34 NOTE 16INVESTMENTS IN GROUP ENTERPRISESPARENT COMPANYInvestments in Group enterprisesDKK'000 2022 2021Cost at January17,711 7,576Additions735 0Transfer0 10,135Cost at 31 December18,446 17,711Value adjustments 1 January -39,379 -32,054Foreign currency adjustment1,223 -1,682Prot for the year8,119 4,492Transfer0 -10,135Value adjustments 31 December-30,037 -39,379Provisions relating to capital shares in Group enterprises 20,297 29,246Carrying amount at 31 December 8,706 7,577VOTING PROFIT FOR COMPANY RIGHTS AND EQUITYTHE YEARCAPITALSTAKETDKK TDKKPWT Norway AS, Oslo, Norway-20,297 7,415 TNOK 400 100%PWT Germany GmbH, Maasbüll, Germany8,579 1,341 TEUR 25 100%Wagner China ApS, Aalborg, Denmark-9,451 29 TDKK 300 100%PWT Sweden AB, Bjärred, Sweden127 -637 TSEK 100 100% Wagner Birsta AB, Sundsvall, Sweden88 -327 TSEK 100 100% Wagner Karlstad AB, Karlstad, Sweden154 -259 TSEK 100 100% The Company has bought 40% of Wagner China ApS for DKK 1 at 07.10.2021, thus the Company now controls 100% of Wagner China ApS.NOTE 17INVESTMENTS IN ASSOCIATESCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Cost at 1 January 0 10,135 0 10,135 Transfer 0 -10,135 0 -10,135Cost at 31 December 0 0 0 0Value adjustments 1 January 0 -10,135 0 -10,135Transfer 0 10,135 0 10,135Value adjustments 31 December 0 0 0 0Carrying amount at 31 December 0 0 0 0VOTING PROFIT FOR COMPANY RIGHTS AND EQUITYTHE YEARCAPITALSTAKETDKK TDKK Wagner (Yantai), Ltd., Yantai, China 5,541 -1,040 CNY 58.199 49%Wagner China ApS has been tranferred to subsidaries as of 07.10.2021. NOTE 18NOTE 2 DEPOSITSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Carrying amount at 1 January 13,476 11,877 13,250 11,651Additions 6,074 2,694 6,075 2,694Disposals -1,080 -1,095 -1,080 -1,095Carrying amount at 31 December 18,470 13,476 18,245 13,250 NOTE 19INVENTORIESCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Goods for resale 213,644 112,146 212,119 112,146Prepayments for goods 42,712 26,926 42,712 26,926Goods for resale, net 256,356 139,072 254,831 139,072 NOTE 20NOTE 2SHARE CAPITAL DKK'000 SHARE CAPITAL 31-12-2022Share capital upon establishment 2007/08 1,985Capital contributions 20208,055Convertible bonds converted to shares 2021354Convertible bonds converted to shares 2022 6,304Closing share capital16,698The share capital is fully paid in and broken down on shares of DKK 1 or multiples thereof. No shares carry special rights.The capital contribution of DKK 8 million was paid with a premium of 124.14, corresponding to a cashpayment of DKK 10 million.In addition, the company has issued convertible bonds for DKK 10 million. Any owner of a convertible bonds may at any time demand their bonds be converted into new shares in the company pursuant to the terms set in the investment agreement. By the end of 2022, the Company has convertible bonds for DKK 2.3 million.Bonds will be converted to DKK 1 per shares, and there is no expire date of the bonds. NOTE 21PROVISIONSCONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021The Group’s total provision obligation broken down on residual terms:Within 1 year 1,639 1,444 1,639 1,444Between 1 and 5 years 4,464 4,428 4,464 4,428After 5 years 1,430 1,500 1,430 1,5007,533 7,372 7,533 7,372Provision obligation at 1 January 7,372 8,556 7,372 8,556Additions during the year 44 34 44 34Reversals during the year 185 -1,210 185 -1,210Effect of change in interest rates -68 -8 -68 -8Provision obligation at 31 December 7,533 7,372 7,533 7,372Provisions obligations contains obligation to re-establish leaseholds (DKK 5,894 thousand) and refundliability on sold clothes (DKK 1,639 thousand).Obligation to re-establish leaseholds relates to projected future costs attributable to relocation of leaseholds and is based on projected costs relying on the current interior and condition of the leaseholds. The obligation is discounted back to net present value using a discount rate of 9.1% (2021: 2.1%), equivalent to a risk-free interest rate. Refund liabilities on sold clothes relates to projected future returns. NOTE 24 NOTE 2DERIVATIVE FINANCIAL INSTRUMENTSThe Group has entered into forward contracts of a total of DKK 90,176 thousand for USD purchasesuntil June 2023 for the purpose of hedging future purchases in USD. The average exchange rate is 721. Cover of currency risksConsolidated 2022:ContractFari value Residual lifevalue Fair valueon the equityDKK’000Forward contract, USD 0-6 months 90,176 -3,737 -2,915Recognised on equity -3,737 -2,915Consolidated 2021 :Forward contract, USD 0-8 months 124,911 2,665 2,079Recognised on equity 2,665 2,079 NOTE 25NOTE 2DEFERRED INCOMEDeferred income compromises mainly obligations in relation to gift cards. Gift cards at DKK 9,135 thousand (2021: DKK 9,960 thousand) are recognised as income as they are used or when they become obsolete after 3 years according to regulations. NOTE 26NOTE 2CHARGES AND SECURITYAs security for debt payable to Spar Nord Bank A/S, a company charge at a nominal DKK 145 million has been provided in non-current assets and current assets.CONSOLIDATED PARENT COMPANYDKK'000 2022 2021 2022 2021Non-current assets with a carrying amount31,822 21,706 28,588 21,361Inventories with a carrying amount256,356 139,072 254,831 139,072Trade receivables with a carrying amount48,473 39,155 44,818 36,761As security for debt payable to Spar Nord Bank A/S, equity investments have been pledged at a nominal NOK 400.000 in PWT Norway AS and a nominal EUR 25.000 in PWT Germany GmbH.Equity investment with a carrying amount0 0 8,579 7,577At 31 December 2022, we have conrmed letters of credit in the amount of DKK 5,797 thousand regarding non-settled purchases of supplies abroad (31 December 2021: DKK 4,878 thousand) and bank guarantees concerning rent and customs at an amount of DKK 5,711 thousand (31 December 2021: DKK 12,953 thousand). NOTE 27CONTRACTUAL OBLIGATIONS AND CONTINGENCIESRent obligations and operating lease liabilitiesOther Consolidated Rentoperating DKK’000obligationleases TotalWithin 1 year62,168 1,375 63,543Between 1 and 5 years65,324 364 65,688Above 5 years4,610 0 4,610132,102 1,739 133,841Other Parent company Rentoperating DKK’000obligationleases TotalWithin 1 year61,953 1,106 63,059Between 1 and 5 years65,324 218 65,542Above 5 years4,610 0 4,610131,887 1,324 133,211The Group’s Danish enterprises are jointly and severally liable for the jointly taxed enterprises’ tax liabilities.In the ordinary course of its business, the Group is subject to various litigation such as product liability claims, employee disputes, rental disputes and other kinds of lawsuits, and faces different types of legal issues. Any claim brought against the Group (with or without merit), could be costly to defend. These matters are inherently difcult to quantify. Management is of the opinion that the result of these disputes will not have a signicant effect on the Group’s nancial position. NOTE 28RELATED PARTY DISCLOSURES AND OWNERSHIPControl BasisOKH 63 Holding ApS, Teglværkssvinget 17, 9500 Hobro Ultimate parent companyOKH Holding ApS, Teglværkssvinget 17, 9500 Hobro Parent company’s ownerPWT Management ApS, Teglværkssvinget 17, 9500 Hobro Owner of PWT Group A/SSignificant influenceThe CEO of PWT Group A/S, Ole Koch Hansen is deemed to exert signicant influence, also exercises control over OKH 63 Holding ApS.Transactions with related partiesAmounts owned by group enterprises are disclosed on the balance sheet of the parent company nancial statements, and interest thereon is disclosed in note 7, Financial income and note 8, Financial expenses. In addition, the Group has during the nancial year conducted the following transactions with the Executive Board and Board members of the company, which performs signicantly influence.CONSOLIDATEDDKK'000 2022 2021Rent, etc. 4,930 4,745Rent obligations regarding related parties represent 29,590 31,629 30000000 0 30000000 0 45000000 45000000 45000000 45000000 40252000 80812000 40252000 80812000 7245 4545 PWT-GROUP.COM Annual report Auditor's report on audited financial statements ParsePort XBRL Converter 2022-01-01 2022-12-31 2021-01-01 2021-12-31 2023-03-27 Lars Johansson Regnskabsklasse C, stor virksomhed 2007-11-30 2023-04-27 31081610 PWT Group A/S Gøteborgvej 15-17 9200 Aalborg SV Opinion Basis for Opinion 2023-03-27 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Skelagervej 1A 9000 Aalborg Denmark