18212099 2025-01-01 2025-12-31 18212099 2025-01-01 2025-12-31 memberOfBoardIdentifier_executive_board_1 18212099 2025-01-01 2025-12-31 memberOfBoardIdentifier_board_of_director_1 18212099 2025-01-01 2025-12-31 memberOfBoardIdentifier_board_of_director_2 18212099 2025-01-01 2025-12-31 memberOfBoardIdentifier_board_of_director_3 18212099 2025-01-01 2025-12-31 memberOfBoardIdentifier_board_of_director_4 18212099 2025-01-01 2025-12-31 1 18212099 2023-01-01 2023-12-31 18212099 2022-01-01 2022-12-31 18212099 2021-01-01 2021-12-31 18212099 2023-12-31 18212099 2022-12-31 18212099 2021-12-31 18212099 2024-01-01 2024-12-31 18212099 2025-12-31 18212099 2024-12-31 18212099 2025-01-01 fsa:ContributedCapitalMember 18212099 2025-01-01 fsa:ReserveForNetRevaluationAccordingToEquityMethodMember 18212099 2025-01-01 fsa:ReserveForDevelopmentExpenditureMember 18212099 2025-01-01 fsa:RetainedEarningsMember 18212099 2025-01-01 18212099 2025-01-01 2025-12-31 fsa:ContributedCapitalMember 18212099 2025-01-01 2025-12-31 fsa:ReserveForNetRevaluationAccordingToEquityMethodMember 18212099 2025-01-01 2025-12-31 fsa:ReserveForDevelopmentExpenditureMember 18212099 2025-01-01 2025-12-31 fsa:RetainedEarningsMember 18212099 2025-12-31 fsa:ContributedCapitalMember 18212099 2025-12-31 fsa:ReserveForNetRevaluationAccordingToEquityMethodMember 18212099 2025-12-31 fsa:ReserveForDevelopmentExpenditureMember 18212099 2025-12-31 fsa:RetainedEarningsMember 18212099 2025-01-01 fsa:AcquiredPatentsMember 18212099 2025-01-01 fsa:DevelopmentProjectsInProgressMember 18212099 2025-01-01 2025-12-31 fsa:AcquiredPatentsMember 18212099 2025-01-01 2025-12-31 fsa:DevelopmentProjectsInProgressMember 18212099 2025-12-31 fsa:AcquiredPatentsMember 18212099 2025-12-31 fsa:DevelopmentProjectsInProgressMember 18212099 2025-01-01 fsa:PlantAndMachineryMember 18212099 2025-01-01 fsa:LeaseholdImprovementsMember 18212099 2025-01-01 fsa:PropertyPlantAndEquipmentInProgressMember 18212099 2025-01-01 2025-12-31 fsa:PlantAndMachineryMember 18212099 2025-01-01 2025-12-31 fsa:LeaseholdImprovementsMember 18212099 2025-01-01 2025-12-31 fsa:PropertyPlantAndEquipmentInProgressMember 18212099 2025-12-31 fsa:PlantAndMachineryMember 18212099 2025-12-31 fsa:LeaseholdImprovementsMember 18212099 2025-12-31 fsa:PropertyPlantAndEquipmentInProgressMember 18212099 2025-01-01 fsa:InvestmentsInGroupEnterprisesMember 18212099 2024-01-01 fsa:InvestmentsInGroupEnterprisesMember 18212099 2025-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2024-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2025-01-01 2025-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2024-01-01 2024-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2025-01-01 2025-12-31 relatedEntityIdentifier_sub_1 fsa:SubsidiaryMember 18212099 2025-12-31 relatedEntityIdentifier_sub_1 fsa:SubsidiaryMember 18212099 2025-01-01 fsa:OtherReceivablesMember 18212099 2025-12-31 fsa:OtherReceivablesMember 18212099 2025-12-31 fsa:OtherLongtermPayablesMember 18212099 2024-12-31 fsa:OtherLongtermPayablesMember 18212099 2025-12-31 fsa:OtherShorttermPayablesMember 18212099 2024-12-31 fsa:OtherShorttermPayablesMember iso4217:DKK pure xbrli:pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2025-01-01 2024-01-01 2025-12-31 2024-12-31 Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning true 2026-03-25 Henrik Danmark The Executive Board and Board of Directors have today considered and adopted the Annual Report of estron a/s for the financial year 1 January - 31 December 2025. The Annual Report is prepared in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements give a true and fair view of the financial position at 31 December 2025 of the Company and of the results of the Company operations for 2025. In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review. We recommend that the Annual Report be adopted at the Annual General Meeting. Them 2026-03-25 Peter Lyhne Uhrenholt CEO Anders Schnettler Kristensen Thomas Marstrand Allan Sørrig Dodt Chairman Vice chairman Sune Lilbæk To the shareholder of estron a/s Opinion In our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2025 and of the results of the Company’s operations for the financial year 1 January - 31 December 2025 in accordance with the Danish Financial Statements Act.We have audited the Financial Statements of estron a/s for the financial year 1 January - 31 December 2025, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies (”the Financial Statements”). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the ”Auditor’s responsibilities for the audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management is responsible for Management’s Review.Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financial Statements Act.Based on the work we have performed, in our view, Management’s Review is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the Financial Statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.Evaluate the overall presentation, structure and contents of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view.Plan and perform the audit to obtain sufficient appropriate audit evidence regarding the consolidated financial information of the entities or business units as a basis for forming an opinion on the Financial Statements. We are responsible for the direction, supervision and review of the audit work performed. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Trekantområdet 2026-03-25 PricewaterhouseCoopersStatsautoriseret Revisionspartnerselskab 33771231 Henrik Forthoft Lind State Authorised Public Accountant mne34169 estron a/s Industrivej 5 8653 Them 86848877 info@estron.dk www.estron.dk 18212099 Silkeborg Herredsvej 32 7100 Vejle Sydbank Seen over a 5-year period, the development of the Company is described by the following financial highlights: 39866000 46115000 32723000 13926000 17884000 9514000 2854000 8774000 7842000 14435000 22877000 15374000 68644000 80494000 71034000 1303000 3949000 1482000 15312000 5818000 53416000 47824000 35369000 28 27 33 36 32 0.543 0.476 0.203 0.222 0.134 0.719 0.692 0.778 0.594 0.498 0.764 0.638 0.285 0.550 0.487 Key activitiesThe Group's main activity consists of design, development and production of wire solutions and connectors for the hearing aid industry as well as cables and sockets for the worldwide audio and security industries.Business modelAt the headquarter in Denmark all activities regarding sales, product development, purchasing and production planning are carried out with a close involvement of key employees in Vietnam. All corporate support activities like marketing, finance, quality and IT are placed in Denmark as well as a part of the production activities. All customer activities are managed from estron Denmark.The subsidiary, estron Vietnam, is operating as a standalone production facility delivering only to estron Denmark.Development in the yearThe income statement of the Company for 2025 shows a profit of DKK 52,941,544, and at 31 December 2025 the balance sheet of the Company shows an equity of DKK 78,313,870.The results and profit for the year are considered satisfactory and above expectations, which were in the range of MDKK 40-45.In 2025 the focus of the global supply chain has been relatively stable despite new tariffs from USA. The various markets of estron have developed positively. estron has had a focus on minimizing the cost of raw material as well as implementing production improvements to secure the customers a minimal impact from the inflation driven increase in cost.At the production site in Vietnam investments have continued in tools and production machinery. Due to the capacity expansion made in Vietnam in 2023 as well as investments in organization, processes and machinery, it has been possible to continue managing the growth within existing production facilities.estron has continued an unchanged level of investments in product development, production facilities and machinery to support all customers with the needed production capacity.Targets and expectations for the year aheadIn 2026, estron expects a more stable development in activities compared to 2025. Due to timing the financial impact in 2026 is expected to be limited.Market demand for the Group's products and solutions is expected to grow steadily in the years to come.As a consequence of the anticipated revenue, the profit in 2026 is expected to be in the range of MDKK 40-45.Special risks - operating risks and financial risksFinancial risksSince most of the Group's revenue and internal business are generated in foreign currencies, the Group is exposed to foreign exchange risks. The primary currencies used are EUR and USD which are well balanced.The Management have evaluated the risk to be low.Special risksIn Management's opinion, the Group has not assumed any special risks, besides ordinary business risks and loss of key customers.Market riskThe global trade patterns seems to be challenged, imposing uncertainty about trade agreements and derived development of inflation.Uncertainty relating to recognition and measurementThere has been no uncertainty regarding recognition and measurement in the Annual Report.Unusual eventsThe financial position at 31 December 2025 of the Company and the results of the activities and cash flows of the Company for the financial year for 2025 have not been affected by any unusual events.Subsequent eventsNo events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. 81834001 62654764 21317657 20006563 1430841 1091533 59085503 41556668 7579733 4611690 2287914 1606895 3217838 2488721 65735312 45286532 12793768 9012568 52941544 36273964 778740 591110 790590 2703343 1569330 3294453 3099328 655313 62998 0 3635372 5935441 6797698 6590754 23936015 15823481 22500 22500 23958515 15845981 32325543 25731188 25745616 18999494 5076396 3487035 1181330 5738483 32003342 28225012 29591408 21959428 1059221 0 905714 451258 593847 569041 32150190 22979727 12384371 10297567 76537903 61502306 108863446 87233494 500000 500000 19294520 11181986 616660 2108608 57902690 46566709 78313870 60357303 325337 546936 325337 546936 1354619 1306286 1354619 1306286 56021 842198 145484 0 5120209 6278529 7077383 10054988 14093753 5772697 2376770 2074557 28869620 25022969 30224239 26329255 108863446 87233494 500000 11181986 2108608 46566709 60357303 0 0 0 35000000 35000000 0 15023 0 0 15023 0 0 -1491948 1491948 0 0 8097511 0 44844033 52941544 500000 19294520 616660 57902690 78313870 17938659 16753643 3046667 2912570 332331 340350 21317657 20006563 3174142 2497191 28 27 0 1410 229118 199303 2058796 1406182 2287914 1606895 592392 450000 332174 485623 2293272 1553098 3217838 2488721 13015367 8194311 -221599 776304 0 1126777 0 -1084824 12793768 9012568 35000000 30500000 8097511 -103185 9844033 5877149 4815103 2703343 454952 372905 0 2218012 0 -67646 5270055 790590 4223994 0 267321 0 4491315 0 778740 790590 3-7 years 14832386 764638 5935441 0 64066 1238760 2674996 0 0 3606475 0 -3538829 15763865 828704 3635372 14177076 764638 0 1162457 1068 0 2674996 0 0 12664537 765706 0 3099328 62998 3635372 3-5 years4-5 years 4641495 4641495 4641495 4641495 11181986 10118231 15023 1166940 7579733 4611690 0 4714875 517778 0 19294520 11181986 23936015 15823481 Investments in subsidiaries are specified as follows: Vietnam Estron Company Ltd Ho Chi Minh City 1.00 22500 22500 22500 Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Deferred tax liabilities at 1 January546,936855,456Amounts recognised in the income statement for the year-221,599-308,520Deferred tax liabilities at 31 December325,337546,936 Payments due within 1 year are recognised in short-term debt. Other debt is recognised in long-term debt.The debt falls due for payment as specified below:Other payables3,731,3893,380,843 0 0 1354619 1306286 1354619 1306286 2376770 2074557 Charges and securityThe following assets have been placed as security with bankers:As security for balance with a credit institution, a company charge of DKK 1,000k has been provided with a charge on ordinary claims relating to trade receivables, inventories, intellectual property rights as well as operating fixtures and equipment and machinery and equipment. Rental and lease obligationsLease obligations under operating leases. Total future lease payments:Within 1 year47,03947,565Between 1 and 5 years97,071126,963144,110174,528The Company has entered into tenancy agreements with a period of notice of up to 6 months to group enterprises. The obligation amounts to DKK 249,123 (2024: DKK 249,123 )Other contingent liabilitiesThe Danish group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. The total amount of corporation tax payable is disclosed in the Annual Report of BKGCA900 A/S, which is the management company of the joint taxation purposes. Moreover, the Danish group companies are jointly and severally liable for Danish withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Company's liability.Other financial obligationsThe company has agreements regarding the purchase of goods and operating equipment amounting to TDKK 11.937. The Company is included in the Group Annual Report of the Parent Company of the largest and smallest group:BKGCA900 A/SCharlottenlund The Annual Report of estron a/s for 2025 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C.The Financial Statements for 2025 are presented in DKK. With reference to section 112 of the Danish Financial Statements Act and to the consolidated financial statements for 2025 of BKGCA900 A/S, the Company has not prepared consolidated financial statements. With reference to section 86(4) of the Danish Financial Statements Act and to the cash flow statement included in the consolidated financial statements of BKGCA900 A/S, the Company has not prepared a cash flow statement. Recognition and measurementRevenues are recognised in the income statement as earned. Furthermore, value adjustments of financial assets and liabilities measured at fair value or amortised cost are recognised. Moreover, all expenses incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changed accounting estimates of amounts that have previously been recognised in the income statement.Assets are recognised in the balance sheet when it is probable that future economic benefits attributable to the asset will flow to the Company, and the value of the asset can be measured reliably.Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow out of the Company, and the value of the liability can be measured reliably.Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Leases in terms of which the Company assumes substantially all the risks and rewards of ownership (finance leases) are recognised in the balance sheet at the lower of the fair value of the leased asset and the net present value of the lease payments computed by applying the interest rate implicit in the lease or an alternative borrowing rate as the discount rate. Assets acquired under finance leases are depreciated and written down for impairment under the same policy as determined for the other fixed assets of the Company.The remaining lease obligation is capitalised and recognised in the balance sheet under debt, and the interest element on the lease payments is charged over the lease term to the income statement.All other leases are considered operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the lease term. Translation policiesDanish kroner is used as the presentation currency. All other currencies are regarded as foreign currencies.Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of future cash flows, the value adjustments are recognised directly in equity.Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the transaction date rates are recognised in financial income and expenses in the income statement.Income statements of foreign subsidiaries and associates that are separate legal entities are translated at transaction date rates or approximated average exchange rates. Balance sheet items are translated at the exchange rates at the balance sheet date. Exchange adjustments arising on the translation of the opening equity and exchange adjustments arising from the translation of the income statements at the exchange rates at the balance sheet date are recognised directly in equity. RevenueRevenue from the sale of goods is recognised when the risks and rewards relating to the goods sold have been transferred to the purchaser, the revenue can be measured reliably and it is probable that the economic benefits relating to the sale will flow to the Company.Revenue is measured at the consideration received and is recognised exclusive of VAT and net of discounts relating to sales. Expenses for raw materials and consumablesExpenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve revenue for the year. Other external expensesOther external expenses comprise indirect production costs and expenses for premises, sales as well as office expenses, etc. Gross profitWith reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a summary of revenue, other operating income, expenses for raw materials and consumables and other external expenses. Staff costs include wages and salaries including compensated absence and pensions as well as other social security contributions etc. made to the entity's employees. Amortisation, depreciation and impairment lossesAmortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment. Other operating income and expensesOther operating income and other operating expenses comprise items of a secondary nature to the main activities of the Company, including gains and losses on the sale of intangible assets and property, plant and equipment. Income from investments in subsidiariesThe item “Income from investments in subsidiaries” in the income statement includes the proportionate share of the profit for the year. Financial income and expenses comprise interest, financial expenses in respect of finance leases, realised and unrealised exchange adjustments, price adjustment of securities, amortisation of mortgage loans as well as extra payments and repayment under the on-account taxation scheme. Tax on profit/loss for the yearTax for the year consists of current tax for the year and deferred tax for the year. The tax attributable to the profit for year is recognised in the income statement, whereas the tax attributable to equity transactions is recognised directly in equity.The Company is jointly taxed with BKGCA900 A/S. The tax effect of the joint taxation with the subsidiaries is allocated to enterprises showing profits or losses in proportion to their taxable incomes (full allocation with credit for tax losses). Intangible fixed assetsDevelopment projectsCosts of development projects comprise salaries, amortisation and other expenses directly or indirectly attributable to the Company’s development activities.Development projects that are clearly defined and identifiable and in respect of which technical feasibility, sufficient resources and a potential future market or development opportunity in the enterprise can be demonstrated, and where it is the intention to manufacture, market or use the project, are recognised as intangible assets. This applies if sufficient certainty exists that the value in use of future earnings can cover cost of sales, distribution and administrative expenses involved as well as the development costs.Development projects that do not meet the criteria for recognition in the balance sheet are recognised as expenses in the income statement as incurred.Capitalised development costs are measured at cost less accumulated amortisation and impairment losses or at a lower recoverable amount. An amount corresponding to the recognised development costs is allocated to the equity item 'Reserve for development costs'. The reserve is reduced by amortisation of and impairment losses on the development projects on a continuing basis.As of the date of completion, capitalised development costs are amortised on a straight-line basis over the period of the expected economic benefit from the development work. The amortisation period is 3-7 year. Other intangible fixed assetsPatent and licenses are measured at cost less accumulated amortisation and less any accumulated impairment loses or at a lower value in use. Patents are amortised over the remaining patent period, and licences are amortised over the license period; however not exceeding 7 years.Development costs and costs relating to rights developed by the Company are recognised in the income statement as costs in the year of acquisition. Property, plant and equipment are measured at cost less accumulated depreciation and less any accumulated impairment losses.Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the asset is ready for use. Depreciation based on cost reduced by any residual value is calculated on a straight-line basis over the expected useful lives of the assets, which are:Plant and machinery3-5 years Leasehold improvements4-5 years Depreciation period and residual value are reassessed annually. Impairment of fixed assetsThe carrying amounts of intangible assets and property, plant and equipment and investments are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation.If so, the asset is written down to its lower recoverable amount. Investments in subsidiariesInvestments in subsidiaries are recognised and measured under the equity method.The item “Investments in subsidiaries” in the balance sheet include the proportionate ownership share of the net asset value of the enterprises calculated on the basis of the fair values of identifiable net assets at the time of acquisition with deduction or addition of unrealised intercompany profits or losses and with addition of the remaining value of any increases in value and goodwill calculated at the time of acquisition of the enterprises.The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to “Reserve for net revaluation under the equity method“ under equity. The reserve is reduced by dividend distributed to the Parent Company and adjusted for other equity movements in the subsidiaries.Subsidiaries with a negative net asset value are recognised at DKK 0. Any legal or constructive obligation of the Parent Company to cover the negative balance of the enterprise is recognised in provisions. Other fixed asset investments consist of deposits. InventoriesInventories are measured at the lower of cost under the FIFO method and net realisable value.The net realisable value of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with deduction of selling expenses and costs of completion. The net realisable value is determined allowing for marketability, obsolescence and development in expected selling price.The cost of goods for resale, raw materials and consumables equals landed cost.The cost of finished goods and work in progress comprises the cost of raw materials, consumables and direct labour with addition of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour as well as maintenance and depreciation of the machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and management. Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which corresponds to nominal value less provisions for bad debts. PrepaymentsPrepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Deferred tax assets and liabilitiesDeferred tax is recognised in respect of all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised in respect of temporary differences concerning goodwill not deductible for tax purposes and other items - apart from business acquisitions - where temporary differences have arisen at the time of acquisition without affecting the profit for the year or the taxable income.Deferred tax is measured on the basis of the tax rules and tax rates that will be effective under the legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. In cases where the computation of the tax base may be made according to alternative tax rules, deferred tax is measured on the basis of the intended use of the asset and settlement of the liability, respectively.Deferred tax assets, including the tax base of tax loss carry-forwards, are measured at the value at which the asset is expected to be realised, either by elimination in tax on future earnings or by set-off against deferred tax liabilities.Deferred tax assets and liabilities are offset within the same legal tax entity. Current tax receivables and liabilitiesCurrent tax receivables and liabilities are recognised in the balance sheet at the amount calculated on the basis of the expected taxable income for the year adjusted for tax on taxable incomes for prior years. Tax receivables and liabilities are offset if there is a legally enforceable right of set-off and an intention to settle on a net basis or simultaneously. Debts are measured at amortised cost, substantially corresponding to nominal value. Financial HighlightsExplanation of financial ratiosReturn on assetsProfit/loss of primary operations x 100 / Total assets at year endSolvency ratioEquity at year end x 100 / Total assets at year endReturn on equityNet profit for the year x 100 / Average equity