15214236 2025-01-01 2025-12-31 15214236 2025-01-01 2025-12-31 0 15214236 2025-01-01 2025-12-31 1 15214236 2025-01-01 2025-12-31 0 15214236 2025-01-01 2025-12-31 1 15214236 2025-01-01 2025-12-31 2 15214236 2025-01-01 2025-12-31 0 15214236 2021-01-01 2021-12-31 4 15214236 2022-01-01 2022-12-31 3 15214236 2023-01-01 2023-12-31 2 15214236 2024-01-01 2024-12-31 1 15214236 2025-01-01 2025-12-31 0 15214236 2021-01-01 2021-12-31 9 15214236 2022-01-01 2022-12-31 8 15214236 2023-01-01 2023-12-31 7 15214236 2024-01-01 2024-12-31 6 15214236 2025-01-01 2025-12-31 5 15214236 2024-01-01 2024-12-31 15214236 2023-01-01 2023-12-31 15214236 2022-01-01 2022-12-31 15214236 2021-01-01 2021-12-31 15214236 2025-12-31 15214236 2024-12-31 15214236 2023-12-31 15214236 2022-12-31 15214236 2021-12-31 15214236 2021-01-01 2021-12-31 14 15214236 2022-01-01 2022-12-31 13 15214236 2023-01-01 2023-12-31 12 15214236 2024-01-01 2024-12-31 11 15214236 2025-01-01 2025-12-31 10 15214236 2021-01-01 2021-12-31 19 15214236 2022-01-01 2022-12-31 18 15214236 2023-01-01 2023-12-31 17 15214236 2024-01-01 2024-12-31 16 15214236 2025-01-01 2025-12-31 15 iso4217:DKK xbrli:pure 2025-01-01 2025-12-31 2024-01-01 2024-12-31 Kristoffer Mejborn Regnskabsklasse C, mellemstor virksomhed Annual report 15214236 Audo A/S Århusgade 130 1 2150 Nordhavn xWizard version 1.1.1513.0, by EasyX Aps. www.easyx.eu Auditor's report on audited financial statements Basis for Opinion Opinion mne35406 mne48485 15214236 2026-04-30 Audo A/S Århusgade 130, 1. 2150 Nordhavn 15214236 Copenhagen www.audocph.com Elisabetta Scotti Chairman Lars Hardboe Galsgaard Silvia Milanese Lars Hardboe Galsgaard CEO EY Godkendt Revisionspartnerselskab Dirch Passers Allé 36 2000 Frederiksberg Statement by Management on the annual report The Board of Directors and the Executive Board have today considered and approved the annual report of   Audo A/S for the financial year 2025.   The annual report is presented in accordance with the Danish Financial Statement Act. In our opinion, the financial statements give a true and fair view of the Entity's financial position at 31   December 2025 and of the results of its operations for the financial year 1 January - 31 December 2025.   Further, in our opinion, the Management's review gives a fair review of the development in the Company's   activities and financial matters, results for the year, cash flows and financial position as well as a description of   material risks and uncertainties that the Company faces.   We recommend the annual report for adoption at the Annual General Meeting. Copenhagen 2026-04-30 Lars Hardboe Galsgaard CEO Elisabetta Scotti Lars Hardboe Galsgaard Chairman Silvia Milanese Independent auditor’s report Opinion   We have audited the financial statements of Audo 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   accounting policies. The financial statements are prepared in accordance with the Danish Financial   Statements Act.   In our opinion, the financial statements give a true and fair view of the 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.   Basis for opinion   We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional   requirements applicable in Denmark. Our responsibilities under those standards and requirements are further   described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We   believe that the audit evidence we have obtained is suꢀicient and appropriate to provide a basis for our opinion.   Independence   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.   Management's responsibilities for the financial statements   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.   Auditor's responsibilities for the audit of the financial statements   Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free   from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our   opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in   accordance with ISAs and additional requirements applicable in Denmark will always detect a material   misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,   individually or in the aggregate, they could reasonably be expected to influence the economic decisions of   users taken on the basis of the financial statements.   As part of an audit conducted in accordance with ISAs and 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 suꢀicient   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 eꢀectiveness 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 note   disclosures, and whether the financial statements represent the underlying transactions and events in a   manner that gives a true and fair view.   We communicate with those charged with governance regarding, among other matters, the planned scope and   timing of the audit and significant audit findings, including any significant deficiencies in internal control that   we identify during our audit.   Statement on the Management's review   Management is responsible for the Management's review.   Our opinion on the financial statements does not cover the Management's review, and we do not express any   form of assurance conclusion thereon.   In connection with our audit of the financial statements, our responsibility is to read the Management's review   and, in doing so, consider whether the Management's review is materially inconsistent with the financial   statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.   Moreover, it is our responsibility to consider whether the Management's review provides the information   required under the Danish Financial Statements Act.   Based on the work we have performed, we conclude that the Management's review is in accordance with the   financial statements and has been prepared in accordance with the requirements of the Danish Financial   Statement Act. We did not identify any material misstatement of the Management's review.   Copenhagen 2026-04-30 EY Godkendt Revisionspartnerselskab EY Godkendt Revisionspartnerselskab 30700228 30700228 Dan Mose Andersen State Authorised Public Accountant Louise Greve State Authorised Public Accountant Management commentary   2025   2024   2023   2021/22   2020/21   DKK'000   DKK'000   DKK'000   DKK'000   DKK'000   (12 months)   (12 months)   (12 months)   (15 months)   (12 months)   Financial highlights   Key figures   Profit /(loss) before depreciation (EBITDA) Profit /(loss) before depreciation (EBITDA) Profit /(loss) before depreciation (EBITDA) Profit /(loss) before depreciation (EBITDA) Profit /(loss) before depreciation (EBITDA) expenses expenses expenses expenses expenses 318798000 70976000 8810000 303562000 51334000 -8502000 320200000 54951000 -12257000 500833000 140496000 48555000 265494000 97593000 51929000 -7261000 -4505000 -9275000 169778000 681000 -24288000 -936000 -18882000 245222000 1158000 -31320000 929000 -21913000 253764000 1158000 30876000 5163000 26449000 287452000 10647000 102997000 43252000 -2313000 31632000 161126000 5852000 52982000 62257000 81139000 52939000 Profit margin (%) Profit margin (%) Profit margin (%) Profit margin (%) Profit margin (%) Return on assets (%) Return on assets (%) Return on assets (%) Return on assets (%) Return on assets (%) 22.3 -2.3 -4.3 31.2 -16.1 16.4 -8 -9.9 25.4 -26.3 17.2 -9.8 -12.3 32 -23.8 28.1 6.2 10.7 35.8 33.9 36.8 16.3 26.8 32.9 119.5 The financial ratios have been calculated as follows:   Ratios   Calculation formula   Gross margin (%)   Gross profit x 100   Revenue   Profit margin (%)   Profit before financials x 100   Revenue   Return on assets (%)   Profit before financials x 100   Total assets at year end   Solvency ratio (%)   Equity at year end x 100   Total assets at year end   Return on equity (%)   Net profit for the year x 100   Average equity   Primary activities   Audo is a Danish design brand, based in Copenhagen, with a simple yet significant purpose: to enrich modern   living through designs that connect individuals creatively, comfortably, and functionally.   Since 1978, we have harnessed the skills of top designers and craftspeople around the world to create   contemporary furniture, lighting and accessories that are clean, clever, and natural, infusing a sense of calm   through high-quality materials in minimalist silhouettes.   By connecting the dots between home, work and hospitality, our design redefines how we use space and,   ultimately, how we connect to those around us.   Among others, the company hold all rights to a unique product portfolio created by Danish designers Mogens   Lassen, Flemming Lassen and Ib Kofod-Larsen. We also hold the rights to a portfolio of products created by   international designers as for example, Norm Architects, Colin King and Anderssen & Voll.   With an iconic portfolio of historic designs, along with diversified contemporary products, the company serves   a broad customer base. The products are sold to the end user through retailers and wholesalers in more than   60 countries. Audo has a strong presence in Northern European and in the US market.   Development in activities and finances   2025 marked a year of gradual demand normalization, resulting in an increase in revenue for the first time in   three years. The year also marked the implementation of a new and ambitious three-year strategy, establishing   a strategic focus on Audo’s brand, product innovation, and international expansion.   Overall, Audo delivered resilience in a year with unpredictable market situations which proves the continuing   appeal of Audo and the strength and relevance of our brand.   Building on the conditions experienced in 2024, throughout 2025 we operated in an environment marked by   high inflation, geopolitical tensions, and rising costs and customs duties. These macroeconomic factors had a   significant impact on both demand and cost levels during the year.   In 2025, Audo completed the go-live of a newly implemented ERP system. The implementation resulted in   additional costs during the year, which were in line with management’s expectations.   Revenue increased by 5 percent to DKK 319 million compared to DKK 304 million in 2024.   The gross profit margin increased by 6 percentage points to 22 percent in 2025, compared with 16 percent in   2024, driven by higher revenue and a continued focus on margin improvement and cost management.   Profit/(loss) before depreciation (EBITDA) improved from a loss of DKK (9) million in 2024 to a profit of DKK 9   million in 2025.   Operating profit/(loss) (EBIT) improved from a loss of DKK (24) million in 2024 to a loss of (7) million in 2025.   Following several years of reduced demand for high-end furniture, 2025 marked a return to revenue growth and   a significant improvement across all key performance indicators, including gross margin, EBITDA and EBIT.   While the overall development for the year was positive, EBIT was below the level communicated in the Annual   Report for 2024. The deviation primarily reflects that the expectations communicated last year were not aligned   with the budgeted earnings level and the outlook applied during the year. Increased cost levels, together with   additional depreciation related to the implementation of the new ERP system, also impacted the result for the   year.   Management considers the financial development to be satisfactory under given market conditions.   Outlook   Audo A/S expects an increase in the revenue in 2026 between 2% and 6%. The profit before financial income   and expenses (EBIT) is expected to be positive in 2026 in the range of DKK 0-10 million. The volatility and   uncertainty in the world have increased substantially in recent years. Geopolitical developments could bring   renewed challenges in 2026. Overall, Audo A/S is, however, anticipating improvements in cost prices and a   lower base of fixed costs. It is in general an unpredictable market situation also for 2026, which of course leads   to uncertainty for the full year expectations on revenue. We see less uncertainty related to the values in our   balance sheet.   Intellectual capital resources   The employees are the Group's most important resource, with main emphasis on design and product   development. The group has an experienced and highly competent staꢀ working throughout the value chain.   The group will continue to implement measures to attract and retain highly skilled staꢀ with expertise in the   development of Furniture, Lighting and Accessories to ensure future growth. Great demand is placed on the   employees' technical and craftsman skills and their ability to engage in a logistically demanding production   process. The Danish labor market has been competitive in 2025, and there is a general increase in demand for   talent within most areas, which is expected to continue. During 2025 Audo A/S has recruited competencies   within the areas of marketing, sales, sourcing, finance, and IT.   Research and development activities   Audo continuously invests in development, updates, and improvements of its product portfolio. Costs related   to development of products are expensed in the income statement or accounted for as an asset following the   accounting policies.   Environmental performance   Many of our raw materials and ingredients are sourced directly from nature and the continued success of our   business is causally linked to the health of the environment.   We are therefore constantly striving to optimize our use of natural resources, to view our products and activities   from a life cycle perspective and to develop and use environmentally friendly products, materials and   technologies in a way that contributes to long-term sustainable development.   These impacts could lead to reputational risk if impacts not managed properly.   During the fiscal year, we produced long-lasting solutions and investing in R&D to further expand products   lifecycle and progressively reduce carbon footprint by using more sustainable materials and ensuring energy   eꢀiciency in use phase.   In line with our environmental policy, we strive towards continuous improvement in our day-to-day operations   where we focus on reducing waste, energy use and greenhouse gas emissions.   Events after the balance sheet date   No event has occurred after the balance sheet date to this date, which may materially aꢀect the assessment of   the Company’s financial position.   318798000 303562000 939000 189261000 -1123000 60623000 70976000 2273000 195302000 -1645000 60844000 51334000 62166000 59836000 15746000 325000 15674000 112000 -7261000 -24288000 2028000 6533000 -11766000 4614000 5550000 -25224000 -2491000 -6342000 -9275000 -18882000 4447000 737000 5894000 303000 9034000 18926000 620000 13062000 21903000 878000 33764000 42040000 1582000 3102000 4684000 3701000 3884000 7585000 2442000 2323000 2442000 2323000 40890000 51948000 54005000 48284000 54005000 48284000 28940000 31279000 1000000 26330000 83679000 5052000 1025000 2768000 7921000 1650000 65012000 124632000 9871000 128888000 169778000 20358000 193274000 245222000 2504000 3468000 2504000 4597000 47010000 55156000 52982000 62257000 5987000 5987000 7427000 7427000 21241000 0 21241000 84087000 277000 84364000 10293000 0 20690000 710000 31092000 22560000 5085000 40051000 27609000 7651000 3964000 89568000 11036000 91173000 110809000 169778000 119949000 245222000 Statement of changes in equity for 2025   Reserve for   Share   develop-   Retained   capital   ment costs   earnings   Total   DKK'000   DKK'000   DKK'000   DKK'000   Equity beginning of year   2.504   4.597   55.156   62.257   Transfer to reserves   0 -1.129   1.129   0 Profit/(loss) for the year   0 0 -9.275   -9.275   Equity end of year   2.504   3.468   47.010   52.982   The Company's share capital is DKK 2.504.000 divided into shares of DKK 1.000.   Notes to financial statements   2025   2024   DKK'000   DKK'000   1. Staꢀ expenses   Wages and salaries   58.140   53.836   Pensions   3.288   3.339   Other social security costs   738   1.016   62.166   58.191   Average number of employees   83 83 Management remuneration is not disclosed following section 98b(3)(2) of the Danish Financial   Statements Act.   The Executive Board and other senior managers are covered by bonus schemes that are based   on yearly performance.   83 83 2025   2024   DKK'000   DKK'000   2. Depreciation, amortisation and impaiment of intangible assets   Amortisation of intangible assets   12.753   12.016   Depreciation on property, plant and equipment   2.993   3.658   15.746   15.674   Completed   development   Acquired   Acquired   projects   trademarks   other rights   DKK'000   DKK'000   DKK'000   7. Intangible assets   Cost beginning   of the year   8.872   1.811   43.433   Transfer   0 904   0 Additions   1.124   0 0 Disposals   0 -209   -1.169   Cost end of year   9.996   2.506   42.264   Amortisation and impairment   losses beginning of year   -2.978   -1.508   -30.371   Transfer   -684   113   0 Amortisation for the year   -1.887   -483   -3.011   Reversal regarding disposals   0 109   152   Amortisation and impairment   losses end of year   -5.549   -1.769   -33.230   Carrying amount   end of year   4.447   737   9.034   Completed development projects   Completed development projects comprises of capitalized cost for development of new products as well as   development of tools for the actual production.   The cost of development projects comprises of cost such as salaries and development of tools for production.   Based on management evaluation the projects have been finalized and launched as planned and are amortized   over 5 years. The completed development projects are regularly evaluated by the management of Audo and   management has found no indication of the need for write-downs in relation to the accounting value.   Software   Goodwill   DKK'000   DKK'000   7. Intangible assets (continued)   Cost beginning   of the year   28.428   4.427   Additions   3.198   0 Disposals   0 -1.672   Cost end of year   31.626   2.755   Amortisation and impairment   losses beginning of year   -6.525   -3.549   Transfer   1.147   0 Amortisation for the year   -7.322   -49   Reversal regarding disposals   0 1.463   Amortisation and impairment   losses end of year   -12.700   -2.135   Carrying amount   end of year   18.926   620   2025   2024   DKK'000   DKK'000   3. Financial income   Financial income from group enterprises   354   3.914   Other financial income   22   438   Exhange rate adjustments, income   1.653   262   2.029   4.614   2025   2024   DKK'000   DKK'000   4. Financial expenses   Financial expenses to group enterprises   1.957   4.381   Other financial expenses   2.137   1.169   Exhange rate adjustments   2.439   0 6.533   5.550   2025   2024   DKK'000   DKK'000   5. Tax on profit/loss for the year   Current tax   -1.052   -7.921   Change in deferred tax   -1.439   2.401   Adjustment of tax relating to previous year   0 -822   0 -6.342   which breaks down as follows:   Tax on profit/loss for the year   -2.491   -6.342   -2.491   -6.342   6 -9275000 -18882000 Other fixtures   and fittings,   Leasehold   tools and   improve-   equipment   ments   DKK'000   DKK'000   8. Property, plant and equipment   Cost beginning   of the year   9.976   9.114   Transfer   0 0 Additions   275   406   Disposals   -2.091   -4.113   Cost end of year   8.160   5.407   Amortisation and impairment   losses beginning of year   -6.275   -5.230   Transfer   0 128   Amortisation for the year   -1.677   -1.316   Reversal regarding disposals   1.374   4.113   Amortisation and impairment   losses end of year   -6.578   -2.305   Carrying amount   end of year   1.582   3.102   Deposits   DKK'000   9. Fixed assets investment   Cost beginning   of the year   2.323   Additions   119   Disposals   0 Cost end of year   2.442   Carrying amount   end of year   2.442   10. Prepayments   Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions etc.   2025   2024   DKK'000   DKK'000   11. Deferred tax liabilities   Provision for deferred tax at 1 January   7.427   5.848   Amounts recognised in the income statement for the year   -1.439   2.401   Amounts recognised as adjustment of tax relating to previous year   0 -822   Provision for deferred tax at 31 December   5.988   7.427   2025   2024   DKK'000   DKK'000   12. Long term debt   Financial lease liabilities   Between 1 and 5 years   0 277   Long term part   0 277   Within 1 year   0 710   Financial lease liabilities total   0 987   Payables to group enterprises   Between 1 and 5 years   21.344   84.087   Long term part   21.344   84.087   Within 1 year   0 0 Payables to group enterprises total   21.344   84.087   13. Prepayments received from customers   Prepayments received from customers comprises payments received in respect   of income in subsequent years.   14. Contingent assets, liabilities and other financial obligations   Rental and lease obligations   Lease obligations under operating leases. Total future lease payments:   2025   2025   DKK'000   DKK'000   Between 1 and 5 years   1.227   943   Within 1 year   821   665   2.048   1.608   Lease obligations, period of non-terminability for all lease obligations   34.900   24.021   Guarantee commitments   3.155   3.155   The Company has, as part of its normal course of business, entered into customary executory contracts.   Other contingent liabilities   The Group's enterprises are jointly and severally liable for the Group's jointly taxed income etc. The total   the respective period. Moreover, the respective Groups' Danish enterprises are jointly and severally liable for   royalty and interest. Any subsequent adjustments to the corporation tax or withholding tax may result in   changes to the Company's liability.   15. Related parties   Name and registered oꢀice of the Parent preparing consolidated financial statements for the largest group:   - Flos B&B Italia Group S.p.A., Via Manzoni 38 - 20121 Milan (Ml), Italy   Name and registered oꢀice of the Parent preparing consolidated financial statements for the smallest group:   - Flos B&B Italia S.p.A., Via Manzoni 38- 20121 Milan (Ml), Italy Annual Reports can be requested by   contacting the company).   Related parties with controlling interest:   - Flos B&B Italia Group S.p.A., Via Manzoni 38 - 20121 Milan (Ml), Italy, parent   - Designers Company A/S, Århusgade 130, 1., 2150 Nordhavn, parent   16. Transactions with related parties   2025   2024   DKK'000   DKK'000   Revenues   46.832   57.536   Administrative expenses   12.823   6.062   Financial income   354   3.914   Financial expenses   1.957   4.381   Receivables from group enterprises   31.279   83.679   Payables to group enterprises   48.850   106.647   Accounting policies   The Annual Report of Audo A/S for 2025 has been prepared in accordance with the provisions of the Danish   Financial Statements Act applying to medium enterprises of reporting class C.   The accounting policies applied remain unchanged from last year.   The Financial Statements for 2025 are presented in 000’DKK.   Cash flow statement 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 Flos B&B Italia Group S.p.A and Flos B&B Italia S.p.A, the   Company has not prepared a cash flow statement.   Recognition and measurement   Revenues 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   The Company has chosen IAS 17 as interpretation for classification and recognition of leases. 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 policies   Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange   diꢀerences arising due to diꢀerences 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 diꢀerences between the   exchange rates at the balance sheet date and the rates at the time when the receivable or the debt arose are   recognised in financial income and expenses in the income statement.   Income statement Revenue   The Company has chosen IAS 18 as interpretation for revenue recognition. Revenue 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.   Cost of sales   Cost of sales comprise the raw materials and consumables consumed to achieve revenue for the year.   Other external expenses   Other external expenses comprise indirect production costs and expenses for premises, sales and distribution   as well as oꢀice expenses, etc.   Other external expenses also include research and development costs that do not qualify for capitalisation.   Staꢀ costs   Staꢀ costs comprise wages and salaries, and social security contributions, pension contributions, etc. for   entity staꢀ.   Amortisation, depreciation and impairment losses   Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of   intangible assets and property, plant and equipment.   Goodwill is amortised over the expected economic life, measured by reference to an assessment of, among   others factors, the nature and market position of thed business, the stability of the industry and the   dependence on key staꢀ. The amortisation period runs for 10 years. Intangible assests are amortised on a   straight-line basis over the expected useful life of the individual assets. Property, plant and equipment are   depreciated on a straight-line basis to the residual value, based on the cost.   Other operating income and expenses   Other 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.   Financial income and expenses   Financial income and expenses are recognised in the income statement at the amounts relating to the financial   year.   Tax on profit/loss for the year   Tax for the year consists of current tax for the year and changes in deferred tax for the year. The tax attributable   to the profit for the 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 parent and all Danish group enterprises. The tax eꢀect of the joint taxation is   allocated to enterprises in proportion to their taxable incomes.   Balance sheet Intangible asset   Development projects, trademarks and other rights   Costs 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,   suꢀicient 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 suꢀicient 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 3-5 years.   Acquired patents and software licences are measured at cost less accumulated amortisation and less any   accumulated impairment losses or at a lower value in use.   Acquired patents are amortised over the remaining patent period or a shorter useful life. The amortisation   period is years. Software licences are amortised over the period of the agreement, which is 4-10 years.   Goodwill   Goodwill is amortised on a straighline over the estimated useful life of 15-20 years. determined on the basis of   Management's experience with the individual business areas.   Goodwill can be referred to withdrawal of agency agreements in several countries where the company handles   the sale and management of the customers.   Goodwill is amortized over a period of 15-20 years, due to costumer databases and relationships which has   been adopted by the Company from the agent.   Property, plant and equipment   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:   Other fixtures and fittings, tools and equipment   3-8 years   Leasehold improvements   Depreciation period and residual value are reassessed annually.   Impairment of fixed assets   The carrying amounts of intangible assets and property, 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 so, the asset is written down to its lower recoverable amount.   Other fixed asset investments   Other fixed asset investments consist of deposits.   Inventories   Inventories 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. The net realisable value is   determined allowing for marketability, opsolescence 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.   -5 years Receivables   The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables.   Receivables are measured at amortized cost.   Write-down for bad and doubtful debts is made when there is objective evidence that a receivable has been   impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is   recognised on an individual basis.   Impairment losses are calculated as the diꢀerence between the carrying amount of the receivables and the   present value of the expected cash flows, including the realisable value of any collateral received.   Prepayments   Prepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at   cost.   Cash   Cash comprises cash in hand and bank deposits.   Equity Dividend   Dividend distribution proposed by Management for the year is disclosed as a separate equity item.   Provisions   Provisions are recognised when - in consequence of an event occurred before or on the balance sheet date -   the Company has a legal or constructive obligation and it is probable that economic benefits must be given up   to settle the obligation.   Other provisions include expected warranty obligations. Provisions are measured and recognised based on   experience with repairs and returns.   Deferred tax assets and liabilities   Deferred income tax is measured using the balance sheet liability method in respect of temporary diꢀerences   arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting   purposes on the basis of the intended use of the asset and settlement of the liability, respectively.   Deferred tax assets 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-oꢀ against deferred tax liabilities within the same legal tax entity.   Deferred tax is measured on the basis of the tax rules and tax rates that will be eꢀective under the legislation at   the balance sheet date when the deferred tax is expected to crystallise as current tax. Any changes in deferred   tax due to changes to tax rates are recognised in the income statement or in equity if the deferred tax relates to   items recognised in equity.   Current tax receivables and liabilities   Current tax liabilities and receivables are recognised in the balance sheet as the expected taxable income for   the year adjusted for tax on taxable incomes for prior years and tax paid on account. Extra payments and   repayment under the on-account taxation scheme are recognised in the income statement in financial income   and expenses.   Financial debts   The Company has chosen IAS 39 as interpretation for liabilities. Loans, such as loans from credit institutions,   are recognised initially at the proceeds received net of transaction expenses incurred. Subsequently, the loans   are measured at amortised cost; the diꢀerence between the proceeds and the nominal value is recognised as   an interest expense in the income statement over the loan period.   Other debts and other payables are measured at amortised cost, substantially corresponding to nominal value.   Prepayments received from customers   Prepayments received from customers comprises payments received in respect of income in subsequent   years.