28964080 2025-01-01 2025-12-31 28964080 2025-01-01 2025-12-31 2 28964080 2025-01-01 2025-12-31 memberOfBoardIdentifier_executive_board_1 28964080 2025-01-01 2025-12-31 memberOfBoardIdentifier_board_of_director_1 28964080 2025-01-01 2025-12-31 1 28964080 2023-01-01 2023-12-31 28964080 2022-01-01 2022-12-31 28964080 2021-01-01 2021-12-31 28964080 2023-12-31 28964080 2022-12-31 28964080 2021-12-31 28964080 2024-01-01 2024-12-31 28964080 2025-12-31 28964080 2024-12-31 28964080 2025-01-01 fsa:ContributedCapitalMember 28964080 2025-01-01 fsa:ReserveForDevelopmentExpenditureMember 28964080 2025-01-01 fsa:ReserveForCurrentValueOfHedgingMember 28964080 2025-01-01 fsa:RetainedEarningsMember 28964080 2025-01-01 fsa:ProposedDividendRecognisedInEquityMember 28964080 2025-01-01 28964080 2025-01-01 2025-12-31 fsa:ContributedCapitalMember 28964080 2025-01-01 2025-12-31 fsa:ReserveForDevelopmentExpenditureMember 28964080 2025-01-01 2025-12-31 fsa:ReserveForCurrentValueOfHedgingMember 28964080 2025-01-01 2025-12-31 fsa:RetainedEarningsMember 28964080 2025-01-01 2025-12-31 fsa:ProposedDividendRecognisedInEquityMember 28964080 2025-12-31 fsa:ContributedCapitalMember 28964080 2025-12-31 fsa:ReserveForDevelopmentExpenditureMember 28964080 2025-12-31 fsa:ReserveForCurrentValueOfHedgingMember 28964080 2025-12-31 fsa:RetainedEarningsMember 28964080 2025-12-31 fsa:ProposedDividendRecognisedInEquityMember 28964080 2025-01-01 2025-12-31 fsa:ManagementMember 28964080 2024-01-01 2024-12-31 fsa:ManagementMember 28964080 2025-01-01 2025-12-31 fsa:BoardOfDirectorsMember 28964080 2024-01-01 2024-12-31 fsa:BoardOfDirectorsMember 28964080 2025-01-01 fsa:CompletedDevelopmentProjectsMember 28964080 2025-01-01 fsa:AcquiredLicencesMember 28964080 2025-01-01 2025-12-31 fsa:CompletedDevelopmentProjectsMember 28964080 2025-01-01 2025-12-31 fsa:AcquiredLicencesMember 28964080 2025-12-31 fsa:CompletedDevelopmentProjectsMember 28964080 2025-12-31 fsa:AcquiredLicencesMember 28964080 2025-01-01 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2025-01-01 fsa:LeaseholdImprovementsMember 28964080 2025-01-01 2025-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2025-01-01 2025-12-31 fsa:LeaseholdImprovementsMember 28964080 2025-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 28964080 2025-12-31 fsa:LeaseholdImprovementsMember 28964080 2025-12-31 fsa:LongtermLeaseCommitmentsMember 28964080 2024-12-31 fsa:LongtermLeaseCommitmentsMember iso4217:DKK pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2025-01-01 2024-01-01 2025-12-31 2024-12-31 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Regnskabsklasse C, stor virksomhed Revisionspåtegning false 2026-04-30 Jens Rødgaard Knudsen The Executive Board and Board of Directors have today considered and adopted the Annual Report of 2care4 ApS 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. Esbjerg V 2026-04-30 Erik Sandberg CEO Toke Værndal To the shareholder of 2care4 ApS 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 2care4 ApS 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.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. Esbjerg 2026-04-30 PricewaterhouseCoopersStatsautoriseret Revisionspartnerselskab 33771231 Palle H. Jensen Lukasz Nidental State Authorised Public Accountant State Authorised Public Accountant mne32115 mne52103 2care4 ApS Stenhuggervej 12 6710 Esbjerg V +45 75152900 www.2care4.dk 28964080 Esbjerg Esbjerg Brygge 28, 2. 6700 Esbjerg Seen over a 5-year period, the development of the Company is described by the following financial highlights: 1205653000 1163569000 830050000 162418000 124167000 53312000 75377000 52476000 -23300000 -12604000 -9168000 -3582000 48849000 33669000 -21272000 446709000 441791000 382321000 2620000 5031000 3053000 698000 2429000 104735000 75136000 41467000 160 158 131 110 108 0.093 0.108 0.135 0.107 0.064 0.024 0.033 0.063 0.045 0.028 0.071 0.077 0.169 0.119 0.061 0.092 0.189 0.234 0.170 0.108 0.232 0.199 0.543 0.577 0.408 Key activitiesThe company's main activities are sales of Parallel Imported medicine and Generic medicine products.Development in the yearThe income statement of the Company for 2025 shows a profit of DKKm 17 and at 31 December 2025 the balance sheet of the Company shows a positive equity of DKKm 46.The past year and follow-up on development expectations from last yearThe profit level for 2025 was expected to be higher than for 2024 level and therefore the result is not considered satisfactory and is below expectations for 2025. For the Parallel Import business, the market dynamic in 2025 has had a negative impact on the business performance across main markets.Targets and expectations for the year aheadFor the financial year 2026 the Management expect an activity in line with 2025 and net profit level of DKK 15-20 mio.General riskWhen launching new products, the company is very dependent on the processing time partly with the healthcare authorities in the countries where the products are sold and partly with the central European registration authority, EMA, in Amsterdam. In a number of countries, the processing time still remains long, which limits a fast introduction of both new parallel imported goods and Generics.Financial risksThe company is exposed to fluctuations in interest rate levels and foreign exchange rates.Control of the financial risks and cash flows of the company is conducted from the headquarters of the Group. The company pursues a low risk profile within this area.Equivalently, a tight control of the credit policy is implemented. Thus, the company only has a very limited risk towards customers or co-operators. The majority of sales are legally enforced through consolidated pharmaceutical wholesalers.Research and developmentIn general, 2care4 is increasing focus and investment in product development is expected to generate more revenue for the company within few years.Uncertainty relating to recognition and measurementThere has been no uncertainty regarding recognition and measurement in the Annual Report.Subsequent eventsNo events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report. Statement of corporate social responsibility, cf. section 99b of the Financial Statements Act2care4 ApS’ statutory statement on corporate social responsibility pursuant to §99b of the Danish Financial Statements Act is contained in the company’s ESG Report 2025.The report has been prepared as a separate document and is based on the EFRAG Voluntary Sustainability Reporting Standard for SMEs (VSME – Basic Module).The report covers the same accounting period as the annual report and is published as supplementary information to the management review.The ESG report includes the company’s policies, risks, actions, results and key figures regarding relevant environmental and climate issues, social and employee issues, human rights and anti-corruption and bribery. The ESG Report for 2025 can be found at: https://www.2care4.dk/om-os/esg/ Statement on data ethicsThe internal guidelines regarding data ethics in 2care4 ApS is focused on protection of personal data for the employees. The guideline contains description of which personal data the Company is storing and how the data is protected during and beyond employment with the company. The internal guidelines are available for all employees in the company´s system containing all quality standards (D4) and introduction and formal consent of having understood the guidelines are mandatory for all new employees.Overall, the general protection of data in the Company is taken very seriously. The majority of data is embedded in the various data systems in the Company which are being monitored real time for data breaches and general access to data network is protected with two-factor user approval. 1500005000 1230471000 32146000 22214000 1350499000 1078288000 42689000 41553000 138963000 132844000 90859000 81776000 12096000 10466000 36008000 40602000 2852000 7725000 17243000 22159000 21617000 26168000 4642000 5821000 16975000 20347000 29837000 18758000 10154000 11188000 39991000 29946000 3256000 4473000 2981000 2973000 6237000 7446000 46228000 37392000 339081000 230844000 77972000 123128000 38241000 122526000 2536000 2528000 1706000 1429000 120455000 249611000 916000 11248000 460452000 491703000 506680000 529095000 125000 125000 23273000 14632000 -651000 0 18659000 85325000 5000000 0 46406000 100082000 2561000 2769000 14426000 14633000 16987000 17402000 0 1073000 0 1073000 0 318195000 0 158000 88214000 30994000 308620000 35499000 4641000 2453000 41812000 23239000 443287000 410538000 443287000 411611000 506680000 529095000 125000 14632000 0 85325000 0 100082000 0 0 0 70000000 0 70000000 0 0 -835000 0 0 -835000 0 10755000 0 -10755000 0 0 0 2114000 0 -2114000 0 0 0 0 -184000 0 0 -184000 0 0 0 11975000 5000000 16975000 125000 23273000 -651000 18659000 5000000 46406000 Geographical segmentsDenmark771,187784,858EU656,397304,326Other world72,421141,2871,500,0051,230,471Business segmentsHuman1,500,0051,230,4711,500,0051,230,471 81796000 73699000 7610000 6699000 1453000 1378000 90859000 81776000 Including remuneration to the Executive Board and Board of Directors:During the year, both a member of the Executive board and a member of the Board of directors resigned in December. Consequently, for the majority of the year the company had two members of the Executive board and two members of the Board of directors. Accordingly, the note on management and directors’ remuneration is presented for the year, reflecting these changes in the composition of the Executive board and the Board of directors. 2882000 2632000 1301000 1437000 4183000 4069000 160 158 Amortisation of intangible assets9,2377,906Depreciation of property, plant and equipment2,6322,016Gain and loss on disposal22754412,09610,466 2311000 5728000 3000 27000 538000 1970000 2852000 7725000 6488000 3928000 10755000 18231000 17243000 22159000 4850000 2468000 -208000 3353000 4642000 5821000 70000000 0 5000000 0 -58025000 20347000 22835000 74085000 13789000 5725000 0 1693000 36624000 78117000 4077000 62897000 2710000 6527000 0 1461000 6787000 67963000 29837000 10154000 3-5 years3 years Completed development projectsCompleted development projects include development and registration of pharmaceutical products for humans. Each product has a 3-5 year depreciation period, starting from when the product is launched in the market. The management has not established any indication for impairment of the current book value of the assets. 12358000 8096000 1704000 916000 1654000 0 12408000 9012000 7885000 5123000 1724000 908000 457000 0 9152000 6031000 3256000 2981000 3-10 years5 years 119212000 83614000 10359000 5399000 136487000 111574000 73023000 30257000 339081000 230844000 Prepayments consist of prepaid expenses. Deferred tax liabilities at 1 January2,769-583Amounts recognised in the income statement for the year-2083,352Deferred tax liabilities at 31 December2,5612,769 The recognized provision amounts to kDKK 14,426 to cover the estimated reimbursement of price reductions to customers and to cover items at customers and profit on goods that probably will be returned according to cooperation agreements. The provision is recognized based on previous experience regarding the extend of these liabilities.Other provisions14,42614,63314,42614,633The provisions are expected to mature as follows:Within 1 year14,42614,633After 5 years0014,42614,633 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:Lease obligations01,231 0 0 0 1073000 0 1073000 0 158000 Derivative financial instruments contracts in the form of forward exchange contracts have been concluded. At the balance sheet date, the fair value of derivative financial instruments amounts to:Liabilities835538The company has entered a currency forward contract to hedge future cashflow in Swedish kroner, totalling kSEK 85,000. Compared to the forward exchange rates the contract hold a negative value of kDKK 835. The hedging in 2025 meets the accounting criterias for hedging and the loss is therefore booked in the Equity under Reserve for hedging trans­actions.Forward exchange contracts835835 Charges and securityThe following assets have been placed as security with bankers:As collateral for the multi-currency cash pool in the amount of kDKK 376.308, the company has issued af floating company charge at nominalvalue kDKK 150,000 including the following assets, which on the 31st of december 2025 amounts to kDKK.Trade receivables77,972123,128Inventories339,081230,844Fixture and fittings, tools and equipment (excl. finance leasing)6,2376,020Intangible assets39,99129,946The Company participates in 2care4 Group ApS’s cash pool arrangements in Denmark, Sweden and Germany. By participating in this cash pool arrangements, all participants are jointly and severally liable for the total drawings under the arrangements.As of 31 December 2025, the cash pool arrangements show a total net debt of kDKK 376.308. Rental and lease obligationsThe following assets have been placed as security for rent obligations for a period of 28 months. (2024, 40 months)8,09211,731Other contingent liabilitiesThe 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 2care4 Group ApS, which is the management company of the joint taxation purposes. Moreover, the 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 obligationsAs of December 31, 2025, the company has entered into a non-cancellable agreement to purchase goods for delivery in 2026. The total contractual obligation amounts to MDKK 18. Controlling interest2care4 Group ApS, EsbjergParent companyOther related partiesToke Værndal, EsbjergMember of the Board of DirectorsErik Sandberg, OdenseExecutive BoardTransactionsThe Company has chosen only to disclose transactions which have not been made on an arm's length basis in accordance with section 98(c)(6) of the Danish Financial Statements Act. No such transactions have occurred. Consolidated Financial StatementsThe Company is included in the Group Annual Report of the Parent Company of the largest and smallest group:2care4 Group ApSStenhuggervej 12, 6710 Esbjerg V The company has, in accordance with Section 96, subsection 3, number 2 of the Annual Accounts Act, omitted to disclose the fee to the auditor elected by the general meeting. No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. The Annual Report of 2care4 ApS for 2025 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to large enterprises of reporting class C.The Financial Statements for 2025 are presented in TDKK. During the financial year, the Company has reclassified certain items between staff costs and other external expenses. The comparative figures have been restated accordingly. The changes have no impact on profit for the year, equity or the financial position. However, gross profit has been negatively affected by DKKm 3.9 (2024: DKKm 3.4). Apart from this reclassification, there are no changes to the applied accounting policies. 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 2care4 Group ApS, 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 policiesTransactions 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 rates at the time when the receivable or the debt arose are recognised in financial income and expenses in the income statement.Fixed assets acquired in foreign currencies are measured at the transaction date rates. Derivative financial instruments are initially recognised in the balance sheet at cost and are subsequently remeasured at their fair values. Positive and negative fair values of derivative financial instruments are classified as ”Other receivables” and ”Other payables”, respectively.Changes in the fair values of derivative financial instruments are recognised in the income statement unless the derivative financial instrument is designated and qualify as hedge accounting. Hedge accountingChanges in the fair values of financial instruments that are designated and qualify as fair value hedges of a recognised asset or a recognised liability are recognised in the income statement as are any changes in the fair value of the hedged asset or the hedged liability related to the hedged risk.Changes in the fair values of derivative financial instruments that are designated and qualify as hedges of expected future transactions are recognised in the fair value reserve under equity as regards the effective portion of the hedge. 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.Changes in the fair values of financial instruments that are designated and qualify as hedges of net investments in independent foreign subsidiaries or associates are recognised directly in equity as regards the effective portion of the hedge, whereas the ineffective portion is recognised in the income statement. 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 expenses for premises, sales as well as office expenses, etc. 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. Financial income and expenses are recognised in the income statement at the amounts relating to the financial year. 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 2care4 Group ApS. 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 projectsIntellectual property rights etc comprise development projects completed and in progress with related intellectual property rights and acquired intellectual property rights.Development projects on clearly defined and identifiable products and processes, for which the technical rate of utilisation, adequate resources and a potential future market or development opportunity in the enterprise can be established, and where the intention is to manufacture, market or apply the product or process in question, are recognised as intangible assets. Other development costs are recognised as costs in the income statement as incurred. When recognising development projects as intangible assets, anamount equalling the costs incurred is taken to equity under Reserve for development costs that is reduced as the development projects are amortised and written down.The cost of development projects comprises costs such as salaries and amortisation that are directly attributable to the development projects.Completed development projects are amortised on a straight-line basis using their estimated useful lives which are determined based on a specific assessment of each development project. If the useful life cannot be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual property rights, the maximum period of amortisation is the remaining duration of the relevant rights. The amortisation periods used are 5 years.Intellectual property rights acquired are measured at cost less accumulated amortisation. Patents are amortised over their remaining duration, and licences are amortised over the term of the agreement, but not more than 20 years.Intellectual property rights etc are written down to the lower of recoverable amount and carrying amount. 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. Interest expenses on loans contracted directly for financing the construction of property, plant and equipment are recognised in cost over the construction period.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 equipment3-10 years Leasehold improvements5 years The residual value of other fixed assets is determined at nil.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. 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. DividendDividend distribution proposed by Management for the year is disclosed as a separate Dividend item. ProvisionsProvisions 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 reimbursement of price reductions to customers and to cover items at customers and profit on goods that probably will be returned according to cooperation agreements within the warranty period of 1 year. The provision is recognized based on previous experience regarding the extend of these liabilities. Deferred tax assets and liabilitiesDeferred income tax is measured using the balance sheet liability method in respect of temporary differences 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-off 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 effective 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 liabilitiesCurrent 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. Debts are measured at amortised cost, substantially corresponding to nominal value. Financial HighlightsExplanation of financial ratiosGross marginGross profit x 100 / RevenueProfit marginProfit/loss of primary operations x 100 / RevenueReturn 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