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Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2025-01-01 2024-01-01 2025-12-31 2024-12-31 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning true 2026-05-22 Jesper Slot The Executive Board and Board of Directors have today considered and adopted the Annual Report of CIBICOM 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. Ballerup 2026-05-22 Mette Slesvig Jesper Slot CEO CFO Rasmus Forup Helmich Jesper Slot Kevin Kristoffer Ehnhuus Iermiin Chairman Mette Slesvig Hans-Christian Ploug Bettina Dahl-Nielsen Employee representative Employee representative To the shareholder of CIBICOM 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 CIBICOM 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. Hellerup 2026-05-22 PricewaterhouseCoopersStatsautoriseret Revisionspartnerselskab 33771231 Bo Schou-Jacobsen Henrik Aslund Pedersen State Authorised Public Accountant State Authorised Public Accountant mne28703 mne17120 CIBICOM A/S Industriparken 35 2750 Ballerup + 45 70118011 info@cibicom.dk www.cibicom.dk 25598008 Ballerup Strandvejen 44 2900 Hellerup Seen over a 5-year period, the development of the Company is described by the following financial highlights: 167000000 150000000 170000000 37000000 34000000 51000000 -14000000 7000000 10000000 19000000 33000000 52000000 1104000000 1011000000 933000000 55000000 55000000 125000000 78000000 87000000 505000000 495000000 453000000 96 90 88 85 82 0.042 0.023 0.034 0.034 0.055 0.306 0.289 0.457 0.490 0.486 0.073 0.032 0.038 0.070 0.122 EBITDA 122 98 97 102 114 Key activitiesCibicom A/S's primary activities consist of:- Operation of radio and TV broadcasting networks and mission critical communication systems- Design, installation and maintenance services related to the radio and TV broadcasting networks as well as other critical communication infrastructure- Rental of positions for antenna systems and communication platform at Cibicom A/S’ towers- Design, implementation and operation of network infrastructure, MPLS and Internet access- Datacenter and co-location activities- IOT / interdevice communication solutionOperationCibicom A/S operates a communication and infrastructure platform e.g., for national radio and TV broadcasting companies in Denmark performing preventative and corrective maintenance and further development of the communication infrastructure. The activities changes and/or expands as new networks are established or existing are modified.The external environment with respect to broadcast of Radio and TV is in a better position than anticipated few years back. This is driven by the continuous relevance of real-time information, especially within news and sports. There is a recognition of the benefits of having both entertainment and information broadcasted with a low latency (delay) which streaming will not be able to provide. Also, coverage and robustness which this technology provides has only become even more relevant with the current geopolitical situation and as a reminder to the capabilities of the infrastructure a country need. Cibicom Group has secured the TV broadcast operations (DTT) with the major operators up until 30th June 2030 and Cibicom Group is planning to work for a further extension of the TV broadcast operations (DTT) in the coming years, due to the coverage and robustness of this technology.In 2025 we continued the development of our 450 Mhz network and introduced the product “Securecom LTE 450” and we signed the first 5-year contracts at the end of the year. Antenna space rental associated with our broadcast activities and telco infrastructure business showed a stable trend during the year. The company provides services in this area to broadcasters, telecom operators and tele infrastructure providers and we will accelerate our investments into this area going forward.In 2025 Cibicom continued its solid expansion into the fiber interconnect area (B2B) where we offer connectivity through our substantial backbone infrastructure. We are satisfied with the development in this area and expect this part of our business to grow further in the coming period.Datacenter and co-location are another growth area where we see a successful uptake as we are further expanding our customer-base through our 02.22 SKI Public Purchase Agreement in order to further make colocation offer available to municipalities and public authorities with mission critical and colocation needs. In 2025 we continued our expansion into the corporate market by signing new agreements with larger customers. In 2025 we bought an existing Datacenter in Taulov and we expanded our capacity in Ballerup.2025 was a significantly better year for our indoor communications solutions (DAS). We worked on large projects from both corporate markets, municipalities and public authorities.Cibicom A/S has for several years been running our own 24/7/365 Operations Center (NOC), with onsite staff monitoring all networks, infrastructure and other communication services continuously and provide services related to handling incidents and dispatching fields service personal. Monitoring covers all geographic locations where Cibicom has placed its equipment, which is more than 375 locations all over Denmark, including a number of islands without bridge connections. All operations are run with a high focus on security and compliance and Cibicom A/S continue to invest in improving this area to be market leading.Development in the yearThe income statement of the Company for 2025 shows a profit of TDKK 23,149, and at 31 December 2025 the balance sheet of the Company shows an equity of TDKK 326,799.EBITDA for the year is in line with expectations and above last year due to expansion in the company's main business areas.Targets and expectations for the year aheadWe expect to improve EBITDA & net profit/loss for the year due to increased activity. EBITDA is expected in the range of DKK 130 million to 150 million.Research and developmentCibicom A/S continues to priorities resources to ensure a broad knowledge base and competencies inhouse to support business development within all of our several business segments.Uncertainty relating to recognition and measurementRecognition and measurement in the Annual Report have not been subject to any uncertainty.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 eventsReference is made to note 17 in the Financial Statements. 198591000 168414000 76615000 71298000 77218000 73460000 44758000 23656000 15730000 -5914000 3000 0 32546000 29769000 27945000 -12027000 4796000 841000 23149000 -12868000 11107000 8722000 1123000 475000 12230000 9197000 307959000 314133000 219434000 226843000 19489000 24194000 17369000 0 234464000 252817000 798715000 817987000 157727000 132001000 1745000 1729000 159472000 133730000 970417000 960914000 183000 617000 183000 617000 19932000 8324000 15665000 15111000 6147000 5813000 23357000 27358000 0 432000 32621000 34790000 97722000 91828000 63000 59000 97968000 92504000 1068385000 1053418000 38000000 38000000 42465000 27055000 246334000 238969000 326799000 304024000 308019000 353954000 125000000 0 73242000 96748000 15746000 17192000 3710000 3640000 525717000 471534000 46602000 45539000 40322000 110854000 33418000 34081000 1333000 705000 39484000 48825000 46408000 28501000 689000 2195000 7613000 7160000 215869000 277860000 741586000 749394000 1068385000 1053418000 38000000 27055000 238969000 304024000 0 0 -481000 -481000 0 0 -107000 -107000 0 15410000 7739000 23149000 38000000 42465000 246334000 326799000 65336000 60568000 7559000 7196000 976000 759000 2744000 2775000 76615000 71298000 96 90 The Company's Executive Board and Board of Directors is employed at DK Infrastructure Bidco ApS. Remuneration takes place in DK Infrastructure Bidco ApS.For 2024, Wages and salaries include reversal of provisions for pensions, cf. note 2. Special items include reversal of provisions for pensions that have been recognized as income under salaries. Reversal of provisions for pensions and similar obligations0-3,6960-3,696 2873000 1805000 74345000 71655000 77218000 73460000 Which is specified as follows:Acquired licenses and rights2,8731,805Buildings20,11420,529Plant and machinery30,18227,575Other fixtures and fittings, tools and equipment5,6364,933Masts and equipment18,41318,61877,21873,460 Share of profits21,7704,416Amortisation of goodwill-6,040-10,33015,730-5,914 689000 2195000 4107000 -1354000 4796000 841000 15410000 -40975000 7739000 28107000 12840000 91343000 5084000 820000 17924000 92163000 4119000 90868000 2698000 172000 6817000 91040000 11107000 1123000 619276000 572835000 60036000 0 551913000 13940000 22773000 931000 17369000 60000 633216000 595608000 60967000 17369000 551973000 305143000 345992000 35842000 0 299096000 20114000 30182000 5636000 0 18413000 325257000 376174000 41478000 0 317509000 307959000 219434000 19489000 17369000 234464000 0 127221000 0 0 0 104882000 104883000 10000000 0 114882000 104883000 27118000 68030000 21770000 4418000 0 35000000 6043000 10330000 42845000 27118000 157727000 132001000 Positive differences arising on initial measurement of subsidiaries at net asset value28,81334,854Investments in subsidiaries are specified as follows:2.0015.0001.050 Cibicom Services A/S Ballerup 1.00 Cibicom Mobility ApS Ballerup 1.00 Telpartner A/S Ballerup 1.00 1729000 16000 1745000 1745000 Deferred tax asset at 1 January27,35826,265Additional depreciation in 20230-1,166Amounts recognised in the income statement for the year-4,1071,354Amounts recognised in equity for the year 106905Deferred tax asset at 31 December23,35727,358The Company´s deferred tax asset amounts to TDKK 23.357 (2024: TDKK 27.358). The majority of the deferred tax asset amount is due to temporary differences in tax depreciations concerning fixed assets. The deferred tax assets has been computed based on a tax rate of 22 %.Management has found it fair to recognise the tax asset at its full value as it is expected to be utilised according to the Company's budgets and future projects. Prepayments consist of prepaid expenses concerning rent, insurance premiums and subscriptions.Of the total sum of prepaid expenses, DKK 8,4 million falls due after 1 year. 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:Mortgage loans354,621399,493Credit institutions165,322110,854Lease obligations106,660130,829Deposits15,74617,192Other payables11,32310,800 162638000 164708000 145381000 189246000 308019000 353954000 46602000 45539000 0 0 125000000 0 125000000 0 40322000 110854000 2254000 1952000 70988000 94796000 73242000 96748000 33418000 34081000 0 0 15746000 17192000 15746000 17192000 0 0 0 0 3710000 3640000 3710000 3640000 7613000 7160000 Charges and securityThe following assets have been placed as security with mortgage credit institutes:Land and buildings with an accounting value excluding leasing assets307,959314,133The following assets have been placed as security for lease obligations:Plant and machinery with an accounting value127,221130,621 Rental and lease obligationsLease obligations under operating leases. Total future lease payments:Within 1 year1,7281,225Between 1 and 5 years2,7152,3724,4433,597Lease commitments in the non-cancellable period54,67459,081Other contingent liabilitiesThe Company has entered into few lease agreements with restoration obligations. The likelihood of a claim for restoration being assessed is considered to be low, and therefore no provision has been recognized for this.The Company has issue a letter of support for one of its subsidiaries valid until 31 March 2027.The 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 DK Infrastructure Topco 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 obligationsThe Company has entered into agreements for network commited contracts for the delivery of Internet with a total value of TDKK 33,499. The agreements is valid for a period of 5 years.In addition, the Company has entered into agreements with suppliers in 2025 for the delivery of tangible fixed assets with a total value of TDKK 13,374, which will be delivered in 2026. TransactionsThe Company had following transactions with group companies:Revenue, TDKK 12,374Purchase of operation and maintenance of equipments, TDKK 9,187Rent, TDKK 6,317Management fee, TDKK 7,763Other fee, TDKK 2,645Furthermore, the Company has intercompany accounts with group companies. Information about this is included in the balance sheet and notes. Consolidated Financial StatementsThe company is included in the consolidated financial statements of the following companies:DK Infrastructure Topco ApSDK-2750 BallerupDK Infrastructure Bidco ApSDK-2750 Ballerup No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. The Annual Report of CIBICOM 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 accounting policies applied remain unchanged from last year.The Financial Statements for 2025 are presented in TDKK. With reference to section 112 of the Danish Financial Statements Act and to the consolidated financial statements for 2025 of DK Infrastructure Bidco ApS, 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 DK Infrastructure Bidco 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.Recognition and measurement take into account predictable losses and risks occurring before the presentation of the Annual Report which confirm or invalidate affairs and conditions existing at the balance sheet date. Business combinationsBusiness acquisitions carried through on or after 1 July 2018Acquisitions of subsidiaries are accounted for using the purchase method under which the identifiable assets and liabilities of the entity acquired are measured at fair value at the time of acquisition.The time of acquisition is the time when the Group obtains control of the entity acquired.The cost of the entity acquired is the fair value of the consideration agreed, including consideration contingent on future events. Transaction costs directly attributable to the acquisition of subsidiaries are recognised in the income statement as incurred.Positive differences between the cost of the entity acquired and identifiable assets and liabilities are recognised as goodwill in intangible assets in the balance sheet and are amortised in the income statement on a straight-line basis over their estimated useful lives. Where the differences are negative, they are recognised immediately in the income statement.Where the purchase price allocation is not final, positive and negative differences from acquired subsidiaries due to changes to the recognition and measurement of identifiable net assets may be adjusted for up to 12 months after the time of acquisition. These adjustments are also reflected in the value of goodwill or negative goodwill, including in amortisation already made.Where cost includes contingent consideration, this is measured at fair value at the time of acquisition. Contingent consideration is subsequently measured at fair value. Any value adjustments are recognised in the income statement.In respect of step acquisitions, any previously held investments in the entity acquired are remeasured at fair value at the time of acquisition. The difference between the carrying amount of the investment previously held and the fair value is recognised in the income statement. 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. 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 services is recognised when the risks and rewards relating to the services have been rendered 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.Contract work in progress (construction contracts) is recognised at the rate of completion, which means that revenue equals the selling price of the work completed for the year (percentage-of-completion method). This method is applied when total revenues and expenses in respect of the contract and the stage of completion at the balance sheet date can be measured reliably, and it is probable that the economic benefits, including payments, will flow to the Company. The stage of completion is determined on the basis of the ratio between the expenses incurred and the total expected expenses of the contract.Revenue is measured at the consideration received and is recognised exclusive of VAT and net of discounts relating to sales. 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, work on own account recognised in assets and other external expenses. Staff expenses comprise wages and salaries as well as payroll expenses. Amortisation, depreciation and impairment lossesAmortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment 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 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 Danish group entreprises. 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 assetsIntangible fixed assets acquired is measured at cost less accumulated amortisation.Intangible fixed assets comprise the right of use for joint equipment on the master. The right of use is amortized on a straight-line basis over the 12-year contractual term of the rights.Licences are measured at the lower of cost less accumulated amortisation and recoverable amount. Licences are amortised over the licence period; however not exceeding 3 years. 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:Production buildings5-40 years Masts and equipment11-30 years Plant and machinery5-20 years Other fixtures and fittings, tools and equipment2-15 years The fixed assets’ residual values are 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. 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 licenses. 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. 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, 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 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 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. Loans, such as mortgage loans and 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 difference between the proceeds and the nominal value is recognised as an interest expense in the income statement over the loan period.Mortgage loans are measured at amortised cost, which for cash loans corresponds to the remaining loan. Amortised cost of debenture loans corresponds to the remaining loan calculated as the underlying cash value of the loan at the date of raising the loan adjusted for depreciation of the price adjustment of the loan made over the term of the loan at the date of raising the loan.Other 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