Årsrapport33771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 Hellerup2022-01-012021-01-012022-12-312021-12-3130914678Cobe A/SOrientkaj42150NordhavnKøbenhavn32544300www.cobe.dkcobe@cobe.dkPricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab33771231Strandvejen442900HellerupDanmark2023-05-31Dan Stubbergaard HansenRegnskabsklasse C, mellemstor virksomhedRevisionspåtegningThe Executive Board and Board of Directors have today considered and adopted the Annual Report of Cobe A/S for the financial year 1 January - 31 December 2022.The Annual Report is prepared in accordance with the Danish Financial Statements Act.In our opinion the Financial Statements and the Consolidated Financial Statements give a true and fair view of the financial position at 31 December 2022 of the Company and the Group and of the results of the Company and Group operations for 2022.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.Copenhagen2023-05-31Nina MathiesenExecutive OfficerMari Lea Louekari RandsborgExecutive OfficerMartin DelferChairmanHenrik TvarnøDan Stubbergaard HansenTo the Shareholders of Cobe A/SOpinionIn our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2022 and of the results of the Group’s and the Parent Company’s operations for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of Cobe A/S for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company (”the Financial Statements”). Basis for OpinionWe 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 Group 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 Financials Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Management is responsible for the preparation of consolidated financial statements and parent company 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 Group’s and 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 Group or 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 and the Group’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 Group’s and 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 Group and 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. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. 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. Hellerup2023-05-31Hellerup2023-05-31PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabJacob F Christiansenstatsautoriseret revisormne18628Kasper Theodor Sørensenstatsautoriseret revisormne47825Seen over a five-year period, the development of the Group is described by the following financial highlights: 994020001217480001057790001272000100660009630000-46200022000-830000245000-4500003390008022000712000051211000530290004126200016291000189620001343500013950008720003930002442000437200012413411172.177.680.474.267.65.42.31.38.39.111.84.12.51923.337.734.331.835.832.625.39.71.949.5106Consolidated and Parent Company Financial Statements of Cobe A/S for 2022 have been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C. The Annual Report has been prepared under the same accounting policies as last year. Principal activity Cobe A/S is a knowledge-based community of architects dedicated to development of and consultancy on buildings, urban planning, public space designs and landscape architecture primarily in Denmark, Scandinavia, Northern Europe and Canada. Ownership and Executive Board Cobe A/S is owned by Founder Dan Stubbergaard, who is in board of directors, and Managing Director Nina Mathiesen. They comprise the Executive Board of Cobe A/S and are authorised to bind the company. Financial Development of the year The year was characterized by a slow but steady continuous growth. Cobe had several big wins especially within Urban Planning. Cobe continues participation in a large number of prestigious architecture competitions in Denmark and a high level of activity with international competitions. Expansion and consolidation in international markets continues especially with more ongoing projects in Germany. This meant we had to increase the number of employees through out the year. The income statement of the company for 2022 shows a profit of DKK 5.125.253, and at 31 December 2022 the balance sheet of the Company shows equity of DKK 22.579.209. The finances of Cobe are thereby on the rise after a few challenged years with Covid. Uncertainties regarding recognition and measurement Contract work in progress is measured at selling price of the work performed calculated based on the stage of completion. The stage of completion is measured by the proportion that the contract expenses incurred to date and the estimated total contract expenses. The total contract expenses is calculated on the basis of budgets. Where the selling price cannot be measured reliably, the selling price is measured at the lower of expenses incurred and net realisable value. 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. Cobe assignments and projects in 2022 In 2022, new projects included Humbolthein in Germany, Nyhavna in Norway, Collingwood in Canada, the transformation of Palads in Copenhagen and the prestigious Music school in Frederiksberg to name a few. All examples of future-proof urbanism, landscape and architecture, pushing the boundaries for how to shape the world around us. Cobe completed AAU Innovate in Denmark — the new University building for Aalborg Universitet, the new city park in Høje Tåstrup, Denmark with the world’s longest skate park and numerous new Clever ultra-fast charging stations that continues to expand the network of cleaner and greener transportation in Denmark. Cobe also had a large number of projects under construction in 2021. These included, among others, mixed-use developments such as Europahafenkopf Bremen in Germany and West Don Lands 8 in Canada and in Copenhagen; the Paper Island, The Opera Park and the Tip of Nordø. All slated for completion by 2023. Currency risks A share of Cobe’s activities take place abroad. Cobe makes every effort to enter into contracts denominated in either euros or Danish kroner. However, contracts in e.g. North America are entered in currencies that are pegged to the US dollar. This means that Cobe is exposed to foreign exchange risks. The risk in 2022 have however been a minimum. Markets In 2022, Cobe had ongoing projects in Denmark, Germany, Belgium, UK, Sweden, Norway, Finland, Canada and Thailand. These included both design and execution of residential, commercial, cultural, educational and urban development projects. Intellectual Capital and Management Culture At the company’s core is a flat organizational structure in which work is performed in project-based teams and where individual employees are given both mandate and responsibility as well as recognition for unique skills and expertise. Cobe has intellectual capital that include expertise in architectural typologies such as city development & transformation, cultural institutions, education, office and housing. Employee development takes place through continuous further training, professional challenges and a focus on results, collaboration, and a well-functioning social work environment. Research and Development Activities Cobe has continued in 2022 to further invest in developing intellectual capital within sustainability, transformation, building materials, urbanism, landscape architecture, biodiversity and product design. In 2022 Cobe has been focusing on embedding the knowledge and results from previous investments in research and development into our ongoing projects, taking full advantage of the knowledge and experience we have gained through the last years, and to create bigger value for our clients. Business Areas Cobe’s core business is centred around future-proof, sustainable solutions in urbanism, landscape and architecture. With Cobe’s mindset and values – and a focus on context, sustainability, and the specific narrative of each project – Cobe can deliver excellent results to a mix of scales and typologies. From design objects, urban spaces, landscapes and buildings – to urban and strategic development plans for districts and cities. Sustainability policies at Cobe It is Cobe’s purpose to build future-proof architecture. Sustainable urbanism, landscapes and buildings that exist only to contribute. Extraordinary design that generates value for everyone, every day. Radical solutions that work for generations to come. Incorporating sustainability into every process has never been more important. The building industry generates almost 40% of the world’s CO2 emissions. Exchanging the planet’s resources into extraordinary places, buildings and landscapes that immediately make a difference in the everyday, and contribute to a future-proof urban life, is an integral part of the way Cobe works. The biggest risk for Cobe is knowing too little or using too old knowledge about sustainable solutions in the construction industry. That's why we work to keep developing our employees knowledge of sustainable construction solutions. During 2022 we have continued our work on broadening our competencies within timber constructions, transformation, new building materials and biodiversity, as we see these as key elements to lower the Co2 emissions in new buildings. Furthermore, we have worked on achieving more knowledge in creating more healthier and sustainable cities. This is done though transformation of existing buildings, carless- and more green cities. It is our aim to further expand our knowledge, services and professional partnerships and networks to provide the services needed for our clients and to evaluate the environmental impact of a given project. Working environment policies and initiatives As a part of the company’s strategy, Cobe is continuously working to improve employee relations and the company’s internal working environment. Cobe wants all employees to feel inspired, challenged and appreciated for the work they do. This is done by offering challenging high-profile projects, excellent working conditions and development opportunities within numerous career paths. If Cobe does not continue to actively improve the working environment, we would not be able to retain and attract talented employees. Therefore, it is important that we continue to constantly monitor and pay attention to what is important to our employees, as this strategy has proven to foster tangible results at Cobe for many years. Human rights Cobe has an informal policy on anti-corruption and human rights violations. In Cobe we are in the process of formalising this in a Cobe Code of Conduct, which we will monitor for the need for further action on an ongoing basis. Cobe supports and respects the protection of internationally proclaimed human rights act and will, to the extent our capacity allows, prevent any violation of human and fundamental rights. In our current business areas, we have not identified any risks of violation of human rights in 2022, and we follow local legislation where we operate. Cobe has adhere to the European Convention of Human Rights. Management will continue to monitor the business. Anti-corruption and bribery As a professional, international organization, Cobe supports the United Nations' Convention Against Corruption and fully comply with Danish and local legislation where we operate. Cobe has zero-tolerance, when it comes to corruption and fraud, and we are committed to fight corruption and will engage in collaborations and relations that share the same mission. Cobe has not registered any attempts at corruption or bribery in 2022 as to why Cobe believes there are no risks concerning anti-corruption and bribery in our area of business. However management will continue to monitor the situation, which is consistent with our forthcoming Cobe Code of Conduct. Data ethics Cobe supports citizens' fundamental rights, legal certainty and basic social values. This also applies to the data that Cobe may obtain. Cobe does not develop IT programs or use robots in our daily work. We dont have any collection of data, that falls outside the GDPR framework. Therefore, we have not developed a specific policy on data ethics. We have implemented a system which ensures, we comply with all applicable GDPR rules that relate to our business. We will of course continuously reassess the company and see if we need to change this practice. Future outlook Cobe will continue to develop its interdisciplinary competences to both extraordinary quality and futureproof aesthetics, as well as sustainable solutions to the challenges the world is facing related to the built environment. As a business partner and consultant, Cobe is known for its collaborative approach. All extraordinary ideas are the result of a collaborative environment and dialogue among clients, users, partners and stakeholders. Cobe works to enhance understanding between everyone internally and externally, and believes architecture is for all. 2023 will be affected by inflation, the rise of material prizes, the Russian invasion of Ukraine which Cobe expects will impact both revenue and profit. Cobe will therefore focus on furthering its efforts within business development and improving its core services: from ideas, concepts and plans – to processes, dialogue and collaboration – and further to realized buildings and places. In 2023 Cobe expects to further the slow but steady continuous rise and advance the 2022 bottom line level. The Company expects a profit before tax in 2023 of TDK 8.000. Diversity and inclusion policies At Cobe we are committed to fostering, cultivating and preserving a culture of diversity and inclusion. Cobe is the people working here. The collective sum of our individual differences and unique capabilities has grown our positive culture, strengthened it, and enabled our company’s achievements. We embrace and encourage everyone’s differences in age, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status and other characteristics that make everyone unique. At Cobe we aim to continually monitor Diversity & Inclusion through yearly evaluations which was also carried out in 2022. The evaluations and statistics of this year showed among other that there is a very high level of equal distribution of roles and titles between female and male: Male / female distribution in Cobes’s leadership 50/50, Project managers 50/50 and generally among all employees 48/52. The statistics also show a very high level of equal payment between female and male: Average salary difference on level 1: 0,5% (female highest). Average salary difference on level 2: 2,0% (female highest). Average salary difference on level 3: 1,2% (male highest). Average salary difference on level 4: 1,3% (male highest). By following our Diversity & Inclusion policies, measuring it and evaluating it we hope to continuously better ourselves and strive for an even better Cobe that can embrace the many and the few providing openness and equal opportunities. Subsequent events Management considers that no significant events have occurred since the end of the financial year 2022, which could have a material effect on the financial position of the Company.1299556299562438512828304895182315383000383000229418401050394921650406104778541337368510960961131385511082146393678404741594759353239173882998849946957017550184994695701755011606296181260816062961812608707741321713666931400189488900437832235536576064094736523484094731119198387576111326537690566158212193263651426621510101490568537459143809648529751252531655804507617016657139896417656498964176564989641765649896417656423865792061120238657920611209650771228024965077122802401889600188960335165634781043351656347810400833739626534165000016500001650000165000016500001650000248373922765345100620530466859343595931202281850382593657427487779256191411940256589985819402565899858516241488324132227924845433207321535782348313023918484002624547200056426245472000564333283943436533933382684360089372139360312675236191550409952775547219974704057552537724459617125982261752345243584720835189291450000050000050000050000050000050000050000050000000357347336191-3075195520017434112168607081707369016544069450276650000045027665000001454069880700225792091797906722433803178802609790274835217897902748352178979027483521789790274835217872544807105269725448071052697254480710526972544807105269907564068098617983223676281502084870208487043657204804365710170562273001102130911784451109898231154024820198654189087291899352618555207274531342601399826248006256604765982261752345243584720835189291450000001955216860708500000988070-500000000-2262700-248405734044502766490835000000-307517434112450276614540650000033619101654406950000000-50000000-226270000437835296214502766050000035734701707369045027660Geographical segments Revenue, Denmark 92.080.292 62.278.395 90.407.711 62.278.395 Revenue, exports 37.875.337 33.345.990 37.875.337 32.903.920 129.955.629 95.624.385 128.283.048 95.182.315730998136019110973099813601911095845659477869058456594778690574048530324574048530324547517546753785475175467537884994695701755018499469570175501187849814442581878498144425813811313811384620831658462083165152167617294431521676172944316062961812608160629618126085258000226581389322658138932252678225267860716439550260716439550214042115621913448815311397877723135797877722379211191983875761113265376905524725216200143809648529714380964852971490568537459143809648529738415570203911752075918462029221198964Amortised over 3 years 3841557020391175207591846202922119896470558922165886188960139522700-388902-6991301889600-1889608251177209597304994772937862012587292629470-388903-69913058645981130896023865799650770Depreciated over 3-10 years 3-10 years 70558922165886188960139522700-388902-6991301889600-1889608251177209597304994772937862012587292629470-388903-69913058645981130896023865799650770290343290343186049047639229034333619182874-226272976443783223553357347336191COBE-BRUTBrussels60COBE Architects Inc.Toronto100COBE Copenhagen Ltd.London100COBE Kopenhagen GmbHBerlin1001650000165000016500001650000Selling price of work in progress 112.824.330 128.717.110 112.824.330 128.717.110 Payments received on account -110.884.074 -123.025.739 -110.884.074 -123.025.739 1.940.256 5.691.371 1.940.256 5.691.371 Recognised in the balance sheet as follows: Contract work in progress recognised in assets 1.940.256 5.899.858 1.940.256 5.899.858 Prepayments received recognised in debt 0 -208.487 0 -208.487 1.940.256 5.691.371 1.940.256 5.691.371Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions and interest.45027665000004502766500000004378322355349083-9909005734041165713529621942160Provision for deferred tax at 1 January 8.352.178 7.866.881 8.352.178 7.866.881 Amounts recognised in the income statement for the year 1.438.096 485.297 1.438.096 485.297 Provision for deferred tax at 31 December 9.790.274 8.352.178 9.790.274 8.352.17872544807105269725448071052697254480710526972544807105269Charges and security The following assets have been placed as security with mortgage credit institutes: Debtors, tangible assets and immaterial rights have been placed as security with mortgage credit institutes, DKK 5,000k. Contingent liabilities The Company has entered into a tenancy agreement concerning the Company's domicile. The tenancy agreement is non-terminable until 15 February 2028. The rent obligation amounts to DKK 19.458k. The Company has also entered into agreements regarding leasing assets. The agreements are non-terminable until 1 July 2025 and 1 January 2024 respectively. The total obligation amounts to DKK 1.641k. The Danish group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. Moreover, the Danish group companies are jointly and severally liable for Danish withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Company’s liability. The company is involved in a minor numbers of disputes. None of these are expected to have an effect on the company.Basis Controlling interest COBE HOLDING A/S 34052786 Copenhagen Parent Company Dan Stubbergaard Beneficial owner Transactions The Company has chosen only to disclose transactions which have not been made on an arm’s length basis in accordance with section 98(c)(7) of the Danish Financial Statements Act. The Company is included in the consolidated financial statements for the parrent company Name Place of registered office COBE HOLDING ApS (største koncern udelad hvis samme som mindste) Copenhagen (mindste koncern) The Group Annual Report of COBE HOLDING ApS may be obtained at the following address: Orientkaj 4, 2150 Nordhavn No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date.The Annual Report of Cobe A/S for 2022 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 Consolidated and Parent Company Financial Statements for 2022 are presented in DKK.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 Cobe Holding ApS, the Company and the Group have not prepared a cash flow statement.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.The Consolidated Financial Statements comprise the Parent Company, Cobe A/S, and subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or in which the Parent Company, through share ownership or otherwise, exercises control. Enterprises in which the Group holds between 20% and 50% of the votes and exercises significant influence but not control are classified as associates. On consolidation, items of a uniform nature are combined. Elimination is made of intercompany income and expenses, shareholdings, dividends and accounts as well as of realised and unrealised profits and losses on transactions between the consolidated enterprises. The Parent Company’s investments in the consolidated subsidiaries are set off against the Parent Company’s share of the net asset value of subsidiaries stated at the time of consolidation.Minority interests form part of the Group’s total equity. Upon distribution of net profit, net profit is broken down on the share attributable to minority interests and the share attributable to the shareholders of the Parent Company. Minority interests are recognised on the basis of a remeasurement of acquired assets and liabilities to fair value at the time of acquisition of subsidiaries. On subsequent changes to minority interests where the Group retains control of the subsidiary, the consideration is recognised directly in equity.Leases in terms of which the Group 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 Group. 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.Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of future cash flows, the value adjustments are recognised directly in equity. Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the 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.Information on geographical segments based on the Group´s risks and returns and its internal financial reporting system. Geographical segments are regarded as the primary segments.Expenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve revenue for the year.Other external expenses comprise indirect production costs and expenses for premises, sales and distribution as well as office expenses, etc.Staff expenses comprise wages and salaries as well as payroll expenses.Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment.Other operating income and other operating expenses comprise items of a secondary nature to the main activities of the Group, including gains and losses on the sale of intangible assets and property, plant and equipment.The 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 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 wholly owned Danish and foreign subsidiaries. The tax effect of the joint taxation is allocated to enterprises in proportion to their taxable incomes.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 raised directly for financing the construction of property, plant and equipment are recognised in cost over the period of construction. 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 3-10 years Leasehold improvements 3-10 years The fixed assets’ residual values are determined at nil. Depreciation period and residual value are reassessed annually.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.Investments 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. 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.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.Contract work in progress regarding service is measured at selling price of the work performed calculated on the basis of the stage of completion. The stage of completion is measured by the proportion that the contract expenses incurred to date bear to the estimated total contract expenses. Where it is probable that total contract expenses will exceed total revenues from a contract, the expected loss is recognised as an expense in the income statement. Where the selling price cannot be measured reliably, the selling price is measured at the lower of expenses incurred and net realisable value. Payments received on account are set off against the selling price. The individual contracts are classified as receivables when the net selling price is positive and as liabilities when the net selling price is negative. Expenses relating to sales work and the winning of contracts are recognised in the income statement as incurred.Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest.Dividend distribution proposed by Management for the year is disclosed as a separate equity item.Deferred 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 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.Amortised over 3 years Depreciated over 3-10 years 3-10 years Software is measured at the lower of cost less accumulated amortisation and recoverable amount. Software is amortised over the remaining patent period; however not exceeding 3 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