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cmn:ConsolidatedMember fsa:AcquiredPatentsMember 30914678 2023-01-01 2023-12-31 fsa:AcquiredPatentsMember 30914678 2023-01-01 2023-12-31 fsa:FixturesFittingsToolsAndEquipmentMember cmn:ConsolidatedMember 30914678 2023-01-01 2023-12-31 fsa:LeaseholdImprovementsMember cmn:ConsolidatedMember 30914678 2023-01-01 2023-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 30914678 2023-01-01 2023-12-31 fsa:LeaseholdImprovementsMember 30914678 2023-01-01 2023-12-31 fsa:InvestmentsInGroupEnterprisesMember 30914678 2022-01-01 2022-12-31 fsa:InvestmentsInGroupEnterprisesMember 30914678 2023-01-01 2023-12-31 1 fsa:SubsidiaryMember 30914678 2023-01-01 2023-12-31 2 fsa:SubsidiaryMember 30914678 2023-01-01 2023-12-31 3 fsa:SubsidiaryMember 30914678 2023-01-01 2023-12-31 4 fsa:SubsidiaryMember iso4217:DKK pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2023-01-01 2022-01-01 2023-12-31 2022-12-31 30914678 Cobe A/S Orientkaj 4 2150 Nordhavn + 45 32544300 www.cobe.dk cobe@cobe.dk PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Strandvejen 44 2900 Hellerup Denmark 39 45 39 45 koebenhavn@pwc.dk 2024-05-17 Martin Delfer Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning The 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 2023. 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 2023 of the Company and the Group and of the results of the Company and Group operations for 2023. 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. 2024-05-17 Copenhagen Nina Mathiesen Executive Officer Mari Lea Louekari Randsborg Executive Officer Martin Delfer Chairman Mari Lea Louekari Randsborg Dan Stubbergaard Hansen To the shareholder of Cobe A/S Opinion In 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 2023 and of the results of the Group’s and the Parent Company’s operations for the financial year 1 January - 31 December 2023 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 2023, 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 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 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 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 Parent 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 Parent 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 Group´s and the Parent 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 Group´s and the Parent 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 Parent 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. 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 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. Hellerup 2024-05-17 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Jacob F Christiansen State Authorised Public Accountant mne18628 André Christensen State Authorised Public Accountant mne50615 95624000 99402000 121748000 2171000 1272000 10066000 22000 -830000 245000 1656000 339000 8022000 52345000 51211000 53029000 554000 1395000 872000 393000 2442000 17979000 16291000 18962000 113 124 134 0.704 0.721 0.776 0.804 0.742 0.059 0.054 0.023 0.013 0.083 0.127 0.118 0.041 0.025 0.19 0.392 0.377 0.343 0.318 0.358 0.268 0.253 0.097 0.019 0.495 Key activities 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 the board of directors, and CEO Nina Mathiesen. Dan Stubbergaard, CEO Nina Mathiesen and CEO Mari Randsborg comprise the Executive Board of Cobe A/S and are authorised to bind the company. Business Areas Cobe’s core business is centered 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. Development in the year The year was characterized by a continuous growth. Cobe had several big wins especially within Urban Planning and Architectural transformation. Cobe continues participation in a large number of prestigious architecture competitions in Denmark and abroad. Expansion and consolidation in international markets continues especially with more ongoing projects in Germany. The income statement of the Group for 2023 shows a profit of DKK 6,288,137 and at 31 December 2023 the balance sheet of the Group shows equity of DKK 24,362,159. The finances of Cobe are thereby on a continuous rise. Market risks In 2023, Cobe had ongoing projects in Denmark, Germany, Sweden, Norway, Finland, Belgium, The Netherlands, Slovenia, Estonia, Austria, UK, Thailand and Canada. These included both design and execution of residential, commercial, cultural, educational and urban development projects. Cobe assignments and projects in 2023 In 2023, new projects included transformation of the Danish Parliament, Gasklocka in Stockholm, Espoo Cityhall in Finland and 3 new projects in Canada 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 The Opera Park, Paper Island and the tip of Nordø — all in the center of Copenhagen, Europahafenkopf Bremen, West Don Lands 8 in Toronto and numerous new Clever ultra-fast charging stations that continues to expand the network of cleaner and greener transportation in Denmark. Foreign exchange risks A share of Cobe’s activities take place abroad. Cobe makes every effort to enter into contractsdenominated 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 2023 have however been a minimum. Research and development Cobe has continued in 2023 to further invest in developing intellectual capital within sustainability, transformation, reuse/renovation, building materials and biodiversity. In 2023 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. Intellectual capital resources 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. Uncertainty relating to recognition and measurement Contract work in progress is calculated at selling price of the work performed based on thestage of completion. The stage of completion is measured by the proportion that the contract expensesincurred to date and the estimated total contract expenses. The total contract expenses are 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 realizable 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. 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. 2024 will still be affected by a unruly market, high interest rates, new building requirements that push for more sustainable solutions but which is also challenging the industry. Cobe expects this will impact both revenue and profit. Cobe will therefore focus on furthering its efforts within business development and improving its core services within urbanism, landscape and architecture: from ideas, concepts and plans – to processes, dialogue and collaboration – and further to realized buildings and places. In 2024 Cobe expects an increased revenue in the range of a minimum 5% raise from 2023 level. Subsequent events Management considers that no significant events have occurred since the end of the financial year 2023, which could have a material effect on the financial position of the Company. 134182905 129955629 132365578 128283048 47496 38300 47496 38300 25435021 22941840 22940563 21650406 14312437 13373685 14151492 13138551 94482943 93678404 95321019 93532391 85235827 84994695 85235827 84994695 1383858 1606296 1383858 1606296 7863258 7077413 8701334 6931400 0 0 -595746 43783 2039542 657606 1985667 652348 1585864 1119198 1555956 1113265 8316936 6615821 8535299 6514266 2028799 1490568 2028799 1438096 6288137 5125253 6506500 5076170 8150000 4502766 8150000 4502766 0 0 -354664 43783 -218363 49083 0 0 -1643500 573404 -1288836 529621 46475 98964 46475 98964 46475 98964 46475 98964 1857395 2386579 1857395 2386579 716695 965077 716695 965077 0 0 0 0 2574090 3351656 2574090 3351656 0 0 344353 833739 1650000 1650000 1650000 1650000 1650000 1650000 1994353 2483739 4270565 5100620 4614918 5934359 25620491 28185038 25508938 27487779 2876731 1940256 2876731 1940256 626278 516241 4296299 1322279 16837 32073 10699 7823 0 30239 0 0 1292353 2624547 1292353 2624547 30432690 33328394 33985020 33382684 27432813 21393603 22915443 19155040 57865503 54721997 56900463 52537724 62136068 59822617 61515381 58472083 500000 500000 500000 500000 0 0 0 357347 -5758 -3075 0 0 15790612 17434112 15784854 17073690 8150000 4502766 8150000 4502766 24434854 22433803 24434854 22433803 -72695 145406 0 0 24362159 22579209 24434854 22433803 11819073 9790274 11819073 9790274 0 0 109044 0 11819073 9790274 11928117 9790274 7480646 7254480 7480646 7254480 7480646 7254480 7480646 7254480 7752917 9075640 6962090 7983223 186108 0 186108 0 103346 0 103346 20480 0 101705 0 0 10431819 11021309 10420220 10989823 18474190 20198654 17671764 18993526 25954836 27453134 25152410 26248006 62136068 59822617 61515381 58472083 500000 -3075 17434112 4502766 145406 0 -2683 0 0 262 0 0 0 -4502766 0 0 0 -1643500 8150000 -218363 500000 -5758 15790612 8150000 -72695 500000 357347 17073690 4502766 0 0 0 -4502766 0 -2683 0 0 0 -354664 -1288836 8150000 500000 0 15784854 8150000 No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. 72777852 73099813 72777852 73099813 6540735 5845659 6540735 5845659 557003 574048 557003 574048 5360237 5475175 5360237 5475175 85235827 84994695 85235827 84994695 2983740 1878498 2983740 1878498 133 138 133 138 52489 84620 52489 84620 1331369 1521676 1331369 1521676 1383858 1606296 1383858 1606296 0 5258 0 0 35848 22658 35848 22658 312018 22526 258143 22526 1691676 607164 1691676 607164 2039542 657606 1985667 652348 40008 140421 10100 134488 1545856 978777 1545856 978777 OtherFinanceExpenses 1585864 1119198 1555956 1113265 0 52472 0 0 2028799 1438096 2028799 1438096 2028799 1490568 2028799 1438096 391175 391175 391175 391175 292211 292211 52489 52489 344700 344700 46475 46475 8251177 2095973 8251177 2095973 553803 0 553803 0 70000 27175 70000 27175 8734980 2068798 8734980 2068798 5864598 1130896 5864598 1130896 1082987 248382 1082987 248382 70000 27175 70000 27175 6877585 1352103 6877585 1352103 1857395 716695 1857395 716695 476392 290343 0 186049 476392 476392 357347 336191 -2683 -22627 -595747 43783 -241083 357347 109044 0 344353 833739 COBE-BRUT Brussels 60 COBE Architects Inc. Toronto 100 COBE Copenhagen Ltd London 100 COBE Kopenhagen GmbH Berlin 100 1650000 1650000 1650000 1650000 1650000 1650000 Investments in subsidiaries are specified as follows: Selling price of work in progress 134998548 112824330 134998548 112824330 Payments received on account -132307925 -110884074 -132307925 -110884074 Total 2690623 1940256 2690623 1940256 Recognised in the balance sheet as follows: Contract work in progress recognised in assets 2876731 1940256 2876731 1940256 Prepayments received recognised in debt -186108 0 -186108 0 Total 2690623 1940256 2690623 1940256 Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Deferred tax liabilities at 1 January 9790274 8352178 9790274 8352178 Amounts recognised in the income statement for the year 2028799 1438096 2028799 1438096 Deferred tax liabilities at 31 December 11819073 9790274 11819073 9790274 0 0 0 0 7480646 7254480 7480646 7254480 7480646 7254480 7480646 7254480 10431819 11021309 10420220 10989823 Payments due within 1 year are recognised in short-term debt. Other debt is recognised in long-term debt. The debt falls due for payment as specified below: Other payables Other 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 15,741k 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 609k 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/S34052786Copenhagen 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 Group Annual Report of COBE HOLDING ApS may be obtained at the following address:Orientkaj 4, 2150 Nordhavn Consolidated Financial Statements The Company is included in the consolidated financial statements for the parrent company Name Place of registered office COBE HOLDING ApS Copenhagen The Annual Report of Cobe A/S for 2023 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 Financial Statements and the Parent Company Financial Statements for 2023 are presented in DKK. true 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. Basis of consolidation 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 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 acquistition 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. 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 Group. The stage of completion is determined on the basis of the ratio between the expenses incurred and the total expected expenses of the contract. Services are recognised at the rate of completion of the service to which the contract relates by using the percentage-of-completion method, which means that revenue equals the selling price of the service completed for the year. This method is applied when total revenues and expenses in respect of the service 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 Group. The stage of completion is determined on the basis of the ratio between the expenses incurred and the total expected expenses of the service. 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 consumables comprise the raw materials and consumables consumed to achieve the consolidated 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 the management company of the joint taxation purpose. The tax effect of the joint taxation is allocated to Danish enterprises in proportion to their taxable incomes. 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 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. 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 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 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 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 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. Gross margin Gross profit x 100 / Revenue Profit margin Profit/loss of ordinary primary operations x 100 / Revenue Return on assets Profit/loss of ordinary primary operations x 100 / Total assets at year end Solvency ratio Equity at year end x 100 / Total assets at year end Return on equity Net profit for the year x 100 / Average equity