Årsrapport33771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 Hellerup2022-01-012021-01-012022-12-312021-12-3129526532Auditdata A/SWildersgade101408CopenhagenCopenhagen40 51 87 8563 60 40 61PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab33771231Strandvejen442900HellerupDanmark2023-06-30Martin Connie PinborgRegnskabsklasse C, mellemstor virksomhed1RevisionspåtegningThe Executive Board and Board of Directors have today considered and adopted the Annual Report of Auditdata 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 and of consolidated cash flows 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.Copenhagen2023-06-30Kurt Groth BagerCEOMartin Connie PinborgExecutive OfficerLars Rahbæk BoilesenChairmanClaus Bak PetersenMorten Grube WeicherLars Christian LundeTo the Shareholders of Auditdata 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 and of consolidated cash flows 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 Auditdata 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, as well as consolidated statement of cash flows (”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. Hellerup2023-06-30Hellerup2023-06-30PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabSøren Ørjan Jensenstate authorized public accountantmne33226Martin Lundenstate authorized public accountantmne32209Seen over a five-year period, the development of the Group is described by the following financial highlights: 2019600010626000171580001193200013707000Result before depreciationsResult before depreciationsResult before depreciationsResult before depreciationsResult before depreciations490000031960004781000-1836000-741000-5024000-2458000-13650001378000360002098000996440008963600077948000140930006791000815400016755000131670007788000-17014000-22655000-12352000-1427000-2036000-1083000-2524000-524000625300074300004428000-511000-10470005994000-2058000-136000Årets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likvider9889823.6-1.76.63.66.110.210.114.17.610.515.9-19.113.20.524.4Key activities Auditdata is a leading independent provider of audiology solutions. The Company develops and sells software (SaaS and perpetual licence based) and software powered hardware primarily for the audiology industry, both private and public. Its products are focused with Office Management Systems and instruments for audiologists, and focus around improving the patient care experience. Market overview Auditdata distributes its products globally through direct and indirect channels. Development in the year 2022 was a year characterised by further post-Covid normalisation in the audiology market. In the year Auditdata executed on its growth strategy and gained market share in our core markets. The company also gained market share globally within private audiology clinics. Within hospitals, Audidata focused on upgrading Hospitals to a newer version of office management systems. The positive development has resulted in a significant increase in revenue from the company's sales of clinical equipment and subscription based software solutions. The Group's income statement for 2022 shows a profit before depreciation and amortisation of TDKK 20,196. The Group’s balance sheet shows equity of TDKK 12,980. The past year and follow-up on development expectations from last year The results for the year were slightly below the guidance given last year. Management finds the result to be satisfactory. Capital resources The Group has received commitments for a renewal of loans, which is why the capital resources are considered to be adequate for the following financial year. Operating risks and financial risks Foreign exchange risks Foreign exchange risks relating to investments in foreign subsidiaries are not hedged. Targets and expectations for the year ahead The Company expects continued growth in the sale of our products, particularly to the private retail sector. Management expects a profit before depreciation and amortisation for 2022 in to end in the range amount of TDKK 20,000 to TDKK 30,000, Research and development To support the expected growth, we expect to continue our investments in the development of new products in the years to come. External environment As the Group does not produce hardware but buys it from subcontractors, the impact on the external environment is very limited. Intellectual capital resources The Company's knowledge resources are crucial to the future earnings, which is why supplementary education and practical training of employees are essential for the Group. Uncertainty relating to recognition and measurement No uncertainty has been involved in the recognition and measurement of the Financial Statements for the period from 1 January 2022 to 31 December 2022. Unusual events No unusual circumstances have occurred in the financial year, apart from those already addressed in the Review. Subsequent events In May 2023 the company has refinanced its debt financing with a new term facility, which runs to 2029. With the new financing in place the company has the financial resources in place to execute on the growth strategy for 2023 and 2024.741990006726200063078000410820005400300056636000413790003271600015598000124530001141500086720004598000-182700010284000-30600000-5801000-30560001152000180500010240008170002988000254600029670005200002762000-25680002540000-3065000868000-183000645000-6800001894000-23850001895000-2385000458430002639100040800000195870002171000265200000627000855000627000855000962600011348000009776000146900009776000146900006804300055936000512030003513200033480003360000202700024000003348000336000020270002400000001601600018089000487000469000487000469000487000469000165030001855800071878000597650006973300056090000318100026050002074000158800037177000305390002241600020422000006019000106190001979000600015370000317900028270003179000279600022890002826000149000099200044624000361980003464100034829000817400086850005548000467900055979000474880004226300041096000127857000107253000111996000971860001513000150500015130001504000151300015050001513000150400000394480002673700000-1189000-877000114670009359000-26791000-165010001298000010864000129810001086300082910004541000829100045410000042600008291000454100087170004541000290000002900000029000000290000002680002620000268000262000029268000316200002926800031620000277490002327600027749000232760002600002600001265600059490009293000713600000182800010830004000000040000000552200093680005071000615100027365000216350001306300012516000773180006022800061030000501620001065860009184800090298000817820001278570001072530001119960009718600015040000093590009000001391000000-312000000-86500001894000151300000011467000150400026736000-877000-16500000900000139100000-3120000000-8650000127120000-1271200001895000151300039448000-1189000-26791000 The Company issues warrants to key employees entitling them to subscribe for B shares in the Company. The total value of issued warrants is DKK TDKK 1,224. Warrants can only be exercised in connection with a sale of the Company, an IPO, etc. (exit event) and are conditional upon the employees being employed by the Company at that time. In addition, it is a prerequisite that, on exit, an average annual return has been achieved that exceeds a level stipulated in the agreements (hurdle rate). The exercise price is generally a price established at the time of issuance plus 10% p.a. Employees have paid a price for the warrants equal to the estimated fair value at the time of granting. 1894000-23850001830200013406000-6355000489700013841000159180001152000115000299000025460001200300013487000-2530000-82600014533000143130002660900017973000142700020360001800044000-28054000-20053000-40000000447500026930004000000200000014000000-8650000130100004693000-511000-1047000868500097320008174000868500081740008685000As mentioned in note 2 the Company has refinanced its debt financing with a new term facility in April 2023. The Company today has sufficient operating liquidity and have secured additional growth capital if needed, through potential increase in credit lines”.In May 2023 the company has refinanced its debt financing with a new term facility, which runs to 2029. With the new financing in place the company has the financial resources in place to execute on the growth strategy for 2023 and 2024.494460005224300036822000287530004142000433400041420003949000326000032600008900059000890001400054003000566360004137900032716000494655524946555249371149371154390006263000543900062630001251166635 To read about the Company's incentive programme, please see the description under the statement of changes in equity.1427800011508000105400008090000132000094500087500058200015598000124530001141500086720006000060000114600018050001018000817000298800025460002967000520000298800025460002967000520000-2956000-2299000-3179000-2796000375000024120003750000211600074000-296000740000868000-183000645000-68000096074000480800011400004123700014690000-20300000-24000001683400000097760001469000000-1469000012739500048080001140000409970009776000696830002156000285000298890000-15600000-600000120250004810002280001542000081552000263700051300031371000045843000217100062700096260009776000 The development projects completed by the Company concern the development of various types of software and instruments for hearing tests and office management systems. The developed projects are today part of the Company’s product portfolio and sold in the present market to existing customers. The development projects in progress concern the development of new versions of software and hardware within all of our categories. The projects are proceeding as planned and are expected to be completed within 1 to 2 years. The projects are progressing according to plan The new products are expected to be sold Company’s existing customers through migration from older versions, which has end-of-life, as well as to new customers and in new markets.8395800011400001792600014690000168340000097760001469000000-1469000011548200011400001792600097760006437000028500017926000010312000228000007468200051300017926000040800000627000097760009151000-3050001427000102730005791000-1840001318000692500033480005662000501000616300032610008750004136000202700025809000258090002580900025809000-27587000-23653000-312000-878000-4330000-1683000-1471000-1373000-33700000-2758700023481000198670004260000 Remaining positive difference included in the above carrying amount at 31 December Ikke lovkrav 7.969 9.440Benoto ApSCopenhagen100Auditdata Ukraine TOVUkraine100Auditdata North America Inc.Pensylvania, USA100Auditdata Ltd.Middlesex, England100Auditdata LLC.Pensylvania, USA100Audidata Inc.Ontario, Canada1004680004680001900019000487000487000Prepayments consist of prepaid expenses concerning rent, insurance premiums etc.1895000-2385000Provision for deferred tax at 1 January 4.541 2.119 4.541 2.080 Amounts recognised in the income statement for the year 3.750 2.412 3.750 2.116 Amounts recognised in equity for the year (residual) 0 10 0 345 Provision for deferred tax at 31 December 8.291 4.541 8.291 4.54129000000290000002900000029000000290000002900000029000000290000002680002620000268000262000026800026200002680002620000 Deferred income excist of payments related to income the following year.-1152000-1805000298800025460001559800012848000868000-183000-576000-109000-807500080700022960004155000044000-63550004897000Charges and security The following assets have been placed as security with bankers: A company charge totalling TDKK 15.000 serving as a charge in intangible assets and property, plant and equipment, as well as inventories and trade receivables at a total carrying amount of 77.719 59.542 77.719 59.542 Rental and lease obligations Lease obligations under operating leases. Total future lease payments: Within 1 year 13 29 13 29 13 29 13 29 Rental obligations, non-cancellable period until 30 April 2024 2.728 2.658 2.681 2.595 Other contingent liabilities The parent company has provided surety for Jyske Bank's balances with the subsidiaries Auditdata Ltd. and Auditdata North America Inc. The Group’s Danish enterprises are jointly and severally liable for tax on the jointly taxed income, etc., of the Group.The total amount of corporation tax due for the jointly taxed companies constitutes TDKK 0. Moreover, the Danish jointly taxed group enterprises are jointly and severally liable for Danish withholding taxes by way of dividend tax, royalty tax and tax on unearned income. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Group’s liability. 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. Transactions with related parties take place on an arm’s length basis and consist of the purchase of development services, the sale of products, software, etc. for resale, etc. Apart from the above, there have been no transactions with the Supervisory Board, the Executive Board, senior officers, significant shareholders, group enterprises or other related parties, except for intercompany transactions and normal management remuneration. The Annual Report of Auditdata 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 Consolidated and Parent Company Financial Statements for 2022 are presented in TDKK.The Financial Statements have been prepared under the historical cost method. 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, Auditdata 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. Business combinations 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. Amortisation of goodwill is allocated in the Consolidated Financial Statements to the operations to which goodwill is related. 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.Danish kroner is used as the presentation currency. All other currencies are regarded as foreign currencies. 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.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, see below.Changes 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 retained earnings 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.The value of share-based payment, including share option and warrant plans that do not involve an outflow of cash and cash equivalents, offered to the Executive Board and a number of senior employees is not recognised in the income statement. The most significant conditions of the share option plans are disclosed in the notes.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.With 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, expenses for raw materials and consumables and other external expenses.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. Government grants, such as economic stimulus packages, are recognised when it is reasonably certain that the Company complies with the conditions for receiving the grant, and it is reasonably certain that the Company will receive the grant. The grant is systematically recognised in the income statement over the period to which it relates, or immediately if the grant is not conditional upon incurrence of future costs or investments. Government grants are recognised as other operating income, or in the balance sheet if the purpose of the grant is investment in an asset.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. 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 - 5 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 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.Inventories are measured at the lower of cost under the FIFO method and net realisable value. The net realisable value of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with deduction of selling expenses. The net realisable value is determined allowing for marketability, 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.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.Provisions are recognised when - in consequence of an event occurred before or on the balance sheet date - the Group has a legal or constructive obligation and it is probable that economic benefits must be given up to settle the obligation.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.Loans, such as loans from credit institutions, are recognised initially at the proceeds received net of transaction expenses incurred. Subsequently, the loans are measured at amortised cost; the difference between the proceeds and the nominal value is recognised as an interest expense in the income statement over the loan period. Other debts are measured at amortised cost, substantially corresponding to nominal value.Deferred income comprises payments received in respect of income in subsequent years.The cash flow statement shows the Group´s cash flows for the year broken down by operating, investing and financing activities, changes for the year in cash and cash equivalents as well as the Group´s cash and cash equivalents at the beginning and end of the year. Cash flows from operating activities Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working capital and non-cash operating items such as depreciation, amortisation and impairment losses, and provisions. Working capital comprises current assets less short-term debt excluding items included in cash and cash equivalents. Cash flows from investing activities Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant and equipment as well as fixed asset investments. Cash flows from financing activities Cash flows from financing activities comprise cash flows from the raising and repayment of long-term debt as well as payments to and from shareholders. Cash and cash equivalents The cash flow statement cannot be immediately derived from the published financial records.Cash and cash equivalents comprise ”Cash at bank and in hand”.Goodwill are measured at cost less accumulated depreciation. Goodwill is amortised on a straight-line basis over the estimated useful life of 5 - 10 years. Customer relations are measured at cost less accumulated depreciation. Customer relations is amortised on a straight-line basis over the estimated useful life of 5 - 10 years. Costs of development projects comprise salaries directly attributable to the Company’s development activities. Development projects that are clearly defined and identifiable and in respect of which technical feasibility, sufficient resources and a potential future market or development opportunity in the Group can be demonstrated, and where it is the intention to manufacture, market or use the project, are recognised as intangible assets. This applies if sufficient certainty exists that the value in use of future earnings can cover cost of sales, distribution and administrative expenses involved as well as the development costs. Development projects that do not meet the criteria for recognition in the balance sheet are recognised as expenses in the income statement as incurred. Capitalized development costs related to software consists of development of existing software applications. The recognized amount is expected to be recovered by the continuing sales of service subscriptions which include the right to upgrade of the software to the newest versions. Capitalised development costs are measured at cost less accumulated amortisation and impairment losses or at a lower recoverable amount. An amount corresponding to the recognised development costs is allocated to the equity item “Reserve for development costs”. The reserve comprises only development costs recognised in financial years beginning on or after 1 January 2016. The reserve is reduced by amortisation of and impairment losses on the development projects on a continuing basis. As of the date of completion, capitalised development costs are amortised on a straight-line basis over the period of the expected economic benefit from the development work. The amortisation period is 3 - 5 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