Årsrapport30700228EY Godkendt Revisionspartnerselskab, Godkendt Revisionspartnerselskabc/o Postbok 250, Dirch Passers Allé, 362000, Frederiksberg2021-01-012021-12-312022-01-012022-12-3125903315Oath (Denmark) ApSSundkrogsgade212100CopenhagenCopenhagenEY Godkendt Revisionspartnerselskab, Godkendt RevisionspartnerselskabEY Godkendt Revisionspartnerselskab, Godkendt Revisionspartnerselskab3070022830700228Henrik ReedtzRikke Buchholtstatsautoriseret revisorstatsautoriseret revisormne24830mne46359c/o Postbok 250, Dirch Passers Alléc/o Postbok 250, Dirch Passers Allé363620002000FrederiksbergFrederiksbergDanmarkDanmark+45 7323 3000+45 7323 3000copenhagen@dk.ey.comcopenhagen@dk.ey.com2023-05-19Joseph NivaroRegnskabsklasse BRevisionspåtegningCaseWare fra Revisorgruppen DanmarkanpartshaverenCopenhagen2023-05-08Copenhagen2023-05-08Grundlag for 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, the Managing Director has approved the annual report of Oath (Denmark) ApS (the "Company") for the financial year 1 January - 31 December 2022. The annual report has been prepared in accordance with the Danish Financial Statements Act. I consider the chosen accounting policy to be appropriate, and in my opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company's operations for the financial year 1 January – 31 December 2022. Further, in my opinion, the Management's review gives a true and fair review of the matters discussed in the Management's review. The annual report is recommended for approval by the general meeting. Michel Hubertus Paulus TeheuxWe have audited the financial statements of Oath (Denmark) ApS for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared under the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company's operations for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to 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 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 additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Statement on the Management’s review 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, we conclude that Management’s review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of Management’s review. The principal activities of the company The Company’s principal activity is marketing of products related to Internet based marketing videos and online advertising in Denmark. The recipient of these services is Yahoo EMEA Limited (formerly Verizon Media EMEA Limited), a company registered and existing in the Republic of Ireland. Recognition and measurement uncertainties The recognition and measurement of items in the financial statements is not subject to any uncertainty. Unusual matters The Company’s financial position at 31 December 2022 and the results of its operations for the financial year ended 31 December 2022 are not affected by any unusual matters. Business review The Company’s income statement for the year ended 31 December shows a profit of TEUR 139 and the balance sheet at 31 December 2022 shows equity of TEUR 4,420. Management considers the Company's financial performance in the year satisfactory. Significant events after the financial year In February 2023, Yahoo announced plans to transform Yahoo's Ad tech division, Yahoo for Business, to set it up for long-term success. Yahoo for Business is now narrowing its focus and future investments solely on its flagship DSP business, which has a strong market position and high-growth potential. The new division will be called, simply, Yahoo Advertising. At the same time, the Company will sunset its SSP, while fully shifting its Native Advertising efforts to the partnership with Taboola that was announced last November 2022. Management is currently assessing the impact of this announcement for the Company. The annual report for Oath (Denmark) ApS has been presented in accordance with the Danish Financial Statements Act regulations concerning reporting class B enterprises and elective choice of certain provisions applying to reporting class C entities. The annual report is presented in euro (EUR). The accounting policies used in the preparation of the financial statements are consistent with those of last year. Pursuant to sections §110 subsection 1, of the Danish Financial Statements Act, the Company has not prepared consolidated financial statements. Recognition and measurement in general Income is recognised in the income statement concurrently with its realisation, including the recognition of value adjustments of financial assets and liabilities. Likewise, all costs are recognised in the income statement, including depreciations amortisations, writedowns for impairment, provisions, and reversals due to changes in estimated amounts previously recognised in the income statement. Assets are recognised in the statement of financial position when it seems probable that future economic benefits will flow to the Company and the value of the asset can be reliably measured. Liabilities are recognised in the statement of financial position when it is seems probable that future economic benefits will flow out of the Company and the value of the liability can be reliably measured. At the first recognition, assets and liabilities are measured at cost. Later, assets and liabilities are measured as described below for each individual accounting item. Foreign currency translation Transactions in foreign currency are translated by using the exchange rate prevailing at the date of the transaction. Differences in the rate of exchange arising between the rate at the date of transaction and the rate at the date of payment are recognised in the profit and loss account as an item under net financials. If currency positions are considered to hedge future cash flows, the value adjustments are recognised directly in equity in a fair value reserve. Receivables, payables, and other foreign currency monetary items are translated using the closing rate. The difference between the closing rate and the rate at the time of the occurrence or initial recognition in the latest financial statements of the receivable or payable is recognised in the income statement under financial income and expenses. Fixed assets acquired and paid for in foreign currency are measured at the exchange rate prevailing at the date of the transaction. Gross profit Gross profit comprises the revenue less operating expenses. Revenue The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income from the rendering of services, are recognised as revenue as the services are rendered, implying that revenue corresponds to the market value of the services rendered in the year (production method). Income from supply of services is recognized as revenue with reference to the stage of completion. Revenue is measured at the fair value of the agreed consideration exclusive of VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. Operating expenses Operating expenses comprise costs relating to the Company's primary activities incurred in the year, including expenses relating to administration, premises, lease payments under operating leases, marketing, etc. Staff costs Staff costs include salaries and wages, including holiday allowances, pensions, and other social security costs, etc., for staff members. Staff costs are less government reimbursements. Depreciation, amortisation, and writedown for impairment Depreciation, amortisation, and writedown for impairment comprise depreciation on, amortisation of, and writedown for impairment of tangible assets, respectively. Financial income and expenses Financial income and expenses comprise interest, realised and unrealised capital gains and losses concerning financial assets and liabilities, additions and reimbursements under the Danish tax prepayment scheme, etc. Financial income and expenses are recognised in the profit and loss account with the amounts that concerns the financial year. Dividend from equity investments in group enterprises is recognised in the financial year in which the dividend is declared. Distributions of dividend where the dividend exceeds the profit for the year or where the carrying amount of the Company's investments in the subsidiary exceeds the carrying amount of the subsidiary's net asset value will be evidence of impairment, meaning that an impairment test must be conducted. Interest and other costs concerning loans for financing the production of tangible fixed assets and concerning the production period are not recognised in the cost of the fixed asset. Tax of the results for the year Tax for the year comprises the current income tax for the year and changes in deferred tax and is recognised in the income statement with the share attributable to the net profit or loss for the year and directly in equity with the share attributable to entries directly in equity. The Company is the administration company in respect of the joint taxation arrangement and accordingly settles all corporation taxes to the tax authorities. The current Danish income tax is allocated among the jointly taxed companies proportional to their respective taxable income (full allocation with reimbursement of tax losses). Property, plant and equipment Other fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses. The depreciable amount is cost less the expected residual value at the end of the useful life. Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the asset is available for use. Depreciation is done on a straight-line basis according to an assessment of the expected useful life: Buildings Useful life 3-5 years Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised.Writedown of non-current assets The carrying amount of property, plant and equipment and investments in subsidiaries is tested annually for indication of impairment other than the decrease in value reflected by amortisation/depreciation. Impairment tests are conducted on individual assets or cash-generating units when there is indication of impairment. Write-down is made to the carrying amount and the recoverable amount. The recoverable amount is the higher value of value in use and selling price less expected selling cost. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets. Previously recognised impairment losses are reversed when conditions for impairment no longer exist. Impairment relating to goodwill is not reversed.Investments in subsidiaries Investments in subsidiaries are recognised and measured at cost. If the recoverable amount is lower than the cost price, it shall be written down for impairment to this lower value. Deposits Deposits are measured at amortised cost and represent lease deposits, etc. Receivables Receivables are measured at amortised cost which usually corresponds to face value. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Write-down for bad and doubtful debts is made when there is objective evidence that a receivable or a portfolio of receivables has been impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Prepayments Prepayments and accrued income recognised under assets comprise incurred costs concerning the following financial year. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand. Equity Proposed dividend is recognised as a liability at the date when it is adopted at the annual general meeting (declaration date). Dividend expected to be distributed for the year is presented as a separate line item in equity. Corporate tax and deferred tax Current tax receivables and tax liabilities are recognised in the statement of financial position with the amount calculated on the basis of the expected taxable income for the year adjusted for tax on previous years’ taxable income and prepaid taxes. Tax receivables and tax liabilities are offset to the extent that a legal right of set-off exists and the items are expected to be settled net or simultaneously. Joint taxation contributions payable and receivable are recognised in the statement of financial position as ”Tax receivables from group enterprises" or "Income tax payable to group enterprises" According to the rules of joint taxation, the Company is unlimitedly, jointly, and severally liable to pay the Danish tax authorities the total income tax, including withholding tax on interest, royalties, and dividends, arising from the jointly taxed group of companies. Deferred tax is tax on all temporary differences in the carrying amount and tax base of assets and liabilities measured on the basis of the planned application of the asset and disposal of the liability, respectively. Deferred tax assets, including the tax value of tax losses allowed for carryforward, are recognised at the value at which they are expected to be realisable, either by settlement against tax of future earnings or by set-off in deferred tax liabilities within the same legal tax unit. Any deferred net tax assets are measured at net realisable value. Liabilities other than provisions Financial liabilities are measured at amortised cost, which is usually equivalent to nominal value. Other liabilities are measured at net realisable value. 5. Contingencies Joint Taxation The Company is jointly taxed with Danish group companies. Hence, the Company has unlimited joint and several liability for payment of Danish corporation taxes. Any subsequent corrections of the income subject to joint taxation may entail that the Company's liability will increase. There is an ongoing tax audit in the Company. The case concerns the valuation placed on the Company’s intangible assets transferred to a group company AOL Europe Holdings (2) & Cie S.e.n.c, Luxembourg in May 2012. The Company has appealed the assessment. The Company is confident that it will ultimately win the appeal on the basis that the original valuation of 2012 was reasonable. If the appeal is unsuccessful however the Company may be required to pay estimate amount of €13,129,695 calculated as at 31 December 2022 in Income tax, penalties and interest. Operating lease commitments The Company has entered into rent agreements at the following amounts: The lease will continue until either party gives the required notice. The lease in 2023 has an average monthly payment of DKK 63,420 monthly, totaling DKK 761,046. 6. Information on the parent company Oath (Denmark) ApS is a wholly-owned subsidiary of Yahoo Netherlands B.V. The parent undertaking of the smallest and largest group of undertakings for which group financial statements are drawn up and or which the Company is a member at year end is College Parent L.P. whose principal place of business is 9 West 57th Street, 43rd Floor, New York, NY 10019 and is a limited partnership formed in the state of Delaware, United States of America. 259033152022-01-012022-12-31259033152021-01-012021-12-31259033152021-12-31259033152022-12-31259033152022-01-012022-12-311259033152022-01-012022-12-311259033152022-01-012022-12-312259033152022-01-012022-12-31e:RetainedEarningsMember259033152021-01-012021-12-31e:RetainedEarningsMember259033152022-01-01e:ContributedCapitalMember259033152022-12-31e:ContributedCapitalMember259033152022-01-01e:RetainedEarningsMember259033152022-01-012022-12-31e:RetainedEarningsMember259033152022-12-31e:RetainedEarningsMember259033152021-01-01e:ContributedCapitalMember259033152021-12-31e:ContributedCapitalMember259033152021-01-01e:RetainedEarningsMember259033152021-01-012021-12-31e:RetainedEarningsMember259033152021-12-31e:RetainedEarningsMemberiso4217:EURxbrli:pure