Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Dalgasgade 27, 3. sal 7400 Herning 2022-07-01 2023-06-30 2021-07-01 2022-06-30 10104106 Nextway Software A/S Birk Centerpark 40 7400 Herning 1985-12-14 Herning EY Godkendt Revisionspartnerselskab 30700228 Dalgasgade 27, 3. sal 7400 Herning Danmark +45 73 23 30 00 2023-11-16 Thomas Hougaard-Enevoldsen Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2023-11-03 2023-11-03 CaseWare Working Papers Herning Kim Hellum Thomas Hougaard-Enevoldsen Lars Erik Rüger Jepsen Chair Carl Aage Nielsen Bjarne Aarup Andersen Herning Karsten Mehlsen State Authorised Public Accountant mne18473 6887285 6100800 5663901 1205131 584959 679130 -413596 -429133 Operating profit/loss Operating profit/loss Operating profit/loss Operating profit/loss Operating profit/loss -13114 11660 -176255 -29384 -79533 475329 -346828 -421497 8453808 7762236 6314243 111352 39365 84609 139119 219975 1491882 961667 1391698 2104989 1584200 -149519 -527912 -593679 -658843 0 0 0 -1321856 -866222 1577077 990521 -808362 Total cash flows Total cash flows Total cash flows Total cash flows Total cash flows 122.9 119.1 102.4 88 87.9 Current ratio Current ratio Current ratio Current ratio Current ratio 40.8 25.3 17.6 12.4 22 40 30.1 38.7 -29.5 -26.3 15.6 7.2 8.4 -5.3 -6.7 Return on assets Return on assets Return on assets Return on assets Return on assets 54 60 63 7669752 6761464 1547439 1132393 5699229 5468465 525722 681831 765392 708040 576896 531754 1205131 584959 444821 -81192 0 0 620767 491357 54250 120792 63300 138252 67364 109132 57824 71230 1192017 596619 1071064 477187 222150 72095 81048 -47339 969867 524524 990016 524526 1292736 1277748 1292110 1273576 24160 19020 24170 19020 895306 1017121 0 0 390296 291919 390296 291919 2602498 2605808 1706576 1584515 119544 80620 8191 11115 1787 3356 0 0 121331 83976 8191 11115 0 0 3519507 3260920 0 0 1219413 613374 0 0 4738920 3874294 2723829 2689784 6453687 5469924 871757 1179650 0 0 2309104 1322599 0 0 0 0 0 424990 76962 66727 134962 124752 408718 589016 306197 319767 0 131985 0 131985 393669 323209 120981 104314 4060210 3613186 562140 1105808 235873 1550531 28762 58446 4296083 5163717 590902 1164254 7019912 7853501 7044589 6634178 149043 149209 149043 149209 0 0 1240207 1221573 2712622 1838569 1492564 616998 2861665 1987778 2881814 1987780 392788 186873 344245 200260 268550 1344231 268550 1344231 661338 1531104 612795 1544491 17118 9920 5724 6481 234038 304875 103982 101337 0 0 3259181 2777000 1292 439 0 0 1662442 1826452 181093 217089 1582019 2192933 0 0 3496909 4334619 3549980 3101907 7019912 7853501 7044589 6634178 149274 1342608 524524 65 28563 149209 1838569 969868 166 95815 149043 2712622 149274 1202918 139691 18655 505871 65 28564 149209 1221573 616998 18634 971381 166 95815 149043 1240207 1492564 969867 524524 957181 768477 -1279322 -1031215 647726 261786 0 26005 67364 109133 0 -181296 25618 0 554744 359954 695547 526833 107305 61493 1932 34265 -800920 -554061 1075680 0 0 672115 -1075680 -672115 -1321856 -866222 1540611 2406833 218755 1540611 5065427 4811232 448140 575853 436102 466410 75193 102841 197700 190823 2389 3137 5699229 5468465 525722 681831 53 52 2 3 0 0 14957 18189 54250 120792 48343 120063 62678 31247 -63219 -71861 159472 17194 144267 868 0 23654 0 23654 222150 72095 81048 -47339 3720027 264994 3575188 291919 1116 -49 -4001 -467 507686 18738 0 169123 70279 0 0 -70279 4299108 283683 3571187 390296 2442279 245974 2558067 0 2302 -27 -2932 0 561791 13576 120746 0 3006372 259523 2675881 0 1292736 24160 895306 390296 3488969 239764 291919 -4215 -287 -467 508142 18751 169123 70279 0 -70279 4063175 258228 390296 2215393 220744 0 -2877 -262 0 558549 13576 0 2771065 234058 0 1292110 24170 390296 838554 224580 625 -18 107305 0 52170 0 894314 224562 757934 221224 633 -14 67562 1565 51359 0 774770 222775 119544 1787 21593 -25 1855 6180 17243 10478 -13 4770 6183 9052 8191 8632422 821326 -9854 -1193 0 412528 8622568 1232661 -5371502 -207952 -87281 240 741544 -30 265046 0 -120746 0 0 194464 -13248 3519507 1219413 Nextway Software Denmark A/S Herning, DK 100 1115831 300549 Nextway Software Finland Oy Helsinki, FI 100 704204 105651 Nextway Software (UK) Ltd. Cranfield, UK 100 32047 2240 Nextway Software Norway AS Oslo, NO 100 630939 45387 Nextway Software Sweden AB Malmø, SE 100 141152 22304 Nextway Software Germany GmbH Hamburg, DE 50 -20146 121174 Nextway Software Switzerland GmbH Buchs, CH 100 801140 201001 Nextway Software Austria GmbH Rankweil, AT 0 -175876 -6253 392788 0 392788 0 268550 0 268550 268550 344245 0 344245 0 268550 0 268550 268550 18635 18655 971381 505871 765392 708041 1121 0 -96604 -120792 -67364 -109133 222150 72095 -307893 -144006 842567 429729 -128862 -457480 235873 1550531 17118 9920 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Nextway Software A/S for the financial year 1 July 2022 - 30 June 2023. The annual report is prepared in accordance with the Danish Financial Statements Act. 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 Company at 30 June 2023 and of the results of the Group's and the Company's operations and of the consolidated cash flows for the financial year 1 July 2022 - 30 June 2023. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of Nextway Software A/S We have audited the consolidated financial statements and the parent company financial statements of Nextway Software A/S for the financial year 1 July 2022 - 30 June 2023, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies, for the Group and the Parent Company, and a consolidated cash flow statement. The consolidated financial statements and the parent company financial statements are prepared in accordance with the Danish Financial Statements Act. 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 30 June 2023, and of the results of the Group's and Parent Company's operations as well as the consolidated cash flows for the financial year 1 July 2022 - 30 June 2023 in accordance with the Danish Financial Statements Act. 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 consolidated financial statements and the parent Company financial statements" (herinafter collectively referred to as "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 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. 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 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 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 the 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 note 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 the Management's review. Our opinion on the financial statements does not cover the 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 the Management's review and, in doing so, consider whether the 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 the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of the Management's review. Nextway Software helps companies harvest the benefits of digitalization, by replacing processes involving paper, pdf’s, spreadsheets, and emails with business relevant easy-to-use software. Our mission is to make companies more efficient, and people’s live at work easier. To many of our customers we deliver, maintain and support business critical software. Our standard products are based on our own software platform Next®, which has a proven performance record in companies throughout the world and in almost any line of business. Headquartered in Denmark and with own staffed offices in Switzerland, Germany, Denmark, and Finland, supplemented by staff in Norway and in Austria, we are operating as an international company, serving European customers on a local and global scale. Our set-up enables us to engage with the majority of our customers with local staff backed by international specialists. We also provide our software as OEM and through implementation partners. Value-generating revenue streams Software as a Service Software licenses as subscription Software maintenance Consultancy In addition to this, we invest in developing new software products, to secure our future growth. This year we exceeded our expectations and goals set forward for the year. We have managed to significantly increase the revenue level achieved in the previous financial years. In the financial year Nextway adopted an updated 5-year strategy plan with the following focus areas: Insurance industry In the financial year Nextway hired an experienced SVP with a dedicated responsibility for the initiatives towards the insurance industry, Nextway will strengthen and broaden the efforts toward that specific industry. Finance industry Based on the strong position in Private Banking, Asset and Wealth Management, Nextway will strengthen the efforts towards the Finance industry. Existing and new customers Recognizing the enormous potential with the existing customer base, we will invest resources in expanding their solutions. And we will attract new customers, where eCMS (Enterprise Content Management System) is mission critical even if they are not within the Insurance or Finance sectors. Primary costs Our primary costs are staff costs for professional services consultants, software engineers, product managers, sales execs, supporting staff, and management. Other costs Our organization operate as ‘one international software company’, allowing us to employ resources wherever they are available and deploy the resources wherever they are needed. This organizational approach enables us continuously to optimize the total admin costs of the company. Operational result The Group has shown a positive development in financial result from €524.524 to €969.867. The Group gross profit of the year is in the amount of €7.669.752 and index 113 compared to FY 2021/2022. For the parent company the gross profit is €1.547.439 and index 137 compared to FY 2021/2022. This year’s Group operational result (EBITDA) is at index 152 compared to last year and is achieved in spite of a change in income recognition due to sales on the “Software as a service” business model. For the parent company the EBITDA is at index 227 compared to last year. The EBT result for the Group is €1.192.017 and index 200 compared to last year. The EBT result for the parent company is €1.071.064 and index 224 compared to last year. The results above have exceeded the expectations from last year’s annual report and is the result of focused implementation of the agreed strategy. Non-operational costs When we invest in new software, we will see increased depreciations from the moment the new software reaches the market. In financial year 22/23, like previous years, we successfully launched new products as well as extensions to our existing product portfolio. The depreciations in the future are expected to rise following continued increased investments. Result before tax (excluding internal currency adjustments) Our positive result before tax (EBT), represents a solid profit for the company. Based on our new 2027 strategy, we will continue to invest in the right strategic initiatives, enabling us to grow this result as the strategy unwinds in the coming years. Tax Nextway is currently not subject to joint taxation and is taxed locally in each operating market, which is supported by a well-documented transfer pricing policy. The valuation of our intangible assets (goodwill and development projects) is based on assumptions, expressed through budgets and business cases. These come with a degree of uncertainty. The performance related to software-product business cases is evaluated periodically, and impairment is tested by our independent auditors. Our financial performance has exceeded the result in FY 2021/2022. Management finds the development satisfactory and sees this as a result of focus and commitment in executing on strategic initiatives. As a professional provider of business-critical software, Nextway is dependent on highly skilled and knowledgeable employees throughout the organization. We continuously invest in developing our organization. At the center of these efforts is a set of appreciated core values: Easy, Respectful, Unified, Smart, and Ambitious. Nextway is big enough to matter, and small enough to care. Nextway’s business involves a number of commercial and financial risk elements, but only those considered normal for a software vendor. Nextway is continuously investing in our primary intangible asset – Next. This development is done with own resources and with addition of external parties when required. We believe that developing new products, modules and features is the key to secure that we reach our strategic goals and stay relevant at our existing customers. For Nextway, it is a strategic goal to be ‘a responsible global citizen’.We accept and embrace our responsibilities towards the world community, the surrounding societies, our customers, partners, and competitors and our employees. Look up our CSR charter at www.nextway.software No events have occurred after the balance sheet date to this date which would influence this annual report. Nextway Software closed the books for the fiscal year with a positive development in financial result from €524.524 to €969.867. We will pursue our new 2027 strategy, with new ambitious goals for growth and markets shares in the selected industries and focus areas. Furthermore, the efforts in changing the business model towards Software as a service and subscription-based license sales will continue. An up-to-date product portfolio, a growing customer base, a solid backlog, and a strong sales pipe is our foundation. We therefore expect to see continued positive financial results in the future. In 2023/2024 we expect the Group Gross profit to exceed € 8.400.000 and a EBT to exceed € 1.300.000. For the parent company we expect in 2022/23 that the Gross profit will exceed € 1.800.000 and a EBT to exceed € 800.000. There can however be a short-term effect from the revised income recognition on “Software as a service” that will affect these goals. The annual report of Nextway Software A/S for 2022/23 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to medium-sized reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement is prepared for the parent company, as its cash flows are reflected in the consolidated cash flow statement. Reporting currency The financial statements are presented in EURO (EUR). Control The consolidated financial statements comprise the Parent Company and group entities controlled by the Parent Company. Control means a parent company’s power to direct a group entity’s financial and operating policy decisions. Besides the above power, the parent company should also be able to yield a return from its investment. In assessing if the parent company controls an entity, de facto control is taken into consideration as well. The existence of potential voting rights which may currently be exercised or converted into additional voting rights is considered when assessing if an entity can become empowered to direct another entity’s financial and operating decisions. Preparation of consolidated financial statements The consolidated financial statements are prepared as a consolidation of the parent company's and the individual group entities' financial statements, which are prepared according to the group's accounting policies. On consolidation, intra-group income and expenses, shareholdings, intra-group balances and dividends, and realised and unrealised gains on intra-group transactions are eliminated. Unrealised gains on transactions with associates are eliminated in proportion to the group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains if they do not reflect impairment. In the consolidated financial statements, the accounting items of group entities are recognised in full. Non-controlling interests' share of the profit/loss for the year and of the equity of group entities which are not wholly-owned are included in the group's profit/loss and equity, respectively, but are disclosed separately. Acquisitions and disposals of non-controlling interests which are still controlled are recognised directly in equity as a transaction between shareholders. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. Foreign group entities On recognition of foreign group entities which are integral entities, monetary items are translated at closing rates. Non monetary items are translated at the exchange rate at the acquisition date or at the date of any subsequent revaluation or impairment of the asset. Income statement items are translated at the exchange rates at the transaction date. However, items derived from non monetary items are translated at historical exchange rates for the non monetary item. The Company has chosen IFRS 15 as interpretation for revenue recognition. Income from the sale of goods for resale and finished goods is recognised in revenue when the most significant rewards and risks have been transferred to the buyer, the income can be measured reliably, and payment is expected to be received. Income from the sale of goods and services, including Management fees and royalty, is recognised in the income statement when the goods or services in question have been delivered and the risk has been transferred to the buyer provided that the income can be measured reliably and is expected to be received. Income from the provision of services as consultancy hours is recognised as revenue as the services are provided. Accordingly, revenue corresponds to the selling price of services performed during the year (percentage of completion method). Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. The items revenue, other operating income and external expenses have been aggregated into one item in the income statement called gross profit in accordance with section 32 of the Danish Financial Statements Act. Other operating income comprise items of a secondary nature relative to the Company's core activities, including gains on the sale of non-current assets. Cost of sales includes the cost of goods used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. The basis of amortisation/depreciation, which is calculated as cost less any residual value, is amortised/depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Completed development projects 5 years Acquired intangible assets 3-5 years Goodwill 20 years Fixtures and fittings, other plant and equipment 3-5 years Leasehold improvements 5 years The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In group entities, the full elimination of internal profit and loss is carried out without regard to ownership shares. The proportionate share of the individual group entities' profit/loss after tax after full elimination of internal gains/losses are recognised in the parent company's income statement. Financial income and expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest income and expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. The parent company is covered by the Danish rules on mandatory joint taxation of the Group's Danish group entities. Group entities are included in the joint taxation arrangement from the date at which they are included in the consolidated financial statements and up to the date when they are no longer consolidated. The parent company acts as management company for the joint taxation arrangement and consequently settles all corporate income tax payments with the tax authorities. On payment of joint taxation contributions, the Danish corporate income tax charge is allocated between the jointly taxed entities in proportion to their taxable income. Entities with tax losses receive joint taxation contributions from entities that have been able to use the tax losses to reduce their own taxable income. Tax for the year, which comprises the current income tax charge, joint taxation contributions and deferred tax adjustments, including adjustments arising from changes in tax rates, is recognised in the income statement as regards the portion that relates to the profit/loss for the year and directly in equity as regards the portion that relates to entries directly in equity. Goodwill is amortised over the expected economic life of the asset, measured by reference to Management's experience in the individual business segments. Goodwill is amortised on a straight-line basis over 20 years. Amortization assessment is based on the long time history of the group, the strategy for the future with an expected strong marked position founded form the originally platform which will last at least 20 years. The client life cycle is long and 20 years is considered appropriate. Development costs comprise expenses, salaries and amortisation directly or indirectly attributable to development activities. Development projects that are clearly defined and identifiable, where the technical feasibility, sufficient resources and a potential future market or development opportunities are identifiable and where the Company intends to produce, market or use the project, are recognised as intangible assets provided that the cost can be measured reliably and that there is sufficient assurance that future earnings can cover production costs, selling costs and administrative expenses and development costs. Other development costs are recognised in the income statement as incurred. Development costs that are recognised in the balance sheet are measured at cost less accumulated amortisation and impairment losses. On completion of a development project, development costs are amortised on a straight-line basis over the estimated useful life. The amortisation period is 5 years. Acquired intangible assets include software and trademarks, which are measured at cost less accumulated amortisation and impairment losses. Software is amortised over 3-5 years, whereas trademarks are not amortised. Gains and losses on the sale of intangible assets are recognised in the income statement under "Other operating income" or "Other operating expenses", respectively. Gains and losses are calculated as the difference between the selling price less selling expenses and the carrying amount at the time of sale. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. Leases that do not transfer substantially all the risks and rewards incident to the ownership to the Company are classified as operating leases. Payments relating to operating leases and any other rent agreements are recognised in the income statement over the term of the lease. The Company's aggregate liabilities relating to operating leases and other rent agreements are disclosed under "Contingent liabilities". Equity investments in subsidiaries are measured according to the equity method. Equity investments in joint ventures are also measured according to the equity method in the consolidated financial statements. On initial recognition, equity investments in group entities are measured at cost, i.e. plus transaction costs. The cost is allocated in accordance with the acquisition method; see the accounting policies regarding business combinations. The cost is adjusted by shares of profit/loss after tax calculated in accordance with the Group's accounting policies less or plus unrealised intra-group gains/losses. Identified increases in value and goodwill, if any, compared to the underlying entity's net asset value are amortised in accordance with the accounting policies for the assets and liabilities to which they can be attributed. Negative goodwill is recognised in the income statement. Dividend received is deduced from the carrying amount. Equity investments in group entities measured at net asset value are subject to impairment test requirements if there is any indication of impairment. The carrying amount of intangible assets, property, plant and equipment and investments in group entities and associates is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. 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 and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Receivables in respect of which there is no objective evidence of individual impairment are tested for objective evidence of impairment on a portfolio basis. The portfolios are primarily based on the debtors' domicile and credit ratings in line with the Company's risk management policy. The objective evidence applied to portfolios is determined based on historical loss experience. Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Service supplies and contract work in progress for third parties are measured at the market value of the work performed less progress billings. The market value is calculated based on the stage of completion at the balance sheet date and the total expected income from the relevant contract. The stage of completion is calculated based on the expenses incurred relative to the expected total expenses relating to the relevant contract. Where the outcome of contract work in progress cannot be estimated reliably, the market value is measured at the expenses incurred in so far as they are expected to be paid by the purchaser. Where the total expenses relating to the work in progress are expected to exceed the total market value, the expected loss is recognised as a loss-making agreement under "Provisions" and is expensed in the income statement. The value of work in progress less progress billings is classified as assets when the selling price exceeds progress billings and as liabilities when progress billings exceed the market value. Work in progress includes license income which has been recognized as income but not yet invoiced. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprise cash. Provisions comprise anticipated expenses relating to warranty commitments, onerous contracts, restructurings, etc. Provisions are recognised when the Company has a legal or constructive obligation at the balance sheet date as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Provisions are measured at net realisable value or at fair value if the obligation is expected to be settled far into the future. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. As management company for all the entities in the joint taxation arrangement, the parent company is liable for payment of the group entities' income taxes vis à vis the tax authorities as the group entities pay their joint taxation contributions. Joint taxation contributions payable or receivable are recognised in the balance sheet as income tax receivables or payables. The Company has chosen IAS 39 as interpretation for liabilities. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at net realisable value. Subordinate loan capital Liabilities where the creditors have stated they are willing to subordinate their claim to rank after all the entity's other creditors are presented as subordinate loan capital. Subordinate loan capital is recognised using the same method as applies to liabilities. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. The cash flow statement shows the Company's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year. Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital and paid corporate income tax. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities and of intangible assets, property, plant and equipment and investments. Cash flows from financing activities comprise changes in the size or composition of the Company's share capital and related expenses as well as raising of loans, repayment of interest bearing debt and payment of dividends to shareholders. Cash and cash equivalents comprise cash, short term bank loans and short term securities which are readily convertible into cash and which are subject only to insignificant risks of changes in value. The financial ratios stated under "Financial highlights" have been calculated as follows: Current ratio Current assets x 100 Current liabilities Equity ratio Equity, year-end x 100 Total equity and liabilities, year-end Return on equity Profit/loss after tax x 100 Average equity Return on assets Profit/loss from operating activites x 100 Average assets At the end of the year, Nextway Software A/S has capitalised consolidated goodwill of EUR 0.9 million, primarily relating to the concentration of the Group's operating companies as wholly-owned subsidiaries. During the year, the Company performed an impairment test of the recognised goodwill. The test did not result in any reason for the Company to write down the accounting values. Due to several key assumptions, the impairment test are associated with uncertainty, including Management's expectations as to the Company's budget for the coming years, the growth rate in the terminal period and the discount factor. In the case that the assumptions used develop negatively, impairment losses may need to be recognised in the coming financial years. No events have occurred after the balance sheet date to this date which would influence this annual report. No events have occurred after the balance sheet date to this date which would influence this annual report. Total remuneration to group Management: EUR 506 thousand (2021/22: EUR 670 thousand). Total remuneration to board of directors in parent company: EUR 40 thousand (2021/22: EUR 60 thousand) Total remuneration to Management: EUR 506 thousand (2021/22: EUR 670 thousand). Total remuneration to board of directors: EUR 40 thousand (2021/22: EUR 60 thousand) Completed development projects (Group and entity) The company continuously recognizes development costs for a number of individual development projects. The development projects are initiated after an assessment phase and based on both the company's own and the customers' identified needs for new products and functionalities in the company's software, etc. In connection with the initiation of a development project, a business plan is prepared and there is an ongoing assessment of whether this business plan is complied with and followed. Development costs included in the balance sheet consist partly of ongoing development projects and partly of completed development projects. The usual development period typically extends over 1-3 years depending on the individual project. The recognised costs consist partly of hours incurred within the Group and partly of external costs incurred. All development projects are individually assessed to see whether they meet the criteria for recognition set out in the Danish Financial Statements Act Section 83 and IAS 38 as interpretation. Note 16 provides more details on security for loans, etc. as regards property, plant and equipment. Note 16 provides more details on security for loans, etc. as regards property, plant and equipment. Investments in group enterprises consists partly of recognized goodwill. Goodwill amounts to EUR 0.9 million for 2022/23 comprised herein (2021/22: EUR 1.0 million). Nextway Software Denmark A/S and Nextway Software A/S each hold 50% of Nextway Software Germany GmbH. Nextway Software Switzerland GmbH is the wholly owner of Nextway Software Austria GmbH. Prepayments include accrual of expenses relating to subsequent financial years. Prepayments include accrual of expenses relating to subsequent financial years. 1,110,000 shares of DKK 1 nominal value. At 30 June 2023 this correspond to EUR 149,044. The subordinate loan is subordinated to all other debt that cannot be covered by the debtor's assets in the event that the Company files for bankruptcy, is wound up, or enters into agreements with creditors. The subordination does not apply in the event that the Company is reconstructed. The subordinate loan is subordinated to all other debt that cannot be covered by the debtor's assets in the event that the Company files for bankruptcy, is wound up, or enters into agreements with creditors. The subordination does not apply in the event that the Company is reconstructed. At 30 June 2023, the Group recognised a deferred tax liability totaling EUR 392,788 The tax liability is related to the difference between the accounting and tax values of intangible assets, items of property, plant and equipment and tax loss carryforwards. Based on the budgets up until 2025/26, Management considers it likely that there will be future taxable income against which utilised tax losses and unutilised tax deductions can be offset. Deferred income consists of payments received from customers that may not be recognised until the subsequent financial year. Other rent and lease liabilities: Group Parent company EUR 2022/23 2021/22 2022/23 2021/22 Rent and lease liabilities 725,622 1,054,564 219,000 468,739 The Company is the administration company and has joint and several liability together with the other entities in the joint taxation arrangement for Danish corporate income taxes on dividends, interest and royalties. At 30 June 2023, payable corporate income tax amounted to EUR 0. Any subsequent corrections to the taxable income subject to joint taxation or withholding taxes may entail that the Company's liability will increase. The Group has provided operating equipment, unsecured claims and intellectual property rights with a carrying amount of EUR 2.020 thousand at 30 June 2023 as collateral for group entities' debt to credit institutions not exceeding EUR 537 thousand. The liability totalled EUR 6 thousand at 30 June 2023. The Company has provided operating equipment, unsecured claims and intellectual property rights with a carrying amount of EUR 2.020 thousand at 30 June 2023 as collateral for group entities' debt to credit institutions not exceeding EUR 537 thousand. The liability totalled EUR 6 thousand at 30 June 2023. Related party transactions The Group solely discloses related party transactions that have not been carried out on an arm's length basis, cf. section 98c(7) of the Danish Financial Statements Act. 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