xbrli:pureiso4217:USD353957682022-01-012022-12-31cmn:ConsolidatedMember353957682022-01-012022-12-311cmn:ConsolidatedMember353957682022-01-012022-12-311cmn:ConsolidatedMember353957682022-01-012022-12-312cmn:ConsolidatedMember353957682022-01-012022-12-312cmn:ConsolidatedMember353957682022-01-012022-12-31353957682021-01-012021-12-31cmn:ConsolidatedMember353957682021-01-012021-12-31353957682022-01-012022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember353957682021-01-012021-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMember353957682022-01-012022-12-31fsa:RetainedEarningsMember353957682022-01-012022-12-31fsa:RetainedEarningsMember353957682021-01-012021-12-31fsa:RetainedEarningsMember353957682022-12-31cmn:ConsolidatedMember353957682021-12-31cmn:ConsolidatedMember353957682022-12-31353957682021-12-31353957682022-01-01cmn:ConsolidatedMember353957682021-01-01cmn:ConsolidatedMember353957682022-01-01fsa:ContributedCapitalMembercmn:ConsolidatedMember353957682022-01-01fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember353957682022-01-01fsa:RetainedEarningsMembercmn:ConsolidatedMember353957682022-01-01fsa:EquityAttributableToParentMembercmn:ConsolidatedMember353957682022-01-01fsa:MinorityInterestsMembercmn:ConsolidatedMember353957682022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember353957682022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMembercmn:ConsolidatedMember353957682022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember353957682022-12-31fsa:EquityAttributableToParentMembercmn:ConsolidatedMember353957682022-12-31fsa:MinorityInterestsMembercmn:ConsolidatedMember353957682022-01-01fsa:ContributedCapitalMember353957682022-01-01fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMember353957682022-01-01fsa:RetainedEarningsMember353957682022-01-01353957682022-12-31fsa:ContributedCapitalMember353957682022-12-31fsa:ReserveForCurrentValueAdjustmentsOfCurrencyGainsMember353957682022-12-31fsa:RetainedEarningsMember353957682022-01-012022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember353957682022-01-012022-12-31fsa:ContributedCapitalMember353957682022-01-012022-12-311cmn:ConsolidatedMember353957682022-01-012022-12-312cmn:ConsolidatedMember353957682021-01-012021-12-311cmn:ConsolidatedMember353957682021-01-012021-12-312cmn:ConsolidatedMember353957682022-01-012022-12-31fsa:ShorttermDeferredIncomeMembercmn:ConsolidatedMemberGrundlag for konklusionKonklusion33963556Deloitte Statsautoriseret RevisionspartnerselskabRevisionspåtegningRegnskabsklasse C, mellemstor virksomhed2021-12-312021-01-0133963556Weidekampsgade 6Deloitte Statsautoriseret Revisionspartnerselskab2300 København S2022-12-312022-01-01Emkl Holding ApS35395768ÅrsrapportKøbenhavn S23006WeidekampsgadeKøbenhavnKøbenhavn K1256<br /><br />42AmaliegadeThe Executive Board has today considered and approved the annual report of Emkl Holding ApS for the financial year 01.01.2022 - 31.12.2022. The annual report is presented in accordance with the Danish Financial Statements Act.In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year
01.01.2022 - 31.12.2022.We believe that the management commentary contains a fair review of the affairs and conditions referred to therein.We recommend the annual report for adoption at the Annual General Meeting.Copenhagen2023-07-13Lars SkjøthMette Marie Louise StougaardTo the shareholders of Emkl Holding ApSWe have audited the consolidated financial statements and the parent financial statements of Emkl Holding ApS for the financial year 01.01.2022 - 31.12.2022, which comprise the income statement, balance sheet, statement of changes in equity and notes, including a
summary of significant accounting policies, for the Group as well as the Parent, and the consolidated cash flow statement. The consolidated financial statements and the parent financial statements
are prepared in accordance with the
Danish Financial Statements Act.
In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2022 - 31.12.2022 in accordance
with the Danish Financial Statements Act.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 consolidated financial statements and the parent financial statements" section of this auditor’s
report. We are independent of the Group in accordance
with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.Management is responsible for the preparation of consolidated financial statements and parent 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 consolidated financial statements and parent financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group's and the Entity’s ability to continue
as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate
the Entity or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent 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 consolidated financial statements and parent 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:<br />Identify and assess the risks of material misstatement of the consolidated financial statements and the parent 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.
<br />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 Entity’s internal control.
<br />Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by Management.
<br />Conclude on the appropriateness of Management’s use of the going concern basis of accounting in
preparing the consolidated financial statements and the parent 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 Entity’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 consolidated financial statements and the parent 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 Entity to cease to continue as a going concern.
<br />Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures
in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and
events in a manner that gives a true and fair view.<br />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 commentary.
Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management
commentary and, in doing so, consider whether the management commentary is materially inconsistent with
the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Moreover, it is our responsibility to consider whether the management commentary provides the information
required under the Danish Financial Statements Act.<br />Based on the work we have performed, we conclude that the management commentary is in accordance with
the consolidated financial statements and the parent 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 commentary.Copenhagen2023-07-13Mads Haugegaard AlbrechtsenManal Naffahmne45846mne49116State Authorised Public AccountantState Authorised Public AccountantFinancial highlights2022
USD'0002021
USD'0002020
USD'000Key figuresRevenue16,38112,4116,980Gross profit/loss3,9415,5282,933Operating profit/loss(4,388)(367)(1,767)Net financials(1,612)(361)(2,375)Profit/loss for the year(6,001)(708)(4,147)Balance sheet total31,98714,82616,477Investments in property, plant and equipment7506440Equity(9,620)(25,132)(26,027)Equity excl. minority interests(12,014)(25,132)(26,027)Cash flows from operating activities(360)867N/ACash flows from investing activities(6,106)(637)N/ACash flows from financing activities20,2720N/ARatiosGross margin (%)24.0644.5442.02Net margin (%)(36.63)(5.70)(59.41)Equity ratio (%)(37.56)(169.51)(157.96)As 2022 is the first year with a consolidated report, some key figures for 2020 are missing as per "N/A".Financial highlights are defined and calculated in accordance with the current version of "Recommendations &
Ratios" issued by the CFA Society Denmark.Gross margin (%)
:Gross profit/loss * 100
RevenueNet margin (%)
:
Profit/loss for the year * 100
RevenueEquity ratio (%)
:Equity excl. minority interests * 100
Balance sheet totalPrimary activitiesThe main activities of Emkl Holding ApS and its subsidiaries are within hair gain and scalp health treatments using the ”Hårklinikken” methods.
Hårklinikken is a leading Danish clinic brand focusing on hair gain and scalp health treatments.
The Group develops and markets hair gain and scalp health products targeted consumer markets. Products are labeled and marketed under the name ”Hårklinikken” and sold through own clinics and online channels to consumer customers worldwide. The Group’s headquarters are located in Amaliegade, Copenhagen.
The groups main activities are investments in clinic subsidiaries within hair gain and scalp health treatments as well as related activities, including holding and developing recipes, concepts, trademarks and intangible rights, and production, licensing and sales of products, trademarks and rights and other activities related thereto.
Development in activities and financesIn 2022, the group realized revenue of 16,381 kUSD compared to revenue of 12,411 kUSD last year. Revenue has grown 32%. Operating profit (EBITDA) of 2,012 kUSD in loss was realized compared to a profit of 1,573 kUSD last year. The group results is significantly affected by increased marketing spend, for both working media and no-working media. In addition, the group has continued to invest in strategic initiatives related to the sales organization and marketing activities as well as in consolidating and rolling out new ERP.
In February 2022 Volt Investment holdings bought 25,3% of the company shares, which underlines the expected interest and potential for the company.
As part of the growth strategy, Hairclinic Group ApS has acquired Harklinikken Hair Care Center LLC as of 10 February 2022. The purpose of the acquisition is to integrate Harklinikken Dubai in the existing Group and thereby furthering the growth strategy for Hairclinic Group. Profit/loss for the year in relation to expected developmentsManagement considers the results for the financial year 2022 to be satisfactory.Uncertainty relating to recognition and measurementIn 2014, the company acquired the patent and hereby the right to the production and development of methods and products in
hair loss. The carrying amount of the acquired intangible asset amounts to USD 7,253 thousand at 31
December 2022. The value of acquired rights relates primarily to expectation of future sales and
earnings, which by nature is subject to uncertainty.Unusual circumstances affecting recognition and measurementNo significant unusual circumstances affecting recognition and measurement have occurred.OutlookThe group expects revenue to increase +25% compared with 2022 level, and anticipates normalized operating
profit margin (EBITDA) to be in line with 2022.
Knowledge resourcesIt is essential for the Group to attract, develop and retain high-quality employees with an appertaining high level of competences. The realization of the Group’s goal of ensuring both quality, knowledge and knowhow at each employee level will be facilitated through recruitment procedures and a continuous development of the existing employees and their competences. Throughout the year, a considerable number of experienced and highly qualified employees have been added to the Group. This initiative has strengthened the Group's knowledge and competence base.Research and development activitiesThe Group’s research activities are related to products developed internally. The development of the company's activities and financial matters are shown in the following income statement and the balance sheet. Events after the balance sheet dateNo events have occurred after the balance sheet date to this date, which would influence the evaluation of this annual report.
The company's current and planned activities do not give rise to any special financial risks, and the company's liquidity resources are expected to be adequately secured. 16380521124110333484692140916889548015474129394102855277365953226395499923753151940092-4387513-367355435765121153617300192912047654157228314417041560593-5999402-728102-1553003-15450121200-199720-63901-6000602-7081300-7654789-76547891654187-6000602-708130-1553003-14811110-1553003-1553003-148111100725256292482441035368118328144707550127586851043152514957591094916925101505010109491621514228628157160677103085835393342684835520738143667801160998033426848355207386269337303548962344569501107156461116338821251915103914226115542424592812423612085121767280284900064683027398229542550375429793754297915082856127761212776121047191381691762055632155333982675427193198733614825513338251153606345715360121931147412193-2468460825-2468460825-12004239-25205014-4246269-2922799-12013563-2513199623937870-9619776-251319961219360825-25205014-25131996014641-24684-12004239-120135632393787-25131996-4259479-28497811219360825-2922799-284978111474-24684-424626938080103389573823808010338909113380801033895738238080103389091131324378304482329828584968260544234701686970692175133930352700910001274491412541607112399575093808459438913238319873361482551333825115360634570-739600-739600739600038862026764920271535020271535-719-855091327515124128701241287-719-85509229533143305237531619400932106533-2100153-419077190823-324741-336592190252507989-223671-197218-2073893161-360233867340-338846-644487-56709180Intercompany loansOther investments-96295311770-23609-6106059-636919-6466292230421202715360202715360138052442304211508285612776121 Staff costs2022
USD2021
USDWages and salaries5,472,1783,481,368Pension costs221,048175,351Other social security costs14,78724,972Other staff costs245,213273,3085,953,2263,954,999Average number of full-time employees6654The Executive board has not received remuneration in 2022 and 2021. 665402 Depreciation, amortisation and impairment losses2022
USD2021
USDAmortisation of intangible assets2,056,1761,777,317Depreciation on property, plant and equipment319,139162,7752,375,3151,940,0923 Other financial income2022
USD2021
USDOther interest income2,1961,691Exchange rate adjustments433,242895,672Other financial income327314,173435,7651,211,5362 Other financial income2022
USD2021
USDFinancial income from group enterprises17,30019,29117,30019,2914 Other financial expenses2022
USD2021
USDOther interest expenses1,468,0481,562,519Exchange rate adjustments561,0250Other financial expenses18,5819,7642,047,6541,572,2832022
USD2021
USDOther interest expenses1,468,0481,562,519Exchange rate adjustments561,0250Other financial expenses18,5819,7642,047,6541,572,283<br />3 Other financial expenses2022
USD2021
USDOther interest expenses1,441,7041,560,5931,441,7041,560,593<br />2022
USD2021
USDOther interest expenses1,441,7041,560,5931,441,7041,560,5935 Tax on profit/loss for the year2022
USD2021
USDCurrent tax1,200(12,453)Change in deferred tax0(7,519)1,200(19,972)4 Tax on profit/loss for the year2022
USD2021
USDCurrent tax0(63,901)0(63,901)6 Proposed distribution of profit/loss2022
USD2021
USDRetained earnings(6,000,602)(708,130)(6,000,602)(708,130)5 Proposed distribution of profit and loss2022
USD2021
USDRetained earnings(1,553,003)(1,481,111)(1,553,003)(1,481,111)7 Intangible assetsCompleted development projects
USDAcquired intangible assets
USDAcquired rights
USDGoodwill
USDCost beginning of year122,67427,534,7892,218,6960Exchange rate adjustments(7,232)(1,623,132)00Additions0004,951,200Cost end of year115,44225,911,6572,218,6964,951,200Amortisation and impairment losses beginning of year(122,674)(18,286,545)(1,035,415)0Exchange rate adjustments7,2321,055,26800Amortisation for the year0(1,427,818)(147,913)(480,445)Amortisation and impairment losses end of year(115,442)(18,659,095)(1,183,328)(480,445)Carrying amount end of year07,252,5621,035,3684,470,755Completed development projects
USDAcquired intangible assets
USDAcquired rights
USDGoodwill
USDCost beginning of year122,67427,534,7892,218,6960Exchange rate adjustments(7,232)(1,623,132)00Additions0004,951,200Cost end of year115,44225,911,6572,218,6964,951,200Amortisation and impairment losses beginning of year(122,674)(18,286,545)(1,035,415)0Exchange rate adjustments7,2321,055,26800Amortisation for the year0(1,427,818)(147,913)(480,445)Amortisation and impairment losses end of year(115,442)(18,659,095)(1,183,328)(480,445)Carrying amount end of year07,252,5621,035,3684,470,7558 Property, plant and equipmentOther fixtures and fittings, tools and equipment
USDLeasehold improvements
USDCost beginning of year1,467,6680Addition through business combinations etc542,3220Exchange rate adjustments(34,825)0Additions195,67911,564Cost end of year2,170,84411,564Depreciation and impairment losses beginning of year(372,752)0Exchange rate adjustments14,529(36)Depreciation for the year(316,862)(2,277)Depreciation and impairment losses end of year(675,085)(2,313)Carrying amount end of year1,495,7599,2519 Financial assetsInvestments in associates
USDDeposits
USDCost beginning of year22,86260,677Exchange rate adjustments(1,348)(1,829)Additions027,026Disposals0(4,303)Cost end of year21,51481,571Carrying amount end of year21,51481,571
AssociatesRegistered inOwnership
%Hair by Jost ApSApS33.336 Financial assetsInvestments in group enterprises
USDCost beginning of year35,520,738Exchange rate adjustments(2,093,890)Cost end of year33,426,848Carrying amount end of year33,426,848A specification of investments in subsidiaries and associates is evident from the notes to the consolidated financial statements.10 Receivables from owners and managementExecutive
Board
USDReceivables24,236Interest rate
(%)9,55%Repaid during the year96,615Incurred and repaid during the year18,142The receivables is recognized in the subsidiaries; Hairclinic Group ApS, HK koncept og produkt ApS and Hårklinikken ApS. 11 PrepaymentsConsists of prepayments on costs concerning subsequent financial year, such as insurance, rent etc.
12 Contributed capitalNumberPar value
USDNominal
value
USDA-shares80,00014.3411,474B-shares27,09514.343,886107,09515,36013 Non-current liabilities other than provisionsDue after
more than 12
months
2022
USDPayables to owners and management 38,080,10338,080,1037 Non-current liabilities other than provisionsDue after
more than 12
months
2022
USDPayables to owners and management 38,080,10338,080,10314 Deferred incomeDeferred income consists of revenue to be recognized in future periods as the recognition criteris has not been completed yet.15 Changes in working capital2022
USD2021
USDIncrease/decrease in inventories642,160(535,933)Increase/decrease in receivables(201,982)(916,977)Increase/decrease in trade payables etc.1,666,355(647,243)2,106,533(2,100,153)16
Fair value informationListed investments and securities
USDFair value end of year 3Unrealised fair value
adjustments recognised in
the income statement
947Listed investments and securities
The fair value of the Company's listed securities is determined using the price per. 31 December 2022.
17 Unrecognised rental and lease commitments2022
USD2021
USDTotal liabilities under rental or lease agreements until maturity 3,442,4933,404,015The Group subsidiaries has entered into lease agreements with remaining terms of between one and seven years, as well as rental agreements with a notice period of 6 months.18
Group relationsName and registered office of the Parent preparing consolidated financial statements for the smallest group:
EMKL Holding ApS, Amaliegade 42, Copenhagen, Denmark (Central Business Registration No 35 39 57 68).19 SubsidiariesRegistered inCorporate
formOwnership
%Hårklinikken ApSDenmarkApS72.68Harklinikken LLCUnited StatesLLC72.68Harklinikken ehfIcelandehf72.68Harklinikken LLCUnited Arab EmiratesLLC83.00Harklinikken GmbHGermanyGmbH72.68Harklinikken LLCUnited KingdomLLC72.68Hairclinic GroupDenmarkApS72.68-128599-37103342684835520738398229493025049525119312671 Going concernThe management has found that the equity is lost per 31 December 2022. The management is working on a plan
to re-establish the equity and improve the cash flow through the income from investments in group enterprises.
The management expects that it will be possible for the company to pay its liabilities as they become due and has presented the annual report based on going concern.
The company has
received declaration of support from the owner, which results in certainty about the company's capability of
continuing operation. 9 Contingent liabilitiesThe Entity participates in a Danish joint
taxation arrangement in which EMKL Holding ApS serves as the administration company.
According to the joint taxation provisions
of the Danish Corporation Tax Act, the Entity is therefore secondarily
liable for income taxes etc. for the
jointly taxed entities, limited to the equity interest by which the Entity
participates in the Group, EMKL Holding ApS and also secondarily liable for obligations, if any, relating to the withholding of tax on
interest, royalties and
dividends for the jointly taxed entities. The jointly taxed entities' total known net liability
under the joint
taxation arrangement is disclosed in the administration company's financial statements.10 Related parties with controlling interestLars Skjøth, PO Box 72814 Dubai, UAE, owns the majority share in the Entity, thus exercising control. 11 Non-arm’s length related party transactionsOnly non-arm's length related party transactions are disclosed in the annual report. No
such transactions were conducted during the financial year.This annual report has been prepared in accordance with the provisions of the Danish Financial Statements Act
governing reporting class C enterprises (medium).The accounting policies applied to these consolidated financial statements and parent financial statements are consistent with those applied last year.falseRecognition and measurementAssets are recognised in the balance sheet when it is probable as a result of a prior event that future economic
benefits will flow to the Entity, and the value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a
result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the
value of the liability can be measured reliably.
On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial
recognition is effected as described below for each financial statement item.
Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm
or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and
measurement.
Income is recognised in the income statement when earned, whereas costs are recognised by the amounts
attributable to this financial year. <br />Consolidated financial statementsThe consolidated financial statements comprise the Parent and the group enterprises (subsidiaries) that are controlled by the Parent. Control is achieved by the Parent, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence. Enterprises in which the Group, directly or indirectly, holds between 20% and 50% of the voting rights and exercises significant, but not controlling, influence are regarded as associates.<br />Basis of consolidationThe consolidated financial statements are prepared on the basis of the financial statements of the Parent and its subsidiaries. The consolidated financial statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits and losses on transactions between the consolidated enterprises are eliminated. The financial statements used for consolidation have been prepared applying the Group’s accounting policies.
Subsidiaries’ financial statement items are recognised in full in the consolidated financial statements. Minority interests’ pro rata shares of the profit/loss and the net assets are disclosed as separate items in Management's proposal for the distribution of net profit/loss and equity, respectively.
Investments in subsidiaries are offset at the pro rata share of such subsidiaries’ net assets at the acquisition date, with net assets having been calculated at fair value.Business combinationsNewly acquired or newly established enterprises are recognised in the financial statements from the time
of acquiring or establishing such enterprises. Divested or wound-up enterprises are recognised in the income
statement up to the time of their divestment or winding-up.
The purchase method is applied at the acquisition of new enterprises, under which identifiable assets and
liabilities of these enterprises are measured at fair value at the acquisition date. Provisions for costs of
restructuring of the enterprise acquired are only made in so far as such restructuring was decided by the
enterprise acquired prior to acquisition. Allowance is made for the tax effect of restatements.Positive differences in amount (goodwill) between cost of the acquired share and fair value of the assets
and liabilities taken over are recognised in intangible assets, and they are amortised systematically over
the income statement based on an individual assessment of their useful lives. If the useful life cannot be
estimated reliably, it is fixed at 10 years. Useful life is reassessed annually.Gross profit or lossGross profit comprises the revenue, changes in inventories of finished goods and external costs.
RevenueRevenue from the sale of manufactured goods and goods for resale is recognised in the income statement
when delivery is made and risk has passed to the buyer. Revenue from the sale of services is recognised
in the
income statement when delivery is made to the buyer. Revenue is recognised net of VAT, duties and
sales
discounts and is measured at fair value of the consideration fixed.Cost of salesCost of sales comprises goods consumed in the financial year measured at cost, adjusted for ordinary
inventory
writedowns.Other external expensesOther external expenses include expenses relating to the Entity’s ordinary activities, including expenses for
premises, stationery and office supplies, marketing costs, etc. This item also includes writedowns of
receivables recognised in current assets.Staff costsStaff costs comprise wages and salaries, and social security contributions, pension contributions, etc
. for entity
staff.Depreciation, amortisation and impairment lossesDepreciation, amortisation and impairment losses relating to property, plant and equipment and intangible
assets comprise depreciation, amortisation and impairment losses for the financial year, and gains and
losses from the sale of intangible assets and plant and equipment.Other financial incomeOther financial income comprises interest income, including
interest income on receivables from group enterprises, exchange gains, bank interest and tax relief under the Danish
Tax Prepayment Scheme etc.Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group
enterprises, exchange losses, bank interest and tax surcharge under the Danish Tax Prepayment Scheme etc.Tax on profit/loss for the yearTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the
income statement by the portion attributable to the profit for the year and recognised directly in equity by
the
portion attributable to entries directly in equity.GoodwillGoodwill is the positive difference between cost and fair value of assets and liabilities arising from
acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the experience gained by
Management for each business area. For goodwill the useful life
has been determined based on an assessment of whether the enterprises
are strategically acquired enterprises
with a strong market position and a long-term earnings profile and whether the amount of goodwill includes
intangible resources of a temporary nature that cannot be
separated and recognised as separate assets. Useful
lives are reassessed annually. The amortisation periods
used are 10 years.
Goodwill is written down to the lower of recoverable amount and carrying amount.<br />Intellectual property rights etc.Intellectual property rights etc. comprise development projects completed and acquired intellectual property rights.Development projects on clearly defined and identifiable products and processes, for which the technical rate
of utilisation, adequate resources and a potential future market or development opportunity in the enterprise
can be established, and where the intention is to manufacture, market or apply the product or process in
question, are recognised as intangible assets. Other development costs are recognised as costs in the income
statement as incurred. When recognising development projects as intangible assets, an amount equalling
the costs incurred less deferred tax is taken to equity in the reserve for development costs that is reduced
as the development projects are amortised and written down.
The cost of development projects comprises costs such as salaries and amortisation that are directly and
indirectly attributable to the development projects.
Completed development projects are amortised on a straight-line basis using their estimated useful lives
which are determined based on a specific assessment of each development project. If the useful life cannot
be estimated reliably, it is fixed at 10 years.Intellectual property rights acquired are measured at cost less accumulated amortisation. The amortisation
periods
used are 10 years.
Intellectual property rights etc. are written down to the lower of recoverable amount and carrying amount.Plant and equipmentPlant and machinery, and other fixtures and fittings, tools and equipment are
measured at
cost less accumulated depreciation and impairment losses.
Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of
the
asset until the time when it is ready to be put into operation.
The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line
depreciation is made on the basis of the following estimated useful lives of the assets:Useful life
Other fixtures and fittings, tools and equipment3-5 yearsLeasehold improvements3-5 yearsFor leasehold improvements and assets subject to finance leases, the depreciation period cannot exceed
the contract period.
Estimated useful lives and residual values are reassessed annually.
Items of plant and equipment are written down to the lower of recoverable amount and carrying
amount.Investments in group enterprisesInvestments in group enterprises are measured at cost. Investments are written down to the
lower of recoverable amount and carrying amount.Investments in associatesInvestments in associates are measured at cost. Investments are written down to the lower
of
recoverable amount and carrying amount.Investments in associates fall within the definitions of both participating interests and associates, yet in these consolidated financial statements they have been presented as investments in associates because this designation reflects more accurately the Group’s involvement in the relevant entities.
InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value.
Cost consists of purchase price plus delivery costs. Cost of manufactured goods and work in progress consists
of costs of raw materials, consumables, direct labour costs and indirect production costs.
Indirect production costs comprise indirect materials and labour costs, costs of maintenance of, depreciation
on machinery, factory buildings and equipment used in the manufacturing process, and costs of factory administration and management. Finance costs are not included in cost.
The net realisable value of inventories is calculated as the estimated selling price less completion costs and
costs incurred to execute sale.ReceivablesReceivables are measured at amortised cost, usually equalling nominal value, less writedowns for bad and
doubtful debts.Joint taxation contributions payable or receivable Current joint taxation contributions payable or receivable are recognised in the
balance sheet, stated as tax computed on this year's taxable income, adjusted for
prepaid tax. For tax losses, joint taxation contributions receivable are only recognised if such losses are
expected to be used under the joint taxation arrangement.<br />Tax payable or receivable Current tax payable or receivable is recognised in the balance sheet, stated as tax computed on this year's
taxable income, adjusted for prepaid tax.PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at
cost.Other investments (current assets)Other current asset investments comprise listed securities measured at fair value (market price) at the
balance sheet date.CashCash comprises cash in hand and bank deposits.Minority interestsOn initial recognition, minority interests are measured at the minority interests’ share of the acquiree’s net assets measured at fair value. No goodwill related to the minority interests’ equity interests in the acquiree is recognised.Other financial liabilitiesOther financial liabilities are measured at amortised cost, which usually corresponds to nominal value.Deferred incomeDeferred income comprises income received for recognition in subsequent financial years. Deferred income
is measured at cost.Cash flow statementThe cash flow statement shows cash flows from operating, investing and financing activities, and cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes, and financial income, financial expenses and income tax paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments, and purchase, development, improvement and sale,
etc. of intangible assets and property, plant and equipment.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs, and the raising of loans, repayments of interest-bearing debt, including lease liabilities, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk.
The cash flow statement shows cash flows from operating, investing and financing activities, and cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes, and financial income, financial expenses and income tax paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments, and purchase, development, improvement and sale,
etc. of intangible assets and property, plant and equipment.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs, and the raising of loans, repayments of interest-bearing debt, including lease liabilities, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk.
2023-07-13Mette Marie Louise Stougaard