On initial recognition, financial liabilities are recognised at fair
value less transaction costs. Subsequently, financial liabilities
are measured at amortised cost.
Other payables are measured at amortised cost, which
substantially corresponds to the nominal value.
Cash flow statement
Cash flows from operating activities are calculated based on
the indirect method as profit/loss after tax adjusted for non-
cash operating items, changes in working capital, interest
received and paid, dividends received and corporation tax
paid.
Cash flows for investing activities comprise payments in
connection with acquisitions and disposals of intangible
assets, property, plant and equipment and other non-current
assets.
Cash flows from financing activities comprise changes in the
size or composition of the share capital and related costs
as well as changes in balances with group entities and other
related parties, the raising of loans, repayment of interest-
bearing debt including lease liabilities, as well as payment of
dividend to shareholders.
Cash and cash equivalents comprise cash at bank and in
hand.
Financial ratios
The financial ratios stated under “Financial highlights” have
been calculated as follows:
Current assets x 100
Current ratio
Current liabilities
Equity at year end x 100
Solvency ratio
Total liabilities at year end
Profit/loss for the year x 100
Return on equity
Average equity
22 | Annual Report 2021/2022
Parent Company
The accounting policies applied in the parent company
financial statements deviate from the accounting policies
applied in the consolidated financial statements as described
above in the following respects.
Dividends from subsidiaries
Distribution of retained earnings in subsidiaries is recognised
as income in the statement of comprehensive income in
the year of declaration. Impairment tests are performed
if dividend distributions exceed the given subsidiary’s
comprehensive income for the period.
Tax for the year
The Parent Company is not an independent taxable entity,
and consequently, no provision for tax on the Parent
Company’s profit/loss is made in the annual report.
The Parent Company’s profit/loss is taxed at the Parent
Company’s partners in accordance with applicable rules in
Danish tax law.
Equity investments in subsidiaries
Equity investments in subsidiaries are measured at cost.
In case of evidence of impairment, an impairment test is
conducted. In connection with the impairment test, the
subsidiary’s recoverable amount is calculated. Equity
investments are written down to the lower of the carrying
amount and the recoverable amount. Impairment losses are
recognised in the statement of comprehensive income as
financial expenses.
Impairment losses are reversed in so far as the assumptions
and estimates underlying the impairment losses have
changed.