1.  

ACCOUNTING POLICIES  

The consolidated and the parent company financial statements of CeMat A/S for 2024 have been prepared in accordance with International Financial Reporting Standards  

as adopted by the EU and additional Danish disclosure requirements for annual reports of reporting class D entities (listed) as set out in the Danish Executive Order on  

Adoption of IFRSs issued in pursuance of the Danish Financial Statements Act and the rules and regulations of Nasdaq Copenhagen.  

The consolidated financial statements and the parent company financial statements are presented in Danish kroner (DKK), which is the Group’s presentation currency and  

the functional currency of the parent company.  

Implementation of new and revised standards and interpretations  

New and revised standards and interpretations applying to financial years beginning on 1 January 2024 have been implemented in the annual report for 2024.  

Standards and interpretations affecting the profit/loss for the year or the financial position  

The implementation of new and revised standards and interpretations in the annual report for 2024 has not resulted in changes to presentation or disclosure.  

Standards and interpretations affecting presentation and disclosure  

The implementation of new and revised standards and interpretations in the annual report for 2024 has not resulted in changes to presentation or disclosure.  

Standards and interpretations not yet in force  

In Management’s opinion, the application of new and revised standards and interpretations will not have a material impact on the annual reports for the coming financial  

years. In other respects, the accounting policies are consistent with last year’s, as described in the following.  

Consolidated financial statements  

The consolidated financial statements consolidate the financial statements of the parent company, CeMat A/S, and subsidiaries in which the parent company directly or  

indirectly holds more than 50% of the shares.  

Basis of consolidation  

The consolidated financial statements are prepared on the basis of the financial statements of the parent company and those of the subsidiaries, which are all prepared in  

accordance with the Group’s accounting policies.  

On consolidation, items of the same nature are aggregated and intra-group income and expenses, intra-group balances and shareholdings are eliminated. Unrealised gains  

and losses on transactions between consolidated companies are also eliminated.  

Financial statement items of subsidiaries are fully consolidated. The non-controlling interests’ proportionate share of the profit/loss is included in the consolidated profit/loss  

and comprehensive income for the year and as a separate item under consolidated equity.  

Non-controlling interests  

On initial recognition, non-controlling interests are either recognised at their fair value or at their pro-rata share of the fair value of the acquired company’s identifiable  

assets, liabilities and contingent liabilities. The choice of method is made individually for each transaction. The non-controlling interests are subsequently adjusted for their  

proportionate share of changes to the equity of the subsidiary. The comprehensive income is allocated to the non-controlling interests irrespective of the non-controlling  

interest consequently becoming negative.  

Acquisition or sale of non-controlling interests in a subsidiary not resulting in loss of controlling influence is recognised in the consolidated financial statements as an equity  

transaction, and the difference between the remuneration and the carrying amount is allocated to the parent company’s share of equity.  

Foreign currency translation  

On initial recognition, transactions denominated in currencies other than the individual company’s functional currency are translated at the exchange rate ruling at the  

transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated at  

the exchange rates at the balance sheet date. Exchange differences between the exchange rate at the transaction date and the exchange rate at the date of payment or the  

balance sheet date, respectively, are recognised in the income statement under financial items.  

Property, plant and equipment and intangible assets, inventories and other non-monetary assets acquired in foreign currency and measured based on historical cost are  

translated at the exchange rates at the transaction date.  

On recognition in the consolidated financial statements of entities whose financial statements are presented in a functional currency other than Danish kroner (DKK), the  

income statements are translated at average exchange rates for the respective months, unless these deviate materially from the actual exchange rates at the transaction  

dates. In that case, the actual exchange rates are used. Balance sheet items are translated at the exchange rates at the balance sheet date.  

Exchange differences arising on the translation of foreign subsidiaries’ opening balance sheet items to the exchange rates at the balance sheet date and on the translation  

of the income statements from average exchange rates to exchange rates at the balance sheet date are recognised in other comprehensive income.  

Foreign exchange adjustments of receivables from or payables to subsidiaries which are considered part of the parent company’s overall investment in the subsidiary in  

question are recognised in other comprehensive income in the consolidated financial statements, while they are recognised in the income statement of the parent company.  

Tax  

Tax for the year, which consists of current tax and changes in deferred tax for the year, is recognised in the income statement with respect to the portion attributable to the  

profit/loss for the year and directly in equity with respect to the portion attributable to entries directly in equity.  

Current tax payable and receivable is recognised in the balance sheet as the tax calculated on the taxable income for the year, adjusted for tax paid on account.  

The calculation of the year’s current tax is based on the tax rates and tax rules applicable at the balance sheet date.  

Deferred tax is measured using the tax rates and tax rules that, based on legislation in force or in reality in force at the balance sheet date, are expected to apply in the  

respective countries when the deferred tax is expected to crystallise as current tax. Changes in deferred tax as a result of changed tax rates or rules are recognised in the  

income statement, unless the deferred tax can be attributed to items previously recognised directly in equity. In the latter case, the change is also recognised directly in  

equity.  

Deferred tax is measured using the balance sheet 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 the initial recognition of goodwill or the initial recognition of a transaction, apart from business  

combinations, and where the temporary difference existing at the date of initial recognition affects neither profit/loss for the year nor taxable income.  

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, unless the parent company is able to control when the deferred tax  

is to be realised and it is likely that the deferred tax will not crystallise as current tax within the foreseeable future.  

Deferred tax is calculated based on the planned use of the individual asset and the settlement of the individual liability, respectively.  

Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised in the balance sheet at the value at which the asset is expected to be realised, either  

through a set-off against deferred tax liabilities or as net tax assets to be offset against future positive taxable income. At each balance sheet date, an assessment is made  

as to whether it is likely that there will be sufficient future taxable income for the deferred tax asset to be utilised.  

INCOME STATEMENT  

Revenue  

Revenue is measured as the fair value of the consideration received or receivable. If interest-free credit has been granted for payment of the outstanding consideration  

extending beyond the usual credit period, the fair value of the payment is calculated by discounting future payments. The difference between the fair value and the nominal  

value of the consideration is recognised as financial income in the income statement over the extended credit period by using the effective interest method.  

Revenue is stated exclusive of VAT, duties, discounts, etc. levied on behalf of a third party.  

For leasing contracts that provide for rent exemptions, the effective rent for the entire contract period is used.  

Revenues from the sale of real estate (residential units, commercial space, etc.) are recognised at the time when the real estate purchaser takes over control of the real  

estate acquired and receives significant risks and rewards of ownership. According to the assessment of the management of the company, this takes place at the moment of  

handing over the real estate to the buyer on the basis of the acceptance protocol signed by the parties, provided that the buyer has made 100% payments towards the  

purchase price of the real estate.  

Cost of goods and services sold  

Cost of goods and services sold comprise direct costs incurred in generating the revenue.  

Other external expenses  

Other external expenses include premises maintenance costs, advertising costs, administrative expenses, bad debts, etc. Other external expenses also comprise costs of  

development projects that do not qualify for recognition in the balance sheet.  

Staff costs  

Staff costs comprise wages and salaries and social security costs, pensions, share-based payment, etc. to the employees of the Group.  

Financial items  

Financial items comprise interest income and expenses, the interest element of finance lease payments, realised and unrealised foreign exchange gains and losses as well as  

surcharges and allowances under the Danish tax prepayment scheme.  

External financing costs are recognized as costs in the income statement in the period in which they are incurred, with the exception of activated costs, i.e. costs that ca be  

directly attributed to the acquisition, construction or production of a 'qualifying asset' (in the case of the Company: for work in progress) as part of their production cost.  

Financial costs are capitalized to work in progress only during the period when the development project is active. The project is considered active when design or construction  

work is carried out on the purchased land and during the process of obtaining key administrative decisions needed to run the project. Financial costs cease to be capitalized  

when substantially all activities necessary to prepare the apartment for delivery to customers have been completed. Activation of financial costs is suspended in the event  

of suspension of activities related to investment activities on the project, including work related to the design, construction process or obtaining appropriate permits and  

administrative decisions regarding the project.  

BALANCE SHEET  

Investment property  

Investment property comprises properties owned for the purpose of receiving rent or obtaining capital gains.  

On initial recognition, investment property is measured at cost, comprising the purchase price and any costs directly attributable to the acquisition.  

Subsequently, investment property is measured at fair value, representing the price at which it is estimated that the property can be sold to an independent buyer at the  

balance sheet date.  

Investment property is divided into four groups: Internal roads; plots designed for external

roads; development areas; and industrial buildings.  

Internal roads, plots designed for external roads, and development areas (in the following referred to as “properties”) are valued using a comparative approach. This approach  

assumes the variation in prices between at least three comparable properties can be explained by the differences in their individual attributes such as location, surroundings,  

accessibility, development potential, etc. The influence of each of these attributes on value is assigned a percentage weighting, and the characteristics of each comparable  

and the subject are then rated, typically from 1–5, very good to very poor. The price of each comparable is adjusted according to how it differs from the subject, with the  

resulting adjusted average price from the comparables taken as providing a reasonable indication of the subject’s value.  

Industrial buildings are valued using an earnings-based approach based on normal earnings. Income from each lessee is expected to be generated for as long as the lease is  

in force or until the first time it may be terminated if considered advantageous. Thereafter, income is expected to continue to be generated at market rent. Adjustments are  

made for lost rental income, fitting-out deposits and un-obtainable running costs.  

The required rates of return having been set are an important input in estimating the fair values. The required rate of return used was 13.4%.  

As regards properties where claims as to title have not yet been accommodated, the value is further reduced by 20% due to the risk that such claims will be accommodated  

and due to the expenses associated with this transitional phase.  

Adjustments of the fair value of investment property are recognised in profit or loss in the financial year in which the change occurred.  

Investments in subsidiaries  

On initial recognition, investments in subsidiaries are measured at cost plus transaction costs. Where the recoverable amount of the investments is lower than cost, the  

investments are written down to this lower value.  

Inventory  

Finished products  

Finished products are mainly residential units and parking spaces. Finished products are valued at the lower of the two values: manufacturing cost and net realisable value.  

The net realisable value is the estimated selling price assessed by the Management Board of the company based on market prices.  

Work in progress  

Work in progress is valued at the lower of the two values: purchase price / production cost / fair value at the moment of transfer from the investment property (land plots)  

and the net realisable value. In the event of any discrepancies, a write-down is made. With regard to the company's development projects, the necessity to make an  

impairment loss is assessed on the basis of the "impairment test" described below, based on an analysis of the production cost and the net realisable value.  

Inventory impairment test  

If a development project is expected to generate a loss, it results in a write-down of work in progress, which is immediately recognised in the profit and loss account.  

For each development project, budgets are prepared that include both past and future cash flows for each implemented project. These budgets are updated at least semi-  

annually. For the purposes of impairment testing, project budgets include all past and projected net revenues less the direct costs of land acquisition, design, construction  

and other costs related to project preparation, demonstration premises and the on-site sales office. These budgets are also encumbered with associated past and projected  

borrowing costs and projected customer claims (if applicable). Project budgets are prepared using the principle of prudent valuation. If the margin on the project, calculated  

taking into account all revenues and the above-mentioned costs, is positive, then there is no need to create an inventory impairment write-down. A negative margin indicates  

a potential impairment problem, which, after careful verification of cash flows for a given project, results in the recognition of an inventory impairment loss in the amount  

of the estimated negative value of this margin.  

The revaluation write-off is recognised in the cost of sales in the item "Adjustment of the value of inventories to the net realisable value". A possible reversal of such an  

impairment loss for a given project is possible if the expected value of the margin on this project becomes positive.  

Transferring land plots from investment property to inventories  

Investment property is transferred to inventory when the development process has been decided and initiated, a decision on the possible way of developing the plot has  

been obtained, and expenses related to the project have already taken place.  

Receivables  

Receivables comprise non-current deposits in connection with the purchase and sale of goods and receivables from sale of goods and services. Receivables are classified as  

loans and receivables, which are financial assets with fixed or determinable payments that are not quoted in an active market and are not derivative financial instruments.  

On initial recognition, receivables are measured at fair value and subsequently at amortised cost, which usually corresponds to the nominal value less write-downs for bad  

debts.  

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the  

expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the  

payment profiles of sales over a period of 12 months respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are  

adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The group has identified  

the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates  

based on expected changes in these factors.  

Prepayments  

Prepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at cost.  

Provisions  

Provisions are recognised when the Group has a legal or constructive obligation as a consequence of past events during the financial year or prior years, and when it is likely  

that settlement of the obligation will require an outflow of the Group’s financial resources. Warranty commitments cover commitments to repair faulty or defective products  

sold within the warranty period.  

Provisions are measured as the best estimate of the costs required to settle the liabilities at the balance sheet date. Provisions with an expected term of more than a year  

after the balance sheet date are measured at present value.  

Lease liabilities  

IFRS 16 eliminates the classification of leases as either operating leases or finance leases. Lease liabilities for all leases with a term of more than 12 months are recognised,  

unless the underlying asset is of low value.  

At the commencement date, a lease liability is measured at the present value of future lease payments. The lease payments are discounted using the interest rate implicit in  

the lease, if that rate can be readily determined. If that rate cannot be readily determined, the incremental borrowing rate is used.  

After the commencement date, the lease liability is measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to  

reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modification or to reflect revised in-substance fixed lease  

payments.  

Other financial liabilities  

Other financial liabilities comprise bank debt, trade payables and other payables to public authorities. On initial recognition, other financial liabilities are measured at fair  

value less transaction costs. In subsequent periods, financial liabilities are measured at amortised cost, applying the effective interest method, to the effect that the difference  

between the proceeds and the nominal value is recognised in the income statement as a financial expense over the term of the loan.  

CASH FLOW STATEMENT  

The consolidated cash flow statement is presented according to the indirect method and shows cash flows from operating, investing and financing activities as well as cash  

and cash equivalents at the beginning and the end of the year.  

The cash effect of acquisitions and divestments of entities is shown separately under cash flows from investing activities. Cash flows from the acquisition of entities are  

recognised in the cash flow statement from the date of acquisition. Cash flows from the disposal of entities are recognised up to the date of disposal.  

Cash flows from operating activities are presented according to the indirect method and stated as operating profit, adjusted for non-cash operating items and changes in  

working capital and financial income and expenses, less the income tax paid during the financial year attributable to operating activities.  

Cash flows from investing activities comprise payments related to the purchase and sale of financial assets, including non-current prepayments for goods, subsidiaries as well  

as the purchase, development, improvement, sale, etc. of intangible assets and property, plant and equipment.  

Cash flows from financing activities comprise changes in the size or the composition of the parent company’s share capital and related costs as well as the raising and  

repayment of loans, cash deposits, instalments on interest-bearing debt, acquisition of treasury shares and payment of dividends. Furthermore, cash flows regarding assets  

held under finance leases in the form of lease payments made are recognised.  

Cash and cash equivalents comprise cash deposits.  

Segment information  

The Group is assessed as having two segments:  

(A) Property management division comprising letting of premises and land and the provision of utilities to tenants, including power, water, natural gas, facility  

services, etc.  

(B) Property development – including the preparation and implementation of development projects, primarily in the field of housing and commercial space.  

Financial ratios  

Formula  

EBITDA margin (%)  

EBITDA*100  

Revenue  

EBIT margin (%) (Profit margin)  

EBIT*100  

Revenue  

Return on invested capital (%)  

EBIT*100  

incl. goodwill  

Average invested capital  

Equity ratio (%)  

Equity*100  

Total assets  

Return on equity (%)  

Profit/loss for the year after tax*100  

Average equity  

Calculations of earnings per share and diluted earnings per share are specified in Note 8.  

Net working capital (NWC) is defined as the value of inventories, receivables and other operating assets less trade payables and other current operating liabilities. Cash and  

cash equivalents and deferred tax assets are not included in the net working capital.  

Net interest-bearing debt is defined as interest-bearing liabilities less interest-bearing assets, such as cash and cash equivalents.  

Invested capital is defined as net working capital plus the carrying amount of non-current property, plant and equipment and intangible assets, less other provisions and non-  

current operating liabilities.  

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) is defined as EBIT plus depreciation, amortisation and goodwill impairment of the year.  

New standards, interpretations and amendments effective from 1 January 2024  

The following new standards, amendments and interpretations are effective for the first time for periods beginning on or after 1 January 2024:  

•

Supplier Finance Arrangements (Amendments to IAS 7 & IFRS 7);  

•

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16);  

•

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);and  

•

Non-current Liabilities with Covenants (Amendments to IAS 1).  

The new standards, interpretations and amendments do not have significant impact on the Group’s financial statements.  

New standards, interpretations and amendments not yet effective  

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective in future accounting periods  

that the group has decided not to adopt early. The most significant of these are:  

•

Lack of Exchangeability (Amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates);  

•

Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS 7);  

•

Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7);  

•

IFRS 18 Presentation and Disclosure in Financial Statements;  

•

IFRS 19 Subsidiaries without Public Accountability: Disclosures.  

The Group is currently assessing the effect of these new accounting standards and amendments.  

2.  

SIGNIFICANT ACCOUNTING ESTIMATES, ASSUMPTIONS AND UNCERTAINTIES  

In applying the Group’s accounting policies, as outlined in Note 1, Management is required to make judgements, estimates and assumptions about the carrying amounts of  

assets and liabilities which cannot be immediately inferred from other sources.  

The estimates and assumptions applied are based on historical experience and other factors that Management considers reasonable under the circumstances, but which are  

inherently uncertain and unpredictable. Such assumptions may be incomplete or inaccurate, and unexpected events or circumstances may occur. In addition, the Group is  

subject to risks and uncertainties that may cause actual outcomes to deviate from such estimates. CeMat’s risks are described in “Risks and risk management” and in Note  

24 “Financial risks and financial instruments”.  

Estimates and underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognised in the reference period in which the change occurs  

and in future reference periods if the change affects the period in which it is made as well as subsequent reference periods.  

Measurement of investment property  

The Group’s investment property is measured at its estimated fair value in accordance with IAS 40 and IFRS 13, and any value adjustments are recognised in the income  

statement. Management has reviewed the updated valuation report received in December 2024 and its underlying assumptions. Management’s valuation estimate is in line  

with that indicated in the report, and the fair value consequently reflects the value stated in the report.  

As the property market is not in all respects as efficient and liquid as, for example, the equity market, there can be no assurance that a buyer willing to pay the fair value at  

which the property is stated in the financial statements can be found at any given time. In other words, properties are subject to a liquidity risk in a sales situation.  

Investments in subsidiaries  

Investments in subsidiaries are recognised in the parent company's financial statements at cost less any write-downs to the recoverable amount.  

Forward-looking statements  

All forward-looking statements in this annual report reflect Management’s current expectations for certain future events and financial results. Forward-looking statements  

are inherently subject to uncertainty, and actual results may therefore differ materially from expectations.  

Factors that may cause actual results to deviate materially from expectations include, but are not limited to, general economic developments, developments in the financial  

markets and changes in the Polish real estate rental market. Changes in the political climate in Poland may also affect forecasts and results.  

Tax asset utilisation  

Deferred tax assets are recognised for all unutilised tax losses and differences to the extent it is considered likely that they can be utilised through taxable income within a  

foreseeable number of years.  

The annual report is published only in English.  

3.  

SEGMENT INFORMATION  

Based on IFRS 8 Operating Segments, the CeMat Group is assessed as having two segments:  

(A) Property management division comprising letting of premises and land and the provision of utilities to tenants, including power, water, natural gas, facility  

services, etc.  

(B) Property development – including the preparation and implementation of development projects, primarily in the field of housing and commercial space.  

Property  

2024  

Management &  

Development  

Total  

DKK'000  

Holding  

Sales revenue  

39 372  

24  

39 396  

GROSS PROFIT  

20 458  

24  

20 482  

Overheads  

(13 640)  

(518)  

(14 158)  

Other income / costs  

999  

0

999  

EBITDA  

7 817  

(494)  

7 323  

Depreciation, amortisation and impairment  

(53)  

0

(53)  

EBIT  

7 764  

(494)  

7 270  

Revaluation investment property  

12 047  

0

12 047  

Net result on financial activities  

(1 385)  

(163)  

(1 548)  

PROFIT (LOSS) BEFORE TAX  

18 426  

(657)  

17 769  

Tax on profit/(loss) including deferred tax  

(4 475)  

155  

(4 320)  

PROFIT (LOSS) FOR THE PERIOD  

13 951  

(502)  

13 449