Annual Report 2021
CVR No 20 75 01 70
Getting
connected.
Being useful.
How Trackunit is connecting
the ecosystem to eliminate
downtime
The Annual Report was
presented and adopted at
the Annual General Meeting
of the Company on:
27 June 2022
Chairman of the AGM
Together, we eliminate downtime
to build the most useful industry
for the world
Our approach is human, collaborative and based on
openness and co-creation. We are driven by a design
thinking approach, being empathetic, iterative and always
striving for an ecosystem-wide impact.
We are builders and
doers by heart and
committed to turn every
relevant idea into
a catalyst for change.
Being useful is the core DNA of our
company. We always strive to walk on
two legs, driving a highly commercial
and impact-focused agenda at the
same time.
Downtime is the core of all problems in the construction industry. We
address it through five key areas, looking at downtime through the lens
of machines, humans, companies, our industry as a whole and society
at large. Eliminating Downtime is the contribution made to create an
impact beyond the industry because it exists in the world, for the world.
Construction is a very big player in the world, and we
have at least the same aspirations so that the industry can
consciously create an impact for the world. By doing so, we
deliberately balance an inwards focus with an outwards
outlook because long-term relevance for
any ambitious company will also be measured in
the contribution outside of the industry.
2
Trackunit
Annual Report 2021
Our Purpose
Management Report
4 The Big Picture
5 Our Growth
6 Connecting the Dots
7 Building. Connecting. Growing.
8 Five-year Overview
9 Letter from the CEO
10 We Are Trackunit
11 Overview
12 The Bigger Picture
13 Cultivating a World of Data
14 Our Strategy
16 Developing the Ecosystem
17 IoT Solutions
19 Agile. Curious. Dedicated.
20 The Trackunit Way
21 ESG
22 Getting Better. Getting Greener.
23 Coming Together
24 Finding the Game Changer
25 A Place for All
27 Aligned. Ready. Committed.
28 Financial Review
Consolidated
Financial Statements
Parent Company
Financial Statements
33 Main Elements
37 Notes
64 Trackunit Structure
66 Main Elements
70 Notes
81 Statement by Board of Directors
82 Auditors Report
3
Trackunit
Annual Report 2021
Table of Contents
The UN predicts that
two-thirds of the
world’s population will
live in cities by 2050.
1
When you consider the schools, the homes, the hospitals,
the roads and other essential infrastructure associated with this
expansion, you can begin to see how central a well-functioning
construction industry is for our collective wellbeing in the future.
1 Source: UN
01 — The Big Picture
M-Tec A/S
established
—
Trackunit brand
established
Trackunit
subsidiaries
established across
Western Europe
Trackunit
acquired
by investment
group of
Goldman Sachs
and GRO
Capital
Organic entry
into the North
American market
Trackunit acquires
Dreyer+Timm
Trackunit Iris
platform
launched
to market
Trackunit
acquires Satrak
Introduction of
mobile applications
(Trackunit On &
Trackunit Go)
Eliminate
Downtime
movement
launched
Soeren Brogaard
appointed as CEO
Trackunit Kin and
Bluetooth Mesh Network
introduced to market
Organic entry into
APJ market
Trackunit acquired
by Hg Capital
Trackunit acquires Industrial
IoT division of ZTR
Our Growth
Trackunit is the global leader in brand-agnostic, SaaS-based IoT
solutions for o-highway vehicles and equipment in construction
with a data-led approach predicated on connectivity.
Adaptable and scalable, Trackunit is at the heart of a data-
fueled ecosystem that can propel construction towards
a more sustainable, more ecient future.
Connected assets
1m+
Number of employees
350+
Management Report
Financial Statements 5
Trackunit
Annual Report 2021
Connecting the Dots
Downtime in construction is a global issue. To drive impact,
we must be prepared to serve our customers’ needs where
and when they need us the most.
Our global platform delivers actionable insights to customers
around the world. We operate in more than 100 countries with
a global team supporting customer success in local time
zones and with over 1 million connected assets to date,
provide a home for global connectivity.
Number of customers
7,000
Countries in the global ecosystem
100+
Global hubs
12
Monthly active users
17,000
Management Report
Financial Statements 6
Trackunit
Annual Report 2021
Building. Connecting. Growing.
To serve our industry's long-term needs, we are growing
our business the right way based on a stable foundation
of profitable recurring revenue growth. Ongoing R&D
investment allows us to drive innovation and unlock
new opportunities to address long-standing customer
pain points.
As thought leaders in our industry, we remain committed
to the problems of today and the needs of tomorrow.
Annual recurring revenue (ARR) in DKK
Number of subscriptions
Net revenue in DKK
EBITDA in DKK
Compound Annual Growth Rate (CAGR) 2017-20212021
42%
52%
28%
60%
1.1 m
506 m
104 m
824 m
EBITDA as %
of revenue
Share of recurring revenue
(as % of total revenue)
21%
91%
Management Report
Financial Statements 7
Trackunit
Annual Report 2021
T.DKK
Recurring revenue % of total revenue (non IFRS measure
) .% .% .% .% .%
Annual recurring revenue (non IFRS measure
) , , , , ,
No of subscriptions – End of year (non IFRS measure
) ,, , , , ,
Net revenue , , , , ,
Earnings before special items, depreciation, amortisation and impairment (EBITDA) , , , , ,
Earnings from financial items, net (,) (,) (,) (,) (,)
Profit for the period (,) , (,) (,) (,)
Investments in PPE , , , , ,
Total assets ,, , , , ,
Equity ,, , , , ,
Average number of employees
Ratios
Return on equity (%) . . (.) (.) (.)
Equity ratio (%) .% .% .% .% .%
Notes
Equity ratio is calculated as the equity divided by total assets.
Return on equity is calculated as the profit or loss for the year before
tax divided by the average equity.
The additional key figures (non IFRS measures) have been prepared
on a consolidated basis. The additional key figures are calculated in
accordance with customs within the industry.
Annual recurring revenue is calculated as the recurring revenue in
the last month of the reporting period times 12.
Trackunit Telematics Ltd (Satrak UK Ltd) was acquired 4 June 2018
and consolidated from this date.
The acquisition of the Industrial IOT division from within ZTR Control
Systems, LLC, ZTR Holdings LLC and Trac Rail Inc. (ZTR IIOT) was
completed on 18th of November 2021 and consolidated from this
date. Had ZTR IIOT been consolidated from 1 January 2021, the
proforma net revenue for 2021 would have been T.DKK 791.508 as per
note 18.
Figures for 2017-2019 have not been adjusted to the IFRS adoption
made from 1 January 2020.
Subscriptions EBITDA Employee number
~5.3 ~6.6 ~3.3
Five-year Overview
The key figures and financial ratios have been prepared on a
consolidated basis. The financial ratios have been calculated
in accordance with the recommendations of the Association
of Danish Financial Analysts.
2017 — 2021 growth
1 Non IFRS measures are unaudited
Management Report
Financial Statements 8
Trackunit
Annual Report 2021
That is mirrored in the record numbers we posted in
2021. Net revenue rose to DKK 506 million (USD 73
million) for a near threefold increase on 2017 and
EBITDA was at DKK 104 million for a sevenfold rise.
But it is not just the numbers that marked 2021 as
a milestone year. Global software investors Hg took
a controlling stake in Trackunit in June, and in
November we welcomed the industrial IoT division of
Canada’s ZTR into the Trackunit team. We also formed
key strategic relationships with Hilti & IPAF while making
significant inroads into the Asia-Pacific-Japan market.
Leveraging our Bluetooth mesh network, we now oer
Kin, a Bluetooth IoT device that connects the essential,
smaller and non-powered machinery to the ecosystem
and enables far greater control in the ecient use of
equipment. We were also delighted to post excellent
Customer Health Scores, a measure of satisfaction
we see as a key indicator of performance and
customer demand for Trackunit’s services as we
connected to more than one million assets.
Those scores are also a reflection of the investment
we make in our people and their hard work. We make
every eort to foster an environment where they are
given the autonomy to work creatively, eectively
and intelligently, taking ownership of their areas, with
a customer-led focus that is recognized through the
industry. Our people matter and we are able to do
what we do, only by creating the right conditions for
their talent and commitment to thrive.
All these developments have enabled Trackunit to take
position at the heart of the ecosystem as the leading
provider of IoT solutions facilitating relationships and
connections. We believe it is that very connectivity
that puts construction in a better place to confront
key challenges ahead that, if tackled correctly, will
position it to move forward to a better future.
It is one of the reasons why we have been so eager
to push the Eliminate Downtime agenda. Eliminating
downtime has become an integral part of the DNA
at Trackunit and that is why in 2021, we made data
sharing an essential building block of the movement
serving both the construction industry and, by
extension, society as a whole.
While we are rightly proud of our industry as a global
force for progress as the builder of our schools, roads,
hospitals and other critical infrastructure that help
keep eight billion people housed, warm and
connected, downtime is undoubtedly its biggest
challenge.
And as our understanding grows of climate change,
it is evident that eliminating downtime aligns
fundamentally with sustainability concerns. We see
ourselves as an integrated part of the solution in the
industry, where reduction, rather than just reporting,
of CO
2
emissions becomes the aim.
That is a future we are invested in. And one we think
everyone of our valued 7,000 customers can also
buy into.
Connecting
Business to
Purpose
At Trackunit, we believe that business is
about more than the bottom line. We don't
just want to be successful. We also want
to be useful.
Welcome to the 2021 Trackunit Annual Report.
Compared to prior years we have improved the
company and strategy sections as well as visuals
of the Annual Report to establish a clear link to
our strategy.
We decided to take this step because we think it is
indicative of the growing maturity of the company.
Trackunit started out from humble beginnings in 1998
but, since then, we have evolved into a global
Internet-of-Things player for the o-highway vehicle
area becoming a truly integrated part of our customers’
businesses as part of an evolving ecosystem binding
construction together. Soeren Brogaard, CEO
Management Report
Financial Statements 9
Trackunit
Annual Report 2021
$6.3 trillion per
year will need to be
invested globally
before 2030 to keep
pace with urban
development.
1
Orchestrating the resources needed to cater for this demand
will be key to sustainable urban development. 2021, was
a year in which we reached the milestone of more than 1 million
connected assets, moving us and the construction industry one
step closer to our goal of eliminating downtime.
1 Source: OECD
02 — We are Trackunit
Trackunit is the leading
SaaS-based IoT solution and
machine insights provider to
the global o-highway vehicle
and equipment industry with
a focus on construction.
Overview
From operator safety and machine health to business
optimization, our industry leading IoT solutions and
asset management platform benefits the everyday
operations of our customers. We serve customers
worldwide from our oces in Denmark, Canada, USA,
Singapore, Sweden, Norway, France, Holland,
Germany, UK, Australia, and Japan.
Our core Iris platform consolidates data from our
proprietary IoT devices as well as third-party systems,
making it easy to access, analyze and act on data
insights. Access to our Cloud and IoT platform is
provided via tiered customer subscriptions and add-on
applications, regulating the scope, depth, and access
to data-driven insights.
A purpose-driven organization with highly engaged
employees, we promise to lead the technology
engagement to help eliminate downtime in Construc-
tion. This mission is not only to help the industry to
recover from budget and schedule overruns, but also
to re-establish the reputation of the industry for
innovation and leadership.
Management Report
Financial Statements 11
Trackunit
Annual Report 2021
The
Bigger
Picture
Our purpose is to eliminate downtime
because we believe it will enable
construction to reclaim its place as
a force for good in the world.
The construction industry is one of the great forces for
global progress. It is easy to forget just how vital the
sector is, but when you consider the schools, the
homes, the hospitals, the roads and other essential
infrastructure, the answer is evident. Construction
matters and doing construction well is of critical
importance to our wellbeing.
But, in a race against time to keep pace with the
voracious demands of global urban development,
it has not been as good as it can be. In fact, the
reputation of the industry has taken a hit in recent
decades as it contributes 38% of all global CO
2
emissions and is widely recognized for its low levels
of digitalization.
That is not something to be proud of. That is something
we are addressing head on.
The movement to Eliminate Downtime aims to tackle
the ineciencies that dog construction. A more
productive, connected industry will help make
downtime a thing of the past and ensure machinery
is used in a more rational, eective way.
Better use of machinery very obviously makes
business sense, but it can also massively impact
sustainability in the world around us and begin the
painful process of loosening the grip downtime has
established on the industry.
It goes beyond electrification. It is about using data
to resolve issues in real-time and make smart use of
on-site fleets, machinery, and people to deliver the
best, most ecient outcomes possible.
It is how we will go beyond being successful to being
useful. Becoming a positive catalyst for change.
And helping the sector make that change too.
It is a cause to fight for.
The Eliminate Downtime model is the essential
DNA of Trackunit enabling an ecosystem that is
intent on addressing ineciency in construction,
connecting stakeholders and addressing society's
challenges together.
Machine Human
Company
Industry
Society
Connectivity Safety
Sharing
economy
Technology
Resilience
Eliminate
Downtime
Digital twin
Electrification
Autonomous
Stress
Digital adaptation
Training
Business model
Innovation
Data
Sustainability
Recycling
Data ethics
Diversity
Partnerships
Talent
Management Report
Financial Statements 12
Trackunit
Annual Report 2021
Cultivating a World of Data
Machinery is the conduit to an extra-
ordinary amount of data. Harnessing it
is the key.
Machines generate data. Technicians and operators
generate data. Non-powered attachments also churn out
numbers in the thousands. Put that together, and you
have a data ecosystem that is on an extraordinary scale.
That’s where data insights emerge. And that’s where
Trackunit enters the equation.
We make sense of seemingly disparate data and in
so doing, solve very human problems. And when compa-
nies incorporate these data insights throughout opera-
tions, it creates new opportunities to tackle long-standing
problems and, if applied with thought and precision,
better decision-making through the value chain.
At the macro level, it can be transformative. Businesses
can rethink their business models, build products based
on insights and discover unique solutions to keep moving
forward.
We use Iris as the platform to enable everything we
do at Trackunit with o-the-shelf services that work
instantly to connect entire fleets and help build the
services that tailor the data to the customer.
And at the micro level, it’s a potential real cost saver
and a prime source for eliminating downtime.
We run on data and are committed to putting it to
work for everyone. It’s one of the reasons why Trackunit
is a champion of open data sharing. It opens all kind
of horizons.
Within the machine ecosystem lies
mountains of data that have been
generated by not only the machine
but also by technicians, operators
and non-powered attachments.
Error
Damages
Location
Service
Pre-check
Sensors
Management Report
Financial Statements 13
Trackunit
Annual Report 2021
Four strategic focus areas
Pursuing a purpose requires planning.
Our strategic focus areas are designed
to make it happen.
We want to eliminate downtime. While this is a
long-term journey, we want to engender a sense of
urgency so that the industry is galvanized into action.
Momentum is key to better connections, and we want
that ball to roll.
01 02
03 04
Accelerating asset-class
connectivity
Geographic focus
and expansion
Customer-centric
value creation
Unlocking ecosystem
value
Our
Strategy
Management Report
Financial Statements 14
Trackunit
Annual Report 2021
Unlocking ecosystem value
We are preparing for the future by investing in the
future, creating an open and extendable platform to
serve as the foundation for ecosystem value creation.
We face tough challenges but, by unleashing the full
power of the ecosystem, we will unlock new vectors
for growth.
We will facilitate and empower all players to create
layered value building on our global platform with
access to an industry-leading data lake and software
development kit tools tailored to customer core needs.
The mission to Eliminate Downtime and create lasting
change is too big to go alone, and we are stronger
together.
Customer-centric value creation
By placing our platform at the center of the OHV
ecosystem, our deep connection with OEMs, Rental
companies and Contractors allows us to both create
ecosystem value organically and facilitate value
creation between stakeholders.
Serving as the stewards of our ecosystem, we continue
to place our customers at the front and center of our
innovation eorts, identifying opportunities to deliver
unrivalled insights and value, and creating new
mechanisms for our customers to engage with each
other via our platform.
Geographic focus and expansion
Significant runway remains to drive growth and
change within our core European and North American
markets. As we continue to connect the disconnected
and consolidate markets onto a single clean platform,
our ability to drive impact will only grow. Our recent
acquisition of ZTR’s industrial IoT division has
accelerated our North American presence and
propelled the Trackunit Iris platform to the forefront
of value creation for our North American customers.
Keeping one eye on the future, we have established
oces in Singapore, Australia, and Japan to deliber-
ately build our Asia-Pacific-Japan presence and estab-
lish a foundation for the next wave of connectivity
growth. Representing a huge market with enormous
future potential, our APJ commitment has served to
solidify our global mission to Eliminate Downtime.
Accelerating asset-class connectivity
It all begins with data. Customer value creation is
enabled by the upstream origination of clean
structured data and the ability to both expand data
collection across asset classes and enrich that data
to unlock new insights and value.
In 2021, we launched an initiative to digitize the bottom
of the equipment pyramid leveraging our Bluetooth
mesh network, seeking to scale connectivity to all
asset classes and aggregate the enriched data into
our leading ecosystem platform.
Furthermore, we have built the ability to connect to
third party IoT devices via industry standard ISO
feeds, ensuring that no matter where the point of
connectivity occurs, its data has a home at Trackunit.
Our core is grounded in the deep understanding of
o-highway vehicles and other industrial assets, both
enabling and leveraging data-driven insights to fuel
change and impact for our ecosystem. From data
origination to value creation and delivery, our strategy
is centered on four core focus areas:
01 02 03 04
Management Report
Financial Statements 15
Trackunit
Annual Report 2021
Rental
Contractors
Core customers:
OEM
Broader ecosystem
Future partnerships
Developing the Ecosystem
1 Recurring revenue % of total revenue (non-IFRS measure)
We operate at the center of our ecosystem,
connecting equipment, people, and stake -
holders with a SaaS-based IoT solution that
delivers deep machine, fleet, and market
level insights to ecosystem players.
Due to the criticality of insights, our business model
has proven cyclically resilient as we deliver key
operational insights used to (1) drive eciency gains
at times of high equipment demand and (2) identify
cost-saving opportunities to protect customer margins
when equipment demand is lower.
Core customer value is delivered via dierent subscrip-
tion tiers regulating the access to data and insights.
Additionally, our core oering is complemented by
a number of add-on solutions to enhance the entire
solution portfolio.
Our subscription-only model drives a very high
share of recurring revenue at 91% in 2021
1
) with deep
integrations in customer enterprise IT solutions via APIs.
In 2021, our direct sales channel accounted for the
majority of revenue development, while we continue to
expand and develop our indirect channels and partner
ecosystem. Particular focus remains on growing our
OEM partners who factory-fit our IoT solutions to
deliver connectivity and value to our joint customers
straight from the factory. Our ability to foster
ecosystem value via strategic partnerships was
bolstered even further by the new collaboration with
Hilti launched in 2021, and continued expansion of
our relationship with IPAF.
We also introduced our ‘Work with Trackunit’ platform
in 2021, a partnership programme designed to develop
and deliver useful solutions for the industry with
investment in IoT capabilities to the fore. Premised on
the conviction that partnerships make the most
successful digital ecosystems, we believe this can
become a critical dynamic in eliminating downtime.
Research and development activities are based in
Aalborg, Denmark and in London, Ontario in Canada.
IoT devices, including proprietary firmware, are
designed and developed by Trackunit and manufac-
tured in Denmark and China by third party electronic
manufacturing partners.
Sales teams are placed in Denmark and in the
subsidiary companies in the USA, Canada, UK, France,
Germany, Netherlands, Sweden, Norway, Singapore,
Australia, and Japan. Sales teams in subsidiary
companies are responsible for building and maintain-
ing customer relations in the respective country of
operation and adjacent markets whereas the sales
team and sales management in Denmark are responsi-
ble for Denmark, global accounts, and rest of world.
Management Report
Financial Statements 16
Trackunit
Annual Report 2021
IoT
Solutions
Continuous innovation is at the core of
our evolving IoT solutions, proactively
driving impact in our market.
Customers rely on our core IoT solutions to serve
everything from fundamental fleet monitoring to
advanced preventative maintenance and Health &
Safety use cases. This design flexibility and scope
of oering allows customers to adopt our solutions
regardless of their level of digital maturity and
reinforces our position as a key partner across
all stages of their digitalization journey.
Continuous advancement in ecosystem digitalization
has enabled Trackunit to oer even more sophisticated
products to the market with all our software under-
pinned by flexible connectivity. For OEMs, contractors,
and rental customers, it means a flexible suite of
solutions that can allow their business to develop in
new and exciting ways and help them play their role
in eliminating downtime.
Here are some of the things we do best.
Management Report
Financial Statements 17
Trackunit
Annual Report 2021
Trackunit Kin
Trackunit Kin is a Bluetooth
5.2 IoT device that leverages
our Bluetooth mesh network to
connect. It is simple yet powerful,
with activation requiring less than
a minute and vastly deepening
ecosystem reach by expanding
connectivity to all asset classes.
Connecting to either the Trackunit
Go app or a Trackunit Raw
gateway, Kin-enabled equipment
can be located up to a 400-meter
range enabling operators to
guard against theft and eliminate
downtime through the real time
localization of smaller tools
and equipment.
Trackunit Iris
The cornerstone of our value
creation, Iris is built for the future.
Designed to be safe, secure, and
scalable, Iris allows connectivity
to occur anywhere. With over 1M+
connected assets and 1B+ data
points added daily, Iris' ability to
aggregate mixed-fleet data on a
single platform, provides a single
source of truth to foster new
businesses and accelerate
connectivity.
Trackunit Manager
Trackunit Manager is the pur-
pose-built fleet manager solution
for construction, connecting,
collecting, and presenting real-time
mixed fleet data to customers on a
single interface. It is total overview.
Total control. And complete focus.
Acting on the big picture, Trackunit
manager allows customers to solve
daily pain points by (1) monitoring
machines at all times and prevent-
ing unauthorized access, (2)
Receiving intelligent notifications
about location, maintenance, and
damages, (3) Remotely diagnosing
machines by using live data, and
(4) pinpointing and addressing
irregularities in fleet-wide
performance.
Core IoT solutions:
Trackunit Go
Trackunit Go allows seamless
communication between the
operator, service technician and
site administrator, delivered via
a mobile interface regardless of
location. Because the data is at
their fingertips, Go enables
on-the-spot reporting, remote
diagnostics, and on-site fleet
management capabilities.
Trackunit On
Trackunit On is the mobile
application that connects people
to machines, creating an on-site
interface allowing operators to
conduct checklists and inspec-
tions, report, and log machine
issues, and improve job-site safety.
All that via a smartphone. For users,
it is a complete fleet management
tool at their disposal.
Trackunit Raw
Market bestseller Trackunit Raw
is a compact cellular IoT device,
which delivers stable, secure, and
reliable connectivity. Coverage is
global and as an industry-trusted
performer, it is the ideal piece of
IoT kit for future-proofing fleets
and growing businesses.
Robust, versatile, and secure,
Raw is fit for all kinds of weather
and made to seamlessly connect
all types of equipment to the
Iris platform. Built-in Bluetooth
technology also creates a local
mesh network, serving as a
gateway for non-cellular IoT
devices such as Kin and
third-party Bluetooth tags.
Management Report
Financial Statements 18
Trackunit
Annual Report 2021
Agile. Curious.
Dedicated.
We are only as good as our people.
That is why they are central to driving
change in our industry.
Our people are empowered with the resources to
deliver smart, clever, and even ingenious solutions.
We encourage autonomy, responsibility, and freedom
because we believe this incubates an environment
that is specifically tailored for the creation of
solutions to address the so-called impossible
questions that prevail in construction.
We believe in being transparent. Collaborative. And
in the transformative power of our team. We look at
the bigger picture to make sure that everything we
do, every solution we develop and every transaction
we make fits to a dynamic that makes construction
a better, more useful industry.
In essence, we test. We fail. We learn. And we thrive.
We are also thoroughly invested in ecosystem
engagement. While we lead where we can and are
proud to take an active thought-leadership role, we
believe an industry-wide response is the only way to
address the great issues of the day and we have
made that a clear part of the strategy of the Eliminate
Downtime movement.
It means we never sit still. We do not rush through.
And we are painstaking in our role as ecosystem
stewards and serving our customers. It is what gets
us up every day.
"We encourage autonomy,
responsibility, and freedom
because we believe this
incubates an environment that
is specifically tailored for the
creation of solutions."
Management Report
Financial Statements 19
Trackunit
Annual Report 2021
"We want to
be useful. Not just
successful. Useful.
It is a philosophy
that underpins
everything we do."
The Trackunit
Way
The industry knows more now than ever before, and
the exponential impact of technology is catalyzing the
process. At Trackunit, we are building the platform that
enables construction to work smarter and, through the
ecosystem, become ever more connected.
It means we can reinvigorate the Eliminate Downtime
movement with wave after wave of fresh innovation and
make adoption the smart, business-savvy thing to do.
That is why there has never been a more judicious time
to address downtime. We have the tools to eliminate
it and those tools are in action today as we speak.
Through collaboration, we can facilitate that process.
And that is why our eorts are fully focused on
incubating the ecosystem and an industry-wide
approach to everything we do. The impossible is
happening. Let’s make it happen faster.
At Trackunit, we have developed a way of
doing business that can positively impact
our ecosystem. It is about believing
nothing is impossible.
We want to be useful. Not just successful. Useful.
It is a philosophy that underpins everything we do.
It means we are interested in the big questions. In
making the impossible, possible. Finding solutions
that matter to the world. That make it a better, more
sustainable place.
While we may be one cog within a vast, complex
sector, we believe we can maximize our role and,
with numbers and collaboration at the center of our
approach, connect construction to reclaim its position
as a force for making life better.
That is why we are focused on eliminating downtime.
It is a goal that may have looked out of reach
a decade ago, but via telematics and broader
digitalization eorts, is in sight.
Management Report
Financial Statements 20
Trackunit
Annual Report 2021
Global construction
output is predicted
to grow by $4.5
trillion between
2020 and 2030 to
reach $15.2 trillion.
1
To keep pace with increasing demand there is a fundamental need
for more ecient processes and systems. With our most comprehen-
sive and advanced product and services portfolio to date, Trackunit
is ideally placed to help the construction industry avoid budget and
schedule overruns and to re-establish the reputation of the industry
for innovation and leadership.
1 Source: Oxford Economics
03 — ESG
Getting Better.
Getting Greener.
On an individual level, there have been
dramatic improvements in ESG perfor-
mance. But a cohesive industry eort
would be better.
Climate change is the biggest challenge facing the
planet. But, while we may have a consensus on the
need for action, a coordinated eort is an urgent
requirement.
At Trackunit, we take sustainability seriously. We have
made it a central pillar for everything we do and are
wholly invested in a future that can foster an environ-
ment in which we continue to grow and develop in a
way that works with nature.
Getting organized, getting mobilized and getting
ready as an organization is the first step. But we do
not want to stop there.
We believe that we can use data to help harness the
energy and dynamism of the construction industry to
be a catalyst for positive change. The industry
accounts for 38% of global CO
2
emissions and while it
has become better at documenting its CO
2
emissions,
at taking steps to cut down on emissions and shifting
towards electrification, the sector can do better.
With telematics, we can connect in such a way that
every piece of equipment, every fleet and every worker
is an integral part of the ecosystem utilizing the power
of AI to eliminate downtime and make sure the industry
can up its ESG game.
Our industry is not there yet. And sitting tight, hoping
for better or praying for a miracle sadly will not cut it.
So we are taking action and working with the industry
and where possible, with regulators, to get ahead of
the curve. There is a lot of work ahead and at
Trackunit, we are going to do everything in our power,
to eect the changes we need.
It's industry-wide. It's about cohesion. Data. And the
next steps. Let's march forward.
"We believe that we can use data to help
harness the energy and dynamism of the
construction industry to be a catalyst for
positive change."
Management Report
Financial Statements 22
Trackunit
Annual Report 2021
Coming
Together
Talks are the beginning in any process.
But the industry will be judged on
what it does.
Construction is a complex industry. There are many
moving parts that do not necessarily work in harmo-
ny. But we are trying to bridge those gaps. It is
because the urgency of the climate crisis demands
that. And talks are the beginning of that process.
We have already been a facilitator for Round Table
talks where sustainability is a living, breathing part
of the conversation. With major OEMs on board, it is
by definition a top-down process, but it is to be hoped
that, with data driving the narrative, the talks can
help establish basic principles and a framework for
moving forward.
We welcome this industry initiative because we believe
that without momentum, we get nowhere. It means
tough talking. Fierce debate. And, on occasion, rued
feathers. But it serves a purpose. It is the eort we
need to get a base-level of consensus among players
that, let us never forget, are natural competitors.
The Round-Table talks are just one way Trackunit is
facilitating this. We also have hackathons in the
schedule, have just held an Eliminate Downtime
festival where sustainability was very much part of
the agenda, and will stage other events as we build
the platform for real momentum.
We have also added a sustainability reporting
package to our software oering making it easier for
clients to document their CO
2
reporting and set the
base for improvement, refinement and real-time
changes in how they use their fleets. There will be
more in the pipeline too as we pursue better, more
eective solutions.
We cannot promise we can change everything, but
we can be relentless in pursuing the vision. We are at
base camp and there is a long way to go. But when
the industry connects, then construction can emerge
as a barometer for other industries to track, to
emulate and perhaps even measure against. That
is a virtual circle we can all get on board with.Round Table talks where sustainability is a living,
breathing part of the conversation
Scheduled hackathon
events
Sustainability reporting package in our
software oering
Management Report
Financial Statements 23
Trackunit
Annual Report 2021
Creating something tangible is the next
big step for construction. Could an indus-
try standard metric be the answer?
We are talking. That’s great. But talks need to lead to
something. To deliver tangibles. Maybe something
that might even change the game.
Building a framework for discussion is of course an
achievement in itself and the industry can take heart
in the debate that has already taken place and which
is firmly embedded in the diary moving forward.
But at Trackunit, we’re ambitious for more and we
believe a power usage eectiveness metric could be
the springboard that thrusts construction forward in
the sustainability game.
A Power Usage Eectiveness (PUE) metric is a
measure of the energy eciency of data centers and
they have gained increasing traction since they were
introduced as a barometer in 2006. The closer the PUE
is to a 1.0, the more energy ecient a data center is.
For a data-driven sector like IoT solutions, connecting
the dierent and disparate dots of the construction
industry, such a standard, industry-recognized
measure represents the next big step.
It will enable us to move from a reactive process of
documenting our CO
2
emissions to making real-time
adjustments in fleet-usage, on-site. That will drastical-
ly alter the idle/productivity ratio and make for a far
more ecient use of energy according to day-to-day
requirements.
It will, in eect, let us redefine and shape the future.
That is not hyperbole. It is a potential reality.
We are not pretending getting there will be easy.
Quite the opposite. But the industry is working on it.
And we are working on it. There is no other choice.
Finding the
Game Changer
Management Report
Financial Statements 24
Trackunit
Annual Report 2021
A Place
for All
We believe in diversity because we think it
is the right thing to do. We are particularly
focused on bridging the gender gap as it
helps make our business better.
As a global team, we place high value on equality and
inclusion for all employees regardless of gender,
ethnicity, orientation and nationality. While we are
aware of natural biases, we have strong stances on
diversity, equality and inclusion to mitigate against it.
Driving true diversity of thought and fostering an
environment where all can thrive remains a core value
and principle of our ethos and underpins every
recruitment decision we make.
Trackunit believes gender diversity creates a better
work environment and strengthens performance and
we are committed to increasing the representation of
women in all management positions with specific
targets set for 2025.
There are limits to our ambition given many Trackunit
roles like engineering tend to attract more men. That
skews our gender balance at an approximate 73/27
split, but we want that split to be reflected in our
management as a minimum target. Women currently
account for 16% of management roles, down from 19%
in 2021 following one management-level appointment
this year.
To make that possible, key leaders sponsor at least one
next-generation woman oering mentoring, time and
knowledge and we also have a Trackunit Women in
Leadership community with in-built support structures.
When we recruit, we actively encourage applications
from women in classically male-dominated roles in our
ongoing eorts to address the gender balance.
We are not there yet. But every indicator of what
makes a business successful in the modern world
strongly suggests this is the way to go. The more
diverse we are, the better we will be.
"The more diverse we are,
the better we will be."
Management Report
Financial Statements 25
Trackunit
Annual Report 2021
84%73%
Overall gender split
at Trackunit
MenMen
Management roles gender
split at Trackunit
Women
Women
16%
27%
2025 target
25%
75%
Management Report
Financial Statements 26
Trackunit
Annual Report 2021
Aligned. Ready.
Committed.
employees and therefore does not have formal
CSR policies in place. Nevertheless, we take pride
in the care and consideration for the wellbeing of
our people, society and the environment using the
Danish corporate culture as a starting point for all
our global colleagues supported by Danish law and
under the jurisdiction of Danish authorities.
Trackunit also supports and respects internationally
proclaimed human rights and makes sure that we are
not complicit in violations of such rights underpinned
by the belief that we are all born free and equal in
dignity and rights regardless of nationality, race,
religion, class, or political opinions.
It also promotes social interaction between people
and cultures and has recruitment guidelines in place
that deliberately aim for a mix of culture and gender
in our organization.
Fair working environment
Trackunit supports and respects the protection of
internationally proclaimed labor rights, ensuring
there is no violation of such rights. That includes a
commitment to a proper work-life balance with flexible
work hours that align with family requirements and an
aim to keep sta mentally and physically fit.
We oer mindfulness and meditation courses and
foster an environment where workers can continue
their education. We use monthly employee surveys
as a vital tool to stay on message with sta sentiment,
engage our employees in one-to-one conversations at
least once a year, and act accordingly on recommen-
dations that come our way.
Proactively promoting sustainability
Trackunit supports a proactive approach to environ-
mental challenges and undertakes initiatives to
promote greater environmental responsibility.
This is embedded into our purpose statement to
eliminate downtime within the construction industry
incubating eciencies that will filter through work
and external environments. That ranges from improve-
ments to health and safety, fewer delays in the
construction process implying less energy consump-
tion, and longer machine lifetime expectancy
implying less consumption of raw materials for
machine manufacturing.
Anti-corruption
Trackunit supports the work against corruption in all
its forms, including extortion and bribery and will
neither participate in nor accept in any form of fraud
or corruption. We also have a whistleblower program
in place if someone needs to come forward with
evidence of corruption.
We define bribery as an act on oering or receiving
money, goods, or other forms of recompense from a
business associate in exchange for an alteration of their
behavior to the benefit or interest of the giver that the
recipient would otherwise not alter. We are determined
to prevent, detect, and deter any form thereof.
Data ethics
We generate enormous amounts of data and our
customers rightly expect us to handle their data in a
correct and appropriate manner in line with interna-
tional regulations. Data ethics is an integral part of
the way Trackunit engages with customers, suppliers,
employees, and our other partners.
Trackunit is dedicated to providing our employees
and customers with the right level of privacy and
safeguards necessary for processing data in general.
Therefore, Trackunit has implemented industry
standard technical and organizational measures
relating to the usage and processing of data. Trackunit
only processes data when the appropriate measures
are taken, and on a legitimate basis to ensure the
common interest of all involved parties.
All decision-making in Trackunit is done on a non-
discriminatory and unbiased basis. There is no
circumstance in which the violation of a person’s
fundamental rights is tolerated in Trackunit.
We are fully aligned and committed to UN
Sustainable Development Goals and have
made significant progress through 2021
on various initiatives.
We have highlighted 2021 as a momentous year
already and Trackunit also took significant steps with
its commitment to sustainability goals as outlined by
the UN Global Compact.
While we have faced the considerable challenge of
COVID-19, our commitment has been unwavering and
the goals we have outlined to 2025 continue to provide
a framework for everything we do towards mitigating
against environmental pollution in the future.
Building the culture
We have taken clear steps to ensure the health of our
workforce and build a culture that is fit for purpose
and supports our key UN-aligned goals.
The Trackunit culture is underpinned by a strong belief
system with clear, evidence-based, buy-in from
Management Report
Financial Statements 27
Trackunit
Annual Report 2021
The market size for
IoT in construction
is projected to reach
$16.8 billion by 2024.
1
This growth is primarily triggered by the need to avoid delays
through better productivity and safety. At Trackunit, we are lead-
ing innovation and driving impact in this market, providing OEMs,
contractors, and rental customers with a flexible suite of solutions
that allows their business to develop in new and exciting ways.
1 Source: Markets and Markets
04 — Financial Review
Financial
Review
Developments in activities and
financial aairs 2021
On June 4, 2021, the Trackunit Group was acquired by
Hg, a leading global software investor. The acquisition
was made through M-Tec Holding Danmark ApS. The
addition of Hg as the new investor provides specialized
software-as-a-service (SaaS) expertise at a time of
increasing technology mobilization within the
construction industry and Trackunit is now positioned
to intensify its global expansion.
On November 18, 2021, Trackunit and the Industrial
IoT division of ZTR came together to better serve the
growing demands of the construction industry. With
125 employees and more than 450,000 connectivity-
enabled assets under contract, ZTR integrates with
150+ industrial Original Equipment Manufacturers,
and many top rental houses worldwide.
At the end of 2021, the Group had more than 1 million
connected assets to its platform.
"At the end of 2021, the Group had more than
1 million connected assets to its platform."
Management Report
Financial Statements 29
Trackunit
Annual Report 2021
The income statement of the Group represents six
weeks of ownership of ZTR.
Furthermore, in the spring of 2021, Trackunit increased
its Asia Pacific and Japan (APJ) presence with the
opening of new oces in Singapore, Japan, and
Australia. The new oces build upon Trackunit’s
existing presence to better serve current and new
customers throughout the region.
Also 2021 was a year of adding further features into
the SaaS platform, with large development projects
into the Trackunit Manager as part of the journey
towards becoming the platform of the industry.
As part of this journey, Trackunit launched Trackunit
Kin in 2021 to enable seamless connectivity and
tracking of all non-powered construction site assets.
Trackunit Kin leverages and extends Trackunit’s
globally available mesh network, with Bluetooth
connectivity and enables the industry to connect
a wider range of lower value and/or non-powered
assets.
During the year we welcomed 161 new employees
including 125 from ZTR and the group now employs
more than 350 people globally. New hires were
primarily within the areas of sales and engineering
as well as the people from ZTR.
The income statement shows a positive EBITDA of DKK
104m but a negative net profit of DKK 7m. The profit is
materially influenced by costs related to the acquisi-
tions above.
The results for the year are further impacted by
amortization of intangible assets and financial
expenses related to the above acquisitions.
The financial result for 2021 is considered
satisfactory.
"In the spring of 2021, Trackunit increased its Asia
Pacific and Japan (APJ) presence with the opening of
new oces in Singapore, Japan, and Australia."
Management Report
Financial Statements 30
Trackunit
Annual Report 2021
Significant changes in operations
and financial matters
In connection with the first-time implementation of
IFRS, the recognition of revenue of IoT devices is now
aligned with subscriptions as they are seen as a single
performance obligation and therefore recognized on
a straight-line basis over the contract period (3 year
minimum). The connected devices are likewise
recognized on a straight-line basis over a period of
3 years. The change in revenue recognition has
aected the result of the year 2021 negatively with
DKK 16m and last year positively with DKK 4m.
There are no other significant changes in operations
and financial matters that have aected recognition
and measurement of the Groups results and
financial status.
Unusual conditions that aect recognition
and measurement
There are no unusual factors that have aected
recognition and measurement of the Groups results
and financial status.
Outlook
Management is positive going into 2022 and by
delivering on the corporate strategy revenue for 2022
is expected in the range of 800-1,000m DKK and
EBITDA in the range 125-200m DKK.
Significant assumptions
and uncertainties
There are no material conditions and uncertainties
that aect the Group’s results and balance sheet.
Risk factors
Activities in foreign countries and hereby earnings,
exchange rates and interest rates of various currencies
aect cash flows and equity. Adjustment of invest-
ments in subsidiaries and associates that are
independent entities, are recognized directly in equity.
Currency risks related to interest rate cash flows and
sales in transactional currencies dierent from DKK
are not hedged while overall cashflow in dierent
currencies are to some degree aligned.
Development activities
The development activities primarily include develop-
ment of next generation Trackunit services, which
includes continued development of features to the
software platform, incorporating reporting, streaming
API (real time data) and an improved administration
module. Also in development is the next generation
of battery powered IoT device, which oers enhanced
network compatibility.
Significant events after the balance
sheet date
There are no significant events after the balance
sheet date.
The Group does not have customers or aliates in
either Ukraine or Russia and therefore, we are not
directly aected by the war in Ukraine.
Net revenue
M.DKK
2021
506
2020
394
2019
352
Management Report
Financial Statements 31
Trackunit
Annual Report 2021
Consolidated
Financial
Statements
33 Main Elements
37 Notes
64 Trackunit Structure
T.DKK Notes
Revenue from contracts with customers 506,016 393,692
Cost of providing services (168,223 ) (113,468 )
Gross Profit 337,793 280,224
External costs (52,852 ) (48,934 )
Other operating expenses 2 (285 )
Employee costs (180,715 ) (124,993 )
Earnings before depreciation, amortization and
impairment (EBITDA), and before special items 104,228 106,012
Special non-recurring items (51,777 ) (17,599 )
Depreciation, amortization costs and impairment loss of
property, plant and equipment and intangible assets , , (41,504 ) (26,254 )
Earnings before interest and tax (EBIT) 10,947 62,158
Finance income 155 33
Finance costs , (5,457 ) (8,570 )
Earnings before tax (EBT) 5,644 53,621
Income tax expense (12,707 ) (12,432 )
Profit/(Loss) for the period (7,062 ) 41,189
T.DKK Notes
Profit/(loss) for the period (7,062 ) 41,189
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange dierences regarding subsidiaries in another currency (16,687 ) (1,321 )
Change in value of cash flow hedges
– Gains/loss on cash flow hedges 859 (859 )
Income tax relating to these items (189 ) 189
Other comprehensive income for the period, net of tax (16,017 ) (1,991 )
Total comprehensive income for the period (23,079 ) 39,198
Consolidated Statement of Profit and Loss
1 January – 31 December
Consolidated Statement of Comprehensive Income
1 January – 31 December
Management Report
Financial Statements
33
Trackunit
Annual Report 2021
T.DKK Notes
Non-current assets
Intangible assets 1,668,550 175,570
Property, plant and equipment 7,593 5,448
Right-of-use assets 24,760 22,405
Deferred tax assets 20,643 15,895
Connected devices 210,701 49,320
Deposits 1,757 1,583
Total non-current assets 1,934,005 270,221
Current assets
Inventories 37,789 3,992
Trade receivables , 141,418 62,106
Receivables from group enterprises 80,703 43,838
Connected devices 107,842 35,418
Other financial assets at amortized cost 3,542 5,773
Other current assets 14,602 5,513
Cash and cash equivalents 94,409 96,166
Total current assets 480,305 252,805
Total assets 2,414,311 523,026
T.DKK Notes
Share capital 500 500
Share premium 1,140,938 102,800
Other reserves (17,539 ) (1,522 )
Retained earnings (63,647 ) (56,585 )
Total equity 1,060,252 45,194
Credit institutions , - 65,972
Lease liabilities , 18,264 17,165
Other long-term debt - 6,388
Deferred tax liabilities 162,561 17,313
Deferred revenue 272,454 127,428
Total non-current liabilities 453,279 234,265
Credit institutions , 0 1,437
Borrowings - 2,675
Lease liabilities , 6,803 5,320
Trade and other payables 107,899 37,330
Payables to group enterprises 334,113 35,028
Current income tax liabilities 20,320 11,928
Deferred revenue 431,645 148,991
Derivative financial instruments 0 859
Total current liabilities 900,780 243,567
Total liabilities 1,354,059 477,833
Total equity and liabilities 2,414,311 523,026
Consolidated Balance Sheet – 31 December
Assets
Consolidated Balance Sheet – 31 December
Equity and Liabilities
Management Report
Financial Statements
34
Trackunit
Annual Report 2021
Notes
Critical accounting estimates and judgements
Related parties
Commitments and contingent liabilities
Business combinations
Financial risk management
Events after the balance sheet date
Group companies
Basis of preparation
T.DKK
Share
capital
Share
premium
Other reserves –
Foreign currency
translation
Other reserves –
Reserve for
hedges
Retained
earnings
Total
equity
Balance at January 500 102,800 (852 ) (670 ) (56,585 ) 45,194
Profit for the period 0 0 0 0 (7,062 ) (7,062 )
Other comprehensive income 0 0 (16,687 ) 670 0 (16,017 )
Total comprehensive income for the period 0 0 (16,687 ) 670 (7,062 ) (23,079 )
Transactions with owners in their capacity as owners
Increase in share capital 0 1,038,138 0 0 0 1,038,138
Balance at December 500 1,140,938 (17,539 ) 0 (63,647 ) 1,060,252
T.DKK
Share
capital
Share
premium
Other reserves –
Foreign currency
translation
Other reserves –
Reserve for
hedges
Retained
earnings
Total
equity
Balance at January 500 102,800 469 0 (25,214 ) 78,555
Accumulated eect of change due to adopting of IFRS - - - - (72,559 ) (72,559 )
Balance at January 500 102,800 469 0 (97,773 ) 5,996
Profit for the period - - - - 41,189 41,189
Other comprehensive income for the period - - (1,321 ) (670 ) - (1,991 )
Total comprehensive income for the period 0 0 (1,321 ) (670 ) 41,189 39,198
Balance at December 500 102,800 (852 ) (670 ) (56,585 ) 45,194
Consolidated Statement of Changes in Equity
January 1 – December 31
Management Report
Financial Statements
35
Trackunit
Annual Report 2021
Consolidated Cash Flow Statement
1 January – 31 December
T.DKK Notes
Earnings before interest and tax (EBIT) 10,947 62,158
Depreciations and amortizations 41,504 26,254
Non-cash items (2 ) 206
Change in net working capital 336,470 12,568
Cash flows from primary operating activities 388,919 101,187
Received interests 125 (53 )
Paid interests (3,684 ) (4,625 )
Paid income taxes (12,071 ) (6,246 )
Cash flow from operating activities 373,288 90,262
Purchase of property, plant and equipment (1,481 ) (4,862 )
Sale of property, plant and equipment 2 63
Purchase of intangible assets (16,735 ) (10,854 )
Change in deposits 21 (16 )
Business acquisitions (net of cash acquired) (1,297,405 ) 0
Cash flow from investing activities (1,315,597 ) (15,668 )
T.DKK Notes
Cash flow from investing activities (1,315,597 ) (15,668 )
Repayment of borrowings (2,675 ) (828 )
Repayments to credit institutions (68,569 ) (1,760 )
Paid loan fees to credit institutions 0 (1,427 )
Capital increase 1,038,140 0
Dividends paid (21,000 ) 0
Lease principal payments (6,392 ) (6,874 )
Cash flow from financing activities 939,505 (10,889 )
Net cash flow for the year (2,804 ) 63,704
Cash and cash equivalents, beginning of the period 96,166 36,414
Unrealized exchange rate gains and losses 1,047 (3,953 )
Cash and cash equivalents, end of the year 94,409 96,166
The cash flow statement cannot be derived from
the published financial information only.
Cash and cash equivalents 94,409 96,166
Management Report
Financial Statements
36
Trackunit
Annual Report 2021
38 Note 1 Critical Accounting Estimates and Judgements
39 Note 2 Revenue from Contracts with Customers
41 Note 3 Sta Costs
42 Note 4 Audit Fees
42 Note 5 Special Non-Recurring Items
43 Note 6 Financial Income and Expenses
44 Note 7 Income Tax
46 Note 8 Distribution of Profit/Loss
46 Note 9 Intangible Assets
51 Note 10 Property, Plant and Equipment
52 Note 11 Leases as Lessee
53 Note 12 Inventories
54 Note 13 Trade Receivables
55 Note 14 Financial Assets and Liabilities
56 Note 15 Share Capital
56 Note 16 Related Parties
56 Note 17 Commitments and Contingent Liabilities
57 Note 18 Business Combinations
58 Note 19 Financial Risk Management
61 Note 20 Events After the Balance Sheet Date
61 Note 21 Changes in Net Working Capital
61 Note 22 Group Companies
62 Note 23 Basis of Preparation
Index of
Consolidated Notes
Management Report
Financial Statements
37
Trackunit
Annual Report 2021
1. Critical Accounting Estimates and Judgements
The preparation of the Group’s consolidated financial
statements requires management to make judgements,
estimates and assumptions that aect the reported
amounts of revenues, expenses, assets and liabilities,
the accompanying disclosures, and the disclosure of
contingent liabilities at the date of the consolidated
financial statements. Estimates and assumptions are
continually evaluated and are based on manage-
ment’s experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances. Uncertainty
about these assumptions and estimates could result in
outcomes that require a material adjustment to the
carrying amount of assets or liabilities aected in
future periods.
In particular, the Group has identified a number of
areas where significant judgements, estimates and
assumptions are required. Further information on each
of these areas and how they impact the various
accounting policies are described and highlighted
separately with the associated accounting policy note
within the related qualitative and quantitative note, as
described below.
Revenue recognition
Revenue is recognized when promised goods or
services are transferred to customers in an amount
that reflects the consideration to which we expect to
be entitled in exchange for those goods or services.
We determine revenue recognition through the
following steps:
1. identification of the contract, or contracts,
with a customer;
2. identification of the performance obligations
in the contract;
3. determination of the transaction price;
4. allocation of the transaction price to the perfor-
mance obligations in the contract; and
5. recognition of revenue when, or as, we satisfy
a performance obligation.
We oer subscriptions to access our Cloud and IoT
platforms. Customers subscribe to one or more
Applications which includes data that is primarily
provided by various proprietary connected device
access points, including connectivity sensors. Our
Cloud and IoT platforms and the related connected
device access points are highly interdependent and
interrelated and represent a combined performance
obligation.
The combined performance obligation is satisfied over
time, as we continually provide access to and fulfill our
obligation to the customer over the subscription term.
Accordingly, the fixed consideration related to the
combined performance obligation is recognized on a
straight-line basis over the contract term, beginning on
the date that access to the Cloud and IoT platforms or
specified application and connected device is provided.
Connected Devices
We capitalize connected devices associated with
subscription contracts. These costs are directly related
to the customer. These contract fulfillment costs are
amortized over a period of benefit of three years.
We determined the period of benefit by taking into
consideration the expected life of the connected
device, the connected device’s warranty period, past
experience with customers, the duration of our
relationships with our customers and other available
information.
Acquisition of enterprises and activities
In connection with acquisition of enterprises and
activities the fair value of identifiable assets, liabilities
and contingent liabilities is measured. Estimation of
fair value mainly applies to intangible and tangible
assets, inventories, and deferred tax hereof. The
estimation of fair value is related to Management
estimates which are based on the expected future
earnings of the assets. For a significant portion of the
assets and liabilities there is no active market that can
be used for determining the fair value. This applies
particularly to intangible assets acquired such as
customer relations and trademarks. The estimation of
fair value is based on an estimate and may therefore
be subject to uncertainty and may subsequently be
adjusted up to one year after the end of the year of
the acquisition.
Impairment of goodwill and
customer relations
Determining whether goodwill and customer relations
are impaired requires an estimation of the value in use
of the cash generating units to which goodwill and
customer relations have been allocated. The value in
use calculation requires the directors to estimate the
future cash flows expected to arise from the cash-gen-
erating unit and a suitable discount rate to calculate
present value. Where the actual future cash flows are
less than expected, a material impairment loss may
arise. The key assumptions used in the impairment
tests of goodwill and customer relations are disclosed
in note 9.
Leases
When determining the present value of lease assets
and lease liabilities the Group make estimates
regarding amortization period based on expected
useful lives and internal interest.
Deferred tax
Management’s judgement is required to determine the
amount of deferred tax assets that can be recognized,
based upon the likely timing and the level of future
taxable profits. Judgement is based on factors such as
historical profits and approved budgets.
Management Report
Financial Statements
38
Trackunit
Annual Report 2021
2. Revenue from Contracts with Customers
§ Accounting policy
Revenue recognition
The Group generates revenue from subscriptions to
access its cloud-hosted platform whereby the
customer is charged a subscription fee for access for
a specified term. Subscription agreements contain
multiple service elements for one or more of Trackunit’s
cloud-based Applications via mobile app(s) or website
that enable data collection and provide access to the
cellular network, one or more wireless gateways and
other devices (collectively, “connected devices” or
“IoT devices”), support services delivered over the
term of the arrangement and warranty coverage. The
Group’s arrangements are generally sold as non-can-
celable subscriptions and have contract terms
typically for three to five years in length. The Group
determines revenue recognition through the following
steps:
Identification of the contract, or contracts,
with a customer
A contract with a customer exists when
• The Group enters into an enforceable contract
with a customer that defines each party’s rights
regarding the goods or services to be transferred
and identifies the payment terms related to these
goods or services,
• the contract has commercial substance, and
• The Group determines that collection of substan-
tially all consideration for goods or services that
are transferred is probable based on the custom-
er’s intent and ability to pay the promised
consideration.
Identification of the performance obligations in
the contract
Performance obligations promised in a contract are
identified based on the goods or services that will be
transferred to the customer that are both capable of
being distinct, whereby the customer can benefit from
the goods or services either on their own or together
with other resources that are readily available from
third parties or from Trackunit, and are distinct in the
context of the contract, whereby the transfer of the
goods or services is separately identifiable from other
promises in the contract. To the extent a contract
includes multiple promised goods or services,
Trackunit applies judgment to determine whether
promised goods or services are capable of being
distinct in the context of the contract. If these criteria
are not met, the promised goods or services are
accounted for as a combined performance obligation.
Trackunit has determined that its integrated solution
represents a combined performance obligation as the
cloud-based Applications and connected devices,
individually, are not distinct within the context of
customer contracts because they are highly interde-
pendent and interrelated.
Trackunit has certain accessories sold in connection
with its integrated sensor solution, which have been
determined to be separate performance obligations.
Also, consultancy services and installation of the IoT
devices are considered to be separate performance
obligations.
Determination of the transaction price
The transaction price is determined based on the
consideration to which Trackunit will be entitled in
exchange for transferring goods or services to the
customer. Such amounts are stated within the
customer contracts.
Allocation of the transaction price to the perfor-
mance obligations in the contract
If the contract contains a single performance
obligation, the entire transaction price is allocated to
the single performance obligation. Contracts that
contain multiple performance obligations require an
allocation of the transaction price to each perfor-
mance obligation based on a relative standalone
selling price (SSP) basis. The Group determines SSP
based on the price at which the performance
obligation is sold separately. If the SSP is not
observable through past transactions, Trackunit
estimates the SSP taking into consideration available
information, such as market conditions and internally
approved pricing guidelines related to the perfor-
mance obligations.
Recognition of revenue when or as Trackunit
satisfies a performance obligation
Trackunit satisfies substantially all of its performance
obligations over time. Specifically, the combined
cloud-based application and connected device
performance obligation and related support services
and warranty coverage represent stand-ready
performance obligations provided throughout the
term the customer has access to the platform.
Revenue recognition commences ratably when control
of the services is transferred to the customers, in an
amount that reflects the consideration that Trackunit
expects to receive in exchange for those services over
the contractual term. Other revenue is earned through
the sale of replacement devices, as well as related
shipping and handling fees and professional services
fees for consulting or installation services.
Management Report
Financial Statements
39
Trackunit
Annual Report 2021
T.DKK EMEA US APJ Total
Timing of revenue recognition
At a point in time , , ,
Over time , , ,
Total revenue , , , ,
T.DKK EMEA US APJ Total
Timing of revenue recognition
At a point in time , , ,
Over time , , ,
Total revenue , , ,
T.DKK
Non-current
contract liabilities –
Deferred revenue , ,
Current contract
liabilities –
Deferred revenue , ,
, ,
T.DKK
Deferred revenue
beginning of period , ,
Revenue recognized
that was included in
deferred revenue
at the beginning
of the period (,) (,)
Acquired deferred
revenue ,
Deferred revenue
invoiced in the period , ,
Deferred revenue
end of period , ,
Revenue recognized in relation to deferred revenue
The following table shows how much of the revenue
recognized in the current reporting period relates to
carried-forward contract liabilities and how much
relates to performance obligations that were satisfied
in a prior year.
§ Accounting policy
Deferred revenue
Deferred revenue represents amounts billed to
customers or payments received from customers for
which revenue has not yet been recognized. Deferred
revenue consists of prepayments made by customers
for future periods. A portion of customer contracts is
paid in advance for the full, multi-year term. Additional-
ly, Trackunit enables its customers to prepay all, or
part, of their contractual obligations monthly,
quarterly, or annually. As a result, the deferred revenue
balance does not represent the total contract value of
all multi-year, non-cancelable subscription agreements.
The current portion of deferred revenue represents the
amount that is expected to be recognized within one
year of the consolidated balance sheet date.
Cost of revenue
Cost of revenue consists primarily of the amortization
of the cost of capitalized connected devices, software
hosting-related costs as well as connectivity cost for
telecom services.
Costs to obtain and fulfill a contract
For typical sales arrangements, Trackunit capitalizes
Liabilities related to contracts with customers
The group has recognized the following assets and
liabilities related to contracts with customers:
the cost of connected devices sold to customers upon
shipment and the capitalized cost is recorded as
connected devices on Trackunit’s consolidated
balance sheet. Connected devices are amortized over
a period of benefit of three years. Trackunit deter-
mined the period of benefit by taking into consider-
ation the expected life of the connected device, the
connected device’s warranty period, past experience
with customers, the duration of Trackunit’s relation-
ships with its customers, and other available informa-
tion. Amortization of these costs is included in cost of
revenue on the consolidated statements of operations
and comprehensive loss.
Management Report
Financial Statements
40
Trackunit
Annual Report 2021
3. Sta Costs
§ Accounting policy
Salary costs comprise of salaries, social security
contributions, pension contributions and other
sta-related costs. Sta costs are recognized in the
financial year during which the employees performed
the related work.
T.DKK
Wages and salaries , ,
Termination benefits ,
Social security costs , ,
Pension costs, defined contribution plans , ,
Other employee costs , ,
Total sta cost , ,
Average number of full-time employees 348 183
T.DKK
Salaries and other short-term employee benefits , ,
Termination benefits
Post-employment benefits
, ,
Compensation to the Board of Directors and Executive Management
Compensation to the Board of Directors
Compensation to the Executive Management , ,
, ,
Key management compensation
Key management includes Board of Directors,
Executive management as well as executive manage-
ment in key aliates. The compensation paid or
payables to key management for employee services
is shown below:
Management Report
Financial Statements
41
Trackunit
Annual Report 2021
4. Audit Fees
T.DKK
Statutory audit ,
Tax advisory services
Other services
Total Audit fees ,
5. Special Non-recurring Items
§ Accounting policy
Special non-recurring items consist of costs and
income of a one-o nature in relation to the Group's
primary activities. Special items relate to M&A
activities, restructuring costs, costs regarding
integration and significant non-recurring items
including termination benefits related to retirement
of members of the executive management.
Special non-recurring items include cost for M&A of the
Industrial IOT division of ZTR Control Systems, LLC, ZTR
Holdings LLC and Trac Rail Inc. M&A cost includes
external cost for lawyers, advisors, and auditors.
Due to the global supply shortage of computer chips
and other electronic components, the company has
incurred increased costs of T.DKK 11,157, which is
included under the cost of providing services.
T.DKK
Redundancy ,
Legal
Consultancy ,
M&A ,
Settlement ,
Total special non-recurring items , ,
Management Report
Financial Statements
42
Trackunit
Annual Report 2021
6. Financial Income and Expenses
§ Accounting policy
Financial income and expenses comprise interest
income and expense, realized and unrealized
exchange gains and losses on transactions in foreign
currencies, amortization of financial assets and
liabilities as well as surcharges and refunds under
the on-account tax scheme. Financial income and
expenses are recognized at the amounts relating to
the financial year.
T.DKK
Interest income, banks
Other interest income
Total financial income
Interest expenses, mortgage debt and borrowings , ,
Interest and finance charges for lease liabilities
Loan fee amortizations , ,
Exchange rate adjustments ,
Other financial expenses, including bank fees ,
Total financial cost , ,
Management Report
Financial Statements
43
Trackunit
Annual Report 2021
7. Income Tax
§ Accounting policy
Current tax
The tax expense for the period comprises current and
deferred tax. Tax is recognized in profit and loss,
except to the extent that it relates to items recognized
in other comprehensive income or directly in equity. In
this case, the tax is also recognized in other compre-
hensive income or directly in equity, respectively.
The current income tax charge is calculated based on
the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the
Company and its subsidiaries operate and generate
taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions, where
appropriate, based on amounts expected to be paid
to the tax authorities.
T.DKK
Current tax on profits for the year , ,
Current tax on profits for prior years ()
Total current tax , ,
Origination and reversal of temporary dierences (,)
Total deferred tax (,)
Income tax expenses for the period , ,
Profit before tax , ,
Computed % (,) (,)
Tax effects of:
Eect of income/expenses that is exempt from taxation (,) ()
Eect of not recognized tax assets
Eect of dierent tax rates of subsidiaries operating in other jurisdictions , ()
Eect of opening balance adjustment to deferred tax ()
Eect of tax on profit for prior years ()
Other (,) ()
Tax charge (,) (,)
Income tax expenses for the period (,) (,)
The tax charge relating to components of other comprehensive
income is as follows:
Cash flow hedges ()
Other comprehensive income ()
§ Accounting policy
Deferred tax
Deferred income tax is recognized on temporary
dierences arising between the tax bases of assets and
liabilities and their carrying amounts in the Consolidat-
ed Financial Statements. However, deferred tax
liabilities are not recognized if they arise from the initial
recognition of goodwill. Deferred income tax is not
accounted for if it arises from the initial recognition of
an asset or liability in a transaction other than a
business combination that, at the time of the transac-
tion, aects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantively
enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is
realized, or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the
extent that it is probable that future taxable profit will
be available, against which the temporary dierences
can be utilized.
Deferred income tax liabilities are provided on taxable
temporary dierences arising from investments in
subsidiaries, except for deferred income tax liability
where the timing of the reversal of the temporary
dierence is controlled by the Group and it is probable
that the temporary dierence will not reverse in the
foreseeable future.
Management Report
Financial Statements
44
Trackunit
Annual Report 2021
Deferred income tax assets are recognized on deduct-
ible temporary dierences arising from investments in
subsidiaries, only to the extent that it is probable that
the temporary dierence will reverse in the future and
that there is sucient taxable profit available, against
which the temporary dierence can be utilized.
T.DKK
Deferred tax assets
Deferred tax at January , ,
Deferred tax recognized in the income statement , (,)
Deferred tax recognized in other comprehensive income
Currency exchange ()
Deferred tax at December , ,
Deferred tax relates to:
Property, plant and equipment () ()
Short term assets
Provisions , ,
Other liabilities () ()
, ,
T.DKK
Deferred tax liabilities
Deferred tax at January , ,
Addition on acquisition of subsidiary ,
Deferred tax recognized in the income statement (,) (,)
Deferred tax recognized in other comprehensive income
Currency exchange () ()
Deferred tax at December , ,
Deferred tax relates to:
Intangible assets , ,
Property, plant and equipment , ,
Short term assets () ()
Provisions (,)
Other liabilities ()
, ,
Deferred income tax assets and liabilities are oset
when there is a legally enforceable right to oset
current tax assets against current tax liabilities and
when the deferred income tax assets and liabilities
relate to income taxes levied by the same taxation
authority on either the same taxable entity or dierent
taxable entities where there is an intention to settle the
balances on a net basis.
Of the deferred tax liability M.DKK . is expected to
be recovered after more than months.
Tax loss carry forwards are recognized to the extent that
they are expected to be used in the future. If the result of
expected future earnings gives a reasonable probability
that the losses will be realised in a foreseeable future,
the deferred tax assets has been recognized.
Management Report
Financial Statements
45
Trackunit
Annual Report 2021
9. Intangible Assets
Trademarks, customer relations, technology
platform and order backlog
Separately acquired trademarks, customer relations,
technology platform and order backlog acquired at
the acquisition of subsidiaries are shown at historical
cost and fair value, respectively. Trademarks, customer
relations, technology platform and order backlog have
a finite useful life and are carried at cost less
accumulated amortization. Amortization is calculated
using the straight-line method to allocate the cost over
their estimated useful lives as follows:
• Trademarks 2-15 years
• Customer relations 6-18 years
• Technology platform 3-4 years
• Order backlog 3 years
Software
Externally acquired software is recognized as
intangible assets if the costs are expected to generate
future economic benefits. Externally acquired software
is recorded at historical cost.
Costs associated with maintaining software pro-
grammes are recognized as an expense as incurred
Amortization is based on the straight-line method over
the expected useful lives of 5 years.
8. Distribution of Profit/Loss
T.DKK
Proposed dividend for the year ,
Retained earnings (,) ,
(,) ,
§ Accounting policy
Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred
over the group’s interest in net fair value of the net
identifiable assets, liabilities, and contingent liabilities
of the acquiree.
For the purpose of impairment testing, goodwill
acquired in a business combination is allocated to
each of the CGUs, or groups of CGUs, which is
expected to benefit from the synergies of the combina-
tion. Each unit or group of units to which the goodwill
is allocated represents the lowest level within the entity
at which the goodwill is monitored for internal
management purposes.
Goodwill impairment reviews are undertaken annually
or more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of
goodwill is compared to the recoverable amount, which
is the higher of value in use and the fair value less costs
of disposal. Any impairment is recognized immediately
as an expense and is not subsequently reversed.
Management Report
Financial Statements
46
Trackunit
Annual Report 2021
The amortization begins when the software is at a
stage where its commercial potentials can be utilized
in the manner intended by Management.
Development projects
Research expenses are recognized as an expense as
they are incurred. Development costs are recognized
as intangible assets if the costs are expected to
generate future economic benefits and the criteria
below are meet.
Development costs that are directly attributable to the
design and testing of identifiable and unique software
controlled by the group are recognized as intangible
assets where the following criteria are met:
• it is technically feasible to complete the software
so that it will be available for use
• management intends to complete the software and
use or sell it
• there is an ability to use or sell the software
• it can be demonstrated how the software will
generate probable future economic benefits
• adequate technical, financial, and other resources
to complete the development and to use or sell the
software are available, and
• the expenditure attributable to the software during
its development can be reliably measured.
Directly attributable costs that are capitalized as part
of the software include employee costs and an
appropriate portion of relevant overheads.
Capitalized development costs are recorded as
intangible assets and amortized from the point when
the development project is at a stage where its
commercial potentials can be utilized in the manner
intended by Management.
Amortization is based on the straight-line method over
the expected useful lives of 3-5 years.
Research expenditure and development expenditure
that do not meet the criteria above are recognized as
an expense in the income statement as incurred.
Development costs previously recognized as an
expense are not recognized as an asset in a subse-
quent period.
Impairment of non-financial assets
Intangible assets that have an indefinite useful life
(Goodwill) are not subject to amortization and are
tested annually for impairment, or more frequently
if events or changes in circumstances indicate that
they might be impaired. Assets that are subject to
amortization are reviewed whenever events or changes
in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is
recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair
value less cost of disposal and value in use. For the
purposes of assessing impairment, assets are grouped
at the lowest levels for which there are largely
independent cash inflows from other assets or groups
of assets (cash-generating units). Prior impairment of
non-financial assets (other than goodwill) is reviewed
for possible reversal at each reporting date.
Management Report
Financial Statements
47
Trackunit
Annual Report 2021
T.DKK Goodwill Trademarks
Customer
relations Software
Software
Order Book
Technology
Platform
Completed
development
projects
Development
projects
in progress Total
Cost:
At January , , , , , ,
Exchange dierences , () () () ,
Addition acquisition of subsidiary , , , , , ,,
Additions during the year , , ,
Reclassifications , (,)
As at December , , , , , , , , ,,
Amortisation and impairment:
At January , , , ,
Exchange dierences
Amortisation charge , , , , , ,
As at December , , , , , ,
Carrying amount December , , , , , , , , ,,
Management Report
Financial Statements
48
Trackunit
Annual Report 2021
T.DKK Goodwill Trademarks
Customer
relations Software
Software
Order Book
Technology
Platform
Completed
development
projects
Development
projects
in progress Total
Cost:
At January , , , , , ,
Exchange dierences (,) (,) (,)
Additions during the year , , ,
Reclassifications , (,)
As at December , , , , , ,
Amortisation and impairment:
At January , , , ,
Exchange dierences () ()
Amortisation charge , , , ,
As at December , , , ,
Carrying amount December , , , , , ,
Management Report
Financial Statements
49
Trackunit
Annual Report 2021
Research and development cost included in the
income statement amounts to 14,346 T.DKK
(2020: 6,806 T.DKK).
Impairment test for goodwill
Impairment test was performed at the end of 2021.
The impairment test was based on the cash-generating-
units (CGU's) to which goodwill can be allocated.
The basis for determining the recoverable amount is
value-in-use for the CGU's. Acquired companies and/
or activities are integrated into the Trackunit business
as quickly as possible in order to obtain the optimum
synergies. Consequently, soon after an acquisition, it
is no longer possible to allocate goodwill to individual
acquisitions. Trackunit as a group is evaluated to be
one cash-generating unit (Trackunit). This is also
sustained by our business model where all subsidiaries
are sales companies with access to the same software
portfolio. No special software is made for one
subsidiary alone. We act as one company.
The impairment test compares the recoverable
amount, equivalent to the present value of the
expected future cash flows, with the invested capital
of the individual CGU. The expected future cash flow
is based on budgets for 2022 and business plans for
2023-2025. Budgets and business plans are approved
by group management and the board of directors.
Primary variables are sales, EBIT, and investments.
The construction industry is one of the least digitalized
industries and the market for connectivity will continue
to expand for many years. The growth rate beyond the
budget and forecast periods (the terminal period) is
therefore considered to be 4%, which is based on
management expectation to the underlying market
growth and further supported by historic performance.
Revenue and EBIT margin is in line with the overall busi-
ness plan and forecasted in a detailed model including
volume of new subscriptions, churn, price mix, license
mix and expectations to the development in gross
profit margins. Sales expectations and EBIT margin
used in the impairment test is therefore considered
reasonable taking the initiatives in the business plan
and general market outlook into consideration.
Investments are assumed to be level with depreciations
and amortizations in the terminal period. The pre-tax
discount rate used to calculate the recoverable
amount is 9.8%
Determination of fair value is considered a level 3
measurement due to application of a discount
compared to the observable multiples.
The performed impairment test did not show any need
for impairment. Therefore, impairment will not be
required. In relation to sensitivity analysis, a simulta-
neous 1.5 percentage point increase in WACC and 2
percentage point decrease in the terminal period
growth rate does not lead to an impairment charge.
Further the majority of the booked value of goodwill
can all be allocated to the acquisition made during
the year. As there have been no significant changes
in the business model and profit is in line with
expectations the booked value therefore indicated the
market value at the balance date and no impairment
is needed.
Impairment test for customer relations
The customer relations are amortized and tested if
there are indications of impairment. Customer
relations are amortized over 6-18 years. Customer
relations valuation is performed on the time of the
acquisition and based on a multi-period excess
earnings method (MEEM), considering the customers
present at that time. Management has analyzed
whether the main prerequisites of the MEEM calcula-
tion are still present. Further the majority of the
booked value of customer relations can be allocated
to the acquisition made during the year. As there have
been no significant changes to the customer base
since the acquisition impairment will not be required.
Management Report
Financial Statements
50
Trackunit
Annual Report 2021
10. Property, Plant and Equipment
§ Accounting policy
Tangible assets are mainly comprised of plant and
machinery and other equipment, which are measured
at cost less accumulated depreciation, and any
impairment losses. The cost comprises the acquisition
cost and other directly attributable expenses of
preparing the asset for its intended use.
T.DKK
Plant and
machinery
Other
equipment Total
Cost:
At January , , ,
Exchange dierences ()
Addition on acquisition of subsidiary , ,
Additions during the year , ,
Disposals during the year () ()
As at December , , ,
Amortization and impairment:
At January , , ,
Exchange dierences
Depreciation for the year , ,
Depreciation of disposed assets () ()
As at December , , ,
Carrying amount December , , ,
T.DKK
Plant and
machinery
Other
equipment Total
Cost:
At January , , ,
Exchange dierences () () ()
Additions during the year , , ,
Disposals during the year () (,) (,)
Reclassifications () () ()
As at December , , ,
Amortization and impairment:
At January , , ,
Exchange dierences () () ()
Depreciation for the year , ,
Depreciation of disposed assets () (,) (,)
As at December , , ,
Carrying amount December , , ,
Depreciation is calculated using the straight-line
method to allocate the cost or revalued amounts of the
assets, net of their residual values, over their estimated
useful lives as follows:
• Plant and machinery 3-7 years
• Other equipment 3 years
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the end of
each reporting period.
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount.
These are included in profit or loss.
An asset is impaired to its recoverable amount if
the asset’s carrying amount is greater than its
estimated recoverable amount. The impairment
loss is recognized in profit and loss when the
impairment is identified.
Management Report
Financial Statements
51
Trackunit
Annual Report 2021
11. Leases as Lessee
§ Accounting policy
The lessee is required to recognize all leases as a lease
liability and a lease asset in the balance sheet with
two exceptions: short-term leases (less than 12 months)
and leases relating to low-value assets. It must
furthermore be considered whether the agreement
is a lease or a service arrangement.
The group leases various vehicles, oces, and other
equipment. From 1 January 2019, leases are recognized
as a right-of-use asset and a corresponding liability at
the date the leased asset is available for use by the
group. In general, all lease contracts are recognized as
a lease liability and a lease asset in the balance sheet
with two exceptions: short-term leases (less than 12
months) and leases relating to low-value assets
(< DKK 35.000).
When determining the present value of lease assets
and lease liabilities the Group makes estimates
regarding the amortization period based on expected
useful lives and internal interest.
Cars
Lease contracts could be separated between a leasing
contract and a service arrangement. The group has
decided not to separate lease and non-lease compo-
nents and instead recognize each car as one contract.
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract several factors must be
determined. Leasing period and fixed payments
appear in the lease contract which means only the
interest rate must be determined. Here the groups
incremental borrowing rate to obtain an asset of
similar value is used (3%).
Variable lease payments as extra miles beyond the
lease contract, damages, bridge tolls etc. is not
measured as a lease liability and a lease asset in the
balance sheet. Instead, these costs are recognized in
the profit and loss when they occur.
Oces
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract, several factors must be
determined. Fixed payments appear in the lease
contract. The leasing period for all oces is set the
same date as the headquarter in Aalborg oce expires
even though dierent terms of condition may occur. The
groups incremental borrowing rate to obtain an asset of
similar value of 3% have been applied.
Other equipment
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract several factors must be
determined. Leasing period and fixed payments
appear in the lease contract which means only interest
rate must be determined. Here the group's incremental
borrowing rate to obtain an asset of similar value is
used (3%).
T.DKK
Right-of-use assets
Premises , ,
Vehicles , ,
Others
, ,
Lease liabilities
Current , ,
Non-current , ,
, ,
This note provides information for leases where the
group is a lessee. The following amounts relating
to leases are recognized in the balance sheet:
Management Report
Financial Statements
52
Trackunit
Annual Report 2021
T.DKK
Depreciation charge of right-of-use assets
Premises , ,
Vehicles , ,
Others
, ,
Interest expense
(included in finance cost)
Expense relating to short-term leases
(included in cost of goods sold and administrative expenses)
Expense relating to leases of low-value assets
that are not shown above as short-term leases
(included in administrative expenses)
Expense relating to variable lease payments
not included in lease liabilities
(included in administrative expenses)
The total cash outflow for leases , ,
Additions to right-of-use assets* ,
Amounts recognised in the statement of profit or loss
The following amounts relating to leases are
recognized in the statement of profit or loss:
* This is mainly due to a new agreements on premies.
12. Inventories
§ Accounting policy
Inventories are stated at the lower of cost and net
realizable value. Cost is determined using the first-in,
first-out (FIFO) method. The cost of raw materials and
consumables comprises purchase price and other
direct costs. Finished goods are recognized at
manufacturing cost including materials consumed
T.DKK
Raw materials and supplies , ,
Finished goods , ,
Total inventories , ,
Less: provision for inventory reserves , ,
Total net inventories , ,
Inventories recognized as an expense and included in
‘Cost of providing services’ , ,
and labor costs plus allowance for production
overheads including operating costs, maintenance,
and depreciation of production plant. It excludes
borrowing costs. Net realizable value is the
estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
Management Report
Financial Statements
53
Trackunit
Annual Report 2021
13. Trade Receivables
§ Accounting policy
Receivables are measured at amortized cost. Receiv-
ables are written down for expected credit losses
based on the simplified approach to providing for
expected credit losses, which requires expected
lifetime losses to be recognized from initial recognition
T.DKK Current
-
days
past due
-
days
past due
-
days
past due
More than
days
past due Total
December
Gross carrying amount , , , , , ,
Loss allowance () () () () (,) (,)
Trade receivables , , , , , ,
Expected loss rate % % % % % %
T.DKK Current
-
days
past due
-
days
past due
-
days
past due
More than
days
past due Total
December
Gross carrying amount , , , , , ,
Loss allowance (,) () () () (,) (,)
Trade receivables , , , ,
Expected loss rate % % % % % %
T.DKK
Movement on the Group provision for impairment of trade
receivables are as follows:
Opening balances , ,
Change in provision ,
Write-os during the year () (,)
At December , ,
According to IFRS 9 a provision matrix for the group is
applied. The provision matrix is based on historical loss
rate and management’s expectations to future losses.
The historical loss rate is calculated based on the 2020
data. The matrix provision is applied after adjusting for
any specific provisions and is based on the Groups
expectations to the industry in which it operates.
of receivables. Impairment losses are calculated as
the dierence between carrying amount and present
value of expected cash flows, including the expected
realizable value of any collateral provided. The
discount rate is the eective interest rate used at
the time of initial recognition of the receivable.
Management Report
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54
Trackunit
Annual Report 2021
14. Financial Assets and Liabilities
§ Accounting policy
Financial assets
Classification
The group classifies its financial assets in the following
measurement category; those to be measured at
amortized cost. The classification depends on the
purpose for which the financial assets were acquired.
Management determines the classification of its
financial assets at initial recognition.
Amortized cost
The group classifies its financial assets as at amor-
tized cost only if both of the following criteria are met:
• the assets are held within a business model whose
objective is to collect the contractual cash flows,
and
• the contractual terms give rise to cash flows that
are solely payments of principal and interest.
Recognition and Measurement
Regular purchases and sales of financial assets are
recognized on the trade date - the date on which the
Group commits to purchase or sell the asset. Invest-
ments are initially recognized at fair value, plus
transaction costs for all financial assets not carried at
fair value through profit or loss. Financial assets are
derecognized when the rights to receive cash flows
from the investments have expired or have been
transferred and the Group has transferred
substantially all risks and rewards of ownership.
Financial liabilities and equity instruments
Classification
Debt and equity instruments issued by a group entity
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.
Financial liabilities
Financial liabilities are initially measured at fair value
less transaction costs incurred. Subsequently, the
loans are measured at amortized cost. Amortized cost
is calculated as original cost less installments plus/less
the accumulated amortization of the dierence
between cost and nominal value. Losses and gains on
loans are thus allocated over the term so that the
eective interest rate is recognized in the income
statement over the loan period. Financial liabilities are
derecognized when settled.
Deferred revenue
Deferred revenue are prepayments received from
customers, comprising of payments received regard-
ing income in subsequent years.
T.DKK
Financial assets at amortised cost:
Trade receivables , ,
Receivables from group enterprises , ,
Connected devices , ,
Other financial assets at amortised costs , ,
Cash and cash equivalents , ,
Other current assets , ,
Total , ,
Financial liabilities at amortised cost:
Borrowings/Credit institutions ,
Lease liabilities , ,
Trade and other payables , ,
Payables to group enterprises , ,
Financial liabilities at fair value:
Derivative financial instruments:
Fair value through other comprehensive income
Total , ,
Fair values are approximately the same as the carrying amounts.
Management Report
Financial Statements
55
Trackunit
Annual Report 2021
15. Share Capital 16. Related Parties
17. Commitments and
Contingent Liabilities
§ Accounting policy
Equity instruments
An equity instrument is any contract that evidences a
residual interest in the assets of an entity after
deducting all its liabilities. Equity instruments issued
by a group entity are recognized at the proceeds
received, net of direct issue costs.
Other reserves include:
• Foreign currency translation – movements in other
comprehensive income from retranslation of foreign
operations.
• Other undistributable reserve – movement in share
warrants
• Reserve from loan and securities – reserve for
unpaid share capital
• Reserve for hedging – movements in other compre-
hensive income from fair value adjustments of cash
flow hedging
The group is owned by M-tec Danmark ApS, who owns
100% of the shares.
Galaxy UK Topco Limited is the ultimate owner in the
Group. Galaxy UK Topco Limited is mainly owned by
Hg Genesis 9 Nominess Limited. The directors of Hg
Genesis 9 Nominess Limited deem there not to be an
ultimate controlling party as none of the limited
partners in the limited partnerships managed by Hg
Pooled Management Limited has an ownership of more
than 20% of the issued share capital of the company.
Subject to customary legal provisions, the Group and
subsidiaries act as guarantors of loans for the Group
entity Galaxy Bidco ApS.
The Danish companies are jointly and severally liable
for tax on the Group's jointly taxed income. The jointly
taxed amount is stated in the financial statement of
The Group has no hedging instruments at
31 December 2021.
The share capital comprises 500,00 shares of a
nominal value of DKK 1 each.
Dividends
The dividends paid in 2021 were 0 DKK (2020: DKK 21m).
Capital management
The group’s objectives when managing capital are to
safeguard the group’s ability to continue as a going
concern in order to provide returns for shareholders
and benefits for other stakeholders and to maintain
an optimal capital structure to reduce cost of capital.
The management and the owners monitor the share
and capital structure to ensure that Trackunit ApS’
capital resources support the strategic goals.
Consistent with others in the industry, the group
monitors capital based on the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt
is calculated as total borrowings (including ‘current
and non-current borrowings’ as shown in the consoli-
dated balance sheet) less cash and cash equivalents.
Total capital is calculated as ‘equity’ as shown in the
consolidated balance sheet plus net debt.
During 2021, the group’s strategy was to maintain the
gearing ratio below 10%. The gearing ratio at 31
December 2021 was -6,9% (2020: 4,3%).
Trackunit ApS Group is included in the consolidated
annual report for Galaxy Holdco ApS and the consoli-
dated annual report for Galaxy UK Topco Limited.
The disclosure of “Key management compensation”
is presented in note 3.
The disclosure of shares issued during the period
is presented in note 15.
Transactions with related parties have all been
at arm's-length.
the management company for the joint taxation,
Galaxy Holdco ApS. The Group's Danish companies
are also jointly and severally liable for withholding
taxes, royalty taxes and interest taxes. Any subsequent
adjustments to corporation and withholding taxes may
result in the company's liability amounting to a larger
amount.
Management Report
Financial Statements
56
Trackunit
Annual Report 2021
18. Business Combinations
§ Accounting policy
The acquisition method of accounting is used to
account for all business combinations, regardless of
whether equity instruments or other assets are
acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:
• fair values of the assets transferred
• liabilities incurred to the former owners of the
acquired business
• equity interests issued by the group
• fair value of any asset or liability resulting from a
contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the
subsidiary.
Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combina-
tion are, with limited exceptions, measured initially at
their fair values at the acquisition date. The group
recognizes any non-controlling interest in the acquired
entity on an acquisition-by-acquisition basis either at
fair value or at the non-controlling interest’s proportion-
ate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the
• consideration transferred,
• amount of any non-controlling interest in the
acquired entity, and
• acquisition-date fair value of any previous equity
interest in the acquired entity
over the fair value of the net identifiable assets
acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of
the business acquired, the dierence is recognized
directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is
deferred, the amounts payable in the future are
discounted to their present value as at the date of
exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an indepen-
dent financier under comparable terms and conditions.
Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with
changes in fair value recognized in profit or loss.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date. Any
gains or losses arising from such remeasurement are
recognized in profit or loss.
Acquisition in 2021
In November 2021, the group acquired the Industrial
IOT division from within ZTR Control Systems, LLC, ZTR
Holdings LLC and Trac Rail Inc.
As a result of the acquisition, the group has increased
its presence in the marketplace regarding machine
connectivity. The goodwill recognized is not expected
to be deductible for income tax purposes.
Acquisition of the Industrial IOT division
from within ZTR Control Systems, LLC, ZTR
Holdings LLC and Trac Rail Inc.
The acquisition of the Industrial IOT division from
within ZTR Control Systems, LLC, ZTR Holdings LLC and
Trac Rail Inc. was completed with an acquisition date
on 18th of November 2021. The total consideration paid
amounts to a cash consideration of DKKm 1,297. No
equity instruments have been issued and there is no
contingent consideration in the business combination.
Fair value of the assets and liabilities acquired is
summarized in the following table, which discloses
recognized amounts of identifiable assets acquired
and liabilities assumed. Goodwill covers the acquisi-
tion of know-how and employees, which do not qualify
for recognition as a separate asset.
T.DKK
Net assets acquired
Intangible assets ,
Tangible assets ,
Other non-current assets
Connected Device Cost ,
Current assets ,
Deferred tax liabilities (,)
Other current liabilities (,)
Deferred income (,)
Net assets ,
Consideration paid ,,
Goodwill ,
Acquisition of the Industrial IOT division of from
within ZTR Control Systems, LLC, ZTR Holdings LLC
and Trac Rail Inc.
Acquisition-related costs of T.DKK 51,285 have been
charged to special items in the consolidated income
statement for the year ended 31 December 2021.
Management Report
Financial Statements
57
Trackunit
Annual Report 2021
The revenue included in the consolidated statement of
comprehensive income since 18 November 2021
contributed by the Industrial IOT division of from within
ZTR Control Systems, LLC, ZTR Holdings LLC and Trac
Rail Inc. was T.DKK 40,366.
Had the Industrial IOT division of from within ZTR
Control Systems, LLC, ZTR Holdings LLC and Trac Rail
Inc. been consolidated from 1 January 2021, the
consolidated statement of income would include
pro-forma revenue of T.DKK 325,858 and profit of
T.DKK 12,509.
Of the total profit in the consolidated statement of
profit and loss amounting to T.DKK -7,062 the Industrial
IOT division of from within ZTR Control Systems, LLC,
ZTR Holdings LLC and Trac Rail Inc. contributed with a
loss of T.DKK -44,706.
Financial risk factors
The group’s activities expose it to a variety of financial
risks: market risk (currency and interest risk), credit risk
and liquidity risk. The group’s overall risk management
program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse eects
on the group’s financial performance.
The Financial risks of the group are managed centrally.
The overall risk management guidelines and policies
have been approved by the board of directors. The
board provides principles for overall risk management,
as well as policies covering specific areas, such as
foreign exchange risk, interest rate risk, credit risk, use of
derivative financial instruments and non-derivative
financial instruments, and investment of excess liquidity.
19. Financial Risk Management
Market risk
Foreign exchange risk
The group operates internationally and is exposed to
foreign exchange risk arising from various currency
exposures. Foreign exchange risk arises from future
commercial transactions, recognized assets and
liabilities and net investments in foreign operations.
Increases or decreases in the exchange rate of such
foreign currencies against the functional currency, the
DKK, can aect the group’s results and cash position
negatively or positively.
Management has set up a policy to require group
companies to manage their foreign exchange risk
against their functional currency. Foreign exchange risk
arises when future commercial transactions or
recognized assets or liabilities are denominated in a
currency that is not the entity’s functional currency.
T.DKK
Net Profit
Equity
Net Profit
Equity
USD () (,) () ()
GBP () (,)
The Groups sales, cost of goods sold, and expenses are
mainly incurred in DKK, EUR, USD, CAD, or GBP. The
Group has transactions in other currencies, but the
foreign exchange risks related to this are not considered
material. The group's debt is denominated in EUR, GBP,
and USD.
The group is primarily exposed to changes in DKK/GPB
and DKK/USD exchange rate.
Sensitivity analysis – foreign exchange risk
The following table details the group's sensitivity to a
10% decrease in USD and GBP exchange rates. The
analysis includes impact to the profit and loss and total
equity by translating the profit and loss accounts and
balance sheet with USD and GBP exchange rates 10%
lower than actual balance sheet ending rates. All other
variables are held constant.
Management Report
Financial Statements
58
Trackunit
Annual Report 2021
T.DKK
Income
statement
Equity
Income
statement
Equity
Cash and debt with floating interest rates () ()
Hedge instruments – interest swaps
Interest rate risk
The Group's interest rate risk arises from long-term
borrowings related to acquisition facilities. Borrowings
issued at variable rates expose the group to cash-flow,
interest-rate risk. A group hedging policy, to mitigate
the interest risk, is being developed.
Sensitivity analysis – interest rate risk
Based on the termination dates, repayments, and
interest rates of the individual loan agreements the
impact of a 1% increase in the interest rates is calculat-
ed. The following table details the group's sensitivity to
a 1 percentage point increase in the interest-rate level.
The analysis includes impact to the profit and loss and
total equity. All other variables are held constant.
Tax consequences are not included in the analysis.
The stated sensitivities are based on the recognized
financial assets and liabilities throughout each quarter
of the year. Adjustments are made for installments,
borrowings, etc.
All senior facilities were settled in connection with the
acquisition by Hg. Therefore, the sensitivity analysis in
2021 is zero.
other long-term debt is all without repayment until exit
(changes in ownership). It is expected that the future
profit will generate the needed cash for repayment of
loans and other cash flow requirements.
Financial covenants
The company is measured on a quarterly basis on a
Leverage covenant against the Facility agreement with
the Group’s bank. The company has complied with
those covenants during 2021.
The table below analyzes the group’s non-derivative
and derivative financial liabilities into relevant maturity
groupings based on the remaining period at the
balance sheet date to the contractual maturity date.
The amounts disclosed in the table are the contractual
undiscounted cash flows.
Credit risks
Credit risk is managed on group basis. Standard terms
and conditions apply for the Group and changes are
subject to central approval.
Credit risk arises from cash and cash equivalents and
deposits with banks and financial institutions, as well as
credit exposures to customers, including outstanding
receivables. For banks and financial institutions, only
independently rated parties with a minimum rating of ‘A’
are accepted. For customers individual risk limits are set
based on internal or external ratings.
The maximum exposure corresponds to the carrying
amount.
Liquidity risk
Cash flow forecasting is performed by group finance.
Group finance monitors rolling forecasts of the group’s
liquidity requirements to ensure it has sucient cash to
meet operational needs while always maintaining
sucient headroom on its undrawn committed
borrowing facilities so that the group does not breach
borrowing limits or covenants (where applicable) or any
of its borrowing facilities. Such forecasting takes into
consideration the group’s debt financing plans,
covenant compliance and compliance with internal
balance sheet ratio targets.
The group has unutilized borrowing facilities of M.DKK
100 that may be available for future operating
activities, as well as other incremental loan facilities.
Further the long-term debt to credit institutions and
Management Report
Financial Statements
59
Trackunit
Annual Report 2021
T.DKK
January
Financing
Cash Flows
Other
movements*
Reclassi-
fications
December
Long-term borrowings , (,) , ()
Short-term borrowings , (,)
, (,) , ()
Reconciliation of liabilities arising from financing activities
* Other movements include the net eect of change to loan fees.
T.DKK
Less than
year
to
years
More than
years Total
December
Lease liabilities , , ,
Trade and other payables , ,
, , ,
December
Credit institutions* , (,) , ,
Other long term debt , ,
Lease liabilities , , , ,
Borrowings , ,
Trade and other payables , ,
, , , ,
* Credit institutions include amortisation of loan fees.
Management Report
Financial Statements
60
Trackunit
Annual Report 2021
No subsequent events have occurred after the balance
sheet date that required adjustment to or disclosure in
the consolidated financial statements.
20. Events After the
Balance Sheet Date
21. Changes in Net Working Capital
T.DKK
Changes in inventories (,) ()
Changes in trade receivables and other receivables (,) ,
Changes in trade and other payables , (,)
, ,
22. Group Companies
Name and registered oce Country Direct Group holding (pct.)
Trackunit Pty Ltd Australia %
Trackunit KK Japan %
Trackunit Asia Pacific Pte Ltd Singapore %
Trackunit AB Sweden %
Trackunit AS Norway %
Trackunit America ApS Denmark %
– Trackunit Inc USA %
– Trackunit Canada Inc Canada %
Trackunit SAS France %
Trackunit Ltd United Kingdom %
– Fern Capital Ltd United Kingdom %
· Trackunit Telematics Ltd United Kingdom %
Trackunit GmbH Germany %
Trackunit BV Netherlands %
Management Report
Financial Statements
61
Trackunit
Annual Report 2021
This note provides a list of the significant accounting
policies adopted in the preparation of these consolidat-
ed financial statements to the extent they have not
already been disclosed in the other notes. These
policies have been consistently applied throughout the
financial year presented, unless otherwise stated.
General
The Consolidated Financial Statements for Trackunit
ApS have been prepared in accordance with Interna-
tional Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB)
and as adopted by the European Union as well as
additional Danish disclosure requirements applying
to entities of reporting class C.
The annual report is prepared according to standards
and interpretations eective for financial years
beginning on 1 January 2021. No standards or interpre-
tations other than those mentioned below have been
adopted early.
General information on recognition
and measurement
The Financial Statements have been prepared under
the historical cost method, except for the measurement
of certain financial instruments at fair value.
First-time adoption of IFRS
These consolidated financial statements are the first
consolidated financial statements that are presented
in accordance with IFRS.
23. Basis of Preparation
The comparative figures for 2020 in the income
statement and the balance sheet items as at 1 January
2020 and 31 December 2020 were restated in accor-
dance with IFRS.
The Group has applied the standards which are
mandatory as of 31 December 2021.
Explanation of the adjustments from
Danish GAAP to IFRS
Revenue recognition of IOT devices
Recognition of revenue in the income statement of IoT
devices have been changed due to the adoption of IFRS.
Before the change IoT devices were recognized in the
income statement at delivery time and subscriptions
As at January
For the year ended
December As at December
T.DKK Assets Liabilities Equity Profit & Loss Assets Liabilities Equity
According to the Danish Financial Statement Act , , , , , , ,
IFRS adjustments
Revenue recognition of IOT devices , , -, , , , -,
Goodwill - - - , , - ,
, , -, , , , -,
December , , , , , , ,
Group reconciliation
were recognized in the income statement over time
based on the contract. Recognition of revenue of IOT
devices is now aligned with subscriptions as they are
seen as a single performance obligation and therefore
recognized on a straight-line basis over the contract
period (minimum 3 years). The connected devices are
likewise recognized on a straight-line basis over a period
of 3 years. The change in revenue recognition have
aected the result of the year negatively with DKK 16m
and last year positively with DKK 4m.
Goodwill amortization
Under Danish GAAP, goodwill is amortised over the
expected useful life. Under IFRS, goodwill is not
amortised but subject to an annual impairment test.
Exemptions applied
The group has applied the following exemptions from
full retrospective application of IFRS:
• Business combinations occurring before the date
of transition to IFRS have not been restated. The
carrying amount of goodwill as of 1 January 2020
is considered deemed cost of goodwill
• IAS 21 has not been applied for goodwill arising in
business combinations occurring before the date of
transition. Consequently, goodwill is treated as an
assets of the parent company and is not subject to
foreign currency translation.
• Cumulative currency translation dierences for
foreign operations with a functional currency
Management Report
Financial Statements
62
Trackunit
Annual Report 2021
dierent from DKK are deemed to be zero as of
1 January 2020.
• Lease assets have been recognized at the present
value of the lease liabilities as of 1 January 2020
by applying an incremental borrowing rate as
at that date.
Implementation of new standards,
amendments, and interpretations
The group has applied the following amendments for
the first time for their annual reporting period com-
mencing 1 January 2021:
• Covid-19-Related Rent Concessions – amendments
to IFRS 16, and
• Interest Rate Benchmark Reform – Phase 2 –
amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16.
The group also elected to adopt the following
amendments early:
• Annual Improvements to IFRS Standards
2018–2020, and
• Deferred Tax related to Assets and Liabilities arising
from a Single Transaction – amendments to IAS 12.
The amendments listed above did not have any impact
on the amounts recognized in prior periods and are not
expected to significantly aect the current or future
periods.
New Agenda decision regarding Cloud computing
capitalization: On the basis of the IFRIC agenda
decision regarding account for cost relating to Software
as a Service (SaaS), Trackunit has done a reevaluation
of accounting principles and policies to incorporate
these clarifications and decisions set out. On the basis
of this reevaluation no changes have been made.
New standards, amendments and interpretations
adopted but not yet eective
Certain new accounting standards and interpretations
have been published that are not mandatory for 31
December 2021 reporting periods and have not been
adopted early by the group. These standards are not
expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable
future transactions.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities over which the group has
control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to aect
those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are
deconsolidated from the date that control ceases.
Inter-company transactions, balances, and unrealized
gains on transactions between group companies are
eliminated. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiar-
ies have been changed where necessary to ensure
consistency with the policies adopted by the group.
Foreign currency translation
Functional and presentation currency
Items in the financial statements of each of the
reporting companies of the Group are measured in the
currency of the primary economic environment in which
the company operates (the functional currency).
The financial statements are presented in Danish
Kroner (DKK), which is Trackunit ApS’ functional and
presentation currency. The financial statements have
been rounded to the nearest thousand.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions or valuation where items are
re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and
from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognized in profit and loss, except
when deferred in other comprehensive income as
qualifying cash flow hedges and qualifying net
investment hedges. Foreign exchange gains and losses
are presented in the income statement within “finance
income or costs”.
Group companies
The results and financial position of all the group
entities that have a functional currency dierent from
the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet
presented are translated at the closing rate at the
date of that balance sheet.
• Income and expenses for each statement of profit
and loss are translated at average exchange rates;
and
• All resulting exchange dierences are recognized
in other comprehensive income.
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the clos-
ing rate. Exchange dierences arising are recognized in
other comprehensive income.
Management Report
Financial Statements
63
Trackunit
Annual Report 2021
Trackunit Structure
Name and registered oce Country Direct Group holding (pct.)
Trackunit ApS Denmark %
Trackunit Pty Ltd. Australia %
Trackunit KK Japan %
Trackunit Asia Pacific Pte Ltd. Singapore %
Trackunit AB Sweden %
Trackunit AS Norway %
– Trackunit America ApS Denmark %
– Trackunit Inc. USA %
Trackunit Canada Inc. Canada %
Trackunit SAS France %
– Trackunit Ltd. United Kingdom %
· Fern Capital Ltd United Kingdom %
Trackunit Telematics Ltd. United Kingdom %
Trackunit GmbH Germany %
Trackunit B.V. Netherlands %
Statement of cash flow
The Statement of Cash Flows is presented using the
indirect method. The Statement of Cash Flows shows
cash flows used in operating activities, cash flows used
in investing activities, cash flows from financing
activities, and the group's cash and cash equivalents
at the beginning and end of the year.
Cash flows used in operating activities is comprised
of net profit or loss for the year adjusted for non-cash
items, such as share-based payment expense, fair value
revaluations of shareholder warrants, depreciations,
paid financial items, corporate tax paid, and change in
working capital. Cash flows used in investing activities
is comprised of payments relating to property, plant,
and equipment.
Cash flows from financing activities is comprised of
proceeds from borrowings, such as interest-bearing
convertible loans, and proceeds from share issuances
and related transaction costs.
Cash and cash equivalents
In the consolidated statement of cash flows, cash
and cash equivalents includes cash in hand and other
short-term highly liquid investments with original
maturities of three months or less.
Management Report
Financial Statements
64
Trackunit
Annual Report 2021
Parent
Company
Financial
Statements
66 Main Elements
70 Notes
Parent Statement of Profit and Loss
1 January – 31 December
T.DKK Notes
Gross profit/(loss) , ,
Sta expenses (,) (,)
Profit/loss before depreciations , ,
Depreciation, amortization and impairment of intangible assets
and property, plant and equipment (,) (,)
Other operating expenses (,) (,)
Profit/loss before depreciations , ,
Income from investments in subsidiaries (,) ,
Finance income , ,
Finance costs (,) (,)
Profit/loss before tax , ,
Income tax expense (,) (,)
Profit/(Loss) for the year (,) ,
T.DKK Notes
Completed development projects , ,
Acquired licenses , ,
Goodwill , ,
Development projects in progress , ,
Intangible assets , ,
Land and buildings , ,
Other fixtures and fittings, tools and equipment , ,
Leasehold improvements
Property, plant and equipment , ,
Investments in subsidaries ,, ,
Deposits , ,
Fixed assets investments ,, ,
Total non-current assets ,, ,
Inventories , ,
Trade receivables , ,
Receivables from group enterprises , ,
Connected device costs , ,
Other receivables , ,
Prepayments , ,
Receivables , ,
Cash and cash equivalents , ,
Total current assets , ,
Total assets ,, ,
Parent Balance Sheet – 31 December
Assets
Management Report
Financial Statements
66
Trackunit
Annual Report 2021
Parent Balance Sheet – 31 December
Equity and Liabilities
T.DKK Notes
Share capital
Reserve for net revaluation under the equity method (,) ,
Reserve for development costs , ,
Reserve for hedging transactions () ()
Retained earnings ,, ,
Proposed dividend for the year ,
Total equity ,, ,
Provision for deferred tax , ,
Provision relating to investments in group enterprises
Provision , ,
Credit institutions ,
Lease obligations , ,
Other payables ,
Deferred income , , ,
Total non-current liabilities , ,
T.DKK Notes
Credit institutions ,
Lease obligations , ,
Trade payables , ,
Payables to group enterprises ,
Corporation tax payables to group enterprises , ,
Other payables , ,
Deferred income , , ,
Total current liabilities , ,
Total liabilities , ,
Total equity and liabilities ,, ,
Contingent assets, liabilities and financial obligations
Events after the balance sheet date
Related parties
Significant accounting policies
Management Report
Financial Statements
67
Trackunit
Annual Report 2021
T.DKK
Share
capital
Reserve for net
revaluation under
the equity method
Reserve for
development
costs
Reserve for
hedging
transactions
Retained
earnings
Proposed
dividend for
the year
Total
equity
Balance at January , , () , , ,
Capital increase ,, ,,
Dividend (,) (,)
Exchange adjustment relating to foreign entities , ,
Development costs for the year , (,)
Amortization for the year (,) ,
Net profit/loss for the year (,) , (,)
Other equity movements
Balance at December (,) , () ,, ,,
Parent Statement of Changes in Equity
January 1 – December 31
Management Report
Financial Statements
68
Trackunit
Annual Report 2021
T.DKK
Share
capital
Reserve for net
revaluation under
the equity method
Reserve for
development
costs
Reserve for
hedging
transactions
Retained
earnings
Proposed
dividend for
the year
Total
equity
Balance at January , , , ,
Accumulated eect of change in accounting policies (,) (,)
Balance at January , , , ,
Exchange adjustment relating to foreign entities (,) (,)
Fair value adjustment of hedging instruments, beginning of the year () ()
Tax on adjustment of hedging instruments for the year
Development cost for the year , (,)
Amortisation for the year (,) ,
Net profit/loss for the year , , , ,
Balance at December , , () , , ,
Management Report
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Annual Report 2021
71 Note 1 Sta Costs
71 Note 2 Depreciation, Amortization and Impairment of Intangible
Assets and Property, Plant and Equipment
71 Note 3 Other Operating Expenses
72 Note 4 Financial Income and Expenses
72 Note 5 Tax on Profit/Loss for the Year
72 Note 6 Intangible Assets
73 Note 7 Property, Plant and Equipment
73 Note 8 Investments in Subsidiaries
74 Note 9 Other Fixed Investments
74 Note 10 Inventories
74 Note 11 Prepayments
74 Note 12 Share Capital
75 Note 13 Distribution of Profit/Loss
75 Note 14 Provision for Deferred Tax
75 Note 15 Long-Term Debt
76 Note 16 Derivative Financial Instruments
76 Note 17 Deferred Revenue
76 Note 18 Contingent Assets, Liabilities, and Financial Obligations
76 Note 19 Events After the Balance Sheet Date
76 Note 20 Related Parties
77 Note 21 Significant Accounting Policies
Index of
Consolidated Notes
Management Report
Financial Statements
70
Trackunit
Annual Report 2021
1. Sta Costs 2. Depreciation, Amortization and Impairment of Intangible
Assets and Property, Plant and Equipment
3. Other Operating Expenses
T.DKK
Wages and salaries , ,
Pensions , ,
Other social security costs
Other employee costs , ,
Total sta cost , ,
Including remuneration to the Executive Board and Board of Directors of:
Exectutive Board , ,
Supervisory Board
, ,
Average number of full time employees
T.DKK
Amortization of intangible assets , ,
Depreciation of property, plant and equipment , ,
, ,
T.DKK
M&A activities ,
Consultancy ,
Redundancy ,
Settlement
Other expenses
, ,
Management Report
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Trackunit
Annual Report 2021
4. Financial Income and Expenses
5. Tax on Profit/Loss for the Year
T.DKK
Financial income
Interest income, banks – –
Exchange rate adjustments ,
Interest received from group enterprises , ,
Other financial income
, ,
Financial cost
Interest expenses, bank debt ,
Interest and finance charges for lease liabilities
Loan fee amortizations ,
Interest paid from Group enterprises , ,
Other financial expenses, including bank fees ,
Exchange rate adjustments ,
, ,
T.DKK
Current tax for the year , ,
Deferred tax for the year ,
, ,
T.DKK Goodwill Software
Completed
development
projects
Development
projects
in progress Total
Cost:
At January , , , , ,
Exchange dierences
Addition acquisition of subsidiary
Additions during the year , , ,
Reclassifications , (,)
As at December , , , , ,
Amortization and impairment:
At January , , , ,
Exchange dierences
Addition acquisition of subsidiary
Amortization charge , , , ,
As at December , , , ,
Carrying amount December , , , , ,
6. Intangible Assets
Completed development projects relate to develop-
ment of products and services that are ready for sale.
Management Report
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72
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Annual Report 2021
T.DKK
Land and
buildings
Other fixtures
and fittings, tools
and equipment
Leasehold
improvements
Cost:
At January , , ,
Additions during the year ,
Disposals during the year ()
As at December , , ,
Amortization and impairment:
At January , , ,
Depreciation for the year , ,
Depreciation of disposed assets ()
As at December , , ,
Carrying amount December , ,
Including assets under finance
leases amounting to , ,
7. Property, Plant and Equipment 8. Investments in Subsidiaries
T.DKK
Cost at January , ,
Exchange adjustment ,
Additions for the year ,,
Cost af December ,, ,
Value adjustments at January , ,
Exchange adjustments (,)
Dividend received (,)
Net profit/loss for the year (,) ,
Value adjustments at December (,) ,
Equity investments with negative net asset value amortized over receivables , ,
Equity investments with negative net asset vaule transferred to provision
Carrying amount at December ,, ,
Management Report
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Trackunit
Annual Report 2021
Name and registered
oce Country
Direct Group
holding (pct.)
Trackunit Pty Ltd Australia %
Trackunit KK Japan %
Trackunit Asia Pacific Pte Ltd Singapore %
Trackunit AB Sweden %
Trackunit AS Norway %
Trackunit America ApS Denmark %
– Trackunit Inc USA %
– Trackunit Canada Inc Canada %
Trackunit SAS France %
Trackunit Ltd United Kingdom %
– Fern Capital Ltd United Kingdom %
· Trackunit Telematics Ltd United Kingdom %
Trackunit GmbH Germany %
Trackunit BV Netherlands %
Investment in subsidiaries are specified as follows:
T.DKK
Cost at January , ,
Additions for the year
Disposals for the year -
Cost af December , ,
Carrying amount at December , ,
T.DKK
Raw materials and consumables ,
Work in progress ()
Finished goods and goods for resale ,
, ,
9. Other Fixed Investments
11. Prepayments 12. Share Capital
10. Inventories
Prepayments amounts to T.DKK 10,616 for 2021 (2020:
T.DKK 5,181) and consist of prepaid expenses concern-
ing rent, insurance premiums and subscriptions.
The share capital consists of 500,000 shares of
a nominal value of T.DKK 1. No shares carry any
special rights.
Management Report
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Trackunit
Annual Report 2021
T.DKK
Proposed dividend for the year ,
Transfer to/from reserves in accordance with the Articles of Association (,) ,
Retained earnings , ,
(,) ,
T.DKK
Provision for deered tax at January , ,
Amounts recognized in the income statement for the year ,
Provision for deered tax at December , ,
13. Distribution of Profit/Loss 15. Long-term Debt
14. Provision for Deferred Tax
T.DKK
Less than
year
to
years
More than
years Total
December
Lease obligations , , ,
Other payables , ,
Deferred income , , ,
, , ,
December
Credit institutions , , ,
Lease obligations , , ,
Other payables , , ,
Deferred income , , ,
, , ,
Payments due within 1 year are recognized in short-term
debt. Other debt is recognized in long-term debt.
The debt falls due for payment as specified below:
Management Report
Financial Statements
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Trackunit
Annual Report 2021
T.DKK
Liabilities
16. Derivative Financial
Instruments
18. Contingent Assets,
Liabilities, and Financial
Obligations
20. Related Parties
17. Deferred Revenue 19. Events After the Balance
Sheet Date
Derivative financial instruments contracts in the form
of interest rate swaps have been concluded. At the
balance sheet end date, the fair value of derivative
financial instruments amount to:
The Danish group companies are jointly and severally
liable for tax on the Danish jointly taxed incomes etc. of
the Danish Group. The total amount of corporation tax
payable is disclosed in the Annual Report of Galaxy
Holdco ApS, which is the administration company of the
jointly taxation purpose. Moreover, the Danish group
companies are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty
payments and tax on unearned income. Any subse-
quent adjustments of corporation taxes and withhold-
ing taxes may increase the Company’s liability.
Transactions with related parties have been at
arm's-length.
Refer to the consolidated financial statement
regarding the company's ownership structure.
Deferred revenue consists of payments received in
respect of income subsequent years. The total
deferred revenue amounts to T.DKK 157,029 in 2021
(2020: T.DKK 114,072)
No subsequent events have occurred after the balance
sheet date that required adjustment to or disclosure in
the financial statements.
Management Report
Financial Statements
76
Trackunit
Annual Report 2021
The Annual Report of Trackunit ApS for 2021 has been
prepared in accordance with the provisions of the
Danish Financial Statements Act applying to reporting
class C.
The Financial Statements for 2021 are presented in T.DKK.
Change in accounting policy
Recognition of revenue in the income statement of IoT
devices has been changed.
Before the change IoT devices were recognized in the
income statement at delivery time and subscriptions
were recognized in the income statement over time
based on the contract. Recognition of revenue of IOT
devices is now aligned with subscriptions as they are
seen as a single performance obligation and therefore
recognized on a straight-line basis over the contract
period (minimum 3 years). The connected devices are
likewise recognized on a straight-line basis over a period
of 3 years. The change in revenue recognition has
aected the result of the year negatively with DKK 4m
and last year negatively with DKK 4m.
Cash flow statement
With reference to section 86(4) of the Danish Financial
Statements Act and to the cash flow statement included
in the consolidated financial statements of Trackunit
ApS, the Company has not prepared a cash flow
statement.
Recognition and measurement
Revenues are recognized in the income statement as
earned. Furthermore, value adjustments of financial
assets and liabilities measured at fair value or
amortized cost are recognized. Moreover, all expenses
incurred to achieve the earnings for the year are
recognized in the income statement, including
depreciation, amortization, impairment losses and
provisions as well as reversals due to changed
accounting estimates of amounts that have previously
been recognized in the income statement.
Assets are recognized in the balance sheet when it is
probable that future economic benefits attributable to
the asset will flow to the Company, and the value of the
asset can be measured reliably.
Liabilities are recognized in the balance sheet when it is
probable that future economic benefits will flow out of
the Company, and the value of the liability can be
measured reliably.
Assets and liabilities are initially measured at cost.
Subsequently, assets and liabilities are measured as
described for each item below.
Leases as lessor
The lessee is required to recognize all leases as a lease
liability and a lease asset in the balance sheet with two
exceptions: short-term leases (less than 12 months) and
leases relating to low-value assets. It must furthermore
be considered whether the agreement is a lease or
a service arrangement.
The company leases various vehicles, oces, and
other equipment. From 1 January 2019, leases are
recognized as a right-of-use asset and a correspond-
ing liability at the date the leased asset is available for
use by the group. In general, all lease contracts are
recognized as a lease liability and a lease asset in the
balance sheet with two exceptions: short-term leases
(less than 12 months) and leases relating to low-value
assets (< USD 5.000).
Cars
Lease contracts could be separated between a leasing
contract and a service arrangement. The group has
decided not to separate lease and non-lease compo-
nents and instead recognizes each car as one contract
according to IFRS 16.15.
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract several factors must be
determined. Leasing period and fixed payments
appears in the lease contract which means only the
interest rate has to be determined. Here the groups
incremental borrowing rate to obtain an asset of
similar value is used. In accordance with the Senior
facilities agreement the interest rate for cars is 2.75%
Variable lease payments as extra miles beyond the
lease contract, damages, bridge tolls etc. is not
measured as a lease liability and a lease asset in the
balance sheet. Instead, these costs are recognized in
the profit and loss when they occur.
Oces
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract several factors must be
determined. Fixed payments appear in the lease
contract. The leasing period for all oces is set the
same date as the HQ oce expires even though
dierent terms of condition may occur. To find the
groups incremental borrowing rate to obtain an asset of
similar value, the interest rate is set to 3,5% for Oces
in accordance with the Senior facilities agreement.
Other equipment
Assets and liabilities arising from a lease are initially
measured on a present value basis. To find the present
value of a lease contract several factors must be
determined. Leasing period and fixed payments
appears in the lease contract which means only the
interest rate has to be determined. Here the groups
incremental borrowing rate to obtain an asset of similar
value is used. In accordance with the Senior facilities
agreement the interest rate for cars is 2.75%
Translation policies
Transactions in foreign currencies are translated at the
exchange rates at the dates of transaction. Gains and
losses arising due to dierences between the transac-
tion date rates and the rates at the dates of payment
21. Significant Accounting Policies
Management Report
Financial Statements
77
Trackunit
Annual Report 2021
are recognized in financial income and expenses in
the income statement.
Receivables, payables, and other monetary items in
foreign currencies that have not been settled at the
balance sheet date are translated at the exchange
rates at the balance sheet date. Any dierences
between the exchange rates at the balance sheet date
and the transaction date rates are recognized in
financial income and expenses in the income statement;
however, see the section on hedge accounting.
Income statements of foreign subsidiaries that are
separate legal entities are translated at transaction
date rates or approximated average exchange rates.
Balance sheet items are translated at the exchange
rates at the balance sheet date. Exchange adjustments
arising on the translation of the opening equity and
exchange adjustments arising from the translation of
the income statements at the exchange rates at the
balance sheet date are recognized directly in equity.
Derivative financial instruments
Derivative financial instruments are initially recognized
in the balance sheet at cost and are subsequently
remeasured at their fair values. Positive and negative
fair values of derivative financial instruments are
classified as “Other receivables” and “Other payables”,
respectively.
Changes in the fair values of derivative financial
instruments are recognized in the income statement
unless the derivative financial instrument is designated
and qualify as hedge accounting, see below.
Hedge accounting
Changes in the fair values of financial instruments
that are designated and qualify as fair value hedges
of a recognized asset, or a recognized liability are
recognized in the income statement as are any
changes in the fair value of the hedged asset or the
hedged liability related to the hedged risk.
Changes in the fair values of derivative financial
instruments that are designated and qualify as
hedges of expected future transactions are recognized
in retained earnings under equity as regards the
eective portion of the hedge. The ineective portion
is recognized in the income statement. If the hedged
transaction results in an asset or a liability, the
amount deferred in equity is transferred from equity
and recognized in the cost of the asset or the liability,
respectively. If the hedged transaction results in an
income or an expense, the amount deferred in equity
is transferred from equity to the income statement in
the period in which the hedged transaction is
recognized. The amount is recognized in the same item
as the hedged transaction.
Changes in the fair values of financial instruments
that are designated and qualify as hedges of net
investments in independent foreign subsidiaries or
associates are recognized directly in equity as regards
the eective portion of the hedge, whereas the
ineective portion is recognized in the income
statement.
Revenue
Revenue recognition
Revenue is recognized when promised goods or services
are transferred to customers in an amount that reflects
the consideration to which we expect to be entitled in
exchange for those goods or services.
We determine revenue recognition through the
following steps:
1. identification of the contract, or contracts, with
a customer;
2. identification of the performance obligations in
the contract;
3. determination of the transaction price;
4. allocation of the transaction price to the perfor-
mance obligations in the contract; and
5. recognition of revenue when, or as, we satisfy
a performance obligation.
We oer subscriptions to access our Cloud and IoT
platforms. Customers subscribe to one or more
Applications which includes data that is primarily
provided by various proprietary connected device access
points, including connectivity sensors. Our Cloud and IoT
platforms and the related connected device access
points are highly interdependent and interrelated and
represent a combined performance obligation.
Deferred revenue
Deferred revenue represents amounts billed to
customers or payments received from customers for
which revenue has not yet been recognized. Deferred
revenue consists of prepayments made by customers
for future periods. A portion of customer contracts is
paid in advance for the full, multi-year term. Additional-
ly, the Group enables its customers to prepay all, or
part, of their contractual obligations monthly,
quarterly, or annually. As a result, the deferred revenue
balance does not represent the total contract value of
all multi-year, non-cancelable subscription agreements.
The current portion of deferred revenue represents the
amount that is expected to be recognized within one
year of the consolidated balance sheet date.
Connected Devices
Trackunit capitalizes connected devices associated
with subscription contracts. These costs are directly
related to customer. These contract fulfillment costs
are amortized over a period of benefit of three years.
Trackunit determined the period of benefit by taking
into consideration the expected life of the connected
device, the connected device’s warranty period, past
experience with customers, the duration of our
relationships with our customers and other available
information.
Other external expenses
Other external expenses comprise expenses for
premises, sales, and distribution as well as oce
expenses, etc.
Management Report
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Annual Report 2021
Gross profit/loss
With reference to section 32 of the Danish Financial
Statements Act, gross profit/loss is calculated as a
summary of revenue, other operating income,
expenses for raw materials and consumables and
other external expenses.
Sta expenses
Sta expenses comprise wages and salaries as well as
payroll expenses.
Amortization, depreciation, and
impairment losses
Amortization, depreciation, and impairment losses
comprise amortization, depreciation and impairment of
intangible assets and property, plant, and equipment.
Other operating income and expenses
Other operating income and other operating expenses
comprise items of a secondary nature to the main
activities of the Company, including gains and losses
on the sale of intangible assets and property, plant,
and equipment.
Income from investments in subsidiaries
The item “Income from investments in subsidiaries” in
the income statement includes the proportionate share
of the profit for the year.
Financial income and expenses
Financial income and expenses are recognized in the
income statement at the amounts relating to the
financial year.
Tax on profit/loss for the year
Tax for the year consists of current tax for the year and
changes in deferred tax for the year. The tax attribut-
able to the profit for the year is recognized in the
income statement, whereas the tax attributable to
equity transactions is recognized directly in equity.
The Company is jointly taxed with wholly owned Danish
and foreign subsidiaries. The tax eect of the joint
taxation is allocated to enterprises in proportion to their
taxable incomes.
Intangible assets
Development projects, patents, and licenses
Costs of development projects comprise salaries,
amortization, and other expenses directly or indirectly
attributable to the Company’s development activities.
Development projects that are clearly defined and
identifiable and in respect of which technical feasibility,
sucient resources and a potential future market or
development opportunity in the enterprise can be
demonstrated, and where it is the intention to manufac-
ture, market or use the project, are recognized as
intangible assets. This applies if sucient certainty
exists that the value in use of future earnings can cover
cost of sales, distribution and administrative expenses
involved as well as the development costs.
Development projects that do not meet the criteria for
recognition in the balance sheet are recognized as
expenses in the income statement as incurred.
Capitalized development costs are measured at cost
less accumulated amortization and impairment losses
or at a lower recoverable amount. An amount corre-
sponding to the recognized development costs is
allocated to the equity item “Reserve for development
costs”. The reserve comprises only development costs
recognized in financial years beginning on or after 1
January 2016. The reserve is reduced by amortization of
and impairment losses on the development projects on
a continuing basis.
As of the date of completion, capitalized development
costs are amortized on a straight-line basis over the
period of the expected economic benefit from the
development work. The amortization period is 3-5 years.
Licenses are measured at cost less accumulated
amortization and less any accumulated impairment
losses or at a lower value in use.
Software licenses are amortized over the period of the
agreement, which is 3-5 years.
Goodwill
Goodwill is amortized on a straight-line basis over the
estimated useful life of 10 years determined on the basis
of Management’s experience with the individual
business areas.
Property, plant and equipment
Property, plant and equipment are measured at cost
less accumulated depreciation and less any accumulat-
ed impairment losses.
Cost comprises the cost of acquisition and expenses
directly related to the acquisition up until the time when
the asset is ready for use.
Depreciation based on cost reduced by any residual
value is calculated on a straight-line basis over the
expected useful lives of the assets, which are:
Other buildings 4 years
Plant and machinery 3-7 years
Other fixtures and fittings,
tools and equipment 3-5 years
Depreciation period and residual value are reassessed
annually.
Assets with a useful life less than 1 year are expensed
in the year of acquisition.
Impairment of fixed assets
The carrying amounts of intangible assets and
property, plant and equipment are reviewed on an
annual basis to determine whether there is any
indication of impairment other than that expressed by
amortization and depreciation.
If so, the asset is written down to its lower recoverable
amount.
Investments in subsidiaries
Investments in subsidiaries are recognized and
measured under the equity method.
Management Report
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Trackunit
Annual Report 2021
The item “Investments in subsidiaries” in the balance
sheet includes the proportionate ownership share of
the net asset value of the enterprises calculated on the
basis of the fair values of identifiable net assets at the
time of acquisition with deduction or addition of
unrealized intercompany profits or losses and with
addition of the remaining value of any increases in
value and goodwill calculated at the time of acquisi-
tion of the enterprises.
The total net revaluation of investments in subsidiaries
is transferred upon distribution of profit to
“Reserve for net revaluation under the equity method“
under equity. The reserve is reduced by dividend
distributed to the Parent Company and adjusted for
other equity movements in the subsidiaries.
Subsidiaries with a negative net asset value are
recognized at DKK 0. Any legal or constructive
obligation of the Parent Company to cover the negative
balance of the enterprise is recognized in provisions.
Other fixed asset investments
Other fixed asset investments consist of deposit.
Inventories
Inventories are measured at the lower of cost under
the FIFO method and net realizable value.
The net realizable value of inventories is calculated at
the amount expected to be generated by sale of the
inventories in the process of normal operations with
deduction of selling expenses. The net realizable value
is determined allowing for marketability, obsolescence,
and development in expected selling price.
The cost of goods for resale, raw materials and
consumables equals landed cost.
The cost of finished goods and work in progress
comprises the cost of raw materials, consumables, and
direct labour with the addition of indirect production
costs. Indirect production costs comprise the cost of
indirect materials and labour as well as maintenance
and depreciation of the machinery, factory buildings
and equipment used in the manufacturing process as
well as costs of factory administration and management.
Receivables
Receivables are recognized in the balance sheet at
amortized cost, which substantially corresponds to
nominal value. Provisions for estimated bad debts
are made.
Prepayments
Prepayments comprise prepaid expenses concerning
rent, insurance premiums and subscriptions.
Equity – dividend
Dividend distribution proposed by Management for the
year is disclosed as a separate equity item.
Deferred tax assets and liabilities
Deferred income tax is measured using the balance
sheet liability method in respect of temporary dierenc-
es arising between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purposes on the basis of the intended use of the asset
and settlement of the liability, respectively.
Deferred tax assets are measured at the value at which
the asset is expected to be realized, either by elimina-
tion in tax on future earnings or by set-o against
deferred tax liabilities within the same legal tax entity.
Deferred tax is measured on the basis of the tax rules
and tax rates that will be eective under the legislation
at the balance sheet date when the deferred tax is
expected to crystallize as current tax. Any changes in
deferred tax due to changes to tax rates are recognized
in the income statement or in equity if the deferred tax
relates to items recognized in equity.
Current tax receivables and liabilities
Current tax liabilities and receivables are recognized in
the balance sheet as the expected taxable income for
the year adjusted for tax on taxable incomes for prior
years and tax paid on account. Extra payments and
repayment under the on-account taxation scheme are
recognized in the income statement in financial income
and expenses.
Financial debts
Loans, such as loans from credit institutions, are
recognized initially at the proceeds received net of
transaction expenses incurred. Subsequently, the
loans are measured at amortized cost; the dierence
between the proceeds and the nominal value is
recognized as an interest expense in the income
statement over the loan period.
Mortgage loans are measured at amortized cost,
which for cash loans corresponds to the remaining
loan. Amortized cost of debenture loans corresponds
to the remaining loan calculated as the underlying
cash value of the loan at the date of raising the loan
adjusted for depreciation of the price adjustment of
the loan made over the term of the loan at the date of
raising the loan.
Other debts are measured at amortized cost, substan-
tially corresponding to nominal value.
Management Report
Financial Statements
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Trackunit
Annual Report 2021
Management Statement
Executive Board
Management Report
Financial Statements 81
Trackunit
Annual Report 2021
Independent Auditor’s Report
Opinion
Basis for opinion
Statement on management’s review
Management’s responsibilities for
the financial statements
Auditor’s responsibilities for the audit
of the financial statements
Management Report
Financial Statements 82
Trackunit
Annual Report 2021
CVR No 33 77 12 31
Management Report
Financial Statements 83
Trackunit
Annual Report 2021
CVR No 20 75 01 70
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Annual Report 2021