Annual Report
For the financial year 1 January - December 31, 2022
NREP A/S
Sub name: Urban Partners A/S
Cvr. nr. 29168709
Southamptongade 4
DK-2150 Nordhavn
The Annual Report was presented and
adopted at the Annual General meeting on
the 7 June 2023
Page 2 of 66
Contents
MANAGEMENT’S STATEMENT ..................................................................................................................................................................... 3
INDEPENDENT AUDITOR’S REPORT ........................................................................................................................................................... 4
COMPANY INFORMATION ............................................................................................................................................................................. 6
FINANCIAL HIGHLIGHTS – 5 YEARS ............................................................................................................................................................ 7
MANAGEMENT REVIEW ................................................................................................................................................................................ 8
INCOME STATEMENT ................................................................................................................................................................................. 15
BALANCE SHEET ......................................................................................................................................................................................... 16
STATEMENT OF CHANGES IN EQUITY ...................................................................................................................................................... 17
STATEMENT OF CASH FLOW ..................................................................................................................................................................... 19
NOTES TO THE FINANCIAL STATEMENT ....................................................................................................................... 20
1. Revenue ..................................................................................................................................................................................... 20
2. Staff expenses ......................................................................................................................................................................... 20
3. Financial Income ................................................................................................................................................................... 21
4. Financial expenses ................................................................................................................................................................ 21
5. Income tax ............................................................................................................................................................................... 22
6. Intangible assets ................................................................................................................................................................... 23
7. Property, plant and equipment ....................................................................................................................................... 26
8. Leases ........................................................................................................................................................................................ 28
9. Investments in subsidiaries ............................................................................................................................................... 29
10. Partially owned subsidiaries ............................................................................................................................................ 32
11. Business Combinations ....................................................................................................................................................... 33
12. Investments in Joint Ventures .......................................................................................................................................... 34
13. Investments in associates .................................................................................................................................................. 35
14. Other financial assets .......................................................................................................................................................... 36
15. Receivables .............................................................................................................................................................................. 37
16. Prepayments / Other current financial assets .......................................................................................................... 38
17. Share base payment ............................................................................................................................................................. 38
18. Share capital ........................................................................................................................................................................... 40
19. Proposed distribution of profit, Parent ........................................................................................................................ 41
20. Trade Payables ...................................................................................................................................................................... 41
21. Financial assets and liabilities ......................................................................................................................................... 41
22. Financial risk management .............................................................................................................................................. 44
23. Related parties ....................................................................................................................................................................... 48
24. Contingent assets, liabilities and other financial obligations ............................................................................. 50
25. Audit Fee .................................................................................................................................................................................. 50
26. Provision ................................................................................................................................................................................... 50
27. Subsequent event .................................................................................................................................................................. 50
28. General Information ............................................................................................................................................................ 51
29. Basis of Preparation ............................................................................................................................................................ 51
30. Accounting Policies for the Group .................................................................................................................................. 51
31. Critical accounting estimates and judgements ......................................................................................................... 63
32. Accounting policies for the Parent Company ............................................................................................................. 65
Page 3 of 66
Management’s statement
The Executive Board and Board of Directors have today considered and adopted the Annual Report of NREP A/S for the
financial year 1 January to 31 December 2022.
The Consolidated Financial Statements have been prepared in accordance with International Financial
Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act and the Parent
Company Financial Statements have been prepared in accordance with the Danish Financial Statements Act. The
Management's Review has been prepared in accordance with the Danish Financial Statements Act.
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements gives a true and fair
view of the financial position at 31 December 2022 of the Group and the Parent Company and of the results of the Group
and Parent Company operations and consolidated cash flows for 1 January to 31 December 2022.
In our opinion, Management’s Review includes a true and fair account of the development in the operations and financial
matters of the group and the Parent Company, of the results for the year and of the financial position of the Group and
the Parent Company.
We recommend that the Annual Report be adopted at the Annual General Meeting.
Nordhavn, 1 June 2023
Executive Board
Claus Schei Mathisen Henrik Skak Bender
Board of Directors
Mikkel Bülow-Lehnsby Jim Hagemann Snabe
Chairperson Vice Chair
Morten Beck Jørgensen Rasmus Nørgaard
Celia Francis
Page 4 of 66
Independent Auditor’s report
To the Shareholders of NREP A/S
Opinion
In our opinion, the Consolidated Financial Statements give a true and fair view of the Group's financial position at 31
December 2022 and of the results of the Group's operations and cash flows for the financial year 1 January 2022 to 31
December 2022 in accordance with International Financial Reporting Standards as adopted by the EU and further
requirements in the Danish Financial Statements Act.
Moreover, in our opinion, the Parent Company Financial Statements give a true and fair view of the Parent Company's
financial position at 31 December 2022 and of the results of the Parent Company's operations for the financial year 1 January
to 31 December 2022 in accordance with the Danish Financial Statements Act.
We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of NREP A/S for the
financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in
equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company, as
well as statement of comprehensive income and cash flow statement for the Group (“Financial Statements”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements
applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in
accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Statement on Management’s Review
Management is responsible for Management’s Review.
Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing
so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge
obtained during the audit, or otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the
Danish Financials Statements Act.
Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial
Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of
the Danish Financial Statement Act. We did not identify any material misstatement in Management’s Review.
Management’s Responsibilities for the Financial Statements
Management is responsible for the preparation of Consolidated Financial Statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish
Financial Statements Act and for the preparation of Parent Company Financial Statements that give a true and fair view in
accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company's ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
Page 5 of 66
of accounting in preparing the Financial Statements unless Management either intends to liquidate the Group or the Parent
Company or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and the
additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these Financial Statements.
As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise
professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the over-ride of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by Management.
• Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the
Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and contents of the Financial Statements, including the disclosures, and
whether the Financial Statements represent the underlying transactions and events in a manner that gives a true
and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the Financial Statements. We are responsible for the direction,
supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
Hellerup, 1 June 2023
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33 77 12 31
Thomas Wraae Holm Qasam Hussain
State Authorised Public Accountant State Authorised Public Accountant
Mne30141 Mne44159
Page 6 of 66
Company information
The Company NREP A/S
Subname: Urban Partners A/S
Southamptongade 4
DK-2150 Nordhavn
Website: www.nrep.com
CVR No: 29 16 87 09
Financial period: 1 January - 31 December
Incorporated: 2 November 2005
Financial year: 17th financial year
Municipality of reg. Office: Copenhagen
Board of Directors Mikkel Bülow-Lehnsby, Chairman
Jim Hagemann Snabe, Deputy Chairman
Celia Francis
Rasmus Nørgaard
Morten Beck Jørgensen
Executive Board Claus Schei Mathisen
Henrik Skak Bender
Auditors PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Strandvejen 44
DK-2900 Hellerup
Lawyers Bruun & Hjejle
Nørregade 21
DK-1165 København K
Bankers Danske Bank A/S
Strødamvej 46
DK-2100 København Ø
Page 7 of 66
Financial highlights – 5 years
Seen over a five-year period, the development of the group is described by the following financial highlights:
Group
tDKK
2022
2021
2020
2019
2018
Profit/loss
Revenue
1,360,125
630,588
525,303
294,662
249,927
Operating profit/loss
889,348
344,390
359,351
197,198
184,676
Profit/loss before financial income and
Expenses
24,891
68,459
90,370
35,990
48,179
Net financials
(11,133)
(5,080)
(11,779)
2,495
(2,996)
Net profit/loss for the year
7,758
82,148
90,152
50,323
33,506
Balance sheet
Balance sheet total
1,934,922
1,178,705
931,959
403,089
267,154
Equity
730,834
712,985
637,286
191,568
140,734
Cash flows
Cash flows from:
- Operating activities
41,749
(139,572)
173,115
35,093
20,611
- Investing activities
(66,074)
(171,183)
(91,447)
(13,454)
(16,278)
- Including investment in property,
plant and equipment
(21,682)
(6,454)
(1,649)
(12,288)
(858)
- Financing activities
120,997
(20,617)
361,053
(6,012)
11,314
Change in cash and cash equivalents
for the year
96,672
(331,372)
442,721
15,627
15,647
Average number of employees
590
385
230
151
121
Ratios
Gross margin
65.4%
54.6%
68.4%
66.9%
73.9%
Profit margin
1.8%
10.9%
17.2%
12.2%
19.3%
Return on assets
1.3%
5.8%
9.7%
8.9%
18.0%
Solvency ratio
37.8%
60.5%
68.4%
47.5%
52.7%
Return on equity
1.1%
12.2%
21.8%
30.3%
35.3%
The ratios have been calculated in accordance with the recommendations of the Association of Danish Financial Analysts.
The ratios are defined as follows:
Gross margin
Operating profit/loss x 100
Revenue
Profit margin
Profit before financials x 100
Revenue
Return on assets
Profit before financials x 100
Total assets
Solvency ratio
Equity at year end x 100
Total assets at year end
Return on equity
Net profit for the year x 100
Average equity
Page 8 of 66
Management review
Key activities
Urban Partners is a platform of vision-aligned
investment verticals shaped around urban problem
solving. The company exist to power the progress of
cities and citizens by investing to help solve the most
pressing urban problems – and does so by uniting
insights, stakeholders, and capital. The aspiration is to
deliver a long-term positive impact alongside attractive
returns.
The platform of Urban Partners holds four vision-
aligned investment verticals shaped around urban
problem solving. With close to DKK 150 billion under
management, the verticals invest in assets, companies,
technologies, and solutions:
● NREP is a real estate investor committed to
driving real change in the industry with a
holistic ESG focus. With a successful track
record, NREP is known for its ability to
reimagine the built environment, including
several large-scale neighborhood
developments. NREP manages one of Europe’s
largest real estate funds and runs a platform
with over 8 million square meters across eight
countries. The company’s carbon pledge is one
of the most progressive in the industry with a
target of becoming Net Zero by 2028.
● 2150 is a venture capital firm investing in the
sustainable reshaping of the broad urban
environment. 2150 backs entrepreneurs
working at the forefront of the green transition
and helps scale the companies and
technologies with long-term equitable impact
across the whole ‘urban stack’, including how
cities are built, designed, constructed, and
powered, to the way people live, work and are
cared for.
● Velo Capital provides flexible real estate credit
solutions, helping its customers focus on
sustainable assets. With 10 years of alternative
real estate credit track record, Velo oversees
three active funds with approximately EUR 1
billion Asset under Management, focusing on
real estate assets in Germany’s top cities. Velo
Capital is currently in the process of launching
new credit strategies across Northern Europe,
with a keen focus on green financing.
● Luma Equity, the newest innovation to our
platform, is an impact private equity investor
with an ambition to aid the transition to
sustainable cities. Building on the combined
Urban Partners impact leadership, end-market
expertise and network, Luma Equity drives an
integrated impact and investment value
creation model. Luma Equity will partner with
strong management teams in scaling up the
required proven green solutions and business
models required to reach truly sustainable
cities.
Urban Partners was founded in 2005 on a bedrock of
strong, Nordic values, originally under the name ‘Nordic
Real Estate Partners’. Today, the company has
investments in 15 countries, offices in 8 markets and a
total of approx. 700 employees. Across verticals, Urban
Partners has three current priorities: 1) decarbonize the
built environment; 2) (re)generate urban
neighborhoods; and 3) pioneer problem-solving
partnerships to bridge the gap between interests of
people, cities, and capital.
In this Report, Urban Partners is referring to the Group
and NREP A/S is referring to the Parent company.
Key development in the year
The income statement of the Group for 2022 shows a
surplus off DKK 7.8 million and at 31 December 2022
the balance sheet of the Group shows equity of DKK
730.8 million compared to a Group profit of DKK 82.1
million in 2021 and an equity of DKK 713.0 million at 31
December 2021.
2022 has been a very eventful year for Urban Partners
with a several major milestones achieved. Below are
some of the main notable events and activities in 2022:
• The perpetual Income+ fund (NIP) raised
additional capital, totaling EUR 1.6 billion at
second close
• A new partnership was formed with C40 to
collaborate on 15-minute city pilots
• Introduction of carbon tax to speed up
decarbonization (NREP)
• The company entered Germany with its first
real estate equity investment (NREP)
Page 9 of 66
• Jens Stender, Partner, assumed the role of Co-
CEO in support of Claus Mathisen, CEO. Also,
Rune Kock, Partner, was announced as CEO for
the real estate vertical (NREP). Finally, Colin
Throssell joined as CFO and Partner
In 2022, Urban Partners onboarded further 216 new
employees bringing the total number of employees at
end of 2022 to 688, equivalent to average 590 FTE.
The launch of Urban Partners as a brand and platform
happened on May 5 2023, and was carried out as a co-
registration of the Urban Partners name in Denmark
and other markets where co-registrations are possible.
Follow-up on development expectations from last
year
Management considers the financial result to be
satisfactory particularly in light of the general market
turmoil that was seen over 2022.
Revenue increased by 116% (DKK 729.5 million) which
is higher than the expected 25%. This is mainly due to
new funds raised and funds committed investments
ended higher than expected which is particularly good
in the current market environment. Other
administrative expenses increased by 64% (DKK 184.6
million) as a result of the investment in organizational
infrastructure and preparation for deploying new
capital for our new funds activities to be launched in
2023.
In 2022, Urban Partners welcomed 216 new
employees. The number of employees increased with
46% which is higher than the expected 30-40% for the
year. Focus has been recruitment of high-level
professionals, with particular focus on real estate
investment teams and credit business professionals as
well as the continued build-up and competency-
enhancement of corporate functions to enable the
strong growth of Urban Partners in a sustainable
manner, with strengthened systems and infrastructure
and a maturing control environment
Profit before taxes (excluding depreciation,
amortization, impairment losses, financials and
promote) ended on DKK 93.6 million which is higher
than the expected range of DKK 70-80 million.
Profit before taxes shows a profit of DKK 21.0 million
(2021: profit of DKK 52.8 million). The lower result year
on year is mainly driven by higher operating expenses
and investment in new business areas which Urban
Partners considers to be an investment into higher
future profitability such as credit etc.
Targets and expectations for the year ahead
Urban Partners' management expects a higher level of
activity during 2023.
With the launch of Urban Partners’ new NSF V, fund
management fees and other income in 2023 is
expected to increase by 5-10% compared to 2022.
Whilst additional new fund products are also being
considered; however, they are likely to launch later in
2023 or potential as late as 2024 and are therefore
anticipated to have limited impact on the 2023 results
of the Group.
Costs are expected to increase, as Urban Partners
continues to build its organization and will seek to
increase the number of employees but in a slower pace
than previous years. Urban Partners expects to increase
number of employees in a range of 5-10%.
Whilst NREP-related investment in particular are
expected to stabilize and deliver solid profitability,
investments into new strategies and verticals (eg Luma
Equities and Velo Capital) will themselves potentially
outpace the revenue stream associated with these
areas, such that overall profitability is expected to
increase but at a slower rate than would otherwise be
the case.
Overall, the result for the coming year is expected to be
somewhat higher than in 2022 and in line with the
longer-term strategic plans of the Group. Profit before
taxes (excluding depreciation, amortization,
impairment losses, financials and promote) is expected
to be in the range of DKK 70-80 million.
Special risks - operating risks and financial risks
The Group regularly defines, monitors, and manages its
external risks (including foreign exchange risk, credit
risk, investment risk, liquidity risk, reputation risk et. al.)
to align with the risk appetite of its stakeholders.
Market risks
Management fees received from funds are primarily
based on the committed or deployed capital. In
Management's assessment, the risk profile of the
Urban Partners is normal for this Market.
Page 10 of 66
The value assessments of properties, held directly or
indirectly through equity investments, are inherently
subject to some degree of uncertainty. In order to limit
the risk to the greatest extent, all relevant properties
have been assessed by external valuers, who are
independent of the company.
In 2022 the war had a very limited direct business
impact on Urban Partners as the business has no assets
in Russia, Belarus, or Ukraine and as it predominantly
operates close end funds with fees associated with
equity commitments, short term valuation fluctuation
does not materially impact income.
The greatest impact from the war has been the rapid
construction cost inflation across a broad range of
building materials and energy where Russia has been a
major supplier. Urban Partners has not had any major
delays or direct losses as a result of increased
construction costs. As such the war in Ukraine had a
moderate impact on the Group’s real estate investment
activity during 2022 (mainly affecting development
projects) but the impact has been manageable.
A further impact and one that we anticipate having
ongoing effects in 2023 is the effect from general
inflation and increasing interest rates. Urban Partners is
experiencing higher interest rates on real estate related
leverage and generally greater nervousness from the
lending sector to provide credit. This is resulting in
lower loan-to-cost (LTC) and loan-to-value (LTV) levels
provided by the banks, reducing the return potential for
new investments currently.
As a result of these factors, Urban Partners’ focus is on
securing successful exits for the current investments in
the exit pipeline as well as carefully managing the
financing risk for new commitments.
Foreign exchange risks
The Group primarily receives management fees in EUR,
whereas the Group's expenses are distributed between
DKK, SEK, NOK, PLN, GBP and EUR. This implies a risk in
respect of exchange fluctuation of which the main part
is however covered for operating purposes by matching
income and expenses in the same currency. Urban
Partners has a dedicated Treasury function which focus
on treasury related risk areas.
Interest rate risks
NREP A/S and affiliated companies have little exposure
to interest rate risk as external financing is limited to a
working capital facility and a mortgage loan.
The Urban Partners Group might be indirectly exposed
to interest rate risk through the Funds' performance.
Funds have a dedicated policy for their own interest
rate risk exposures.
Development activities
During 2022 investments of DKK 12 million were made
in development activities. Development projects
include investments in digitalization projects and zero
carbon activities and few new platforms as well as
specific joint ventures with the aim to support the long-
term strategy and focus areas of Urban Partners.
External environment
Urban Partners considers effective environmental risk
management and sustainability a prerequisite to
operate. Additionally, it sees it as an integrated part of
ensuring and improving the long-term value-creation of
its investments. Effective environmental management
not only mitigates potential risks and liabilities, it can
also improve net operating income, capital
requirements and residual value.
Urban Partners is committed to establishing sustainable
relationships with the local stakeholders that are
impacted by its business activities. This is to ensure
mutual respect and understanding, active partnerships
and shared benefits to support the long-term
development of individual projects. Well beyond mere
regulatory compliance, Urban Partners’ ambition is to
have a positive impact on the local communities in
which we invest.
Urban Partners explicitly includes sustainability as a key
component in its investment policy and investment
decision-making.
Page 11 of 66
Corporate Social Responsibility
Urban Partners business model is described in the
Management Review, under the Key Activities section.
Urban Partners has a policy to take a pioneering role in
solving global and local sustainability challenges related
to real estate. Urban Partners want to develop better
real estate products that enable:
Citizens to live in environmentally sound and healthy
houses at all stages of their life. Businesses to run their
businesses sustainably by offering environmentally
sound and healthy buildings. Environmentally sound
and healthy urban development for a prosperous
society.
Urban Partners’ policies on environmental, social
sustainability and health & safety articulate the Urban
Partners’ strategic commitment to build a prosperous
future and are an integral part of Urban Partners’
approach to risk management and value creation.
While buildings and development provide countless
benefits to society, they also have significant
environmental impacts. For example, approximately 40
% of the total energy use in the society, can be allocated
to the operation of buildings and roughly 40% of global
raw material are used in buildings. Urban Partners focus
on effective energy use, on reusing and recycling
resources with greater effectiveness.
Urban Partners translate the policy into action by
striving to ensure that Urban Partners’ assets undergo
environmental improvement during the ownership.
This also include sustainability assessments in the due
diligence process and developing a plan for
improvement. In developments and new constructions,
the company constantly strive to leap-frog and
transform existing practices and processes for better
environmental outcomes and to pursue opportunities
for increasing provision of natural energy. Risk
management related to sustainability is a part of the
policy.
Urban Partners’ activities are exposed to various
environmental risks including, but not limited to,
physical climate risk and transition risk. Physical risks
being storms, floods, heavy rain which are some of the
most common physical risks in the Nordics. Transition
risks are business-related risks that follow societal and
economic shifts toward a low-carbon and more climate-
friendly future. These risks can include policy and
regulatory risks, technological risks, market risks,
reputational risks, and legal risks.
Urban Partners’ efforts to contribute to combatting
climate change by reducing embodied and operational
carbon footprint are highly aligned with Urban
Partners’ efforts to mitigate such climate change risks.
Urban Partners aspires to achieve a net-zero carbon
portfolio by 2028 and we are utilizing multiple levers to
get there, both during and after the construction phase,
for example: design/build properties to reduce
embodied emissions, design/retrofit to reduce in-use
energy intensity, increase on-site and off-site
renewables and procure energy from renewable
sources.
For 2022, Urban Partners results and progress of the
Environmental conditions are considered satisfactory.
In the future, Urban Partners will continue to focus on
this area and the ambition is to reach net zero
emissions by 2028 for operational and embodied
carbon emissions from real estate assets where Urban
Partners has operational control as defined in Urban
Partners’ decarbonization policy. Urban Partners is
committed to take a leading role in the green transition.
Social and personnel conditions
In order to achieve the Urban Partners’ long-term
objectives and deliver on its purpose, Urban Partners
policy is to build a team of different complementary
personalities, skills and backgrounds, that work
together in a culture where Urban Partners value the
differences. Urban Partners seeks a working
environment that enables everyone to unleash their full
potential and, at the same time, be treated fairly,
equally, and respectfully.
Urban Partners translate the policy into action by
enforcing a non-discriminatory and fair treatment as a
natural principle and value that permeates all business
activities. Urban Partners has since inception diligently
focused on building a working environment and culture
that is characterized by caring, equality, diversity, and
respect, and that is free from oppression,
discrimination, harassment, and bullying.
Urban Partners is committed to ensure compliance
with local labor legislations and requirements in
countries of operation. Employee satisfaction is
measured on a continuously basis, on several KPI`s,
including, but not limited to: Leadership, Job
satisfaction, Personal development, Commitment,
Handling of Covid-19.
Page 12 of 66
The built environment has a profound impact on
human health and wellbeing, both physically, mentally,
and socially. By especially focusing on human-centric
design, healthy materials, and smart integration and co-
existence with nature, Urban Partners aspire to create
healthy, supportive, beautiful, and diverse
communities and environments.
Urban Partners seeks the best possible outcome with
the stakeholders and is committed to establishing
sustainable relationships to ensure social sustainability
of its assets and any development projects. Urban
Partners recognizes that, at every stage of development
and operation potential, negative effects may occur
due to lack of communication and stakeholder
engagement. In the short and long terms, good
management of communication and relationship with
local stakeholders is essential to the business success of
the developments and standing assets with potential
impacts on local stakeholders.
Urban Partners’ activities are exposed to various social
and personnel risks including, but not limited to social
risk and health and wellbeing. Urban Partners is
assessing this risk along with several of other risks, as
an integral part of Urban Partners’ process from lead
stage and initial screenings through to Due Diligence
and eventually Investment Committee. The risk
assessments flags identified or potential risks that
either requires further investigation or requires a next
level screening to de-select the opportunity. Identified
risks are, in subsequent steps, investigated in more
detail to understand if they can be managed/mitigated
in a way that meets Urban Partners’ underwriting and
ESG requirements.
Urban Partners has made their Work Environment and
Diversity policy available to all employees on its
intranet. All employees are encouraged to regularly
review this in order to ensure that Urban Partners
meets it’s legal obligations as well as its moral
obligations within the areas of equal treatment.
During 2022, Urban Partners has completed or are in
the process of completing residential units of
addressing student housing, community-based living,
mixed generation communities, senior housing, care
homes or rental apartments, as part of Urban Partners’
journey to address societal challenges.
For 2022, Urban Partners’ results and progress for
Social and personnel conditions is considered
satisfactory. Urban Partners expect to continuous focus
on this area in the future.
Respect for human rights
Urban Partners does not tolerate slavery or human
trafficking within its business or supply chains. Urban
Partners has implemented an Anti-trafficking and
slavery Policy and applies this policy to all employees,
temporary workers, contract workers and third parties
acting on the Urban Partners’ behalf.
Urban Partners makes the policy available to all
employees on its intranet, in order to ensure awareness
of the topic of slavery and human trafficking and ensure
that Urban Partners meets both its legal obligations as
well as its moral obligations. All new suppliers or
partners must provide assurance that they do not
engage in slavery or human trafficking.
The provisions of this policy are subject to compliance
with applicable legal requirements in the Urban
Partners’ countries of operation.
Urban Partners’ activities are exposed to various
human rights risks including, but not limited to
reputational risk of noncompliance.
As a minimum, Urban Partners will meet all local
requirements (including but not limited to
requirements regarding local community consultation),
assess risks and opportunities as part of due diligence
and, in addition, proactively engage with relevant local
stakeholders to mitigate risks where potential risks are
identified.
Urban Partners communicates the policy to employees,
suppliers, and contractors to inspire, motivate, create
awareness and to actively invite for broad participation.
Urban Partners presents the policy to all onboarding
employees and annually to the rest of Urban Partners,
in order to ensure awareness of the topic of slavery and
human trafficking and ensure that Urban Partners
meets both its legal obligations as well as its moral
obligations. For 2022, Urban Partners’ results and
progress for respect for human rights is considered
satisfactory. In the future, Urban Partners will continue
focus on this area.
Anti-corruption and bribery
Urban Partners is committed to conducting all of its
business operations in an honest, fair, transparent and
ethical manner. Corruption inhibits economic growth
and affects business operations, employment and
investments. In order to avoid the negative
consequences of corruption, the Urban Partners has
Page 13 of 66
implemented an Anti-Bribery and Corruption Policy,
prohibiting any form of corruption and bribery in
connection with its business activities.
The Risk and Compliance Committee monitor the
implementation of this policy and coordinate periodic
training on this policy for the Urban Partners’
employees.
Urban Partners’ activities are exposed to various anti-
corruption and bribery risks including, but not limited
to reputational risk and risk of noncompliance.
Urban Partners will, as a minimum meet, all local
requirements (including but not limited to
requirements regarding local community consultation),
will assess risks and opportunities as part of due
diligence and will proactively engage with relevant local
stakeholders, where potential risks are identified, to
mitigate risks.
Urban Partners communicates its policy to employees,
suppliers, and contractors to inspire, motivate, create
awareness and to actively invite for broad participation.
For 2022, Urban Partners’ results and progress for Anti-
corruption and bribery is considered satisfactory.
Urban Partners will continue to focus on this area in the
future.
Account of the gender composition of management
Urban Partners is committed to encourage a working
environment that promotes equality, inclusion, and
diversity by providing equal opportunity for
employment, training, advancement, and
development.
Urban Partners has developed a Work Environment and
Diversity Policy, in order to promote equality and
diversity and is committed to never discriminate
employment or remuneration because of race, color,
religion, sex, political opinion, national extraction,
social origin or any other attribute which bears no
relation to the job performed. To further promote
workplace awareness, diversity and inclusion, a
rainbow/LGBTQIA community has been initiated
recently.
Over the past years, Urban Partners has steadily
increased the percentage of female talent in the
organization, up from 25% in 2016 to 40% today. In
recent years, women have joined both Partner group,
Advisory board and Board of Directors. However, the
level of female representation is not yet satisfactory in
the composition of senior management forums:
Senior management body:
• Board of Directors consists of four men and
one woman
Urban Partners’ target has not been reached yet but
will focus on reaching the target within the next 3 years.
During the financial year, there has been no changes in
the board, and therefore no opportunities to change
the board composition.
Subsequently in the financial year of 2023 a change has
been made to the board, but without changing the
composition of the board. The candidates considered
were balanced in gender and ultimately led to the
election of the candidate most aligned with the profile
and experience the company wanted to add to the
board at this time.
Other levels of management:
• Executive Leadership Council consists of eight
men and one woman
• Operations Management Team consists of
three men and four women
In one of the two other levels of management in Urban
Partners has equal distribution of men and women.
In order to increase the percentage of the under-
represented gender, Urban Partners has implemented
different initiatives. For example, Urban Partners has
set a goal that at least 40% of all new hires on an annual
basis, should consist of the underrepresented gender.
A goal that was fulfilled in 2022. Urban Partners’ actions
includes requirements to external recruiters, internal
team leaders etc. to increase diversity.
Data ethics
Urban Partners assess that data ethics is data security,
it`s the right to privacy for Urban Partners’ employees
and it`s the organization`s methods of archiving and
documentation.
Urban Partners has developed an Information Security
Policy, Privacy Policy and Documentation Policy which
all covers the subject data ethics.
Urban Partners’ Information Security Policy covers
topics like PC`s, mobile devices, asset management,
access management, encryption, physical security and
environmental security, operational security,
communication security, acquisition, development and
Page 14 of 66
maintenance of systems, supplier relations, in-
formation security incident management, information
security aspects of emergency, contingency and
recovery management and compliance.
Urban Partners’ Privacy Policy covers data gathered
before employment, during employment, master data,
personal data concerning health, data about next of kin,
reprimands, warnings, data about control measures,
use of photos, severance service, sources, storage and
erasure, other recipients who may process personal
data, transfer of personal data to third countries,
employee rights, filing of complaints with the national
data protection agency, archiving and documentation.
Urban Partners’ Documentation Policy covers duties
and responsibilities, preservation of information,
format of recording, archiving and documentation.
All of these policies are an integral part of Urban
Partners’ work to secure compliance with applicable
laws and regulation in general. This includes setting up
internal controls and making sure Urban Partners has
sufficient competencies in place by providing training to
relevant functions.
Urban Partners is aware of the digital operations
resilience act entering (”DORA”) into force by 2025. As
DORA applies to companies within the financial sector,
Urban Partners is currently assessing the necessary
measures to be taken into account prior to the
implementation of the regulation.
Page 15 of 66
Income statement
Group
Parent
tDKK
Note
2022
2021
2022
2021
Revenue
1
1,360,125
630,588
663,782
301,798
Other administrative expenses
(470,777)
(286,198)
(206,353)
(161,872)
Operating profit/loss
889,348
344,390
457,429
139,927
Income from investments in associates related
to Urban Partners managed funds
13
2,115
106,272
-
-
Income from investments in other
investments related to Urban Partners
managed funds
14
(16,629)
144,021
686
-
Staff expenses
2
(802,966)
(501,236)
(376,318)
(238,678)
Depreciation, amor. and impairment losses
6,7,8
(46,977)
(24,988)
(4,882)
(2,397)
Profit/loss before financial income and
expenses
24,891
68,459
76,916
(101,148)
Income/loss from investments in subsidiaries
9
-
-
(19,672)
(47,936)
Income/loss from investments in joint
ventures
12
(6,397)
(4,144)
(6,397)
(4,144)
Income/loss from investments in associates
13
(285)
170
(471)
451
Income/loss from investments in other
investments
14
14,148
158
-
-
Net gain/loss in sale of shares in other
investments
14
(221)
(6,779)
-
(1,095)
Financial income
3
5,559
3,431
4,151
4,845
Financial expenses
4
(16,692)
(8,510)
(30,152)
(13,358)
Profit/loss before tax
21,003
52,784
24,375
(162,386)
Tax on profit/loss for the year
5
(13,245)
29,364
(16,102)
22,255
Net profit/loss for the year
7,758
82,148
8,273
(140,131)
Thereof:
Attributable to the shareholders
3,835
43,995
Attributable non-controlling interests
3,923
38,153
7,758
82,148
Item that may be reclassified to profit or loss
Exchange dif. on translation of foreign
operations
(4,781)
(3,223)
Total other comprehensive income
(4,781)
(3,223)
Total comprehensive income
2,977
78,925
Thereof:
Attributable to the shareholders
(927)
40,948
Attributable non-controlling interests
3,905
37,977
2,977
78,925
Note 1 to 31 form an integral part of these consolidated financial statements.
Page 16 of 66
Balance sheet
Group
Parent
tDKK
Note
2022
2021
2022
2021
Goodwill
321,847
-
-
-
Software
17,348
-
17,348
-
Other intangible
164,869
7,226
-
-
Development projects in progress
15,525
6,913
15,266
4,993
Intangible assets
6
519,589
14,139
32,614
4,993
Land and buildings
7
1,612
1,185
1,160
1,185
Other fixtures, fittings, tools and equipment
7
19,549
6,344
8,763
2,900
Leasehold improvements
7
6,321
5,090
3,601
4,264
Right-of-use assets
8
64,713
49,363
-
-
Property, plant and equipment total
92,195
61,982
13,525
8,350
Investments in subsidiaries
9
-
-
565,571
106,054
Investments in joint ventures
12
1,727
944
1,727
944
Investments in associates
13
134,952
352,339
13,134
220,513
Receivables from group enterprises
14
-
-
23,888
220
Other investments
14
317,811
281,880
41,280
17,457
Other receivables
14
225,756
13,111
216,219
12,934
Deferred tax asset
5
50,657
33,872
32,481
22,365
Total other non-current assets
730,902
682,146
894,300
380,487
Total non-current assets
1,342,686
758,267
940,439
393,829
Trade receivable
15
206,783
182,002
115,111
68,677
Receivables from group enterprises
15
-
-
415,857
148,679
Other receivables and income tax rec.
15
112,158
50,002
89,091
39,388
Other current financial assets
16
16,601
16,831
11,160
7,156
Cash
256,694
171,603
36
95,190
Total current assets
592,236
420,439
631,255
359,090
Total assets
1,934,922
1,178,705
1,571,694
752,919
Share capital
18
1,366
1,359
1,366
1,359
Equity method reserve
-
-
(32,246)
7,530
Reserve for foreign currency translation
(4,422)
341
-
-
Reserve for development costs
-
-
11,908
3,895
Retained earnings
642,683
623,982
406,359
356,197
Equity attributable to shareholders of
parent company
639,627
625,682
387,386
368,980
Minority interests
91,207
87,302
-
-
Equity
730,834
712,985
387,386
368,980
Provisions
26
53,651
51,424
6,794
-
Lease liabilities
8
33,485
30,991
-
-
Deferred tax liabilities
5
85,440
-
26,218
-
Other payables
21
187,518
-
171,494
-
Total non-current liabilities
360,094
82,415
204,506
-
Lease liabilities
8
32,422
19,327
-
-
Credit institutions
21
93,139
51,050
93,139
51,050
Trade payables
20
276,087
62,861
268,113
38,005
Payables to group enterprises
-
-
528,940
199,692
Other payables
21
442,346
250,068
89,609
95,193
Total current liabilities
843,994
383,305
979,802
383,939
Total liabilities
1,204,088
465,721
1,184,308
383,939
Total equity and liabilities
1,934,922
1,178,705
1,571,694
752,919
Page 17 of 66
Statement of changes in Equity
Group
tDKK
Share
capital
Reserve for
foreign
currency
translation
Retained
earnings
Equity
attributable
to owners of
the parent
company
Non-
controlling
interests
Total
2022
Equity at 1 January
1,359
341
623,983
625,682
87,302
712,985
Net profit/loss for the year
-
-
3,835
3,835
3,923
7,758
Exchange diff. relating to foreign
entities
-
(4,762)
-
(4,762)
(19)
(4,781)
Total comprehensive income for
the period
-
(4,762)
3,835
(927)
3,905
2,977
Capital increase
7
-
14,866
14,873
-
14,873
Equity at 31 December
1,366
(4,422)
642,683
639,627
91,207
730,834
2021
Equity at 1 January
1,359
3,388
579,133
583,880
53,406
637,286
Net profit/loss for the year
-
-
43,995
43,995
38,153
82,148
Exchange diff. relating to foreign
entities
-
(3,047)
-
(3,047)
(176)
(3,223)
Total comprehensive income for
the period
-
(3,047)
43,995
40,948
37,977
78,925
NCI movement
-
-
4,081
4,081
(4,081)
-
Other movements
-
-
(3,226)
(3,226)
-
(3,226)
Equity at 31 December
1,359
341
623,983
625,682
87,302
712,985
For the year ended December 31, 2022
Page 18 of 66
Parent
tDKK
Share
capital
Equity method
reserve
Reserve for
development
costs
Retained
earnings
Total
2022
Equity at 1 January
1,359
7,530
3,895
356,197
368,981
Net profit/loss for the year
-
(26,535)
-
34,807
8,273
Exchange rate adj. foreign entities
-
(4,739)
-
-
(4,739)
Capital increase
7
-
-
14,866
14,873
Dividends from subsidiaries
-
-
-
-
-
Other movements associates & JV
-
(8,501)
-
8,501
-
Development costs for the year (net of tax)
-
-
8,013
(8,013)
-
Equity at 31 December
1,366
(32,246)
11,908
406,359
387,386
2021
Equity at 1 January
1,359
70,717
-
440,081
512,158
Net profit/loss for the year
-
(51,595)
-
(88,532)
(140,131)
Exchange rate adj. foreign entities
-
(3,049)
-
-
(3,049)
Disposal of subsidiaries
-
1,353
-
(1,353)
-
Dividends from subsidiaries
-
(7,000)
-
7,000
-
Other movements associates & JV
-
(2,896)
-
2,896
-
Development costs for the year (net of tax)
-
-
3,895
(3,895)
-
Equity at 31 December
1,359
7,530
3,895
356,197
368,980
Page 19 of 66
Statement of cash flow
Group
tDKK
Note
2022
2021
Net profit/loss for the year
7,758
82,148
Adjustments to reconcile profit before tax to net cash flows:
Financial income
3
(5,559)
(3,431)
Financial expenses
4
16,692
8,510
Depreciation, amortisation and impairment losses
6,7,8
46,977
24,988
Loss (gain) on intangible assets
6
4,238
-
Loss (gain) on disposal property, plant and equipment
7
(258)
(526)
Loss (gain) in sale of shares in other investments
221
6,779
Income from Investments in associates
13
285
(170)
Income from investments in joint ventures
12
6,397
4,144
Income from investment in other investments
14
(14,148)
(158)
Income from investments in associates related to Urban Partners
managed funds
13
(2,115)
(106,272)
Income from investments in Urban Partners managed funds
14
16,629
(144,021)
Tax on profit/loss for the year
5
13,245
(29,364)
Changes in net working capital:
Change in other non-current receivables
(212,645)
(8,523)
Change in receivables and other receivables
(24,228)
(128,649)
Change in other current financial assets
(51,098)
(7,088)
Change in trade payables and other payables
162,203
145,738
Change in non-current other payables
78,201
(14,493)
Provisions
2,227
32,292
Exchange rate realised net
3
2,692
(2,595)
Income tax paid
5
(5,966)
1,118
Net cash flow from operating activities
41,749
(139,572)
Acquisition of subsidiaries, net cash acquired
11
14,697
-
Purchase of intangible assets (including business combinations)
6
(32,062)
(8,866)
Purchase of property, plant and equipment
7
(21,683)
(6,454)
Purchase of investments in associates
13
(33)
(206,925)
Purchase of investments in joint ventures
12
(7,180)
(2,150)
Disposal of investments in associates
13
7,156
(4,228)
Purchase of other non-current financial assets
14
(47,338)
(15,800)
Disposal of other non-current financial assets
14
3,616
25,089
Interest income received
3
392
3,431
Dividend income received
13,14
16,360
44,721
Net cash flow from investing activities
(66,074)
(171,183)
Capital increase
18
14,873
-
Proceed from borrowings from interest bearing loans and borrowings
21
151,406
6,189
Repayment of principal portion of lease liabilities
8
(28,590)
(20,891)
Interest paid
4
(16,692)
(5,915)
Cash flow from financing activities
120,997
(20,617)
Change in cash and cash equivalents
96,672
(331,372)
Cash and cash equivalents at 1 January
171,603
505,459
Exchange adjustment of cash and cash equivalents
(11,581)
(2,484)
Cash and cash equivalents at 31 December
256,694
171,603
Page 20 of 66
Notes to the financial statement
1. Revenue
Group
tDKK
Corporate
Living
Logistic
Office
D&I
Care
Credit
Total
2022
Asset Management Fee
416,137
93,989
115,475
60,302
47,527
28,545
67,380
829,355
Service corporate fee
48,550
82,269
21,716
21,737
37,959
10,987
-
223,218
Other revenue
8,477
299,075
-
-
-
-
-
307,552
Total
473,164
475,333
137,191
82,039
85,486
39,532
67,380
1,360,125
2021
Asset Management Fee
217,508
59,652
77,269
21,195
38,480
10,755
-
424,859
Service corporate fee
28,557
59,086
24,977
8,545
24,648
8,455
-
154,269
Other revenue
2,217
49,243
-
-
-
-
-
51,460
Total
248,282
167,981
102,247
29,740
63,129
19,211
-
630,588
Parent
tDKK
Corporate
Living
Logistic
Office
D&I
Care
Credit
Total
2022
Asset Management Fee
(3,112)
40,083
17,602
54,398
30,112
7,431
-
146,514
Service corporate fee
11,414
40,160
3,548
21,756
23,448
3,583
-
103,864
Other revenue
13,575
183,193
(86)
-
-
-
-
196,682
Internal Advisory Fee
216,722
-
-
-
-
-
-
216,722
Total
238,599
263,436
21,064
76,154
53,560
10,969
-
663,782
2021
Asset Management Fee
4,036
29,525
12,564
15,733
29,742
2,253
-
93,854
Service corporate fee
18,253
23,434
4,542
8,545
12,351
2,860
-
69,984
Other revenue
151
-
-
127
-
-
-
277
Internal Advisory Fee
137,683
-
-
-
-
-
-
137,683
Total
160,123
52,959
17,107
24,405
42,092
5,113
-
301,798
Increase in revenue relates to opening and acquisition of new funds, which are in line with NREP Group strategy.
For Group, other revenue mainly relates to income from Platforms.
For Parent, Corporate Asset management fee in 2022 is affected by accruals from 2021 is different allocated.
2. Staff expenses
Group
Parent
tDKK
2022
2021
2022
2021
Wages and salaries
597,671
397,527
276,755
205,354
Pensions
52,206
36,683
18,694
12,933
Other social security expenses
40,507
27,493
(689)
(888)
Other staff expenses
112,583
39,532
81,558
21,278
Total
802,966
501,236
376,318
238,678
Average number of employees
590
385
247
171
Other staff expenses include staff recruitment and temporary work.
Page 21 of 66
Key Management Compensation
The key management for the Urban Partners has been defined as the Executive Leader Council and Board of Directors,
which consist of 15 persons (2021: 17 persons). The compensation paid or payables to key management for employee
services is shown below:
Group
tDKK
2022
2021
Wages and salaries
48,857
41,550
Pensions, defined contribution plans
316
793
Total
49,174
42,343
Compensation to the Board of Directors and Executive Management
Compensation to the Board of Directors
2,082
1.822
Compensation to Executive Board
7,855
6,396
Total Compensation to the Board of Directors and Executive Management
9,937
9,217
Compensation to the Key Management
39,236
34,125
49,174
42,343
3. Financial Income
Group
Parent
tDKK
2022
2021
2022
2021
Dividends on share in other investments
-
-
500
1,164
Interest received from group enterprises
-
-
1,472
558
Exchange gains
2,692
-
-
-
Other interest income
392
467
390
160
Other financial income
2,474
2,964
1,789
2,963
Total
5,559
3,431
4,151
4,845
4. Financial expenses
Group
Parent
tDKK
2022
2021
2022
2021
Interest paid to group enterprises
-
-
9,274
7,570
Other interest expenses
15,360
4,806
13,775
3,252
Exchange losses
-
2,595
7,103
2,536
Lease expenses
1,332
1,109
-
-
Total
16,692
8,510
30,152
13,358
Other interest expenses refer to interest on working capital facility, interest on cash management services and other bank
charges.
Page 22 of 66
5. Income tax
The major components of income tax expense for the years ended 31 December 2022 and 2021 are:
Group
Parent
tDKK
2022
2021
2022
2021
Current tax for the year
-
(1,711)
-
-
Deferred tax for the year
(13,245)
31,074
(16,102)
22,255
Income tax expense - statement of profit/ loss
(13,245)
29,364
(16,102)
22,255
Reconciliation of tax expense and the accounting profit multiplied by Denmark’s domestic tax rate for 2022 and 2021:
At Denmark’s statutory income tax rate of 22% (2021:
22%)
4,621
11,613
5,363
(35,725)
Tax effects
Difference in tax rates
-
-
-
-
Non-taxable income
4,928
(55,136)
4,928
(99)
Non-deductible expenses
6,639
12,092
4,807
13,825
Tax exempt dividends
-
-
-
(256)
Other
(2,943)
2,069
1,005
-
Tax effects, total
8,624
(40,976)
10.739
13,470
Tax expenses
(13,245)
29,363
(16.102)
22,255
Effective tax rate
-63%
56%
-66%
-14%
Deferred tax assets
Provision for deferred tax assets at 1 January
(33,872)
(2,798)
(22,365)
(110)
Amounts recognised in the statement of income for the
year
(16,785)
(31,074)
(10,116)
(22,255)
Deferred tax assets at 31 December
(50,657)
(33,872)
(32,481)
(22,365)
Deferred tax liabilities
Provision for deferred tax liabilities at 1 January
-
-
-
-
Deferred tax liabilities as part of business combination
55,410
-
-
-
Amounts recognised in the statement of income for the
year
30,030
-
26,218
-
Deferred tax liabilities at 31 December
85,440
-
26,218
-
Other receivables
26,218
-
26,218
-
Property, plant and equipment
-
158
-
(110)
Other Intangible
55,410
730
-
-
Development projects
-
690
-
-
Tax loss carry-forward
(50,657)
(35,450)
(32,481)
(22,255)
Other
3,812
-
-
-
34,783
(33,872)
(6,263)
(22,365)
Of which presented as deferred tax assets
50,657
33,872
32,481
22,365
Of which presented as deferred tax liabilities
(85,440)
-
(26,218)
-
Page 23 of 66
6. Intangible assets
Group
tDKK
Software
Other
intangible
assets
Development
projects in
progress
Goodwill
Total
2022
Cost at 1 Jan
3,735
13,051
6,913
-
23,699
Additions for the year
17,750
170,972
12,345
321,847
522,914
Disposals for the year
-
(1,137)
(3,101)
-
(4,238)
Transfer
632
-
(632)
-
-
Movements due to currency
-
-
-
-
-
Cost at 31 Dec
22,117
182,886
15,525
321,847
542,375
Impairment losses and
amortisation at 1 Jan
(3,735)
(5,825)
-
-
(9,560)
Impairment losses and
amortisation for the year
(1,034)
(12,191)
-
-
(13,225)
Movements due to currency
-
-
-
-
-
Impairment losses &
amortisation at 31 Dec
(4,769)
(18,017)
-
-
(22,786)
Carrying amount at 31
December
17,348
164,869
15,525
321,847
519,589
2021
Cost at 1 Jan
21,429
-
11,089
-
32,518
Additions for the year
-
1,953
6,913
-
8,866
Disposals for the year
(17,657)
-
-
-
(17,657)
Transfer
-
11,098
(11,098)
-
-
Movements due to currency
(37)
-
10
-
(27)
Cost at 31 Dec
3,735
13,051
6,913
-
23,699
Impairment losses and
amortisation at 1 Jan
(21,111)
-
(3,999)
-
(25,110)
Impairment losses and
amortisation for the year
(318)
(1,814)
-
-
(2,132)
Disposals for the year
17,657
-
-
-
17,657
Transfer
-
(4,011)
4,011
-
-
Movements due to currency
37
-
(12)
-
24
Impairment losses &
amortisation at 31 Dec
(3,735)
(5,825)
-
-
(9,560)
Carrying amount at 31
December
-
7,226
6,913
-
14,139
Development projects in progress with carrying value of DKK 15.5 million (2021: DKK 6.9 million) holds capitalized costs
related to mainly to Software. Other Intangible assets DKK 164.9 million (2021: DKK 0) consists mainly of customer
relationships and brand.
The carrying value of DKK 486.7 (2021: DKK 7 million) million in intangible assets (goodwill and other intangibles) is mainly
related to the acquisition of Flins Capital Partners GmbH and the Oak group of companies where NREP acquired control
in 2022.
Page 24 of 66
Impairment test of goodwill
Goodwill is monitored by management for the cash generating unit (“CGU”) to which the goodwill has been allocated.
Reference is made to note 11 for the details of the acquisition.
Urban Partners tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount is
determined as the present value of expected future cash flows (value-in-use), which requires the use of management
estimates and judgements. The value-in-use calculations are based on the management approved budget for 2023 and
forecast for 2024-2027 with a calculated terminal value thereafter.
The cashflows applied in the budget period reflects Management’s best estimate of future cash flows from Management
fees and other cash inflows from the business acquired, which also includes the assumption of continued expansion and
investments in new Funds as planned as part of the acquisition. The cash outflows reflect the best estimate of costs of
operating the business acquired including the cost supporting the contemplated growth.
Cash flows beyond the five-years budget period are expected to grow with the rate stated below. The growth rate is
consistent with forecasts included in the industry reports specific to the industry where the CGU operates.
In calculating the present value, the discount rate applied reflects the risk-free interest rate with the addition of risks
relating to the CGU, such as the market and financial exposures.
Key assumptions affecting the future cash flows of the CGU is as follows:
• Investment Management fees from launch of new funds AF IV and AF V is included in the impairment test. Fund
raise of capital will be in alignment with management expectations for the period 2024-2027
• Revenue from Cash Yield fee is based on the performance of the underlying loans in Fund AF I which generates
cash return in excess of a threshold which is paid to investors in the fund on a yearly basis
• Long-term growth-rate: 1%
• WACC (pre-tax): 13% which reflect specific risks of the CGU
The impairment test has presented an enterprise value above the carrying value and management is confident that the
intangible assets are solid and do not require write off or adjustment of the accounted value.
Page 25 of 66
Parent
tDKK
Software
Development
projects in
progress
Total
2022
Cost at 1 January
3,735
4,993
8,728
Additions for the year
17,750
12,336
30,086
Disposals for the year
-
(1,431)
(1,431)
Transfer
632
(632)
-
Cost at 31 December
22,117
15,266
37,383
Impairment losses & amortisation at 1 Jan
(3,735)
-
(3,735)
Impairment losses & amortisation for the year
(1,034)
-
(1,034)
Disposals for the year
-
-
-
Impairment losses & amortisation at 31 Dec
(4,769)
-
(4,769)
Carrying amount at 31 December
17,348
15,266
32,614
2021
Cost at 1 January
20,298
-
20,298
Additions for the year
-
4,993
4,993
Disposals for the year
(16,563)
-
(16,563)
Cost at 31 December
3,735
4,993
8,728
Impairment losses & amortisation at 1 Jan
(19,980)
-
(19,980)
Impairment losses & amortisation for the year
(318)
-
(318)
Disposals for the year
16,563
-
16,563
Impairment losses & amortisation at 31 Dec
(3,735)
-
(3,735)
Carrying amount at 31 December
-
4,993
4,993
Development projects in progress holds capitalized costs related to mainly to Software.
Page 26 of 66
7. Property, plant and equipment
Group
tDKK
Land and
buildings
Other fixtures
and fittings,
tools and
equipment
Leasehold
improve-
ments
Total
2022
Cost at 1 January
1,250
13,727
7,846
22,823
Additions for the year
550
18,349
2,922
21,821
Disposals for the year
-
(2,014)
(66)
(2,081)
Transfer
-
-
-
-
Movements due to currency
-
(302)
(36)
(338)
Cost at 31 December
1,800
29,760
10,665
42,224
Impairment losses and depreciation at
1 Jan
(65)
(7,383)
(2,756)
(10,204)
Additions for the year
-
-
-
-
Disposals for the year
-
1,757
66
1,823
Depreciation for the year
(123)
(4,746)
(1,661)
(6,530)
Movements due to currency
-
161
7
168
Transfer
-
-
-
-
Impairment losses and depreciation at
31 Dec
(188)
(10,211)
(4,344)
(14,743)
Carrying amount at 31 December
1,612
19,549
6,321
27,482
2021
Cost at 1 January
1,250
12,089
8,081
21,420
Additions for the year
-
2,608
3,846
6,454
Disposals for the year
-
(2,277)
(2,816)
(5,093)
Transfer
-
1,265
(1,265)
-
Movements due to currency
-
42
-
42
Cost at 31 December
1,250
13,727
7,846
22,823
Impairment losses and depreciation at
1 Jan
(40)
(6,691)
(2,920)
(9,651)
Additions for the year
-
(1,094)
(159)
(1,253)
Disposals for the year
-
1,751
2,816
4,567
Depreciation for the year
(25)
(2,570)
(1,197)
(3,792)
Movements due to currency
-
1,296
(1,296)
-
Transfer
-
(76)
(0)
(76)
Impairment losses and depreciation at
31 Dec
(65)
(7,383)
(2,756)
(10,204)
Carrying amount at 31 December
1,185
6,344
5,090
12,619
Page 27 of 66
Parent
tDKK
Land and
buildings
Other fixtures
and fittings,
tools and
equipment
Leasehold
improve-
ments
Total
2022
Cost at 1 January
1,250
5,407
6,732
13,388
Additions for the year
-
8,288
735
9,023
Disposals for the year
-
-
-
-
Transfer
-
-
-
-
Cost at 31 December
1,250
13,695
7,467
22,411
Impairment losses and depreciation at 1 Jan
(65)
(2,507)
(2,467)
(5,039)
Depreciation for the year
(25)
(2,424)
(1,399)
(3,848)
Disposals for the year
-
-
-
-
Transfer
-
-
-
-
Impairment losses and depreciation at 31 Dec
(90)
(4,931)
(3,866)
(8,887)
Carrying amount at 31 December
1,160
8,764
3,600
13,525
2021
Cost at 1 January
1,250
2,816
8,081
12,147
Additions for the year
-
1,326
2,732
4,057
Disposals for the year
-
-
(2,816)
(2,816)
Transfer
-
1,265
(1,265)
-
Cost at 31 December
1,250
5,407
6,732
13,388
Impairment losses and depreciation at 1 Jan
(40)
(2,816)
(2,920)
(5,776)
Depreciation for the year
-
-
2,816
2,816
Disposals for the year
(25)
(987)
(1,067)
(2,079)
Transfer
-
1,296
(1,296)
-
Impairment losses and depreciation at 31 Dec
(65)
(2,507)
(2,467)
(5,039)
Carrying amount at 31 December
1,185
2,900
4,264
8,350
Page 28 of 66
8. Leases
The Group has entered leases on land, properties, cars
and equipment. The remaining lease period for land and
buildings is mainly 3 years and is related to offices and
residential premises in Denmark, Sweden, Finland,
Norway and Luxemburg. The non-cancellable lease
period for cars is typically between 12 and 48 months. In
general car leases do not include any extension options.
Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions.
The lease agreements do not impose any covenants, but
leased assets may not be used as security for borrowing
purposes.
The Group has recognized the following amounts relating to leases:
Group
tDKK
Right of use
buildings
Right of use
other fixtures
and fittings,
tools and
equipment
Total
Cost at 1 January 2021
68,750
2,904
71,653
Additions
20,610
271
20,881
Transfers and amendments
-
-
-
Disposals
-
(749)
(749)
Exchange differences
(424)
(161)
(585)
Cost at 31 December 2021
88,936
2,265
91,200
Additions
44,370
231
44,601
Transfers and amendments
-
-
-
Disposals
(3.950)
(869)
(4,819)
Exchange differences
(3,157)
(93)
(3,250)
Cost at 31 December 2022
126,199
1,534
127,733
Depreciation
Depreciation at 1 January 2021
(22,172)
(1,105)
(23,277)
Depreciation charge for the year
(19,255)
(721)
(19,976)
Impairment & Amendments
700
-
700
Disposals
-
553
553
Exchange differences
156
7
163
Depreciation at 31 December 2021
(40,571)
(1,266)
(41,837)
Depreciation charge for the year
(25,822)
(694)
(26,516)
Amendments
(375)
101
(275)
Disposals
3,294
769
4,063
Exchange differences
1,499
47
1,546
Depreciation At 31 December 2022
(61,976)
(1,044)
(63,019)
Carrying amount at 31 December 2O22
64,223
490
64,713
Carrying amount at 31 December 2O21
48,364
999
49,363
Page 29 of 66
The carrying amounts of lease liabilities and the movement during the period is as follows:
Group
tDKK
Lease
liabilities
At 1 January 2021
48,997
Additions - new leases
20,881
Disposals
(312)
Amendments
-
Repayment of lease debt
(20,891)
Interest
1,109
Exchange
534
At 31 December 2021
50,318
Additions - new leases
44,367
Disposals
(46)
Amendments
-
Repayment of lease debt
(28,590)
Interest
1,332
Exchange
(1,474)
At 31 December 2022
65,907
Short term at 31 December 2022
32,422
Long term at 31 December 2022
33,485
Short term at 31 December 2021
19,327
Long term at 31 December 2021
30,991
9. Investments in subsidiaries
Parent
tDKK
2022
2021
Cost at 1 January
68,066
33,173
Additions for the year
499,465
35,379
Disposal for the year
-
(486)
Cost at 31 December
567,531
68,066
Value adjustments at 1 January
11,884
68.514
Exchange adjustment
(4,739)
(3,049)
Net profit/loss for the year
(19,672)
(47,934)
Disposals during the year
-
1.353
Dividend to the Parent Company
-
(7,000)
Value adjustments at 31 December
(12,527)
11,884
Equity investments with negative net asset value amortised over receivables
10,567
26,103
Carrying amount at 31 December
565,571
106,054
Additions for the year, consist of capital injections in newly registered entities (DKK 179 thousand) and capital injections in
existing entities (DKK 55,777 thousand).
Page 30 of 66
Investments in subsidiaries are specified as follows:
Name
Place of
registered
office
Share capital
Votes and
ownership
2022
2021
2022
2021
UMEUS ManCo ApS
Nordhavn, DK
DKK 50,003
DKK 50,002
100%
100%
Woods Office OpCo ApS
Nordhavn, DK
DKK 650,001
DKK 650,000
100%
100%
Komp. NREP Copenhagen Resi. Fund 1 ApS
Nordhavn, DK
DKK 80,000
DKK 80,000
100%
100%
Den Studios Denmark ApS
Nordhavn, DK
DKK 50,003
DKK 50,002
100%
100%
NNSF IV IP CIV GP ApS
Nordhavn, DK
DKK 40,001
DKK 40,001
100%
100%
Komplementarselskabet NREP NSF IV Invest ApS
Nordhavn, DK
DKK 40,001
DKK 40,001
100%
100%
Komplementarselskabet NREP Income+
Investment ApS
Nordhavn, DK
DKK 40,001
DKK 40,001
100%
100%
NREP Income+ Investment K/S
Nordhavn, DK
DKK 0
DKK 0
100%
100%
NREP NSF IV Investment K/S
Nordhavn, DK
DKK 0
DKK 0
0%
100%
JULI Living DK ApS
Nordhavn, DK
DKK 40,000
DKK 40,000
100%
100%
NREP NSF V Investment K/S
Nordhavn, DK
DKK 0
DKK 0
100%
100%
2150 ApS
Nordhavn, DK
DKK 40,000
DKK 40,000
60%
60%
2150 Invest K/S
Nordhavn, DK
DKK 100
DKK 100
3%
60%
2150 Fund CIV K/S
Nordhavn, DK
EUR 0
EUR 0
0%
100%
Komplementarselskabet 2150 CIV ApS
Nordhavn, DK
DKK 40,000
DKK 40,000
60%
60%
Komplementarselskabet 2150 Investment ApS
Nordhavn, DK
DKK 40,000
DKK 40,000
60%
60%
2150 Fund II CIV K/S
Nordhavn, DK
DKK 0,00
-
60%
-
2150 Nordic I ApS
Nordhavn, DK
DKK 80,000
DKK 80,000
0%
60%
2150 Concrete K/S
Nordhavn, DK
DKK 100
-
60%
-
Komplementarselskabet 2150 Investment II ApS
Nordhavn, DK
DKK 40,000
-
60%
-
Komplementarselskabet 2150 concrete ApS
Nordhavn, DK
DKK 40,000
-
60%
-
Komplementarselskabet 2150 Fund II CIV ApS
Nordhavn, DK
DKK 40,000
-
60%
-
Komplementarselskabet NREP NSF V Invest ApS
Nordhavn, DK
DKK 40,000
DKK 40,000
100%
100%
2150 Invest II K/S
Nordhavn, DK
DKK 100
-
60%
-
NREP AS
Oslo, NO
NOK 120,000
NOK 100,800
100%
100%
NREP Ventures Co 2 AS
Oslo, NO
NOK 30,000
NOK 30,000
100%
100%
NREP Income+ InvestCo 124 AS
Oslo, NO
NOK 30,000
NOK 30,000
100%
100%
NREP Income+ InvestCo 125 AS
Oslo, NO
NOK 30,000
NOK 30,000
100%
100%
Umeus Norway AS
Oslo, NO
NOK 30,000
-
100%
-
NREP AB
Stockholm, SE
SEK 100,000
SEK 100,000
100%
100%
NREP InvestCo 65 AB
Stockholm, SE
EUR 6,500
EUR 6,500
62%
62%
NREP Income+ Investment AB
Stockholm, SE
EUR 6,500
EUR 6,500
100%
100%
2150 CarbonCure AB
Stockholm, SE
EUR 25,000
EUR 25,000
0%
100%
NREP NSF III Investco 126 AB (NREP NSF IV
Investment MidCo AB)
Stockholm, SE
EUR 6,500
EUR 6,500
100%
100%
NREP NSF V Investment AB
Stockholm, SE
EUR 6,500
EUR 6,500
100%
100%
NREP Poland sp. z o.o.
Warsaw, PL
PLN 2,683,900
PLN 5,000
100%
100%
Noli Studios Poland z o. o.
Warsaw, PL
PLN 4,160,000
PLN 470,000
100%
100%
NREP Germany GmbH
Frankfurt, GE
EUR 25,000
EUR 25,000
100%
100%
2150 Advisory Germany GmbH
Frankfurt, GE
EUR 25,000
EUR 25,000
60%
60%
Flins Capital Partners GMBH
Munich, GE
EUR 25,000
-
100%
-
NREP Oy
Helsinki, FI
EUR 2,500
EUR 2,500
50%
50%
Noli Studios Finland Oy
Helsinki, FI
EUR 2,500
EUR 2,500
100%
100%
Noli Studios Finland Staff Pool Oy
Helsinki, FI
EUR 2,500
EUR 2,500
100%
100%
Juli Living Finland Oy
Helsinki, FI
EUR 0
EUR 0
100%
100%
Page 31 of 66
Name
Place of
registered
office
Share capital
Votes and ownership
2022
2021
2022
2021
NREP Corporation UK Limited
London, UK
GBP 1
GBP 1
100%
100%
2150 UK Ltd
London, UK
GBP 1
GBP 1
60%
60%
NREP NSF V Feeder 1 GP Limited
London, UK
GBP 1
-
100%
-
NREP LPF MLP S.à.r.l
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
NREP LPF GP S.à.r.l
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
NREP Management Company S.à.r.l.
Luxembourg
EUR 125,000
EUR 125,000
100%
100%
NREP Domus S.à.r.l.
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
Nordic Strategies Fund II GP S.à.r.l
Luxembourg
EUR 12,500
EUR 12,500
100%
100%
NREP Nordic Strategies Fund III GP S.à.r.l
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
NREP Nordic Strategies Fund IV GP S.à.r.l
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
NREP Nordic Strategies Fund V GP S.à.r.l.
Luxembourg
EUR 20,000
EUR 20,000
100%
100%
NREP Income+ Fund GP S.à.r.l.
Luxembourg
EUR 20,000
EUR 20,000
100%
100%
NREP Income+ Fund RE GP S.à.r.l.
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
2150 GP I Sarl
Luxembourg
EUR 12,000
EUR 12,000
60%
60%
NREP Fund Feeder GP S.à.r.l
Luxembourg
EUR 12,000
EUR 12,000
100%
100%
NREP NSF V Feeder 2 GP
Luxembourg
EUR 12,000
-
100%
-
Oak Scsp
Luxembourg
EUR 0
-
100%
-
Oak Investment Scsp
Luxembourg
EUR 2
-
100%
-
OAK General Partner S.à.r.l
Luxembourg
EUR 23,530
-
100%
-
AF IV General Partner S.à.r.l.
Luxembourg
EUR 12,000
-
100%
-
AF I General Partner S.à.r.l.
Luxembourg
EUR 12,500
-
100%
-
AF II General Partner S.à.r.l.
Luxembourg
EUR 12,500
-
100%
-
AF III General Partner S.à.r.l.
Luxembourg
EUR 12,000
-
100%
-
AF V General Partner S.à.r.l.
Luxembourg
EUR 12,000
-
100%
-
2150 GP II Sarl
Luxembourg
EUR 12,000
-
60%
-
2150 GP Opportunity Fund I S.à.r.l.
Luxembourg
EUR 12,000
-
60%
-
2150 GP concrete I Sarl
Luxembourg
EUR 12,000
-
60%
-
NREP Atlantis GP S.à.r.l.
Luxembourg
EUR 12,000
-
100%
-
NREP B.V
Netherlands
EUR 50,000
-
100%
-
Page 32 of 66
10. Partially owned subsidiaries
Proportion of equity interest held by non-controlling interests:
Group
Name
Country of operation
2022
2021
NREP Oy
Helsinki, Finland
50%
50%
NREP InvestCo 65 AB
Stockholm, Sweden
62%
62%
2150 Aps
Nordhavn, Denmark
60%
60%
Group
2022
2021
Accumulated balances of non-controlling interest
NREP Oy
27,444
39,560
NREP InvestCo 65 AB
24
27
2150 ApS
12,598
14,562
Profit allocated to non-controlling interest
NREP Oy
(5,457)
1,837
NREP InvestCo 65 AB
(2)
(6)
2150 ApS
(1,939)
2,829
Summarized statement of profit or loss:
Group
NREP Oy
NREP
InvestCo 65
AB
2150 Aps
2022
Revenue
118,267
-
24,133
Administrative and other expenses
(128,487)
-
(30,386)
Net finance cost
(258)
(6)
176
Profit before tax
(10,478)
(6)
(6,078)
Income tax
(479)
-
1,231
Net profit
(10,957)
(6)
(4,847)
Total comprehensive income
Attributable to non-controlling interests
(5.457)
(2)
(1,939)
Dividends paid to non-controlling interests
-
-
-
2021
Revenue
101,526
-
21,857
Administrative & other expenses
(97,626)
(11)
(12,622)
Net finance cost
(212)
(6)
(170)
Profit before tax
3,688
(17)
9,066
Income tax
-
-
(1,994)
Net profit
3,688
(17)
7,071
Total comprehensive income
Attributable to non-controlling interests
1,837
(6)
2,829
Dividends paid to non-controlling interests
6,944
-
-
Page 33 of 66
Summarised statement of financial position:
Group
tDKK
NREP Oy
NREP
InvestCo 65
AB
2150 ApS
2022
Total assets
55,109
64
31,494
Total equity
(9,722)
57
2,264
Equity attributable to:
Equity holders of parent
(4,880)
35
1,359
Non-controlling interest
(4,842)
21
906
2021
Total assets
80,201
70
36,405
Total equity
1,029
63
7,111
Equity attributable to:
Equity holders of parent
517
39
4,267
Non-controlling interest
513
24
2,845
11. Business Combinations
The Group acquired control of an equity interest in a leading real estate credit specialist business consisting of Flins Capital
Providers (FCP) and the Oak fund setup (Oak) from M3 Capital Partners during the year ended December 31, 2022.
On the 17
th
of November 2021 the purchase was executed through a partnership between Urban Partners, MAA Invest AS
and Atrium Beteiligungs GmbH. On 1
st
April 2022 the Group took control over FCP and Oak.
When acquiring shares the Group acquired a group of entities, including all commitments and employees and the integrated
organization to perform its activities independently and be able to create revenues for the Group - which constitute the
business.
The acquisition was accounted for as a business combination. Therefore, all transferred assets and liabilities of FCP and Oak
were valued at fair value at the final acquisition date.
Details of the purchase consideration, the net assets acquired, and goodwill are as follows:
Purchased consideration
tDKK
Cash paid in 2021
206,778
Contingent consideration
236,732
Total
443,510
Significant estimate: contingent consideration
The Contingent consideration is based on the assumption that EBITDA for the acquired entities is above EUR 6,6 million for
the financial year 2023 where the earn-out cap will be reached.
The fair value of the contingent consideration of DKK 236,732 thousand was estimated by calculating the present value of
the future expected cash flows. The estimates are based on a discount rate of 4.1% and assumed probability-adjusted
EBITDA of above EUR 6,6 million in 2023 for the acquired entities.
Page 34 of 66
The assets and liabilities recognised as a result of the acquisition are as follows:
tDKK
Fair value
Facilities and equipment
138
Prepayments
323
Other current assets
3,617
Cash and cash equivalents
14,697
Liabilities
(10,389)
Net identifiable assets acquired
8,386
Add: Goodwill
321,847
Add: Customer relationships
167,976
Add: Brand
1,029
Less: Deferred tax liabilities
(55,728)
Net assets acquired
443,509
The goodwill is attributable to the acquired business. It will not be deductible for tax purposes. There were no acquisitions
qualifying for a business combination in the year ending 31 December 2021.
Group
tDKK
2022
2021
Purchase consideration – cash
Flow of cash to acquire subsidiary, net of cash acquired*
-
-
Less: Balances acquired
Cash and cash equivalents
14,697
-
Net cash - investing activities
14,697
-
*During 2022 there has been a change in voting rights which give NREP control as per April 1
st
, 2022. In 2022 there has
been no additional payment.
If the purchase of Flins Capital Providers and the Oak fund setup had been consolidated from 1st January 2022, the impact
on the profit would have been tDKK 11,014.
12. Investments in Joint Ventures
Parent
tDKK
2022
2021
Cost at 1 January
9,445
7,295
Additions
7,180
2,150
Cost at 31 December
16,625
9,445
Value adjustments at 1 January
(8,501)
(4,358)
Net profit/loss for the year
(6,397)
(4,144)
Value adjustments at 31 December
(14,898)
(8,501)
Carrying amount at 31 December
1,727
944
Investments in Joint Ventures for 2022 are specified as follows:
Name
Place of registered office
Share capital
Votes and
ownership
NREP-TF ApS
Nordhavn, DK
DKK 60,000
50%
Plushusene Management ApS
Horsens, DK
DKK 1,500,000
50%
Page 35 of 66
13. Investments in associates
Group
Parent
tDKK
2022
2021
2022
2021
Cost at 1 January
244,767
42,464
216,360
13,670
Exchange adjustment
(2,120)
(394)
-
-
Additions for the year
33
206,925
19
206,900
Disposals for the year
(7,156)
(4,228)
-
(4,210)
Transfers for the year
(206,783)
-
(206,778)
-
Other adjustments
(149)
-
(149)
-
Cost at 31 December
28,593
244,767
9,452
216,360
Value adjustments at 1 January
107,572
21,779
4,152
2,203
Exchange adjustment
1,950
158
1
36
Share of result Urban Partners managed funds net of
payments
2,115
106,272
-
-
Share of result other
(285)
170
(471)
452
Dividends
(9,982)
(22,232)
-
(140)
Transfer
(1,963)
-
-
-
Other adjustments
6,952
1,424
-
1,601
Value adjustments at 31 December
106,359
107,572
3,682
4,152
Carrying amount at 31 December
134,951
352,339
13,134
220,513
Investments in associates for 2022 and 2021 are specified as follows:
Share capital
Votes and
ownership
Place of
registered
office
2022
2021
2022
2021
Investment in Urban Partners Fund
NREP Co-Investment Nordhavn K/S
DK
DKK 12,000,000
DKK 12,000,000
48%
48%
Komp. NREP Co-Investment Nordhavn ApS
DK
DKK 60,000
DKK 60,000
48%
48%
Ejendomsselskabet Hellebro A/S
DK
DKK 17,500,000
DKK 17,500,000
20%
20%
NREP InvestCo 3 AB
SE
SEK 100,000
SEK 100,000
23%
23%
NREP InvestCo 28 AB
SE
SEK 50,000
SEK 50,000
0%
32%
NREP InvestCo 15 AB
SE
EUR 6,500
EUR 6,500
39%
39%
NREP InvestCo 31 AB
SE
SEK 50,000
SEK 50,000
0%
25%
NREP InvestCo 14 AB
SE
EUR 6,500
EUR 6,500
36%
36%
NREP NSF III InvestCo 84 AB
SE
EUR 6,500
EUR 6,500
25%
25%
NREP InvestCo 95 AB
SE
EUR 17,333
EUR 17,333
33%
33%
NREP InvestCo 63 AB
SE
EUR 6,500
EUR 6,500
30%
30%
NREP NSF III InvestCo 94 AS
NO
NOK 35,548
NOK 35,548
29%
29%
NREP InvestCo 44 AS
NO
NOK 99,425
NOK 99,425
22%
22%
NREP NSF IV Investment S.à.r.l
LUX
EUR 28,500
EUR 28,500
42%
42%
Flins Capital Partners GmbH
GE
EUR 25,000
EUR 25,000
0%
48%
Page 36 of 66
14. Other financial assets
Group
Parent
tDKK
Other non-
current
investments
Other non-
current
receivables
Non-current
receivables
from group
enterprises
Other non-
current
investments
Other non-
current
receivables
2022
Cost at 1 January
94,419
13,111
26,323
25,336
12,934
Exchange adjustments
(5,361)
0
-
-
-
Additions for the year
47,342
215,826
47,990
23,822
206,465
Disposals for the year
(3,616)
(3,180)
(39,859)
-
(3,180)
Other adjustments
-
-
-
-
-
Transfer for the year
5
-
-
-
-
Cost at 31 December
132,788
225,756
34,454
49,158
216,219
Value adjustments at 1 January
187,461
-
-
-
-
Exchange adjustment
1,139
-
-
-
-
Fair value adjustment, Urban
Partners managed funds net of
payments
(16,629)
-
-
687
-
Fair value adjustment other
14,148
-
-
-
-
Dividends
(6,377)
-
-
(687)
-
Transfer
1,963
-
-
-
-
Other adjustments
3,318
-
-
-
-
Value adjustments at 31 December
185,023
-
-
-
-
Impairment at 1 January
-
-
26,104
7,878
-
Exchange adjustment
-
-
-
-
-
Impairment losses for the year
-
-
(15,537)
-
-
Impairment losses released in
connection with disposals
-
-
-
-
-
Impairment at 31 December
-
-
10,567
7,878
-
Carrying amount at 31 December
317,811
225,756
23,887
41,280
216,219
Page 37 of 66
Group
Parent
tDKK
Other non-
current
investments
Other non-
current
receivables
Non-current
receivables
from group
enterprises
Other non-
current
investments
Other non-
current
receivables
2021
Cost at 1 January
105,748
4,588
31,598
10,457
2,242
Exchange adjustments
(1,598)
0
-
-
-
Additions for the year
15,579
12,197
19,962
14,883
12,371
Disposals for the year
(25,089)
-
(25,237)
(4)
-
Other adjustments
(221)
(4,340)
-
-
(1,679)
Transfer for the year
-
666
-
-
Cost at 31 December
94,419
13,111
26,323
25,336
12,934
Value adjustments at 1 January
65,535
-
-
-
-
Exchange adjustment
235
-
-
-
-
Fair value adjustment, Urban
Partners managed funds net of
payments
144,021
-
-
-
-
Fair value adjustment other
158
-
-
-
-
Dividends
(22,488)
-
-
-
-
Other adjustments
(0)
-
-
-
-
Value adjustments at 31 December
187,461
-
-
-
-
Impairment at 1 January
-
-
1,760
7,878
-
Exchange adjustment
-
-
-
-
-
Impairment losses for the year
-
-
24,344
-
-
Impairment losses released in
connection with disposals
-
-
-
-
-
Impairment at 31 December
-
-
26,104
7,878
-
Carrying amount at 31 December
281,880
13,111
219
17,457
12,934
Other non-current investments represent investments
that do not meet the definition of associates, joint
ventures, or subsidiaries. These investments are
accounted for at fair value through profit and loss.
15. Receivables
Group
Parent
tDKK
2022
2021
2022
2021
Trade receivables
206,783
182,002
115,111
68,677
Receivables from group enterprises
-
-
415,857
148,679
Other current receivables
112,158
50,002
89,091
39,388
Income tax receivable
-
-
-
-
Total receivables
318,941
232,005
620,059
256,743
Page 38 of 66
Trade receivables
Allocation of net trade receivables by maturity period are as follows:
Group
Parent
tDKK
2022
2021
2022
2021
Up to 30 days
116,077
91,968
51,958
14,847
Between 31 and 90 days
61,853
51,012
48,219
32,675
Between 91 and 365 days
28,852
39,022
14,933
21,155
Net receivables at 31 December
206,782
182,002
115,111
68,677
The expected credit loss is based on a provision matrix,
which considers the Groups historic credit losses
combined with forward looking information that is
expected to affect the loss rates. The Group has no
history of significant credit losses on receivables. Due to
the substance in and the agreements for receivables
combined with the historic low credit loss rate, the
expected credit loss on rent and services charge
receivables is immaterial.
Receivables are written off when they are assessed as
uncollectible.
Trade receivables are primarily related to asset
management fees charged from Urban Partners to NREP
fund assets and fund limited partners.
Other current receivables
Other current receivables consist of receivables from
employees, affiliated companies and accrued rental
income.
The Group considers that the carrying amount of trade
and other receivables approximate their fair value.
There is no concentration of credit risk with respect to
specific receivables.
16. Prepayments / Other current financial assets
Other current assets include mainly prepayments. The
prepayments relate to prepaid insurance, platform
licenses, other accounting and consultancy fees for the
funding of Urban Partners Group managed funds.
17. Share base payment
As per 31 December 2022, the Group has one
outstanding share-based incentive plan.
Description of the plan
At the general assembly 10th of August 2020, Urban
Partners has approved the implementation of a warrant
program for certain partners and employees of the
Urban Partners as well as the issuance of 18,076
warrants. The warrants to which the participants
subscribe do not carry a right to vote, receive dividends
or any other rights associated to a shareholder.
On 10th August 2020 18,076 warrants were granted.
The key features of the warrants granted under the plan
are as follows:
• Each participant may subscribe a number of
warrants against a cash payment of DKK 88.61
per warrant. The price of DKK 88.61 is assumed
to be the fair value of the warrant at grant date
• Issued warrants vest equally in four tranches,
being 1 January 2021, 1 January 2022, 1 January
2023 and 1 January 2024 (final date of vesting)
• If the participant exists Urban Partners prior to
the final date of vesting, any unvested warrants
will lapse without further notice or
compensation
• At exercise, each warrant may be converted into
1 share in Urban Partners with a nominal value
of DKK 1 against a cash payment of DKK 1,108,
irrespectively of the time of vesting or exercise.
Page 39 of 66
• The warrants may be exercise in a period of
thirty days from the relevant date of vesting (1
January 2021/2022/2023/2024), although any
unvested warrants shall be vested no later than
three months from the final date of vesting (1
January 2024).
18,076 warrants are still outstanding as of December 31,
2022.
Accounting for Share-Based Payment
The warrants are issued in addition to the normal
renumeration of the employee and constitute an
incentive for the partners and employees to remain in
the employment of Urban Partners. A direct
measurement of the services by the participants is
measured at the fair value of the warrants granted. In
2020, the partners and employee paid DKK 88.61 per
warrant and this value represent the fair value of the
warrants at grant date. Therefore, there is no specific
fair value gain given to the employees at grant date and
by that no cost to recognise.
Movements during the year (in unit):
Group
Number of
option (in units)
Weighted average
exercise price in
DKK per warrant
Outstanding 1 January 2021
18,076
1,108
Granted during 2021
-
-
Forfeited during 2021
-
-
Exercised during 2021
-
-
Expired during 2021
-
-
Outstanding 31 December 2021
18,076
1,108
Granted during 2022
-
-
Forfeited during 2022
-
-
Exercised during 2022
-
-
Expired during 2022
-
-
Outstanding 31 December 2022
18,076
1,108
The weighted average remaining contractual life for the warrants outstanding as of 31 December 2022 is 2 years (3 years
in 2021).
The weighted average fair value of warrants granted during the year was DKK 0 in 2022 and DKK 0 in 2021.
Group
Year ended December 31, 2022
Plan 2022
Number of warrants granted
18,076
Weighted average fair values at the measurement date per warrant (DKK)*
1,108
Dividend yield
4.0%
Risk–free interest rate
0.0%
Expected life of warrants (years)
4
Weighted average share price (EUR) per share
148.50
Exercise price (EUR)
148.50
Model used
Actual transaction
*DKK equivalent of EUR 148.0 has been based on EUR/DKK rate of 7.4584 (30. April 2020)
Page 40 of 66
Market price per share is based on the actual share
transaction with third party in August 2020. No volatility
has been established on future equity.
The warrants have been purchased at fair value, why no
expense has been recognised in staff costs regarding the
incentive program.
18. Share capital
Dividends
The Board of Directors has not proposed dividend for
2022 (2021: DKK 0)
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.
In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt. The Group manages
alternative investment funds and is therefore under the
supervision of the Swedish Financial Supervisory
Authority with regard to activities in its Swedish entity
NREP AB. The capital as defined by management on 31
December 2022 and 2021 consists of total equity of the
Group plus net debt of the Group, as shown on the face
of the consolidated balance sheet.
Capital increase
In 2022 new shares was issued resulting in a capital
increase of DKK 7 thousand (2021: DKK 0).
The share capital has developed as follows:
Group
tDKK
2022
2021
2020
2019
2018
Share capital at 1 January
1,359
1,359
1,000
1,000
1,000
Capital increase
7
-
359
-
-
Capital decrease
-
-
-
-
-
Share capital at 31 December
1,366
1,359
1,359
1,000
1,000
Number of shares outstanding:
Parent
Shares (‘000)
2022
2021
Shares issued at 1 January
1,359
1,359
Shares issued during the year
7
-
Total number of shares
1,366
1,359
Holding of Treasury shares
-
-
Total number of outstanding shares at 31 December
1,366
1,359
Page 41 of 66
19. Proposed distribution of profit, Parent
Parent
tDKK
2022
2021
Reserve for net revaluation under the equity method
(26,535)
(51,595)
Retained earnings
34,807
(88,535)
Total
8,273
(140,131)
20. Trade Payables
Trade payables are non-interest bearing and are normally settled on current month +30-day terms.
21. Financial assets and liabilities
i. Interest-bearing loans and borrowings
Group
Parent
tDKK
2022
2021
2022
2020
Long-term part
109,317
-
109,317
-
Short-term part
93,139
51,050
93,139
51,050
Carrying amount at 31 December
202,456
51,050
202,456
51,050
As of December 31, 2022, the group has borrowing
facilities available. The undrawn borrowing facilities
available on 31 December 2022 amounted to DKK 204.3
million (2021 – DKK 201.8 million). Uncommitted bank
borrowing facilities are normally reaffirmed by the bank
annually, although they can theoretically be withdrawn
at any time.
ii. Other payable
Payments due within 1 year are recognised in short-term debt. Other debt is recognised in long-term debt. The debt falls
due for payment as specified below:
Group
Parent
tDKK
2022
2021
2022
2021
Between 1 and 5 years
78,201
-
62,177
-
Long-term part
78,201
-
62,177
-
Other short-term payables
442,346
250,068
89,609
95,193
Short-term part
442,346
250,068
89,609
95,193
Carrying amount at 31 December
520,547
250,068
151,787
95,193
Short-term other payables consist of cost related to trade payables and staff, such as vacation pay, social security, pension
contribution and bonus. The increase in short term payables, between 2021 and 2022, was a result of increased activity
and number of employees in NREP A/S Group and fund related accruals.
Page 42 of 66
iii. Movements
The movements of financial liabilities are as follows:
Group
tDKK
Beginning of
year
Cash flows
Non-cash
changes
End of year
2022
Current borrowings
51,050
151,406
-
202,456
Total
51,050
151,406
-
202,456
2021
Non-current borrowings - disclosed as liabilities
associated with asset held for sale / distribution
Current borrowings
44,861
6,189
-
51,050
Total
44,861
6,189
-
51,050
iv. Fair value
The Group measures the fair value of its financial assets
and financial liabilities using a fair value hierarchy. A
financial instrument’s classification within the fair value
hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. Three levels
of inputs may be used to measure fair value. The
different levels of the fair value hierarchy are defined as
follows:
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities
Level 2: Inputs other than quoted prices included within
Level 1 that are observables for the asset or liability,
either directly or indirectly; and
Level 3: Unobservable inputs for the asset or liability
The following is a comparison, by class, of the carrying
amounts and fair values of the financial assets and
liabilities, other than those with carrying amounts that
are reasonable approximation of fair value:
Both for Group and the Parent, management assessed
that the fair value of cash and cash equivalents, trade
accounts receivable, trade accounts payable, accrued
compensation and benefits, and other accruals
approximate their respective carrying values due to their
short-term maturities.
The fair values of the Group’s interest-bearing loan are
determined by using the DCF method using discount
rate that reflects the issuer’s borrowing rate as at the
end of the reporting period. Their fair values are the
same as the carrying amounts.
The other non-current investments and the carried
interest portion of the associates are measured at fair
value through the consolidated statement of
comprehensive income.
Page 43 of 66
Group
2022
2021
tDKK
Carrying
amount
Fair value
Carrying
amount
Fair value
Loans and receivables at amortised cost:
Trade receivables
206,783
206,783
182,002
182,002
Other current and non-current receivables
337,914
337,914
63,113
63,113
Cash and cash equivalents
256,694
256,694
171,603
171,603
Financial assets at fair value through profit/loss:
Associates
134,951
134,951
352,339
352,339
Other non-current investments
317,811
317,811
281,880
281,880
Financial assets
1,254,154
1,254,154
1,050,937
1,050,937
Carried at amortised cost:
Credit institutions
93,139
93,139
51,050
51,050
Trade payables
276,087
276,087
62,861
62,861
Other payables
442,346
442,346
250,068
250,068
Provisions
53,651
53,651
51,424
51,424
Financial liabilities
865,223
865,223
415,402
415,402
Parent
2022
2021
tDKK
Carrying
amount
Fair value
Carrying
amount
Fair value
Loans and receivables at amortised cost:
Trade receivables
115,111
115,111
68,677
68,677
Other current and non-current receivables
305,311
305,311
52,322
52,322
Current and non-current receivables from group
enterprises
439,745
439,745
148,898
148,898
Cash and cash equivalents
36
36
95,190
95,190
Financial assets at fair value through profit/loss:
Associates
13,134
13,134
220,513
220,513
Other non-current investments
41,280
41,280
17,457
17,457
Financial assets
914,617
914,617
603,058
603,058
Carried at amortised cost:
Interest bearing loans and borrowings
(93,139)
(93,139)
(51,050)
(51,050)
Trade payables
(268,113)
(268,113)
(38,005)
(38,005)
Other payables
(261,104)
(261,104)
(95,193)
(95,193)
Payables to group enterprises
(528,940)
(528,940)
(199,692)
(199,692)
Financial liabilities
(1,151,296)
(1,151,296)
(383,939)
(383,939)
Page 44 of 66
Group
tDKK
Quoted
prices
(Level 1)
Significant other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total
Other non-current investments and associates (with
shares or underlying shares measures at fair value)
-
-
452,762
452,762
Carrying amount 31 December 2022
-
-
452,762
452,762
Other non-current investments and associates (with
shares or underlying shares measures at fair value)
-
-
634,219
634,219
Carrying amount 31 December 2021
-
-
634,219
634,219
The following table presents the change in level 3 items for the years ended 31 December 2022 and 31 December 2021:
Group
tDKK
2022
2021
Opening at 1 January
634,219
235,526
Additions associates related to Urban Partners managed funds
33
206,925
Transfers and other adjustments associates related to Urban Partners managed
funds
(207,305)
(3,039)
Income from investments in associates related to Urban Partners managed funds
2,115
106,272
Income from investments in other associates
(285)
170
Dividends from investments in associates related to Urban Partners managed funds
(9,982)
(22,232)
Additions from investments related to Urban Partners managed funds
47,342
15,579
Transfers and other adjustments investments related to Urban Partners managed
funds
(4,517)
(26,673)
Income from investments in other investments related to Urban Partners managed
funds
(16,629)
144,021
Income from investments in other investments
14,148
158
Dividends from investments in associates related to Urban Partners managed funds
(6,377)
(22,488)
Closing balance 31 December
452,762
634,219
22. Financial risk management
The Group is subject to the following market risks:
• Market risks
• Foreign exchange risks
• Interest rate risk
• Liquidity risk
• Credit risk
The Group regularly defines, monitors, and manages its
external risks (including foreign exchange risk, credit
risk, investment risk, liquidity risk, reputation risk et. al.)
to align with the risk appetite of its stakeholders.
The valuation of Urban Partners’ co-investments in
Urban Partners managed funds is inherently linked to
the valuation of real estate properties in the fund
portfolios. The value of investment property is subject to
market conditions and is estimated with some degree of
uncertainty. All real estate properties have been valued
by independent external valuers.
i. Market risks
Management fees received from funds are primarily
based on the committed or deployed capital. In
Management's assessment, the risk profile of the Urban
Partners Group is normal for this Market.
Page 45 of 66
The value assessments of properties held directly or
indirectly through equity investments are inherently
subject to some degree of uncertainty. In order to limit
the risk as much as possible, all relevant properties have
been assessed by external valuers, who are external
parties independent of the company.
The fair value of the properties has been determined on
discounted cash flows using equivalent yields between
3.6% and 8.2% depending on the type and location of
the property. These inputs include:
• Future rental cash inflows based on the actual
location, type and quality of the properties and
supported by the terms of any existing lease,
other contracts or external evidence such as
current market rents for similar properties.
• Discount rates reflecting current market
assessments of the uncertainty in the amount
and timing of cash flows.
• Estimated vacancy rates based on current and
expected future market conditions after expiry
of any current lease.
• Maintenance costs including necessary
investments to maintain functionality of the
property for its expected useful life.
• Capitalisation rates based on actual location, size
and quality of the properties and taking into
account market data at the valuation date.
• Terminal value taking into account assumptions
regarding maintenance costs, vacancy rates and
market rents.
ii. Foreign exchange risks
The Group primarily receives management fees in EUR,
whereas the Group's expenses are distributed on DKK,
SEK, NOK, EUR and PLN. This implies a risk in respect of
exchange fluctuation of which the main part is however
covered for operating purposes by matching income and
expenses in the same currency.
Group
DKK
EUR
NOK
SEK
GBP
PLN
Total
2022
Trade receivable and other
receivable
204,684
71,649
16,063
12,160
482
13,904
318,941
Investment in other financial assets
308,325
44,704
566
188,086
1,633
253
543,567
Cash and cash equivalents
22,845
223,826
1,752
(128)
(75)
8,475
256,694
Total Financial assets
535,854
340,179
18,381
200,118
2,040
22,631
1,119,202
Intangible assets
515,394
4,196
-
-
-
-
519,589
Property, plant & equip, total
13,525
4,833
2,547
1,919
4,466
193
27,482
Right-of-use assets
64,713
-
-
-
-
-
64,713
Investment in associates & JV
134,310
100
83
2,186
-
-
136,678
Deferred tax assets
36,663
1,516
5,538
6,941
-
-
50,657
Prepayments
11,764
1,554
201
3,083
-
-
16,601
Total Non-Financial assets
776,367
12,198
8,368
14,128
4,466
193
815,720
Total Assets
1,312,221
352,376
26,748
214,246
6,506
22,824
1,934,922
Credit institutions
93,139
-
-
-
-
-
93,139
Trade and other payables
539,264
264,312
21,571
70,911
4,023
5,870
905,951
Provisions
14,385
10,827
172
20,059
8,207
-
53,651
Lease liabilities
65,907
-
-
-
-
-
65,907
Total Financial liabilities
712,695
275,139
21,744
90,970
12,230
5,870
1,118,648
Tax liabilities
78,463
6,976
-
-
-
-
85,440
Total Non-Financial liabilities
78,463
6,976
-
-
-
-
85,440
Total liabilities
791,159
282,115
21,744
90,970
12,230
5,870
1,204,088
Net currency position
521,063
70,261
5,005
123,276
(5,724)
16,954
730,834
Page 46 of 66
Group
tDKK
DKK
EUR
NOK
SEK
GBP
PLN
Total
2021
Trade receivable and other
receivable
111,963
65,862
17,412
33,840
410
2,517
232,005
Investment in other financial assets
105,981
35,350
139
153,345
-
177
294,991
Cash and cash equivalents
141,600
23,621
956
(154)
4,447
1,134
171,603
Total Financial assets
359,545
124,833
18,506
187,031
4,857
3,827
698,598
Intangible assets
8,274
5,865
-
-
-
-
14,139
Property, plant & equip, total
8,350
2,027
154
2,072
-
16
12,619
Right-of-use assets
49,363
-
-
-
-
-
49,363
Investment in associates & JV
350,554
100
87
2,542
-
-
353,283
Deferred tax assets
23,795
958
93
9,026
-
-
33,872
Prepayments
7,280
6,184
261
3,106
-
-
16,831
Total Non-Financial assets
447,616
15,133
595
16,747
-
16
480,107
Total Assets
807,161
139,966
19,101
203,778
4,857
3,843
1,178,705
Credit institutions
51,050
-
-
-
-
-
51,050
Trade and other payables
156,013
91,785
11,478
46,157
3,461
570
309,464
Provisions
-
867
-
50,557
-
-
51,424
Lease liabilities
50,319
-
-
-
-
-
50,319
Total Financial liabilities
257,381
92,652
11,478
96,713
3,461
570
462,256
Tax liabilities
2,585
347
-
-
533
-
3,465
Total Non-Financial liabilities
2,585
347
-
-
533
-
3,465
Total liabilities
259,966
92,999
11,478
96,713
3,994
570
465,721
Net currency position
547,195
46,967
7,623
107,065
862
3,273
712,984
iii. Interest rate risks
NREP A/S and affiliated companies have little exposure
to interest rate risk as external financing is limited to a
working capital facility with a variable interest of +2,5%
of BOR.
The Urban Partners Group might be indirectly exposed
to interest rate risk through the Funds' performance.
Funds have a dedicated policy for their own interest rate
risk exposures.
The Fund's interest rate risks principally arise from long-
term and short-term borrowings. Borrowings issued at
variable rates expose the Funds to cash flow interest
rate risk. To manage this, the Funds have entered into
interest rate swaps and interest rate caps. For the
interest rate swaps the Funds agrees to exchange, at
specified intervals, the difference between fixed and
variable rate interest amounts calculated by reference
to an agreed upon notional principal amount. Interest
rate caps cap the floating interest at a specific rate.
iv. Liquidity risk
The Group manages its liquidity risk by monitoring the
changes in working capital and by ensuring adequate
funding. Based on the Group's cash management
principle, the Group's cash is accumulated in dedicated
bank accounts. Risk analysis and designing of risk
management plans are conducted at the top
management level. The Group's liquidity risk policy is
based on a conservative approach, whose main
objective is to secure the safeguarding of the cash flows
generated from the operations to ensure sufficient
liquidity enabling timely settlement of the liabilities
undertaken.
At 31 December 2022 the Group has a committed
undrawn borrowing facility of DKK 204.3 (EUR 27.5) that
may be available for future operating activities and to
settle capital commitments. The table below analyses
the 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.
Page 47 of 66
Group
tDKK
Less than
1 year
Between 1
and 5 years
More than
5 years
Total
End 2022
Leases
32,422
24,487
8,998
65,907
Credit institutions
93,139
-
-
93,139
Other payables
442,346
226,980
-
669,326
Trade payables
276,087
-
-
276,087
Total
843,994
251,467
8,998
1,213,776
End 2021
Leases
19,327
21,853
9,139
50,319
Credit institutions
51,050
-
-
51,050
Other payables
245,730
-
-
245,730
Trade payables
62,861
-
-
62,861
Total
378,968
21,853
9,139
409,960
v. Credit risk
Credit risk is the risk that one party to a financial
instrument will cause a financial loss for the other party
by failing to discharge an obligation. The Group has no
significant concentrations of credit risk.
Credit risk arises from cash and cash equivalents held at
banks, trade receivables and other receivables. Credit risk
is managed on a group basis. The Group does not monitor
the credit quality of trade and other receivables on an
ongoing basis. Cash balances are held only with financial
institutions with a Moody’s or Fitch credit rating of Aa3 or
above, except in cases where amounts are immaterial.
Credit risk arises principally from other receivable, trade
receivables and cash and cash equivalents.
NREP A/S monitors credit risk of any financial
counterparty on an annual basis and performs initial
financial due diligence.
The Group’s maximum exposure to credit risk by class of financial asset is as follows:
Group
tDKK
2022
2021
Trade receivables
206,783
182,002
Other receivables
112,158
50,002
Other non-current receivables
225,756
13,111
Cash and Cash Equivalents
256,694
171,603
Page 48 of 66
Cash and cash equivalents and deposits were placed with financial institutions whose ratings are as follows:
Group
tDKK
2022
2021
Financial Institution
Rating Agency
Rating
BBH *
Fitch
A+
47,373
9,376
Danske Bank
Moody's
A1
42,261
147,553
Nordea Bank
Moody's
Aa3
17,094
11,864
RBSI
Moody’s
P1
93,501
-
Commerzbank
Moody’s
A1
25,500
-
ING
Moody’s
A1
23,491
-
Other banks
Moody's/Fitch
-
7,474
2,810
256,694
171,603
* Acting as an intermediary for HSBC, Nordea Bank Denmark, and Nordea Bank Norway
The ratings for financial institutions with which the
Group does business in multiple countries are the same
for all locations of that institution.
Further details on the Group’s credit risk and the related
expected credit loss for rent and service charge
receivables and debt investments are included in note
15 respectively.
23. Related parties
The following transactions were carried through with related parties:
Group
tDKK
2022
2021
Transaction with TBL Holding ApS:
Accounts Payables
-
15
Transaction with AGE Holding AB:
Loans granted/received/Loans repaid
7,437
-
Other income
1
-
Transactions with other related parties:
Account Receivables
41,420
104,343
Accounts Payables
(3,711)
(46,257)
Other income
3,360
(99,509)
Other expenses
(2,323)
(1,745)
Page 49 of 66
Parent
tDKK
2022
2021
Transactions with other related parties:
Loans granted/received/repaid
(90,762)
(88,507)
Subsidiaries
(108,414)
(100,326)
Joint Ventures
13,934
7,930
Associates
2,095
985
Other
1,623
2,904
Accounts Receivables
296,191
131,309
Subsidiaries
275,904
77,156
Joint Ventures
20,285
5,459
Associates
2
-
Other
-
48,694
Accounts Payables
(339,831)
(89,268)
Subsidiaries
(336,121)
(89,268)
Joint Ventures
(3,711)
-
Associates
-
-
Other
-
-
Interest received
1,862
718
Subsidiaries
1,472
558
Joint Ventures
300
95
Associates
31
11
Other
59
54
Interest paid
(9,274)
(7,570)
Subsidiaries
(9,274)
(7,570)
Joint Ventures
-
-
Associates
-
-
Other
-
-
Revenue
382,746
251,971
Subsidiaries
380,820
139,019
Joint Ventures
1,925
(1,533)
Associates
-
-
Other
-
114,485
Other expenses
(160,694)
(4,895)
Subsidiaries
(158,371)
(4,717)
Joint Ventures
(2,322)
-
Associates
-
-
Other
-
(178)
As regards to the Key Management Compensation reference is made to note 2 staff expenses.
Ownership
The following shareholders are recorded in the Company's register of shareholders as holding at least 5% of the votes or at
least 5% of the share capital:
• Two Degrees UP ApS, Højmarksvej 26, 8270 Højbjerg
• Doughnut Capital UP ApS, Højmarksvej 26, 8270 Højbjerg
• NREP Partner Holding ApS, Højmarkvej 26, 8270 Højbjerg
• NREP Partners Investment ApS, Højmarkvej 26, 8270 Højbjerg
• Novo Holdings A/S, Tuborg Havnevej 19, 2900 Hellerup
Page 50 of 66
24. Contingent assets, liabilities and other financial obligations
Group
The Group companies are jointly and separately liable for tax on the jointly taxed incomes etc of the Group. The total
amount of corporation tax payable is disclosed in the Annual Report. NREP A/S is the management company of the joint
taxation purposes for the Danish joint taxation. Moreover, the group companies are jointly and severally liable for Danish
withholding taxes by way of dividend tax and tax on unearned income. Any subsequent adjustments of corporation taxes
and withholding taxes may increase the Company’s liability.
The Group has entered into binding commitments to invest further EUR 5,4m into 2150 Urban Tech Fund.
The Group guarantees as a surety guarantor as a party to the obligations that NREP-TF ApS assumes in accordance with the
Tunnelfabrikken Consortium Agreement.
Parent
NREP A/S has issued a letter of comfort for selected subsidiary companies in order to be in compliance with going concern
requirement.
NREP A/S holds tDKK13,487 of operating lease liability that relates to office leases as at the end of 2022.
25. Audit Fee
Group
Parent
tDKK
2022
2021
2022
2021
Audit fee, PWC
2,399
3,256
1,294
1,818
Other non-audit fees
534
230
286
55
Tax advisory fee
435
207
435
82
Total receivables
3,368
3,693
2,015
1,955
26. Provision
Provision relates to Restructuring and VAT.
Since December 2020, Urban Partners has been in a
dispute with the tax Authorities in Sweden concerning
VAT treatment. In 2023 Urban Partners finally received
a ruling which was in line with the expectations and
provision.
27. Subsequent event
Beginning in March 2023, there was a degree of turmoil
in the banking sector, notably impacting lenders such as
Silicon Valley Bank and a handful of other largely US
based banking institutions with some contagion to the
broader global banking market. The Group had no direct
exposure to those lenders that have been impacted and
as such there has been no impact on its operations and
performance. Whilst there were a limited number of
indirect exposures to impacted institutions, through
tenants and portfolio company investments etc these
were resolved without impact to the Group or its
investments and strategies. The Group continues to
assess the suitability of its ongoing banking relationships
in view of any potential ongoing contagion risk, as per
normal course of business, but is currently operating with
a heightened state of vigilance in this regard.
The Group had its final close for it fifth Value Add Real
estate investment fund, NSF5 in May 2023. The final close
Page 51 of 66
was at a level of EUR 3.65 billion equity commitments
making this the largest vintage of the Groups flagship
value-add series and the largest ever European Value Add
Real Estate Fund. The level of commitments exceeded
Management’s expectations and provides a strong basis
for the Group to perform strongly over 2023, as a result
of higher than initially anticipated management fees
associated with this strategy. Management also see this
as confirmation of the Group’s ability to continue to
attract capital to its investment strategies, despite
challenging global fundraising environment owing to its
proven strategies, pipeline, geographical focus and ESG
leadership and thereby to continue to grow and expand
the Group’s activities
Rickard Tobias Svensson Dahlberg has step out the Board
of Directors and is replaced by Jim Hagemann Snabe.
28. General Information
Urban Partners is a vertically integrated real estate
product innovator, developer, investor and operator that
seeks to make real estate better. Urban Partners takes a
multi-stakeholder approach and leverages its
multidisciplinary team to develop real estate and real
estate anchored businesses that create long-term value
for tenants, investors and the wider communities in
which Urban Partners invests.
Further Urban Partners backs tech entrepreneurs with
constructive capital so they can reimagine and reshape
the urban environment as a VC firm in investing in
sustainable urban tech solutions through the 2150 brand.
Urban Partners also provides specialist financing within
the build environment.
NREP A/S was established on 2 November 2005 and
operates as a North European investment group focusing
on identifying, assessing, and executing property related
investment platforms mainly in the Scandinavian region.
The investment objective of these platforms is to pursue
investments in real estate, either through equity or debt
instruments in Denmark, Finland, Norway, Sweden,
Poland, and Germany with the intention of delivering
strong risk adjusted returns. These platforms typically
focus primarily on suburban areas around all capital cities
as well as the main regional cities, targeting attractive
locations in supply constrained areas in order to maintain
high occupancy levels and the ability to increase rental
income over time.
NREP A/S has its registered office at DK-2150 Nordhavn,
Denmark.
29. Basis of Preparation
The Consolidated Financial Statements of the Urban
Partners Group for 2022 have been prepared in
accordance with the International Financial Reporting
Standards (IFRS) as adopted in EU and additional Danish
disclosure requirements. The financial Statements of
NREP A/S (the Parent Company) have been prepared in
accordance with the Danish Financial Statements Act.
30. Accounting Policies for the Group
Statement of compliance
The financial statements of the Group for 2022 have been
prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union and additional Danish disclosure requirements.
The Group and Parent Company Financial Statements for
2022 are presented in tDKK.
Comprehensive Income and Cash Flow Statement
The Group has elected to present a single statement of
comprehensive income and presents its expenses by
nature. The Group reports cash flows from operating
activities using the indirect method. Financial income
received from joint ventures and associates etc., and
financial expenses paid on loans is presented within
financing activities in the cash flow statement. The
acquisitions and disposals of investments are disclosed as
cash flows from investing activities because this most
appropriately reflects the Groups business activities.
Page 52 of 66
Preparation of the Consolidated Financial Statements
The consolidated financial statements include the
accounts of NREP A/S, and all subsidiaries controlled by
NREP A/S. Control is assumed when the Group is exposed
to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is
transferred to NREP A/S. They are deconsolidated from
the date that control ceases. In assessing control,
potential voting rights that are substantive, are
considered.
Enterprises in which the Group has shared control is
classified as joint ventures.
Enterprises in which the Group holds between 20% and
50% of the votes and exercises significant influence but
not control are classified as associates.
On consolidation, items of a uniform nature are
combined. Elimination is made of intercompany income
and expenses, shareholdings, dividends, and accounts as
well as of realised and unrealised profits and losses on
transactions between the consolidated enterprises.
The Parent Company’s investments in the consolidated
subsidiaries are set off against the Parent Company’s
share of the net asset value of subsidiaries stated at the
time of consolidation.
Funds
Each Urban Partners fund, being composed of one or
more limited Partnerships (or the equivalent) is managed
by a general partner and/or a manager (jointly “Fund
Manager”). The Fund Manager is a direct or indirect
subsidiary of NREP A/S. The authority and powers of the
Fund Manager are defined in the Limited Partnership
Agreement (or similar).
Determining whether or not a Fund Manager should
consolidate its managed funds is based on judgement of
whether the Fund Manager is acting as a principal or an
agent to the fund for accounting purposes. The
assessment of the NREP A/S Groups expected level of
return is based on the funds’ performance, i.e. the
variable returns. Should a fund generate variable return
NREP A/S Group would be entitled to between 8 and 31
percent of the variable return, which is not considered to
meet the control criterion in IFRS on link between power
and return. Instead, NREP A/S Group is considered to be
an agent in relation to the fund investors, for accounting
purposes and, accordingly the funds are not
consolidated.
Investment in associates and joint ventures
An associate is an entity over which the Group has
significant influence. Significant influence is the power to
participate in the financial and operating policy decisions
of the investee but is not control or joint control over
those policies. This is generally the case where the group
holds between 20% and 50% of the voting rights.
A joint venture is a type of joint arrangement whereby
the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint
control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of
the parties sharing control.
The considerations made in determining significant
influence or joint control are similar to those necessary
to determine control over subsidiaries. The Group’s
investment in its associates and joint ventures are
accounted for using the equity method.
Under the equity method, the investment in an associate
or a joint venture is initially recognised at cost. The
carrying amount of the investment is adjusted to
recognise changes in the Group’s share of net assets of
the associate or joint venture since the acquisition date.
Goodwill relating to the associate or joint venture is
included in the carrying amount of the investment and is
not tested for impairment separately.
After application of the equity method, the Group
determines whether it is necessary to recognise an
impairment loss on its investment in its associate or joint
venture. At each reporting date, the Group determines
whether there is objective evidence that the investment
in the associate or joint venture is impaired. If there is
such evidence, the Group calculates the amount of
impairment as the difference between the recoverable
amount of the associate or joint venture and it’s carrying
value, and then recognises the loss within “Income from
investments in associates related to Urban Partners
managed funds”, “Income from investments in
associates” or “Income from investments in joint
venture” in the statement of profit or loss. When the
group’s share of losses in an equity-accounted
investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the
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group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the
other entity.
The group treats transactions with non-controlling
interests that do not result in a loss of control as
transactions with equity owners of the group. A change
in ownership interest results in an adjustment between
the carrying amounts of the controlling and non-
controlling interests to reflect their relative interests in
the subsidiary. Any difference between the amount of
the adjustment to non-controlling interests and any
consideration paid or received is recognised in a separate
reserve within equity attributable to owners of NREP A/S.
Upon loss of significant influence over the associate or
joint control over the joint venture, the Group measures
and recognises any retained investment at its fair value.
Any difference between the carrying amount of the
associate or joint venture upon loss of significant
influence or joint control and the fair value of the
retained investment and proceeds from disposal is
recognised in profit or loss.
Unrealised gains on transactions between the group and
its associates are eliminated to the extent of the group’s
interest in these entities. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies
of equity accounted investees have been changed where
necessary to ensure consistency with the policies
adopted by the Company.
Minority interests
Minority interests form part of the Group’s total equity.
Upon distribution of net profit, net profit is broken down
on the share attributable to minority interests and the
share attributable to the shareholders of the Parent
Company. Minority interests are recognised on the basis
of a remeasurement of acquired assets and liabilities to
fair value at the time of acquisition of subsidiaries.
On subsequent changes to minority interests where the
Group retains control of the subsidiary, the consideration
is recognised directly in equity.
Translation policies
Items included in the financial statements of each of the
group’s entities are measured using the currency of the
primary economic environment in which the entity
operates (‘the functional currency’). The consolidated
financial statements are presented in DKK, which is NREP
A/S functional and presentation currency.
Transactions and balances
Transactions in foreign currencies are initially recorded
by the Group’s entities at their respective functional
currency spot rates at the date the transaction first
qualifies for recognition.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot
rates of exchange at the reporting date.
Differences arising on settlement or translation of
monetary items are recognised in profit or loss. Tax
charges and credits attributable to exchange differences
on those monetary items are recognised in other
comprehensive income.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured
at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e.,
translation differences on items whose fair value gain or
loss is recognised in other comprehensive income or
profit or loss are also recognised in other comprehensive
income or profit or loss, respectively).
In determining the spot exchange rate to use on initial
recognition of the related asset, expense or income (or
part of it) on the derecognition of a non-monetary asset
or non-monetary liability relating to advance
consideration, the date of the transaction is the date on
which the Group initially recognises the non-monetary
asset or non-monetary liability arising from the advance
consideration. If there are multiple payments or receipts
in advance, the Group determines the transaction date
for each payment or receipt of advance consideration.
Group companies
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On consolidation, the assets and liabilities of foreign
operations are translated into DKK at the rate of
exchange prevailing at the reporting date and their
statements of profit or loss are translated at exchange
rates prevailing at the dates of the transactions. The
exchange differences arising on translation for
consolidation are recognised in other comprehensive
income. On disposal of a foreign operation, the
component of other comprehensive income relating to
that particular foreign operation is reclassified to profit or
loss.
Any goodwill arising on the acquisition of a foreign
operation and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition
are treated as assets and liabilities of the foreign
operation and translated at the spot rate of exchange at
the reporting date.
Current versus non-current classification
The Company presents assets and liabilities in the
statement of financial position based on current/non-
current classification.
An asset is current when it is expected to be realised or
intended to be sold or consumed in the normal operating
cycle, held primarily for the purpose of trading, expected
to be realised within twelve months after the reporting
period or cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least
twelve months after the reporting period. All other assets
are classified as non-current.
A liability is current when it is expected to be settled in
the normal operating cycle, it is held primarily for the
purpose of trading, it is due to be settled within twelve
months after the reporting period, there is no
unconditional right to defer the settlement of the liability
for at least twelve months after the reporting period. The
Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
Fair value measurement
The Group measures non-financial assets such as
investment properties and investment in shares owned
directly or indirectly, at fair value at each balance sheet
date.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
• In the principal market for the asset or liability or
• In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be
accessible by the Group.
The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the
financial statements at fair value on a recurring basis, the
Group determines whether transfers have occurred
between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is
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significant to the fair value measurement as a whole) at
the end of each reporting period.
The Group determines the policies and procedures for
both recurring fair value measurement, such as
investment properties and unquoted financial assets, and
for non-recurring measurement, such as assets held for
sale in discontinued operations. At each reporting date,
the Group analyses the movements in the values of assets
and liabilities which are required to be remeasured or re-
assessed as per the Group’s accounting policies.
External valuers are involved for valuation of significant
assets, such as investment properties or investment in
equity on an unquoted financial market. Involvement of
external valuers is determined annually by the Group.
Revenue from contracts with customers
IFRS 15 Revenue from Contracts with Customers (“IFRS
15”), specifies how and when revenue should be
recognized and requires disclosures about the nature,
amount, timing and uncertainty of revenues and cash
flows arising from customer contracts.
Revenue is measured based on the consideration
specified in a contract with a customer and excludes
amounts collected on behalf of third parties. A
performance obligation is a promise in a contract to
transfer a distinct good or service (or a bundle of goods
and services) to the customer and is the unit of account
in IFRS 15. A contract’s transaction price is allocated to
each distinct performance obligation and recognized as
revenue, as, or when, the performance obligation is
satisfied. The company recognizes revenue when it
transfers control of a product or service to a customer.
The company recognizes revenue from the following
major sources:
Asset Management Fee
The company’s primary asset management revenue
streams, which include base management fees, incentive
fees (including incentive distributions and performance
fees), are satisfied over time.
The company earns base management fees in
accordance with contractual arrangements with our
long-term private funds, perpetual strategies, and public
securities’ investment vehicles. Fees are typically equal to
a percentage of fee-bearing capital within the respective
fund or entity and are accrued quarterly. These fees are
earned over the period of time that the management
services are provided and are allocated to the distinct
services provided by the company during the reporting
period.
Service corporate fee
Service corporate fee revenue stream relate to services
not included in the asset management fee agreement
that the Group performs on behalf of the funds it
manages. The revenues arising these services are
recognized on a time spend basis.
Other
Other revenues relate to the hospitality operations which
is generated by providing accommodation, food and
beverage and leisure facilities to hotel guests. Revenue
from accommodation is recognized over the period that
the guest stays at the hotel; food and beverage revenue
as well as revenue from leisure activities is recognized
when goods and services are provided. Further it includes
variable considerations that are considered highly
probable that a reversal will not take place in the future.
Income from interests in associates and other
investments related to Urban Partners Managed funds
Income from interest in associates and other investments
related to Urban Partners Managed funds comprise a fair
value movement of the other investments directly or
indirectly held by the Group.
The carried interest income is calculated taking into
account the required performance conditions and
distribution agreements with each Fund as a whole.
Other administrative expenses
Other administrative expenses comprise expenses for
premises, sales as well as office expenses, etc.
Staff expenses
Staff expenses comprise wages and salaries as well as
payroll-related expenses.
Pension
The Group makes contributions to defined contribution
pension plans. The contributions are recognized in the
consolidated statement of comprehensive income as
incurred.
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Share base compensation
Warrants were issued to certain partners end employees
of the Group. The warrants are equity-settled shared-
based payment transactions as they may only be settled
by shares in NREP A/S. The costs related to the warrants
are recognized over the vesting period of four year. The
participants must make certain payments for receiving
the warrants, which is assumed to equal the fair value of
the issued warrants. The costs related to the warrant are
offset by the payments received from the participant,
creating a nil impact on the consolidated statement of
comprehensive income.
The fair value of the employee services received in
exchange for the warrants is determined at the grant
date.
Depreciation, amortisation and impairment losses
Amortisation, depreciation and impairment losses
comprise amortisation, depreciation and impairment of
property, plant and equipment, intangible assets and
goodwill.
Financial income and expenses
Financial income and expenses comprise interest income
and expense determined on an amortised cost basis and
exchange rate adjustments.
Property, plant and equipment
Property, plant and equipment are measured at cost less
accumulated depreciation and less any accumulated
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. Interest expenses on loans
raised directly for financing the construction of property,
plant and equipment are recognised in cost over the
period of construction. All indirectly attributable
borrowing expenses are recognised in the income
statement.
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:
Land and buildings
50 years
Other fixtures and fittings,
tools, and equipment
3-5 years
Leasehold improvements
20 years
Depreciation period and residual value are reassessed
annually.
Intangible assets
Finite life intangible assets are carried at cost less any
accumulated amortization and any accumulated
impairment losses and are amortized on a straight-line
basis over their estimated useful lives, which range
between 2 to 12 years. Amortization is recorded within
depreciation and amortization in the Statements of
comprehensive income.
Research costs are expensed as incurred. Development
expenditures on an individual project are recognised as
an intangible asset when the Group can demonstrate:
• The technical feasibility of completing the
intangible asset so that the asset will be available
for use or sale
• Its intention to complete and its ability and
intention to use or sell the asset
• How the asset will generate future economic
benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure
during development
Following initial recognition of the development
expenditure as an asset, the asset is carried at cost less
any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete, and the asset is available
for use. It is amortised over the period of expected future
benefit. Amortisation is recorded in cost of sales.
Intangible assets under development and Goodwill are
tested for impairment annually.
Impairment non-financial assets
The Company assesses at each reporting date, whether
there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing
for an asset is required, the Company estimates the
asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s fair value less costs of
disposal and its value in use. The recoverable amount is
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determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of
those from other assets or group of assets. When the
carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written
down to its recoverable amount.
In assessing value in use, the estimated future cash flows
are discounted to their present value using discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent
market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly
traded companies or other available fair value indicators.
Impairment losses are recognised in the statement of
profit or loss in expense categories consistent with the
function of the impaired asset.
For assets excluding goodwill, an assessment is made at
each reporting date to determine whether there is an
indication that previously recognised impairment losses
no longer exist or have decreased. If such indication
exists, the Group estimates the asset’s recoverable
amount. A previously recognised impairment loss is
reversed only if there has been a change in the
assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor
exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal
is recognised in the statement of profit or loss unless the
asset is carried at a revalued amount, in which case, the
reversal is treated as a revaluation increase.
Leases
The Group assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Group applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-
use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease
payments made at or before the commencement date
less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of
the lease term and the estimated useful lives of the
assets. Refer to note 8.
The right-of-use assets are also subject to impairment.
Refer to the accounting policies in section Impairment of
non-financial assets.
Lease liabilities
At the commencement date of the lease, the Company
recognises lease liabilities measured at the present value
of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-
substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also
include the exercise price of a purchase option
reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the
lease term reflects the Company exercising the option to
terminate.
Variable lease payments that do not depend on an index
or a rate are recognised as expenses (unless they are
incurred to produce inventories) in the period in which
the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in
the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to
determine such lease payments) or a change in the
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assessment of an option to purchase the underlying
asset.
Assets held for distribution / sale
The Company classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at
the lower of their carrying amount and fair value less
costs to sell. Costs to sell are the incremental costs
directly attributable to the disposal of an asset (disposal
group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as
met only when the sale is highly probable, and the asset
or disposal group is available for immediate sale in its
present condition. Actions required to complete the sale
should indicate that it is unlikely that significant changes
to the sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the plan
to sell the asset and the sale expected to be completed
within one year from the date of the classification.
Property, plant and equipment and intangible assets are
not depreciated or amortised once classified as held for
sale.
Assets and liabilities classified as held for sale are
presented separately as current items in the statement of
financial position.
Income taxes
Current tax receivables and liabilities
Current income tax assets and liabilities are measured at
the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or
substantively enacted at the reporting date in the
countries where the Group operates and generates
taxable income.
Current income tax relating to items recognised directly
in equity is recognised in equity and not in the statement
of profit or loss.
Management periodically evaluates positions taken in
the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.
Deferred tax assets and liabilities
Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
• In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilised, except:
• When the deferred tax asset relating to the
deductible temporary difference arises from the
initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss
• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable future
and taxable profit will be available against which
the temporary differences can be utilised
The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are re-
assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
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Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying
transaction either in other comprehensive income or
directly in equity.
The Group offsets deferred tax assets and deferred tax
liabilities if and only if it has a legally enforceable right to
set off current tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and
assets on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost and fair value
through profit or loss (FVTPL).
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical
expedient, the Company initially measures a financial
asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs.
The Group only has financial assets subsequently
measured at amortised cost or at FVTPL. The financial
assets at FVTPL are included in the other non-current
investment in note 14.
Subsequent measurement
Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method and
are subject to impairment. Gains and losses are
recognised in profit or loss when the asset is
derecognised, modified, or impaired. The Company’s
financial assets are the following:
Financial assets at amortised cost are mainly trade
receivables, the other current financial assets consist of
prepaid expenses concerning rent, insurance premiums,
subscriptions and interest as well as the long-term loans
to affiliated companies included in other non-current
financial assets.
Financial assets at fair value through profit or loss are
carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement
of profit or loss. This category includes investments in
equity instruments that do not meet the criteria of a
subsidiary or an associate. These investments, included in
other non-current financial assets (note 14) are
presented at fair value, including the fair value of the
carried interests. The profit or loss arising from the fair
valuation as well as the carried interest calculation are
presented in financial income and “income from carried
interests” respectively.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the
Company’s statement of financial position) when:
• The rights to receive cash flows from the asset
have expired or
• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
‘pass-through’ arrangement; and either (a) the
Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all
the risks and rewards of the asset, but has
transferred control of the asset
When the Group has transferred its rights to receive cash
flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has
retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred control of
the asset, the Group continues to recognise the
transferred asset to the extent of its continuing
involvement. In that case, the Group also recognises an
associated liability. The transferred asset and the
associated liability are measured on a basis that reflects
the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the
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maximum amount of consideration that the Group could
be required to repay.
Impairment
The Group calculates an allowance for expected credit
losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the
contractual terms.
The expected credit loss is based on a provision matrix,
which considers the Group’s historic credit losses
combined with forward looking information that is
expected to affect the loss rates. The Group has no
history of significant credit losses on receivables. Due to
the substance in and the agreements for receivables
combined with the historic low credit loss rate, the
expected credit loss on rent and services charge
receivables is immaterial.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective hedge,
as appropriate.
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs. The
Company’s financial liabilities include trade and other
payables, loans and borrowings with credit institutions.
Subsequent measurement
For purposes of subsequent measurement, financial
liabilities are classified in two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and
borrowings)
The Company does not have financial liabilities at fair
value through profit and loss.
For the financial liabilities at amortised cost, after initial
recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the
effective interest rate method. Gains and losses are
recognised in profit or loss when the liabilities are
derecognised as well as through the effective interest
rate amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that
are an integral part of the effective interest rate. The
effective interest rate amortisation is included as finance
costs in the statement of profit or loss. This category
generally applies to interest-bearing loans and
borrowings. For more information, refer to note 21.
Derecognition
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially
modified, such an exchange or modification is treated as
the derecognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the
net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial
position comprise cash at banks subject to an
insignificant risk of changes in value.
Business combinations
Business combinations are accounted for using the
acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration
transferred measured at acquisition date fair value and
the amount of any non-interests in the acquiree. For each
business combination, the Group elects whether to
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measure the non-controlling interests in the acquiree at
fair value or at the proportionate share of the acquiree’s
identifiable net assets. Acquisition-related costs are
expensed as incurred and included in administrative
expenses. When the Group acquires a business, it
assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance
with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This
includes the separation of embedded derivatives in host
contracts by the acquiree. If the business combination is
achieved in stages, any previously held equity interest is
re- measured at its acquisition date fair value and any
resulting gain or loss is recognised in profit or loss. It is
then considered in the determination of goodwill on
acquisition, qualifying as business combinations, is
initially measured at cost being the difference between
the cost of the business acquisition and the fair value of
its identifiable assets, liabilities and contingent liabilities.
New and amended standards and interpretations
The Group applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after 1 January 2022. The Group has not
early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
Property, Plant and Equipment — Proceeds before
Intended Use (Amendments to IAS 16)
The amendments prohibit deducting from the cost of an
item of property, plant and equipment any proceeds
from selling items produced while bringing that asset to
the location and condition necessary for it to be capable
of operating in the manner intended by management.
Instead, an entity recognises the proceeds from selling
such items, and the cost of producing those items, in
profit or loss.
Onerous Contracts — Cost of Fulfilling a Contract
(Amendments to IAS 37)
The amendments specify that the ‘cost of fulfilling’ a
contract comprises the ‘costs that relate directly to the
contract’. Costs that relate directly to a contract can
either be incremental costs of fulfilling that contract
(examples would be direct labour, materials) or an
allocation of other costs that relate directly to fulfilling
contracts (an example would be the allocation of the
depreciation charge for an item of property, plant and
equipment used in fulfilling the contract).
Amendments to the following standards:
IFRS 1 – The amendment permits a subsidiary that applies
paragraph D16(a) of IFRS 1 to measure cumulative
translation differences using the amounts reported by its
parent, based on the parent’s date of transition to IFRSs.
IFRS 9 – The amendment clarifies which fees an entity
includes when it applies the ‘10 per cent’ test in
paragraph B3.3.6 of IFRS 9 in assessing whether to
derecognise a financial liability. An entity includes only
fees paid or received between the entity (the borrower)
and the lender, including fees paid or received by either
the entity or the lender on the other’s behalf.
IFRS 16 – The amendment to Illustrative Example 13
accompanying IFRS 16 removes from the example the
illustration of the reimbursement of leasehold
improvements by the lessor in order to resolve any
potential confusion regarding the treatment of lease
incentives that might arise because of how lease
incentives are illustrated in that example.
IAS 41 – The amendment removes the requirement in
paragraph 22 of IAS 41 for entities to exclude taxation
cash flows when measuring the fair value of a biological
asset using a present value technique.
Reference to the Conceptual Framework – Amendments
to IFRS 3 - Amendments were made to IFRS 3 Business
Combinations to update the references to the
Conceptual Framework for Financial Reporting and to
add an exception for the recognition of liabilities and
contingent liabilities within the scope of IAS 37
Provisions, Contingent Liabilities and Contingent Assets
and Interpretation 21 Levies. The amendments also
confirm that contingent assets should not be recognized
at the acquisition date.
The above amendments are effective for reporting
periods beginning on or after 1 January 2022. They are
not expected to have a material impact on the Group.
Standards issued but not yet effective
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts
(IFRS 17), a comprehensive new accounting standard for
insurance contracts covering recognition and
measurement, presentation and disclosure. Once
effective, IFRS 17 will replace IFRS 4 Insurance Contracts
Page 62 of 66
(IFRS 4) that was issued in 2005. IFRS 17 applies to all
types of insurance contracts (i.e., life, non-life, direct
insurance and re-insurance), regardless of the type of
entities that issue them, as well as to certain guarantees
and financial instruments with discretionary participation
features.
A few scope exceptions will apply. The overall objective
of IFRS 17 is to provide an accounting model for insurance
contracts that is more useful and consistent for insurers.
In contrast to the requirements in IFRS 4, which are
largely based on grandfathering previous local
accounting policies, IFRS 17 provides a comprehensive
model for insurance contracts, covering all relevant
accounting aspects. The core of IFRS 17 is the general
model, supplemented by:
A specific adaptation for contracts with direct
participation features (the variable fee approach)
A simplified approach (the premium allocation approach)
mainly for short-duration contracts
IFRS 17 is effective for reporting periods beginning on or
after 1 January 2023, with comparative figures required.
Early application is permitted, provided the entity also
applies IFRS 9 and IFRS 15 on or before the date it first
applies IFRS 17. This standard is not applicable to the
Group.
Amendments to IAS 1 – Classification of Liabilities as
Current or Non-current
In January 2020, the IASB issued amendments to
paragraphs 69 to 76 of IAS 1 to specify the requirements
for classifying liabilities as current or non-current. The
amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the
reporting period
• That classification is unaffected by the likelihood that
an entity will exercise its deferral right
• That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms of
a liability not impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and must be
applied retrospectively. The Fund is currently assessing
the impact the amendments will have on current practice
and whether existing loan agreements may require
renegotiation.
Definition of Accounting Estimates (Amendments to IAS 8)
In February 2021, the IASB issued amendments to IAS 8,
in which it introduces a definition of ‘accounting
estimates’. The amendments clarify the distinction
between changes in accounting estimates and changes in
accounting policies and the correction of errors. Also,
they clarify how entities use measurement techniques
and inputs to develop accounting estimates.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and apply
to changes in accounting policies and changes in
accounting estimates that occur on or after the start of
that period. Earlier application is permitted as long as this
fact is disclosed.
The amendments are not expected to have a material
impact on the Group.
Disclosure of Accounting Policies (Amendments to IAS 1
and IFRS Practice Statement 2)
In February 2021, the IASB issued amendments to IAS 1
and IFRS Practice Statement 2 Making Materiality
Judgements, in which it provides guidance and examples
to help entities apply materiality judgements to
accounting policy disclosures. The amendments aim to
help entities provide accounting policy disclosures that
are more useful by replacing the requirement for entities
to disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting
policies and adding guidance on how entities apply the
concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with earlier
application permitted. Since the amendments to the
Practice Statement 2 provide non mandatory guidance
on the application of the definition of material to
accounting policy information, an effective date for these
amendments is not necessary.
The Group is currently assessing the impact of the
amendments to determine the impact they will have on
the Group’s accounting policy disclosures.
Page 63 of 66
Deferred Tax related to Assets and Liabilities arising from
a Single Transaction - Amendments to IAS 12
In May 2021, the Board issued amendments to IAS 12,
which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies to
transactions that give rise to equal taxable and deductible
temporary differences. The amendments are applicable
to annual periods beginning on or after 1 January 2023.
The amendments should be applied to transactions that
occur on or after the beginning of the earliest
comparative period presented. In addition, at the
beginning of the earliest comparative period presented,
a deferred tax asset (provided that sufficient taxable
profit is available) and a deferred tax liability should also
be recognised for all deductible and taxable temporary
differences associated with leases and decommissioning
obligations.
The amendments are not expected to have a material
impact on the Group.
31. Critical accounting estimates and judgements
The Group makes accounting estimates and judgements
concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are addressed below.
The judgments, estimates and assumptions applied are
based on historical experience and other factors that
Management considers to be reliable, but which by their
very nature are associated with uncertainty and
unpredictability. These assumptions may prove
incomplete or incorrect, and unexpected events or
circumstances may arise. The most critical estimates,
judgements and assumptions for the individual items are
described below.
The Group is also subject to risks and uncertainties that
may lead to actual results differing from these estimates,
both positively and negatively.
Judgements
In the process of applying the Group’s accounting
policies, management has made the following
judgements, which have the most significant effect on
the amounts recognised in the consolidated financial
statements:
Determining the lease term of contracts with renewal and
termination options
The Group determines the lease term as the non-
cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably
certain to be exercised, or any periods covered by an
option to terminate the lease, if it is reasonably certain
not to be exercised.
The Group has lease contracts that include extension and
termination options. The Group applies judgement in
evaluating whether it is reasonably certain whether or
not to exercise the option to renew or terminate the
lease. That is, it considers all relevant factors that create
an economic incentive for it to exercise either the
renewal or termination. After the commencement date,
the Group reassesses the lease term if there is a
significant event or change in circumstances that is within
its control and affects its ability to exercise or not to
exercise the option to renew or to terminate (e.g.,
construction of significant leasehold improvements or
significant customisation to the leased asset).
The Group typically exercises its option to renew for
these leases because there will be a significant negative
effect on production if a replacement asset is not readily
available. The renewal periods for leases of plant and
machinery with non-cancellable periods are not included
as part of the lease term as these are not reasonably
certain to be exercised. In addition, the renewal options
for leases of motor vehicles are not included as part of
the lease term because the Group typically leases motor
vehicles for not more than five years and, hence, is not
exercising any renewal options. Furthermore, the periods
covered by termination options are included as part of
the lease term only when they are reasonably certain not
to be exercised.
Refer to note 8 for information on potential future rental
payments relating to periods following the exercise date
of extension and termination options that are not
included in the lease term.
Page 64 of 66
Management has made the following judgments when
applying accounting policies:
Shares are classified as equity investments if the Group
does not have an obligation to sell the shares at cost or
an amount lower than fair value if the Investors elect
another Fund Manager. If the Group has such an
obligation, such shares are considered contingent
consideration arrangement related to the services
delivered under the Investment Management
agreements.
Estimates and assumptions
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Group based its assumptions and estimates
on parameters available when the consolidated financial
statements were prepared. Existing circumstances and
assumptions about future developments, however, may
change due to market changes or circumstances arising
that are beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Fair value
Interests in other financial assets managed by Urban
Partners owned directly by the Group or indirectly
through an associate.
Investments in associates and other investments includes
shares owned directly or indirectly which are measured
at fair value.
Valuation of some of the shares are subject to significant
accounting estimates as the valuation is based on the
performance of the Urban Partners Managed Fund
exceeding a predetermined hurdle rate, which is in turn
driven by the risk factors of the fund including financial
capacity of tenants to pay rent, market conditions in
terms of supply and demand of buildings / rental space,
Urban Partners ability to buy / sell buildings at low / high
valuation respectively at the right cycles of the fund
investment cycle, independent valuations or better are
obtained on sale, vacancy rates, renegotiation terms of
rental and financing arrangements, FX rates stability as FX
risk is not hedged in the fund, compliance with loan
covenants, taxation rules stability and the discount rate
applicable to forecasted carried interest flows.
Properties in investments in associates and other non-
current investments
Properties held by entities in which the Group hold an
equity interest through investments in associates or non-
controlling interests are normally measured at fair value.
The fair value of investment properties is determined by
Urban Partners and assessed by independent valuators
using acknowledged valuation techniques. The models
used for valuing investment properties can include the
net present value of estimated future cash flows, the
capitalisation of expected yields approach, and/or recent
transactions of comparable properties. The
determination of the inputs in the valuation calculations
requires management to make judgments and estimates.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or
cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal
and its value in use. The fair value less costs of disposal
calculation is based on available data from binding sales
transactions, conducted at arm’s length, for similar assets
or observable market prices less incremental costs of
disposing of the asset. The value in use calculation is
based on a DCF model. The cash flows are derived from
the budget for the next five years and do not include
restructuring activities that the Group is not yet
committed to or significant future investments that will
enhance the performance of the assets of the CGU being
tested. The recoverable amount is sensitive to the
discount rate used for the DCF model as well as the
expected future cash-inflows and the growth rate used
for extrapolation purposes. These estimates are most
relevant to intangibles with indefinite useful lives
recognised by the Group.
Management has reviewed the development projects
and assessed the possibilities for realising a profitable
business basis. These assessments have been used to
assess the need of impairment of activated project costs.
The assessment did not lead to impairments.
Leases - Estimating the incremental borrowing rate
When the Group cannot readily determine the interest
rate implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR
is the rate of interest that the Group would have to pay
to borrow over a similar term, and with a similar security,
the funds necessary to obtain an asset of a similar value
Page 65 of 66
to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group
‘would have to pay’, which requires estimation when no
observable rates are available (such as for subsidiaries
that do not enter into financing transactions) or when
they need to be adjusted to reflect the terms and
conditions of the lease (for example, when leases are not
in the subsidiary’s functional currency). The Group
estimates the IBR using observable inputs (such as
market interest rates) when available and is required to
make certain entity-specific estimates (such as the
subsidiary’s stand-alone credit rating).
32. Accounting policies for the Parent Company
The accounting policies of the Parent Company are the
same as for the Group except as described below:
The financial statements of the Parent company have
been prepared in accordance with the Danish Financial
Statements Act applying to large enterprises of reporting
class C.
The Parent Company Financial Statements for 2022 are
presented in tDKK.
The income statement is presented according to the
nature of expenses. To obtain a true and fair view of the
investment management activities of company, fair value
changes and dividend from entities holding investments
in the funds managed by Urban Partners is presented as
a separate line item within profit before financial items.
Further, income from associates holding such
investments is presented as a separate item within profit
before financial items.
The balance sheet is presented in a current/non-current
order.
The accounting policies used in the preparation of the
financial statements are consistent with those of last
year.
Revenue
The Parent Company has chosen to use IFRS15 as
interpretation for revenue recognition. Income from the
rendering of services is recognised as revenue as the
services are rendered. Accordingly, revenue corresponds
to the market value of the services rendered during the
year.
Revenue is measured at the fair value of the agreed
consideration excluding VAT and taxes charged on behalf
of third parties. All discounts and rebates granted are
recognised in revenue.
Investments in subsidiaries and associates
Investments in subsidiaries and associates are accounted
for under the equity method. Undistributed reserves in
subsidiaries are recognised in a separate reserve within
equity.
Subsidiaries and associates with a negative net asset
value are recognised at DKK 0 and it is assessed whether
receivables should be considered uncollectible. Any legal
or constructive obligation of the Parent Company to
cover the negative balance of the enterprise is recognised
in provisions.
Other non-current investments
Investment in other non-current assets is measured at
cost.
Receivables
Receivables are measured at amortised cost.
The Parent Company has chosen IAS 39 as interpretation
for impairment of financial receivables.
An impairment loss is recognised if there is objective
evidence that a receivable or a group of receivables is
impaired. If there is objective evidence that an individual
receivable has been impaired, an impairment loss is
recognised on an individual basis.
Receivables in respect of which there is no objective
evidence of individual impairment are tested for
objective evidence of impairment on a portfolio basis.
The portfolios are primarily based on the debtors'
domicile and credit ratings in line with the Company's risk
management policy. The objective evidence applied to
portfolios is determined based on historical loss
experience.
Impairment losses are calculated as the difference
between the carrying amount of the receivables and the
present value of the expected cash flows, including the
realisable value of any collateral received. The effective
interest rate for the individual receivable or portfolio is
used as discount rate.
Page 66 of 66
Leases
The Parent Company has chosen IAS 17 as interpretation
for classification and recognition of leases.
Leases that do not transfer substantially all the risks and
rewards incident to the ownership to the Parent
Company are classified as operating leases. Payments
relating to operating leases and any other rent
agreements are recognised in the income statement over
the term of the lease. The Parent Company's aggregate
liabilities relating to operating leases and other rent
agreements are disclosed under "Contingent liabilities".
Liabilities
Financial liabilities are recognised at the date of
borrowing at the net proceeds received less transaction
costs paid. On subsequent recognition, financial liabilities
are measured at amortised cost, corresponding to the
capitalised value, using the effective interest rate.
Accordingly, the difference between the proceeds and
the nominal value is recognised in the income statement
over the term of the loan. Financial liabilities also include
the capitalised residual lease liability in respect of finance
leases.
Other liabilities are measured at net realisable value.
Cash Flow Statement
With reference to section 86 paragraph 4 of the Danish
Financial Statements Act, no Cash Flow Statement for the
Parent Company are prepared.
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