CVR 10 36 19 90 Sankt Petri Passage 5, 1165 København K
Annual
Report
Karnov Group Denmark A/S
The Annual General Meeting adopted the
annual report on 29 April 2021
Flemming Breinholt
Chairman of the General Meeting
Annual Report 2020 Karnov Group Denmark A/S
2
Contents
,
Management’s Review 3
Yearly overview 3
Financial statements 6
Statement of comprehensive income 6
Balance sheet 7
Statements of changes in equity 8
Cash flow statement 9
Notes 10
Management’s Statement 28
Auditor’s report 29
Financial definitions 31
Annual Report 2020 Karnov Group Denmark A/S
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Management’s Review
,
COMPANY BUSINESS
The Company is a leading provider of information products and
services in the areas of legal and tax and accounting through the
main brands Karnov and UfR mainly serving the Danish market.
Karnov’s vision and mission is to be an indispensable partner for
all legal, tax and accounting professionals and enable its users to
make better decisions, faster. This is accomplished by Karnov
Group delivering the highest quality of content with a state-of-
the-art user experience in order to support the users’ workflow
efficiency.
Karnov’s products are largely digital, including subscription-
based online solutions for law firms, tax and accounting firms,
corporates and the public sector (including courts, libraries,
universities, public authorities and municipalities). Karnov also
publishes and sells printed books and journals.
The success of the Company is highly dependent on the strong
brand names Karnov and UfR which have a long-standing and
strong market position in the Danish market. The continuously
development of the content ensures the quality which is a very
important factor for keeping up strong and reliable customer
relations with high retention rates year after year. The content is
maintained and enhanced by external authors and experts
together with in-house highly educated specialist.
The content is available for customers on a self-developed online
platform, which also is a key factor for the Company's success.
Karnov is constantly developing the platform to be able to
support the customers work-flow.
DEVELOPMENT ACTIVITIES
The Company is a part of Karnov Group with headquarters in
Stockholm, Sweden. Karnov continues to strengthen the value
proposition for our customers with new and enhanced solutions
and workflow tools being launched in line with customer needs.
The Group continuously conducts development activities to
improve functionality and offerings. The development is made by
external specialists together with internal specialist from Karnov
Group Denmark A/S and other entities within the Karnov Group.
There is a constant focus on acquiring and developing the
needed content on the online platform together with relevant
tools for helping the users to get benefit of "better decisions
faster".
FINANCIAL PERFORMANCE 2020
The financial result for the year is as expected.
In the beginning of 2020, the Covid-19 pandemic started
spreading throughout the global markets. As expected, the
Company experienced only a slight impact on its activities and
the Company has managed to grow the business despite the
impact from Covid-19 on the global markets.
Total net sales increased compared to last year DKK 298 m (295).
Operating profit (EBIT) increased by 41.5 (-6.6) percent to DKK
101 m (71) and the EBIT margin was 34 (24) percent.
The EBIT result was positively impacted by upselling to existing
customers and sales of new products to both existing and new
customers. In the comparable year 2019 the Company’s ultimate
parent company Karnov Group AB (publ) was listed at Nasdaq
stock exchange in Stockholm. As part of this process the
Company completed a general optimisation process to improve
efficiency and cost control. The process involved additional costs
in 2019 and at same time the efficiency improvements have had
a positive effect on general cost base in 2020.
OUTLOOK FOR 2021
The company has a position in an attractive and growing segment
of professional information services in Denmark. The market is
characterised by stable customers in both the private and public
sector facing an increasingly complex and rapidly changing
regulatory environment, leading to a growing need for high
qualitative content supporting workflow efficiency. The company
has a diverse and loyal customer base and subscription-based
model providing resilient and visible revenues.
Karnov believes that the combination of its extensive database
built over 150 years, value-adding content, investments in
product development, strong brand legacy and online platform is
key to enabling its customers to make better decisions, faster.
During 2021 the Covid-19 pandemic is expected to impact the
global markets and the Company is actively following the
situation. Currently, our assessment is that the pandemic will
have non-significant impact on the Company’s financial
performance. We are in close contact with our customers and
will on a continuously basis evaluate the situation.
The company expects to continue growth on net sales at similar
level as year 2020. Continued focus on cost control is expected to
secure growth on total cost base at a level not higher than
growth on net sales hence profit for the period is expected to
increase in the coming year. The Company's financial position is
sufficient to drive the Company’s activities forward going.
INTANGIBLE RIGHTS
The Company's success depends largely on the employees, who
are engaged to perform high-quality work in order to offer
customers highly technical informative solutions. To ensure the
high quality the Company develops technical programs and
solutions that are customized and user friendly.
ENVIRONMENT
The Company has no own production, and the Company's
environmental conditions are not considered to pose a significant
financial risk.
Annual Report 2020 Karnov Group Denmark A/S
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Yearly overview
,
In 2017 Karnov Group Denmark A/S was merged with the parent company Karnov Group Holding Denmark A/S with Karnov Group Denmark
A/S as the continuing company. Key figures have not been restated for 2016.
IFRS 16 Leases was adopted as of 1 January 2019. The comparative figures for 2016-2018 have not been adjusted
TDKK 2020 2019 2018 2017 2016
Income statement
Net sales 298.257 294.867 294.858 267.262
254.470
EBITDA 120.903 89.219 100.637 94.836
78.121
EBITDA margin, % 40,5% 30,3% 34,1% 35,5% 30,7%
EBIT 100.600 71.085 85.563 80.725
73.291
EBIT, margin % 33,7% 24,1% 29,0% 30,2% 28,8%
Net financial items -5.560 -15.268 -23.652 -23.805
1.398
Profit for the period 72.494 44.461 46.806 34.733
58.565
Balance sheet
Non-current assets 637.293 654.798 654.565 666.861
193.258
Current assets 60.833 43.907 95.151 58.311
204.395
Cash and cash equivalents 41.227 16.130 9.268 16.519
61.816
Equity 191.374 142.299 116.668 103.364
152.216
Non-current liabilities 253.329 301.414 411.376 419.568
3.808
Current liabilities 253.423 254.993 221.672 202.240
241.629
Total assets 698.126 698.705 749.716 725.172
397.653
Cash flow
Cash flow from operating activities 111.344 146.677 84.734 63.414
76.896
Cash flow from Investing activities -2.102 -5.959 -2.127 -10.642 -
Cash flow from financing activities -84.146 -133.856 -89.858 -98.069
-38.574
Cash flow for the period 25.097 6.862 -7.251 -45.297 38.322
Key ratios
Net working capital -192.590 -211.085 -126.521 -143.929 -37.234
Return on total capital, % 14,4% 10,2% 11,4% 11,1% 18,4%
Equity ratio, % 27,4% 20,4% 15,6% 14,3% 38,3%
Net debt 185.448 265.166 381.515 384.955
-49.195
Annual Report 2020 Karnov Group Denmark A/S
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Financial sta
tements
and notes
Yearly overview 4
Statement of comprehensive income 6
Balance sheet 7
Statement of changes in equity 8
Cash flow statement 9
Notes 10
Appropriation of profit and signatures 26
Auditor’s report 27
Annual Report 2020 Karnov Group Denmark A/S
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Statement of comprehensive income
TDKK Note 2020
2019
Net sales 5 298.257 294.867
Total revenue 298.257 294.867
Goods for resale -75.761 -35.076
Employee benefit expenses 7 -87.872 -81.169
Depreciations and amortisations 10 , 12, 21 -20.303 -18.134
Other operating expenses -13.721 -89.403
Operating profit 100.600 71.085
Financial income 8 3.789 2.642
Financial expenses 8 -9.349 -17.910
Net financial items -5.560 -15.268
Profit before income tax 95.040 55.817
Income tax expense 9 -22.546 -11.356
Profit for the period 72.494 44.461
Other comprehensive income for the period - -
Total comprehensive income for the period 72.494 44.461
Annual Report 2020 Karnov Group Denmark A/S
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Balance sheet
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TDKK Note 31 Dec 2020 31 Dec 2019
ASSETS:
Non-current assets
Goodwill 10 492.586 492.586
Other intangible assets 10 94.510 112.411
Right-of-use assets 21 30.092 34.318
Property, plant and equipment (PPE) 12 3.623 2.318
Deposits 11 1.874 1.924
Deferred tax assets 14.608 11.241
Total non-current assets 637.293 654.798
Current assets
Inventories 15 2.849 3.593
Trade receivables 14 12.734 21.892
Current receivables from other group companies 13 2.578 -
Current receivables from parent company 13 - 8
Other receivables 201 219
Prepaid expenses and accrued income 1.244 2.065
Cash and cash equivalents 41.227 16.130
Total current assets 60.833 43.907
TOTAL ASSETS 698.126 698.705
EQUITY AND LIABILITIES:
Capital and reserves attributable to equity holders of the company
Share capital 10.001 10.001
Retained earnings including net profit for the year 181.373 132.298
Total equity 191.374 142.299
Non-current liabilities
Non-current payables to other group companies 13 226.450 270.600
Lease liabilities, long term 21 26.879 30.814
Total non-current liabilities 253.329 301.414
Current liabilities
Provisions 18 4.043 3.906
Prepaid income 147.342 117.415
Trade payables 3.961 3.708
Current borrowings from group companies 13 225 10.696
Current tax liabilities 17 25.607 52.198
Lease liabilities, short-term 21 4.127 4.041
Other current liabilities 68.118 63.028
Total current liabilities 253.423 254.993
TOTAL EQUITY AND LIABILITIES 698.126 698.705
Annual Report 2020 Karnov Group Denmark A/S
8
Statement of changes in equity
,
TDKK Share capital Retained earnings Proposed dividend Total equity
Balance at 1 January 2019 10.001 106.667 - 116.668
Profit for the period - 44.461 - 44.461
Total comprehensive income/loss - 44.461 - 44.461
Transaction with shareholders in their capacity as owners
Dividends paid to shareholders - -20.000 - -20.000
Sharebased payment - 1.170 - 1.170
Total transaction with shareholders - -18.830 - -18.830
Closing balance at December 31 2019 10.001 132.298 - 142.299
TDKK Share capital Retained earnings Proposed dividend Total equity
Balance at 1 January 2020 10.001 132.298 - 142.299
Profit for the year - 72.494 - 72.494
Total comprehensive income/loss - 72.494 - 72.494
Transaction with shareholders in their capacity as owners
Dividends paid to shareholders - -25.000 - -25.000
Sharebased payment - 1.581 - 1.581
Total transaction with shareholders - -23.419 - -23.419
Closing balance at December 31 2020 10.001 181.373 - 191.374
Annual Report 2020 Karnov Group Denmark A/S
9
Cash flow statement
,
TDKK Note 2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 100.600 71.086
Adjustments:
Non-cash items 25.659 18.134
Effect of changes in working capital:
Increase/decrease in inventories 745 43
Increase/decrease in receivables 9.997 -671
Increase/decrease in trade payables and other payables 5.950 81.501
Increase/decrease in prepaid income 29.927 4.919
Interest paid -9.335 -12.968
Income tax paid -52.198 -15.365
Cash flow from operating activities 111.345 146.677
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of products/solutions - -3.579
Increase/decrease in deposits and other assets 50 -
Acquisition of intangible assets - -2.303
Acquisition of PPE -2.152 -77
Cash flow from investing activities -2.102 -5.959
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt -44.150 -110.870
Dividend payment -25.000 -20.000
Increase/decrease in short-term debt -10.472 1.383
Increase/decrease in lease liabilities -4.525 -4.369
Cash flow from financing activities -84.146 -133.856
Cash flow for the period 25.096 6.862
Cash and cash equivalents at the beginning of the period 16.130 9.268
Cash and cash equivalents at the end of the period 41.227 16.130
Annual Report 2020 Karnov Group Denmark A/S
10
Notes
,
General information
Karnov Group Denmark A/S produces legal, financial and tax
information to judicial, fiscal and accounting professionals in
Denmark. The visiting address of its head office is Sankt Petri
Passage 5, 1165 Copenhagen C.
The financial statements are presented in thousand Danish kroner
(TDKK) unless otherwise stated.
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below.
The consolidated financial statements have been prepared under
the historical cost convention.
BASIS OF PREPARATION
The financial statements of Karnov Group Denmark A/S have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and additional Danish
disclosure requirements for annual reports as stated in the IFRS
Executive Order pursuant to the Danish Financial Statement act for
mid-size entities in reporting class C.
The preparation of financial statements in conformity with IFRS
requires the application of certain critical accounting estimates. It
also requires Management to exercise its judgment in the process
of applying the Company’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas in which
assumptions and estimates are significant to the consolidated
financial statements, are disclosed in note 4.
The accounting policies remain unchanged for the financial
statements compared to 2019.
NEW AND AMENDED STANDARDS
The Company regularly assess the impact of new IFRS standards and
interpretations. If applicable the Company implement new IFRS
standards and interpretations from their mandatory effective dates
at the latest.
The adoption of the new and amended standards has not impacted
the financial statements for 2020.
FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
The functional currency is the currency used in the primary financial
environment in which the entity operates. The functional currency
for Karnov Group Denmark A/S is DKK.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the income statement.
Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement
within “financial income or cost”. All other foreign exchange gains
and losses are presented in the income statement within “operating
profit”.
INTANGIBLE ASSETS
Goodwill
The acquisition method is used for accounting of business
combinations. Goodwill arises from the business combination and
represents the excess of the consideration transferred over to the
company's interest in net fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquire.
Goodwill is not amortised, but it is tested for impairment and is
carried at cost less accumulated impairment losses. For impairment
testing purposes, goodwill acquired in a business combination is
allocated to each of the CGUs, that is expected to benefit from the
synergies of the combination. Each CGU or group of CGUs to which
the goodwill is allocated represents the lowest level within the
entity at which the goodwill is monitored for internal management
purposes.
Goodwill impairment testing are undertaken annually or more
frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use and the fair
value less costs to sell. Any impairment is recognised immediately
as an expense and is not subsequently reversed. (For further
information on impairment testing please refer to note 10)
Capitalised development costs
The company has ongoing development activities regarding
software products related to the online access to the company's
databases.
Development costs that are directly attributable to the design and
testing of identifiable and unique software products controlled by
the company are recognised as intangible assets when the following
criteria are met:
it is technically feasible to complete the software product so
that it will be available for use;
Management intends to complete the software product and
use or sell it;
there is an ability to use or sell the software product;
Annual Report 2020 Karnov Group Denmark A/S
11
it can be demonstrated how the software product will
generate probable future economic benefits;
adequate technical, financial and other resources to complete
the development and to use or sell the software;
product is available; and the expenditure attributable to the
software product during its development can be reliably
measured.
Directly attributable costs that are capitalised as part of the
software product include software development employee costs,
costs for consultants and an appropriate portion of relevant
overheads.
Other development expenditures that do not meet these criteria
are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset
in a subsequent period.
Software development costs recognised as assets are amortised
over their estimated useful lives in the range from 3 to 7 years.
Trademarks
Separately acquired trademarks are shown at historical cost.
Trademarks acquired in a business combination are recognised at
fair value at the acquisition date. Trademarks have an infinite useful
life and are carried at cost without any amortizations but is tested
for impairment once a year. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its
recoverable amount.
Customer relationships
Separately acquired customer relationships are shown at historical
cost. Customer relationships acquired in a business combination are
recognised at fair value at the acquisition date. Customer
relationships have a finite useful life and are carried at cost less
accumulated amortisation and impairment losses. Amortisation is
calculated using the straight-line method to allocate the cost of
customer relationships over their estimated useful lives of 8-14
years.
Favourable contracts
Separately acquired favourable contracts are shown at historical
cost. Favourable contracts acquired in a business combination are
recognised at fair value at the acquisition date. Favourable
contracts have a finite useful life and are carried at cost less
accumulated amortisation and impairment losses. Amortisation is
calculated using the straight-line method to allocate the cost of the
favourable contracts over their estimated useful lives of 3-10 years.
Technology
Separately acquired technology are shown at historical cost.
Technology acquired in a business combination are recognised at
fair value at the acquisition date. Technology have a finite useful life
and are carried at cost less accumulated amortisation and
impairment losses. Amortisation is calculated using the straight-line
method to allocate the cost of technology over their estimated
useful lives of 3-5 years.
LEASES
The Company’s leasing arrangements mainly consists of rental
agreements for the Company’s office locations, car leases and
miscellaneous other leases as operating leases. Lease terms are
negotiated on an individual basis and contain a wide range of terms
and conditions. Management exercises significant judgement in
determining whether it is reasonably certain that these extension
and termination options will be exercised.
Lease assets
Lease assets and liabilities are recognised in the balance sheet at
the commencement date of the contract, if it is or contains a lease.
Lease assets are recognised at cost less accumulated depreciation
and impairment. Cost is defined as the lease liability adjusted for
any lease payments made at or before the commencement date.
Lease assets are depreciated on a straight-line basis over the lease
term.
Lease liabilities
Lease liabilities are measured at the present value of future
payments, using the interest rate implicit in the lease agreement.
Lease payments are discounted using the Company’s incremental
borrowing rate during 2020 adjusted for the functional currencies
and length of the lease term, if the interest rate implicit in the lease
agreement cannot be determined. Lease payments contain fixed
payments less any lease incentives receivable, variable lease
payment that depend on an index or a rate as well as payments of
penalties for terminating the lease, if the terms of the lease
warrants that the Company exercises that option.
The lease liability is remeasured if or when the future payment or
lease term changes. Any net remeasurement of the lease liability is
recognised as an adjustment to the lease asset. If the carrying
amount of the lease asset is reduced to zero, the adjustment will be
recognised in the income statement.
Additional information
Short-term lease expenses, low-value assets and variable lease
payments are classified as operating expenses in the income
statement.
Accounting estimates and assumptions
Expired leases
The lease term is the period during which the lease contract is
enforceable. If the original expiry date of a lease contract has
passed, typically in the case of property leases, but the contract
continues without a determined expiry date, the lease term is set
for an estimated period during which the lease contract is expected
to be enforceable. This estimate is based on Management’s
judgement and takes into consideration the location of the lease,
capitalised leasehold improvements and the experience with similar
leases for the specific area.
Extension and termination options
When determining the lease term for lease agreements containing
extension and termination options, Management considers
circumstances that create a financial incentive to exercise an
extension option or not to exercise a termination option. Extension
and termination options are only included in the lease term if it is
reasonably certain that a lease will be extended/terminated.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recognised at cost less
accumulated depreciation. Cost is defined as the acquisition price
and costs directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
Annual Report 2020 Karnov Group Denmark A/S
12
probable that future economic benefits associated with the item
will flow to the company and the cost of the item can be measured
reliably. The carrying amounts of any replaced parts are
derecognised. All other repairs and maintenance are charged to the
income statement during the financial period in which they are
incurred.
Depreciation on property, plant and equipment is calculated using
the straight-line method to allocate their cost to their residual
values over their estimated useful lives, which are as follows:
Improvements on leaseholds; 5 years
Furniture, fittings and equipment; 3 - 5 years
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
Property, plant and equipment are written down immediately to
their recoverable amounts, if these are lower than their carrying
amount.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within
“other operating income" or “other operating expenses” in the
income statement.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life – for example, goodwill or
intangible assets not ready to use – are not subject to amortisation
and are tested annually for impairment. Property, plant and
equipment and intangible assets that are subject to amortisation
are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be re-
coverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units).
Property, plant and equipment and intangible assets, except for
goodwill, that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
FINANCIAL INSTRUMENTS
The company classifies its financial assets and liabilities in the
following categories: financial assets and liabilities at fair value
through profit or loss, financial assets at amortised cost and other
financial liabilities. The classification depends on the purpose for
which the financial assets or liabilities were acquired. Management
determines the classification of its financial assets at initial
recognition.
Classification
Financial assets and liabilities measured at fair value through profit
or loss are financial assets and liabilities held for trading. A financial
asset or liability is classified in this category if acquired principally
for the purpose of selling in the short term.
Financial assets measured at amortised cost
Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest
are measured at amortised cost. The carrying amount of these
assets is adjusted with expected credit losses (see below). Interest
income is recognized using the effective interest method and is
included in financial income in the income statement. The
company’s financial assets measured at amortised cost comprise of
trade receivables, other receivables, and cash and cash equivalents.
Other financial liabilities
The borrowings of the company (including the balance sheet items
borrowings from related parties) and trade payables are classified
as other financial liabilities. Refer to the description of accounting
policies below.
Recognition and measurement
Regular purchases and sales of financial assets and financial
liabilities are recognised on the trade-date – the date on which the
company commits to purchase or sell the asset or liability. At initial
recognition, the company measures a financial asset or liability at its
fair value plus, in the case of a financial asset or liability not at fair
value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets or liabilities carried at fair value through
profit or loss are expensed in profit or loss. Financial assets are
derecognised when the right to receive cash flows from the
investment has expired or has been transferred and the company
has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the commitment in the
agreement has been fulfilled or otherwise extinguished.
Financial assets and financial liabilities measured at fair value
through profit or loss are subsequently carried at the acquisition
date at fair value. Loans and receivables and other financial
liabilities are subsequently carried at amortised cost using the
effective interest method. Gains or losses arising from changes in
the fair value of ‘financial assets or liabilities at fair value through
profit or loss are presented in the income statement within “finance
costs” in the period in which they arise.
INVENTORIES
Inventories are recognised at the lower of cost and net realisable
value. Cost is determined using the first-in, first-out (FIFO) method.
The cost of goods for resale comprises the cost of acquisition of the
goods. This cost excludes borrowing costs. The inventory mainly
consists of books. Net realisable value is the estimated selling price
in the ordinary course of business, less applicable variable selling
expenses. The required provision for obsolescence has been made
on the basis of individual assessment.
TRADE RECEIVABLES
Trade receivables are amounts owed by customers for merchandise
sold or services performed in the ordinary course of business. If
collection of the outstanding amount is expected in one year or
less, they are classified as current assets. If not, they are presented
as non-current assets.
On initial recognition, trade receivables are measured at fair value
and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
The Company applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been
grouped based on shared credit risk characteristics and the days
past due.
Annual Report 2020 Karnov Group Denmark A/S
13
The expected loss rates are based on a combination of historic
payment profiles of sales and management assessment of expected
future market conditions.
Historically the Company has experienced relatively small amounts
of losses compared to the business activity which is mainly due to
the significant part of subscriptions in the business.
Both losses regarding trade receivables and recoveries of trade
receivables previously written off are recognised within “other
operating expenses” in the income statement.
The carrying amount of trade receivables, after any impairment, is
presumed to correspond to their fair value, as this item is short-
term in nature.
CASH AND CASH EQUIVALENTS
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, restricted cash where it is considered
most likely that restrictions will be raised within a period of less
than 3 months.
SHARE CAPITAL
Ordinary and preference shares are classified as equity.
TRADE PAYABLES
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if
payment is due within one year or less (or in the normal operating
cycle of the business if longer). If not, they are presented as non-
current liabilities.
On initial recognition, trade payables are measured at fair value and
subsequently measured at amortised cost using the effective
interest method. The carrying amount of a trade payable is
expected to correspond with the fair value of the trade payable, as
this item is of a short-term nature.
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently carried at acquisition
cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income
statement over the period of the borrowings, using the effective
interest method.
Borrowings are classified as current liabilities unless the company
has an unconditional right to defer settlement of the liability for at
least 12 months after the end of the reporting period.
All borrowing costs (interest expenses, transaction costs and the
changes in fair value of the options) are recognised within “finance
costs” in the income statement in the period to which they refer.
The fair value of borrowings for disclosure purposes is estimated by
discounting the future contractual cash flows at current market
interest rates available to the company for similar financial
liabilities.
CURRENT TAX AND DEFERRED INCOME TAX
The tax expense for the period comprises current and deferred tax.
Tax is recognised in the in-come statement, except from cases
where it relates to items recognised in other comprehensive
income or directly in equity.
The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the balance sheet date in
the countries where the Company and its subsidiaries operate and
generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate based on amounts expected to be
paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill; deferred income
tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business acquisition
that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by
the balance sheet date and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets are recognised if it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
Deferred income tax is based on temporary differences arising on
investments in subsidiaries, except where the timing of the reversal
of the temporary difference is controlled by the company and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income tax assets and liabilities
relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.
EMPLOYEE BENEFITS
Liabilities for wages and salaries, including non-monetary benefits
and accumulating sick leave that are expected to be settled wholly
within 12 months after the end of the period in which the
employees render the related service are recognised in respect of
employees’ services up to the end of the reporting period and are
measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
PROVISIONS
Provisions are recognised when the company has a present legal or
constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation, and
the amount has been reliably estimated. The company's provisions
consist of costs to restore leased premises. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the provision. The increase
in the provision due to the passage of time is recognised as interest
Annual Report 2020 Karnov Group Denmark A/S
14
expense. The greater portion of the company's provisions is short-
term in nature.
REVENUE RECOGNITION
Revenue is recognised dependant on the relevant contract with the
customer. A customer is a party that has contracted with the
Company to obtain goods or services that are an output of the
Company’s ordinary activities in exchange for consideration. Within
the Company there are the following main revenue streams:
Online sales: Subscriptions, Support
Offline sales and services: Books, Advertisement, Courses
Online sales
Karnov’s products are largely digital, including subscription-based
online solutions for law firms, tax and accounting firms, corporates
and the public sector including courts, universities, public
authorities and municipalities. The company offers term-based
access to its intellectual property. The contracts are individually
priced for each customer based on volume and content of the
contract. Differences in prices are recognised in net sales when
contracts are invoiced.
The majority of Karnov’s contracts with customers have a binding
period of 1-12 months, with the majority being 12-month contracts.
Usually, the customer is invoiced the full contractual fee one month
prior to the beginning of the contractual period. Upfront payments
are recognised as a contract liability (included in balance sheet item
prepaid income). Revenue is recognised on a straight-line basis over
the period which the customer has the right to access the
intellectual property.
All contracts with customers are 12 months or less. As permitted
under IFRS 15, the transaction price allocated to unsatisfied long-
term contracts are therefore not disclosed.
Offline sales
Karnov also publishes and sells printed books and journals and hosts
legal training courses. Revenue is recognised when or as control is
transferred to the customer. For printed books and journals
revenue is recognised at a point in time, when the product is
delivered to the customer. Revenue for training courses is
recognised over time – as the training services are being rendered.
No element of financing is deemed present as the sales are made
with a credit of up to 30 days. Karnov recognises a receivable when
the product is delivered to the customer as this is the point in time
that the consideration of unconditional because only the passage of
time is required before the payment is due. On sale of books the
company grants a 60 day right of return. If conditions for return are
met the company refunds the full invoiced amount after receival of
the returned books. Returned sales are recognised at the time the
books are received back and a credit note is issued. The company
does not recognise a provision in the balance sheet for returned
goods as the yearly number of returned books is considered
immaterial.
DIVIDEND DISTRIBUTION
Dividend distribution to the Company’s shareholders is recognised
as a liability in the company’s financial statements in the period in
which the dividends are approved by the Company’s shareholders.
The Board of directors proposes to distribute no dividend to the
2020 Annual General Meeting.
OTHER
Amounts in tables and combined amounts have been rounded off
on an individual basis. Minor differences due to this rounding off
may, therefore, appear in the totals. Figures commented in the text
are presented in TDKK unless otherwise stated. Comparative figures
from previous period are presented in brackets.
CASH FLOWS STATEMENT
The cash flow statement is prepared using the indirect method and
is based on profit for the year. The cash flow statement shows cash
flows for the year from operating, investing and financing.
Cash flows from operating activities comprise profit adjusted for
non-cash transactions, interest received, interest paid, tax paid and
change in working capital.
Cash flows from investing activities comprise payment in
connection with the purchase and sale of intangible assets and
property, plant and equipment.
Cash flows from financing activities comprise changes in the size or
composition of the share capital, dividend payments to owners,
raing of loans and repayments on loans and sale and purchase of
other financial assets.
Annual Report 2020 Karnov Group Denmark A/S
15
Financial risk management
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Foreign exchange rate risk
The company has only limited assets or liabilities in foreign
currency. Also, the company has limited sales or purchase
transactions in foreign currencies. As a result of this, the company's
exposure to foreign exchange rate risks is very limited.
Interest rate risk
The company's payables and receivables to the parent company
and other group companies are subject to a variable interest rate
which is currently 2%. The finance lease arrangements are based on
internal rate of the arrangements and are not affected by changes
in interest rate levels. Bank deposits are subject to variable interest
rates which are currently 0.0% (0.0%). The carrying amounts of
recognized financial assets or liabilities will not change significantly
subject to changes in interest rate levels.
LIQUIDITY RISK
The company generates sufficient positive cash flows to service its
liabilities and planned development. Surplus cash is declared as
dividend. Capital management is carried out to ensure low risk.
Management monitors funding and liquidity and ensures the
availability of required liquidity through cash management and
committed facilities. The company's liquidity risk is primarily
related to intercompany debt. It is the company's policy to ensure
adequate liquidity to satisfy their obligations to the group
companies.
CREDIT RISK
Credit risk arises primarily from credit exposures to wholesale and
retail customers, from cash and cash equivalents with banks and
financial institutions and receivables from parent and other group
companies. Most of the business is based on subscriptions and
prepayments which makes the risk of losses on receivables low.
Customers' credit ratings are used to determine credit limits and
management monitors the utilization of credit risks on an ongoing
basis. For banks and financial institutions, only independently rated
parties with a minimum rating of ‘A’ are accepted. No credit limits
were exceeded during the reporting period, and management does
not expect any losses from non-performance by these
counterparties. The Company's maximum credit risk is TDKK 60.833
(43.907) and correspond to the carrying amount of receivables and
cash and cash equivalents.
RISKS RELATED TO GLOBAL COVID-19 PANDEMIC
The current Covid-19 pandemic affects all global markets, and the
Company is following the situation on continuously basis. The
Company operates in the legal and tax professional market in
Denmark. These markets encompass, among other things, online
information database services, printed information sources, legal
practice management software and legal training courses. The
products and services are generally offered to law firms, tax and
accounting firms, corporates in a wide range of industries and the
public sector, including courts, libraries, universities and other
public authorities and municipalities.
The nature of the market and the products offered in
combination with the Company’s business model with
approximately 85% subscription-based revenue the Company
assess that the pandemic will have non-significant impact on the
Company’s financial performance.
Critical estimates and judgements
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Estimations and assessments relating to impairment of
goodwill and intangible assets.
In accordance with the accounting policy described in Note 2,
Intangible assets, the Company tests annually whether intangible
assets have suffered any impairment. The recoverable amounts of
cash generating units have been determined based on value-in-use
calculations. These calculations require the application of estimates
(Note 10).
The carrying amount of intangible assets at 31 December 2020,
distributed by cash-generating unit (CGU), are presented in Note
10.
Estimated cash flows for the first year are based on most recent
budgets approved by the Board of Directors. Estimated cash flows
for years 2-10 are based on the Company's business plan for the
period approved by the Board of Directors. After the budget period,
estimated growth in the terminal period are 1.0% (2.0%)
corresponding to the expected market growth.
The assessments behind the growth rates applied for the
discounted cash flow are based partly on historical rates and partly
on expectations to future growth as a result of the implementation
of the strategy for Karnov Group Denmark A/S. Sensitivity
calculations have been made and within a reasonable span of
deviation from the applied assessments, a write-down of goodwill is
not foreseeable in the near future.
Annual Report 2020 Karnov Group Denmark A/S
16
Revenue
Net sales are classified by category as follows:
Karnov Group Denmark A/S’ business operations are in general independent of differences in products and channels and total net sales are
almost entirely related to the Danish marked.
Remuneration to auditors
Reference is made to the financial statements for Karnov Group AB for more information regarding fee to auditor.
Employee benefit expenses
The board of directors do not receive any remuneration.
All employees of Karnov Group Denmark A/S were in April 2019 offered to participate in a long-term incentive program in the form of a
share saving program through investment in Karnov Group AB. The purpose of the incentive program is to encourage a broad ownership
amongst the Company’s employees, facilitate recruitment, maintain competent employees, increase the alignment of interest between the
employees and the Company’s shareholders and increase motivation to reach or exceed the Company’s financial targets. Participation in the
program is voluntary. The participants are divided into five different categories depending on organisational position. Participants who retain
the Savings Shares during the program’s vesting period of at least three years and also remain employed by Karnov Group throughout the
whole vesting period will at the end of the period be eligible for free additional ordinary shares (”Performance Shares”). For further details of
the program please refer to the Annual Report 2019 for Karnov Group AB (www.karnovgroup.com).
TDKK 2020 2019
Total net sales 298.257 294.867
Wages, other benefits and social security costs
TDKK
2020
Excecutive management 5.260 1.669 514 7.443
Other employees 58.837 7.702 7.145 73.684
Other personnel-related costs 6.745
Total 64.097 9.371 7.659 87.872
Ordinary
compensation
Other
benefits
Pension
benefits Total
Wages, other benefits and social security costs
TDKK
2019
Excecutive management 4.774 1.943 482 7.199
Other employees 55.445 6.330 7.240 69.015
Other personnel-related costs 4.955
Total 60.219 8.273 7.722 81.169
Ordinary
compensation
Other
benefits
Pension
benefits Total
Men Women Total Men Women Total
Denmark 72 61 133 75 59 134
Total 72 61 133 75 59 134
Average number of employees Full Time Equivalents (FTEs)
2020 2019
Annual Report 2020 Karnov Group Denmark A/S
17
Results from financial items
Taxes
TDKK 2020 2019
Financial income:
Interest income from cash 14 6
Interest income - intercompany
-
2.336
Foreign exchange gains 75 -
Other finance income 3.700 300
Total financial income 3.789 2.642
Financial expenses:
Interest expenses to loan and borrowings -2.867 -534
Interest expenses - intercompany -6.482 -15.177
Foreign exchange losses
-
-2.199
Total financial expenses -9.349 -17.910
Net financial items -5.560 -15.268
TDKK 2020 2019
Current tax:
Current tax for the year 25.607 52.503
Current tax prior years 306 -
Total current tax 25.913 52.503
Deferred income tax
Change in the deferred tax assets for the year
-3.367
-40.659
Change in the deferred tax liabilities for the year - -488
Total deferred tax expense/benefit -3.367 -41.147
Income tax expense 22.546 11.356
TDKK 2020 2019
Profit/(Loss) before income tax 95.040 55.817
Tax calculated at domestic tax rates applicable to profit before tax 22% (2019: 22%) 20.909 12.280
Expenses not deductible for tax purposes 26 25
Non-deductable interest expenses 500 809
Deferred income 1.478 38.798
Other adjustment taxable income -367 -40.556
Income tax expense 22.546 11.356
Annual Report 2020 Karnov Group Denmark A/S
18
Intangible assets
Other intangibles assets consist of trademarks with a net book value
of TDKK 67,080 (67,080), technology with a net book value of TDKK
5,984 (8,671) and customer relations with a net book value of TDKK
20,395 (29,960).
Impairment tests on goodwill and Trademark
Goodwill and trademark are monitored by Management at
consolidated level for the company. All goodwill and trademarks are
therefore allocated to one CGU.
Management reviews the business performance based on the
management reporting structures on an annual basis.
For the 2020 and 2019 reporting periods, the recoverable
amount of the cash-generating units (CGUs) was determined based
on value-in-use calculations which require the use of assumptions.
Based on the impairment test, a material excess value for the
CGU was identified compared to the carrying amount for which
reason no impairment was made as of December 31, 2020. The
calculations use post-tax cash flow projections for a five-year period
based on the financial budget for 2021, on strategy plans and on
projections hereof. Projections extending beyond 2021 are based
on general parameters, such as expected market growth and
profitability assumptions. The terminal value used in the
calculations for the CGU is determined on the assumption of 1
percent growth (2.0) on the market. The growth rate does not
exceed the long-term average growth rate for the business in which
the CGU operates. The pre-tax discount rate used in the market is
6.8 percent (9.5).
Management has performed a sensitivity analysis for each key
assumption (discount rate and growth rate in the terminal period),
keeping all other assumptions constant. The sensitivity analysis
show that a 1 percent increase in the discount rate or a 1 percent
reduction of the growth assumptions will not change the outcome
of the impairment test.
The Board of Directors and Management have considered and
assessed reasonably possible changes for other key assumptions
and have not identified any instances that could cause the carrying
amount of the CGU to exceed the recoverable amount.
TDKK
Cost at January 1, 2020 492.586 6.700 215.303 714.589
Additions - - 699 699
Disposals - - -2.238 -2.238
Write-down - -3.700 - -3.700
Accumulated cost at December 31, 2020 492.586 3.000 213.764 709.350
Amortisation at January 1, 2020 - - 109.592 109.592
Amortisation for the year - 1.950 12.950 14.900
Disposals - - -2.238 -2.238
Accumulated amortisation at December 31, 2020 - 1.950 120.304 122.254
Net book value at December 31, 2020 492.586 1.050 93.460 587.096
Goodwill
Capitalised
development costs
Other
intangible assets Total
TDKK
Cost at January 1, 2019 492.586 6.700 214.996 714.282
Additions - - 307 307
Accumulated cost at December 31, 2019 492.586 6.700 215.303 714.589
Amortisation at January 1, 2019 - - 96.686 96.686
Amortisation for the year - - 12.906 12.906
Accumulated amortisation at December 31, 2019 - - 109.592 109.592
Net book value at December 31, 2019 492.586 6.700 105.711 604.997
Goodwill
Capitalised
development costs
Other
intangible assets Total
Annual Report 2020 Karnov Group Denmark A/S
19
Deposits – leasehold
The company currently occupy one address in Copenhagen for which the company has paid deposits TDKK 1.874 (TDKK 1.924)
Property, plant and equipment
Financial instruments by category
Trade receivables
Due to the short-term nature of current receivables, their carrying
amount is considered to be the same as fair value.
Current receivables from other group companies
Due to the short-term nature of current receivables, their carrying
amount is considered to be the same as fair value.
TDKK
Cost at January 1, 2020 4.233 8.911 13.144
Additions for the year 1.006 1.146 2.152
Accumulated cost at December 31, 2020 5.239 10.057 15.296
Depreciation at January 1, 2020 2.505 8.321 10.826
Depreciation for the year 459 388 847
Accumulated depreciation at December 31, 2020 2.964 8.709 11.673
Net book value at December 31, 2020 2.275 1.348 3.623
Leasehold
improvements
Furniture, fittings
and equipment Total
TDKK
Cost at January 1, 2019 4.233 8.723 12.956
Additions for the year
-
188 188
Accumulated cost at December 31, 2019 4.233 8.911 13.144
Depreciation at January 1, 2019 2.082 7.992 10.074
Depreciation for the year 423 329 752
Accumulated depreciation at December 31, 2019 2.505 8.321 10.826
Net book value at December 31, 2019 1.728 590 2.318
Leasehold
improvements
Furniture, fittings
and equipment Total
TDKK 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019
FINANCIAL ASSETS
Financial assets at amortised cost
Trade receivables 12.734 21.892 12.734
21.892
Current receivables from other group companies
2.578
-
2.578
-
Cash and cash equivalents 41.227 16.130 41.227
16.130
Total financial assets 56.539 38.022 56.539
38.022
FINANCIAL LIABILITIES
Liabilities at amortised cost
Trade payables 3.961 3.708 3.961
3.708
Non-current payables to other group companies 226.450 270.600 226.450
270.600
Current borrowings from group companies 225 10.696 225
10.696
Total financial liabilities 230.636 285.004 230.636
285.004
Carrying amount Fair value
Annual Report 2020 Karnov Group Denmark A/S
20
Cash and cash equivalents
Cash and cash equivalents are unsecured with a short credit period
and are therefore considered to have a fair value equal to the
carrying amount. They are classified at level 2 in the fair value
hierarchy.
Trade payables
Trade payables are unsecured and are usually paid within 30 days of
recognition. Due to the short-term nature of trade payables, their
carrying amount is considered to be the same as fair value.
Non-current borrowings from group companies
The fair value of non-current borrowings from other group
companies is based on discounted cash flows using a current
borrowing rate. They are classified at level 2 in the fair value
hierarchy due to the use of unobservable inputs, including own
credit risk.
Current borrowings from group companies
The fair value of current borrowings from other group companies is
considered to be the same as the carrying amount since the interest
payable is either close to current market rates or the borrowings
are of a short-term nature.
Trade receivables
Gross trade receivables by age
Breakdown of allowance for impairment
The fair values of trade receivables and other receivables of the
company correspond to book values.
Karnov Group Denmark A/S invoices one month prior to the
contract period of the agreement for which reason the customers
are paying upfront. Historically, Karnov Group Denmark has
experienced relatively small amounts of losses. The creation and
release of provision for impaired receivables have been included in
Other operating expenses in the income statement.
The maximum exposure to credit risk of trade receivables at the
reporting date consists of the carrying amount. The company does
not hold any collateral as security.
TDKK 2020 2019
Trade receivables 48.666 81.479
Less: provision for impairment of trade receivables -200 -645
Trade receivables – net 48.466 80.834
TDKK 2020 2019
Balance not due 35.333 44.885
0-3 months 12.965 35.949
3-6 months
50
-
Over 6 months
118
-
Total trade receivables 48.466 80.834
TDKK 2020 2019
Allowance for impairment at beginning of period -645 -272
Provision for impairment of trade receivables 445 -373
Allowance for impairment at end of period -200 -645
TDKK
31 December 2020
Expected loss rate 0,16% 0,3% 73,0% 52,8% 0,41%
Trade receivables 35.333 12.965 50 118 48.466
Loss allowance 57 44 37 63 200
TotalCurrent 0-3 months 3-6 months > 6 months
Annual Report 2020 Karnov Group Denmark A/S
21
Due to the business model for Karnov Group Denmark A/S
subscriptions are invoiced prior to actual delivery period. In the
event that the delivery of services begins after the end of the
financial period the invoiced amount is offset against deferred
income in current liabilities.
Inventories
Write-downs of finished goods recognized as expenses during the
year amounted to TDKK 1.459 (1.821) and are included in “Goods
for resale” in the income statement. Finished goods are written
down by 50% after 24 months on stock and 100% after 36
months on stock.
Share capital and share premium
The Company's objective when managing capital are to safeguard
their ability to continue as a going concern, so that the Company
can continue to provide returns to shareholders. The company
seeks to declare all cash in excess of what is required in realizing
the coming years' planned activities as dividends and pays
interest on unpaid declared dividend.
Karnov Group Denmark A/S has no external interest-bearing
loans and is primarily financed through intercompany debt and
prepayments from customers.
The capital structure is designed to ensure sufficient financial
flexibility to meet its strategic objectives.
TDKK 2020 2019
Trade receivables gross 48.466 80.834
Reclass to deferred income -35.732 -58.942
Trade receivables net 12.734 21.892
TDKK 2020 2019
Finished goods 2.849 3.593
Total inventories 2.849 3.593
Number of shares Shares of Share capital
At January 1, 2020 10.001 1.000 10.001
Balance December 31, 2020 10.001 1.000 10.001
Annual Report 2020 Karnov Group Denmark A/S
22
Deferred income tax
The analysis of deferred tax assets and deferred tax liabilities is as follows:
The movement in deferred tax assets and deferred tax liabilities during the year, without taking into consideration the offsetting of balances
within the same tax jurisdiction, is as follows:
TDKK 2020 2019
Deferred tax assets:
Temporary differences:
Deferred income 40.276 38.798
Provisions 890 1.585
Furniture, fittings and equipment 153 131
Other liabilities - 1.649
Total deferred tax assets 41.319 42.163
Off-set against deferred tax liabilities -26.711 -30.922
Total deferred tax assets (net) 14.608 11.241
TDKK 2020 2019
Deferred tax liabilities:
Temporary differences:
Leasehold improvements 35 347
Intangible assets 26.676 30.575
Total deferred tax liabilities 26.711 30.922
Off-set against deferred tax assets -26.711 -30.922
Total deferred tax liabilities (net) - -
TDKK 2020 2019
Deferred tax assets:
Deferred tax asset to be recovered after more than 12 months 890 1.585
Deferred tax asset to be recovered within 12 months 40.429 40.578
Total deferred tax assets 41.319 42.163
TDKK 2020 2019
Deferred tax liabilities:
Deferred tax liability to be recovered after more than 12 months 26.711 30.922
Deferred tax liability to be recovered after within 12 months - -
Total deferred tax liabilities 26.711 30.922
Other intangible
assets
PPE Other Total
TDKK
Deferred tax assets
At January 1, 2020 - 131 42.032 42.163
Charged/credited to the income statement - 22 -866 -844
At December 31, 2020 - 153 41.166 41.319
Deferred tax liabilities
At January 1, 2020 30.575 - 347 30.922
Charged/credited to the income statement -3.899 - -312 -4.211
At December 31, 2020 26.676 - 35 26.711
Annual Report 2020 Karnov Group Denmark A/S
23
Provisions for other liabilities and charges
The company is required to restore the leased premises in
Copenhagen to their original condition at end of the respective
lease terms. A provision has been recognised for the present
value of the estimated expenditure required to remove any
leasehold improvements. The costs have been capitalised as part
of the cost of leasehold improvements based on expected costs
at present value.
Reconciliation of liabilities arising from financing activities
,
Pledged assets and contingent liabilities
Karnov Group Denmark A/S are jointly and severally liable for tax on the jointly taxed incomes etc. of the Group. The total amount of
corporation tax payable by the Group amounts to TDKK 26.461. (TDKK 54.051). Moreover, the Danish group companies are jointly and
severally liable for Danish withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent
adjustments of corporation taxes and withholding taxes may increase the Company's liability.
Other intangible
assets
PPE Other Total
TDKK
Deferred tax assets
At January 1, 2019 - - 1.504 1.504
Charged/credited to the income statement - 131 40.528 40.659
At December 31, 2019 - 131 42.032 42.163
Deferred tax liabilities
At January 1, 2019 30.971 136 302 31.409
Charged/credited to the income statement -396 -136 45 -487
At December 31, 2019 30.575 - 347 30.922
TDKK 2020 2019
At January 1 3.906 3.774
Charged to the income statement:
- adjustment to present value 137 132
At December 31, 4.043 3.906
Non-current provisions 4.043 3.906
Total provisions for other liabilities and charges 4.043 3.906
TDKK 2019 Cash flows
Other
movements
Other
reclassifications 2020
Long-term borrowings 270.600 -44.150 226.450
Short-term borrowings 10.696 -10.471 225
Dividend payment - -25.000 25.000 -
Leasing and other long-term liabilities 34.855 -4.525 675 31.005
Total liabilities from financing activities 316.151 -84.146 675 25.000 257.680
Non-cash changes
Annual Report 2020 Karnov Group Denmark A/S
24
Leasing
Related-party transactions
The company is a part of the consolidated financial statements for Karnov Group AB, Stockholm, Sweden. The consolidated financial
statement of Karnov Group can be downloaded from www.karnovgroup.com.
TDKK 2020 2019
No later than 1 year 4.127 4.041
Later than 1 year and no later than 2 years 5.650 3.822
Later than 2 years and no later than 3 years 5.536 3.800
Later than 3 years and no later than 4 years 5.536 3.632
Later than 4 years and no later than 5 years 5.536 3.605
Later than 5 years 4.621 15.955
Total 31.006 34.856
TDKK 2020 2019
Lease assets at January 1 34.318 38.470
Reassessment 173 -
Additions for the year 158 325
Disposals for the year - -
Depreciation for the year -4.556 -4.476
Lease assets at December 31 30.092 34.318
TDKK 2020 2019
Lease liabilities at January 1 34.856 38.470
Reassessment -27 -
Additions for the year - 323
Disposals for the year 158 -
Interest 545 432
Payments -4.525 -4.369
Lease liabilities at December 31 31.006 34.856
TDKK 2020 2019 2020 2019
Sales of goods and service - - 11.044 10.107
Purchase of goods and services - -
- 36.473
Received interest - - - 2.336
Paid interest - - -6.482 15.177
Financial assets - 877
-2.578 3.415
Financial liabilities - - 226.675 276.996
Parent company Group companies
Annual Report 2020 Karnov Group Denmark A/S
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Events after the balance sheet date
The current Covid-19 pandemic affects all global markets, and the Company is following the situation on continuously basis. The Company
operates in the legal and tax professional market in Denmark. These markets encompass, among other things, online information database
services, printed information sources, legal practice management software and legal training courses. The products and services are
generally offered to law firms, tax and accounting firms, corporates in a wide range of industries and the public sector, including courts,
libraries, universities and other public authorities and municipalities.
The nature of the market and the products offered in combination with the Company’s business model with approximately 85%
subscription-based revenue the Company assess that the pandemic will have non-significant impact on the Company’s financial
performance.
No other events have occurred after the reporting date of importance to the financial statements.
Allocated profit for the financial year
TDKK 2020 2019
Dividends paid to shareholders 25.000 20.000
Proposed dividends - 25.000
Transfer for reserves 47.494 -539
Allocated profit for the financial year 72.494 44.461
Annual Report 2020 Karnov Group Denmark A/S
26
Management’s Statement
,
Copenhagen, 29 April, 2021
Flemming Breinholt
Chairman of the Board
Dora Brink Clausen
Board member
Charlotte Arup
Board member
Anne Luise Gramkov de Kort
Board Member
(Employee representative)
Emil Rasmus Riemenschneider
Board Member
(Employee representative)
Niels Carøe Munk Hansen
President and CEO
Annual Report 2020 Karnov Group Denmark A/S
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Auditor’s report
Opinion
Basis for Opinion
Statement on Management’s Review
Management’s Responsibilities for the Financial
Statements
Auditor’s Responsibilities for the Audit of the Financial
Statements
Annual Report 2020 Karnov Group Denmark A/S
28
Hellerup, 29 April 2021
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33 77 12 31
Steffen Kaj Pedersen
State Authorised Public Accountant
mne34357
Annual Report 2020 Karnov Group Denmark A/S
29
Financial definitions
,
This Annual Report contains references to a number of
performance measures. Some of these measures are defined in
IFRS, while others are alternative measures and are not reported
in accordance with applicable financial reporting frameworks or
other legislation.
The measures are used by the Company to help both investors
and management to analyse its operations. The measures used in
this report are described below, together with definitions and the
reason for their use.
Key ratio
Definition
Explanation
Average number of full-time
employees (FTEs)
Average number of full-time employees during the
reporting period.
Non-financial key ratio.
EBITDA
Operating profit before depreciation and
amortisation, financial items, and tax.
EBITDA provides an
overall picture of profits
generated by the operating activities before
depreciation and amortisation.
EBITDA margin
EBITDA as a percentage of net sales.
,
This measure intends to display the
Company
’s
operational profitability, regardless of financing and
amortisation, on an ongoing basis.
Equity ratio (%)
Equity divided
by total
assets
.
An important measure for the assessment of the
company’s financial stability.
Net debt Net debt is defined as total borrowings reduced by
cash and cash equivalents.
Relevant to analyse to ensure that Karnov has an
appropriate financing structure and is able to fulfil its
financial obligations under its loan agreement.
Net working capital (NWC) Current assets less current liabilities. A measure of the company’s tie-up of short-term
capital in its operating activities, and is considered
important for understanding changes in the
operating cash flow.
Operating profit (EBIT) Profit for the year adjusted for interest and taxes. Enables comparability of profitability regardless of
capital structure or tax situation.
Return on
total
capital
Operating profit divided by total assets.
Indicates the operating return on the capital that
owners and lenders have made available. The
intention is to show consolidated returns, regardless
of the type of financing.
Karnov Group Denmark A/S | Corp. Id. 10 36 19 90
Head office: Sankt Petri Passage 5, 1165 Copenhagen C
Tel: +45 33 74 07 00 | www.karnovgroup.com
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