{
WeAnalyse();
WeCode();
WeTrade();
}
Annual report for the financial year
1 July 2022 - 30 June 2023
The annual report was presented and
approved at the Company’s annual
general meeting
on 13 October 2023
With IT at the
basis of everything
chairman of the annual general meeting
Management commentary
Letter from our CEO
Financial highlights
Business summary
Our business model
Our power markets
Expansion in the Asia-Pacific Region
Asset management
Risk management
Our people and culture
External uncertainties
Company information
03
03
06
09
09
12
15
17
18
22
26
27
28
29
31
32
33
34
62
63
65
66
67
68
87
88
Financial statement
Comprehensive income
Balance sheet
Changes in Equity
Cash flows
Notes
Parent company financial statement
Comprehensive income
Balance sheet
Changes in Equity
Cash flows
Notes
Management’s statement
Independent auditor’s report
GetContents();
PAGE 3
ANNUAL REPORT 2022-23YGGDRASIL
The share of power generated by renewa-
bles is rapidly growing and forcing funda-
mental changes in the power markets as
the challenge of matching supply and
demand increases. Previously, power was
produced from stable resources such as
gas, coal, and nuclear etc. However, the
transition towards renewables has made
power supply more reliant on the produc-
tion from wind turbines and solar panels,
and thus highly weather-dependant.
The green transition necessitates the
development of models to accurately
predict power prices and to stabilise the
market. Advanced algorithmic models like
Yggdrasil’s, have demonstrated impres-
sive precision in forecasting power prices.
These models contribute to supporting
the green transition by enhancing market
stability.
The fluctuating power prices through-
out the year have put our data-driven
approach to the test, and our algorithms
have analysed market conditions under
unprecedented circumstances, includ-
ing power shortages and soaring power
prices. The IT platform and our algorithms
have performed as expected and are now
truly showing their strengths – no matter
the circumstances. As we end our fifth
year, Yggdrasil’s IT platform is now fully
developed, and we are ready to reap the
rewards of our hard work and substantial
investments made in previous years.
Engaging in algorithmic power trading has
Letter from our CEO
Steady growth in
turbulent power
markets
MANAGEMENT COMMENTARY
Cash to
EBT ratio
9
8
%
PAGE 4
ANNUAL REPORT 2022-23YGGDRASIL
enabled us to upscale our business with-
out upscaling our workforce. Market-spe-
cific skills are not needed to expand with,
e.g., a new market or product; the algo-
rithms are developed on a global scale,
and our trading strategies only need small
adjustments to perform in a new setting.
Hence, for the financial year 2022-23, we
have increased earnings by more than
100% requiring only a 55% increase in full-
time equivalents (FTEs). Future-wise, we
expect this scalable and cost-effective
business model to improve even further.
We consider our power trading activi-
ties a low-risk business. We engage in
short-term power trading only, and we
keep a good track record when it comes
to analysing market conditions a few
days ahead, and this year’s results are
no exception. During the financial year
2022-23, we finished 93% of all days with
positive earnings, and the largest accu-
mulated drawdown was less than 1% of
our equity. This achievement is the result
of our company’s efforts to diversify our
exposures, geographically as well as by
performing activities in various weather
scenarios.
I am proud of our accomplishments at
Yggdrasil, which were achievable solely
because of a great team effort and an
impressive enthusiasm to succeed, and
we delivered an operating profit of DKK
277m for the financial year 2022-23, an
increase of 86% on the previous year. The
profit has provided a significant tax contri-
bution of 66 m DKK to society. The result
met the year’s expectations and solidified
our performance and continued growth. It
was realised through a further expansion
of our power market portfolio, increased
investments throughout the portfolio, new
products, and, to some degree, through
the high volatility characterising the
market throughout the year.
Expanding our business also led to
reaching an important milestone. During
the financial year 2022-23, we started
managing the first third-party assets.
Having proven that our IT platform can
generate value when engaging in the
power markets, we utilise our expertise to
generate value for asset owners. From our
first experiences, we can see that asset
owners increase their income significantly
without incurring any risk or exposure. By
MANAGEMENT COMMENTARY
PAGE 5
ANNUAL REPORT 2022-23YGGDRASIL
optimising and automating forecasting of
power production, we are proud to help
integrate renewables into power systems
and contribute to green transition.
Outlook: Growing the core business
We have accomplished what I consider
the hardest part of being a startup, namely
setting our team, setting up an established
company with the functions required,
preserving our great startup culture, and
developing and finetuning our IT platform.
We are ready to shift our focus to growing
our business.
MANAGEMENT COMMENTARY
Søren Agersbæk Jensen, Founder and CEO
{“
Our setup is straightforward. We
engage in short-term power trading
because we have access to an
enormous data foundation of high-
quality weather data. We let machines
crunch data impossible for the human
brain to grasp and estimate short-
term power prices. Recently, we
added power market number 31 to
our portfolio without reaching team
member number 30.
Our growth strategy for the year to come
includes adding 6-8 new power markets,
adding new products, creating value for
additional asset owners, and increasing
our investments in all our markets. We
continue to follow the same strategy and
business model of previous years, and
we expect our earnings to increase in the
financial year 2023-24 by approximately
50%.
I hope you will enjoy reading Yggdrasil’s
financial report.
Kind regards,
Søren Agersbæk Jensen,
Founder and CEO
PAGE 6
ANNUAL REPORT 2022-23YGGDRASIL
Highlights of the year
2022-23
Seen over a five-year period, the development of the Group is
described by the following financial highlights:
MANAGEMENT COMMENTARY
Financial highlights
In thousands DKK 2022/23 2021/22 2020/21 2019/20* 2018/19*
Key figures
Profit/loss
Revenue - - - 14,417 8,133
Gross profit 308,182 165,473 45,573 - -
Operating profit before financial in-
come and expenses and tax (EBIT)
277,212 149,307 34,899 665 191
Net financials 8,638 -1,735 -55 220 1,781
Profit before tax (EBT) 285,850 147,572 35,534 6,071 1,972
Profit for the year 219,776 109,498 27,677 5,875 1,931
Balance sheet
Balance sheet total 470,844 249,882 81,429 32,655 15,180
Investment in property, plant and
equipment
- - - - -
Equity 353,352 145,856 35,319 20,112 14,314
Cash flows
Cash flows from operating activities 280,999 79,762 4,142 1,243 69
Cash flows from investing activities - - 718 586 -200
Cash flows from financing activities -6,000 -11,959 11,174 -1,603 300
Change in cash and cash equivalents
for the year
274,999 67,803 16,034 226 169
Number of employees - average for
the year
24 16 12 6 4
Key ratios
Return on assets 58.9% 59.8% 42.9% 2.0% 1.3%
Solvency ratio 75.0% 58.4% 43.4% 61.6% 94.3%
Return on equity 88.1% 120.9% 99.9% 34.1% 13.5%
For definitions of financial key figures and ratios, please refer to note 1.
*The implementation of IFRS as from 1 July 2020 had an impact on the financial statements and key ratios for
2020/21 and onwards. Comparative figures for 2018/19 and 2019/20 have not been restated and were prepared in
accordance with Danish GAAP.
FY 2019-20
FY 2020-21
FY 2021-22
77%
82%
89%
Positive trading days
FY 2022-23
93%
Largest accumulated draw down vs. equity
FY 2019-20FY 2020-21FY 2021-22FY 2022-23
-4.3%
-2.6%
-1.5%
-0.7%
PAGE 7
ANNUAL REPORT 2022-23YGGDRASIL MANAGEMENT COMMENTARY
1
0
0
%
9
7
%
9
5
%
9
6
%
PAGE 8
ANNUAL REPORT 2022-23YGGDRASIL
Accumulated earnings before cost on a daily basis
300,000
TDKK
250,000
200,000
150,000
100,000
50,000
0
6/30/2019
1/1/2020
1/1/2021
1/1/2022
6/30/2020
6/30/2021
6/30/2022
Earnings before cost (TDKK)
DKK
FY 2019-20
16,927
DKK
FY 2020-21
53,991
DKK
FY 2021-22
185,248
DKK
FY 2022-23
353,496
1/1/2023
6/30/2023
500,000
450,000
400,000
350,000
650,000
600,000
550,000
MANAGEMENT COMMENTARY
Power traded outside Denmark
FY 2022-23FY 2021-22
FY 2019-20 FY 2020-21
Total number of trades
FY 2019-20
438,591
FY 2020-21
816,760
FY 2021-22
1,070,376
FY 2022-23
2,867,540
PAGE 9
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
A simple setup:
Short-term algorithmic
trading
Our business model
Our business model is very simple. It is based on IT and short-
term power trading. The setup requires three sets of skills:
Our power market experts understand market behaviour
and built the algorithms, our software developers code the
IT platform, and our back-office supporters make it all run
smoothly.
We consider our setup as simple because
we have a strong idea about future power
prices. We estimate short-term power prices
based on high-quality weather data, a critical
element to our business model. Moreover,
we firmly believe that algorithms represent
the most successful method of predicting
power prices. Machines can process data
that exceeds the comprehension of the
human brain, allowing us to swiftly calculate
power prices based on extensive datasets.
Advantages of our business model
A business model based on IT and short-
term power trading provides several
advantages. The key advantage is scala-
bility. All our power trades have the same
characteristics in all our power markets,
and it allows us to easily increase our
investments.
Short-term trading involves short-term
risk management, which simplifies risk
PAGE 10
ANNUAL REPORT 2022-23YGGDRASIL
governance since fewer variables need to
be measured, verified, and evaluated. A
straightforward structure with few varia
-
bles and automated power trades leads
to reduced complexity and a minimum of
manual tasks. Fewer manual tasks, in turn,
result in fewer errors.
Another advantage of our business model
is a robust cash flow management. Our
short-term perspective allows for compre-
hensive and transparent cash require-
ments. Cash is briefly held as collateral,
minimising the need for liquidity and miti-
gating risk such as exposure to fluctuating
exchange rates.
Why Yggdrasil is both a tech and a
trading company
We consider Yggdrasil as much a tech as
a trading company due to our extensive
implementation of IT across all our opera-
tions. We have digitalised and automated our
work processes, from managing the entire
power trade life cycle to overseeing and
tracking financial transactions. Combining
their expert skills, our highly skilled software
team have coded the framework, and our
experienced professionals from the energy
sector have contributed to its architecture
and design.
We believe that leveraging IT for every work-
flow possible is the most efficient approach
to power trading and to managing our busi-
ness. And we automate everything possible.
We get IT to crunch extensive data foun-
dations, analyse power price correlations,
predict power prices, communicate with
Transmission System Operators (TSOs), and
present live data for optimal decision-mak-
ing to run our business as effectively as
possible.
In addition to automating power trade oper-
ations, we digitalise and automate all other
workflows to work smarter and more effi-
ciently. In-house developed tools help us
display a comprehensive view of weather
data and transparent lists of collateral and
financial transactions. Thanks to our auto
-
mated bots, we get instant responses and
always have the latest information available.
Considering our extensive integration of IT
across our organisation, we define ourselves
as both a tech company and a trading
company.
Algorithmic trading – our definition and
how it works
An algo trade, as we define it, is an
approach to power trading relying solely
on computer-based analysis. Trading
decisions are made without any human
intuition, and the process of order place-
ment and trade executions is done without
human involvement.
We use machine learning to identify data
patterns. These patterns are encoded into
algorithms, forming the foundation of our
power trading strategies, on which each
single trade is based. Suggestions gener-
ated by the trading strategies, whether
to buy or sell power, depend on weather
forecasts and historical data on the devel-
opment of power prices, forming the foun-
dation of our data analysis.
We have developed algorithms for power
markets across the globe. Once we have
documented the effectiveness of our
trading strategies in one market, moving
on to the next market we can leverage our
existing power trading strategies while
fine-tuning them for market-specific
conditions.
BUSINESS SUMMARY
“OUR”:Tech-
Stack;
(MicrosoftAzure
Cloud
SOLID-Principles
C#
.NET 7
BlazorJavaScript
Docker)
{
}
Power markets
at the end of the year
29
Increase in traded volume
81
%
Total traded
13
TWh
PAGE 11
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Advantages of algorithmic trading
The advantages of using algorithmic trad-
ing are many. It can adapt rapidly to chang-
ing market conditions, works around the
clock, and minimises risk. The following
advantages are the ones we consider to
be most important to our business.
Time: The time span between the decision
to buy or sell and executing the trade is
next to nothing because algorithms can
calculate and execute a trade instantly.
Thus, time per trade is reduced consid-
erably.
People: We do not use traders to execute
the power trades as the process is auto-
mated. Hence, the amount of people
needed to run our business is reduced
considerably. After 5 years of trading
power, we are 28 FTEs without the need
for adding further members to our team.
Competences: The organisation is not
dependent on a single competence to
execute the power trades and thus, there
is no dependency on a single person.
Stability: The algorithmic approach is
stable. Once an algorithm has proven to
work, data has shown that it will continue to
be right in the future. Hence, the approach
is less risky.
Accuracy: To be able to forecast power
prices requires the processing of a lot of
data. The human brain is only capable of
processing a limited amount of data and
consequently, forecasting will be more of
a gut feeling than of a rational analysis. A
computer processes endless amounts of
data instantly and is more accurate than
a human can ever be.
Scalability: Using a data-based approach
makes us able to scale our business and
add new markets without increasing the
amount of people accordingly.
Disadvantages of algorithmic trading
Algorithmic trading presents numerous
advantages, yet it also brings about certain
drawbacks. Instead of disregarding these
drawbacks, we tackle them head-on to miti-
gate their impact. We focus on the following
aspects:
Algo-specific knowledge: As algorithms
become more sophisticated, it becomes
increasingly harder to further improve their
performance or even comprehend their
behaviour. This challenge is amplified if multi-
ple individuals utilise the same algorithm. In
our setting, there is no defined limit to the
complexity of the algorithms. This means that
a single person could write an algorithm of
such intricacy that others may struggle to
make further developments. Specific knowl-
edge is thus created which may not be easily
shared among colleagues.
Data and domain-related biases: Our algo-
rithms react to changes in weather condi-
tions. However, it can be difficult to find
sufficient training data of acceptable qual-
ity. For our data to encompass all possi-
ble weather scenarios, we must go back
in time. Previously, correlations between
supply and demand were different. For
instance, a sunny day in the past meant
higher power demands, whereas today,
solar panel production meets those higher
power demands. Consequently, the data is
not representative of the current domain.
Force majeure: Unforeseen events impact
on the short-term power market, e.g. an
earthquake, a large-scale forest fire, or
the start of a conflict between states.
The consequences for the power market
will have an impact on how we trade, but
these scenarios are not “trainable” for our
algorithms as luckily, instances are not
frequent enough to train the algorithms.
Hence, we cannot rely on algorithmic trad-
ing in case of force majeure. We cover this
by always monitoring the power markets
by always having people monitor the
power markets.
EBIT/FTE (DKK’000)
PAGE 12
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
A global approach to
growth
Our power markets
We are committed to ongoing portfolio expansion
while concurrently dampening our exposure to
risk. A global perspective with the spreading of our
activities across three continents – North America,
Europe, and Asia – enables us to optimise our risk
diversification efficiently. In the 2022-2023 finan-
cial year, we have added another 5 power markets
to our portfolio, resulting in a total of 29 power
markets by the end of the financial year.
FY 2021-22
9,332
FY 2022-23
11,551
FY 2020-21
2,908
FY 2019-20
109
Pernille Durup Mortensen, Compliance and Partner
{“
We entered the Italian power market because the
climate in Italy is very different from most of our
European power markets, which diversifies our
risk. Italy’s geographical location south of the Alps
results in weather systems that are different from
the regions north of the mountains, and the market
requires a different approach. Effectively, we could
adapt our trading strategies from California to
navigate the hot Italian summers.
PAGE 13
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Expanding our portfolio aligns with our
growth strategy, and geographical location
is a pivotal factor in our market selection
process. The geographical spread of our
activities is one of the greatest strengths
of our portfolio. Power prices are highly
impacted by weather conditions, and big
leaps in prices are often caused by unfore-
seen weather changes. Markets located
in proximity to each other are affected
by the same weather conditions and thus
react similarly. Therefore, when deciding
on a new market, the geographical market
location is decisive.
By diversifying our investments across
different continents, we reduce our expo-
sure to shared weather patterns. This
diversification results in investments that
are less exposed to correlated weather
conditions, which leads to an independent
investment performance.
Robust European power demand
Expanding Yggdrasil’s cross-border trad-
ing activities in Europe has been one of
the priorities of the year. The choice of
expanding further in Europe amplifies
our focus on our cross-border trading
activities. The demand for reliable power
supply in Europe is high – at the same time,
the grid receives a considerable share of
power from renewables. Therefore, the
European grid requires the movement of
power through interconnectors between
the countries from where there is exces-
sive power to where it is in demand. By
engaging further in cross-border trad
-
ing, Yggdrasil plays a key role in efficiently
distributing power to where it is needed.
During the past year, we have included
Switzerland, Belgium, Sweden, Norway,
and Italy in our portfolio. As the power
markets in Europe were liberalised around
the same time, the markets are similar in
structure. Combined with our experience
in expanding across the world, this means
that the time and resources needed to
integrate new markets have become of
very little importance. Hence, integrating
a new European market into our portfolio
demands minimal resources. After receiv-
ing the necessary permits and authorisa-
tions for a new market, connecting the IT
infrastructure of the local market with our
systems is a matter of days or less, and
our trading strategies can be seamlessly
adapted with only minor adjustments to
suit neighbouring countries. This allows
us to expand further without imposing any
strains on our day-to-day activities.
PAGE 14
ANNUAL REPORT 2022-23YGGDRASIL
Current markets
Upcoming markets
BUSINESS SUMMARY
A new market
A new power market is a new scene, as
each market has its own rules and require-
ments; trading in a new market is risky. Risk
is at the top of the agenda in all our deci-
sions and, to eliminate risk when adding
a new market, we go through some initial
steps before including a new power market
in the Yggdrasil portfolio.
Initially, we carefully analyse what the
influence of the weather in the new market
is like and how it correlates with our exist-
ing markets.
Secondly, test trades are conducted in the
new market to verify the market-specific
trading rules, the settlement process with
counterparties, collateral requirements,
and other market-specific details.
Thirdly, we need to experience how the
market reacts to our trading, and any feed-
back is included in our trading strategies.
PAGE 15
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Strengthening APAC
power market support
Expansion in the Asia-Pacific Region
In December 2022, Yggdrasil opened its first
international office, located in Tokyo. The
establishment of a physical presence in Asia
is a natural development following the expan-
sion to the Japanese power market.
Development of non-hydro renewables
in Europe and APAC
12,000
10,000
8,000
6,000
4,000
2,000
0
Europe 2011
14,000
Europe 2021 APAC 2011 APAC 2021
30%
25%
20%
15%
10%
5%
0
% Renewable
non-hydro
Non-hydro renewable
generated (TWh)
Other sources
Share of electricity generation from non-hydro renewables
Production in TWh
The share of non-hydro renewables in the APAC region has equalled
that of Europe in 2011. However, due to its larger market size, the
potential in terawatt-hours (TWh) already far surpasses that of
Europe today.
PAGE 16
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
The establishment of a Japan office
emphasises our strategic choice of
supporting the development of power
markets in the APAC region. The Asian
power markets are facing similar chal
-
lenges to what the European power
markets encountered around 2010.
Questions arise around the mass inte
-
gration of renewables into established
power systems that previously relied on
conventional power sources. Issues relate
to dealing with very high or low levels of
renewable energy generation, as well as
with struggles around economic returns,
and societal gains implementation and
deregulation policies.
With roots in the European power markets
and experience with similar issues,
Yggdrasil is uniquely placed to deploy the
hard-earned lessons from the challenges
that European market participants have
been facing for more than 15 years. It is in
our DNA to manage volatility like the APAC
region markets are experiencing with the
deployment of renewable energy on a
mass-scale basis. We pride ourselves on
supporting the markets and societies in
the APAC region.
Benefits from Japan office
For Yggdrasil, an office in a region outside
Europe means working also in a different
time zone, which enables us to monitor the
power markets 24/7 more easily. With a
team in Japan, we can do shift rotations
around the clock without anyone having
to work during the nighttime in Denmark.
In addition, our presence in Tokyo enables
closer interaction with the Japanese and
broad APAC energy investment commu-
nity. It brings local knowledge into the
development of the market and the prod-
uct range in the region.
Offering an international environment to
our team is another benefit to our pres-
ence in Japan, and we have prioritised
an intercultural integration between the
offices. The team in Japan have visited
Aalborg on several occasions, and longer
exchange stays are popular in both
Denmark and Japan for both power market
specialists, software developers, and other
team members.
PAGE 17
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Expanding our
business: Renewable
asset management
Asset management
A milestone was reached in the financial year
2022-23 as Yggdrasil managed its first assets.
Asset management is another stride in our
ongoing efforts to diversify market risk, while
our power trading platform continues to create
valuable synergies for asset owners.
Expanding our business with buying power
from third-party asset owners and sell-
ing it to the market is a natural strategic
choice for Yggdrasil’s business engage-
ments. Handling assets means spreading
market risk even further as asset manage-
ment has a different setup than the propri-
etary power trading. More precisely, the
risk and reward profile in handling power
that is externally generated varies from
the profile created by our internal power
trades. In other words, asset management
is a line of business with low correlation to
proprietary power trading.
Offering Yggdrasil’s services to asset
managers, we utilise both our expertise
in power trading and our trading platform.
With our comprehensive knowledge of
analysing weather forecasts and of algo-
rithmic power trading, we know how assets
react to the weather, and we also know
how the market reacts.
Strengthening the green transition
By extending our services to asset owners,
Yggdrasil takes on the risk of the asset
owners for their potential future imbal-
ances. We handle everything from power
offtake and delivery of renewable energy
to the market to paying the asset owners
for the generated power. The asset owners
are no longer exposed to the risk of imbal-
ances – this is now a new uncorrelated risk
handled by Yggdrasil internally. Lowering
risk and decreasing delivery costs conse-
quently foster a more secure and attrac-
tive environment to advance renewables
projects, thus strengthening the green
transition.
Asset management is an integrated part
of our business, and the initial results from
our route-to-market services show that
asset owners gain an increase in income
of 0.3% to 0.8% from our services.
PAGE 18
ANNUAL REPORT 2022-23YGGDRASIL
Our highest priority at Yggdrasil is risk management.
We address potential risks in everything we engage
in, and each single team member is aware of the risks
when engaging with our power markets. Power trading
involves several risks, and the responsibility for risk
management is strategic as well as operational.
Fostering resilience:
Our approach to risk
mitigation
Risk management
BUSINESS SUMMARY
New power markets
5
PAGE 19
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
In close cooperation with the two found-
ers, Yggdrasil’s CEO and COO, the Board
of Directors is responsible for the risk
strategy. Risk management is para
-
mount throughout the organisation and is
adhered to and implemented by everyone
in the company.
To make sure everybody in the team is
working within the same framework for
risk management, different members of
our team are responsible for specifying
our risk management procedures and
making sure the whole team is aligned
and procedures are followed. Power trad-
ing involves different risk aspects, and our
risk management strategy is implemented
within five overall areas.
Market risk
Market risk covers all areas that have
the potential of financial loss or adverse
outcomes in investments due to factors
that affect the overall market or a specific
market conduct. To mitigate market risk
most effectively, Yggdrasil divides risk into
the following focus areas:
Market diversification
Market diversification is key to market risk
management, and by spreading invest-
ments in many different power markets, we
avoid that a single power market becomes
too dominant in our portfolio. Hence, for
each single market added to the portfolio,
we dilute market risk further and reduce
the potential of financial losses without
compromising gains.
Geographical spread
Yggdrasil is active in three continents, and
trading power in markets geographically
far apart is one of the greatest strengths
in our portfolio. Power prices are highly
dependent on weather conditions, and
big leaps in prices are often caused by
unforeseen weather changes. Hence,
markets located in the same region are
affected by the same weather condi
-
tions, which makes investments corre-
late. Therefore, when deciding on a new
market, the geographical market location
is decisive. By spreading investments in
different continents, the risk exposure to
the same weather systems is mitigated.
Uncorrelated weather conditions lead to
uncorrelated investments.
Adding new markets
To follow our growth strategy, we contin-
uously add new markets to our portfolio.
Each market has its own rules and require-
ments, so trading a new market is risky. To
manage the risk of selecting and entering
a new market, we go through some initial
steps.
Initially, it is carefully analysed if the influ-
ence of the weather is specific to the new
market only and not spilling over into our
existing markets. Secondly, test trades
are conducted in the new market to verify
specific trading rules, the settlement
process with counterparties, collateral
requirements, and other market-specific
details. Thirdly, we need to experience
how the market reacts to our trading, and
we finetune our trading strategies. When
the above steps have been completed
successfully, the new market is included
in Yggdrasil’s portfolio.
Increasing investments
A new market provides Yggdrasil with
new investment opportunities. Once a
new market is included in the Yggdrasil
portfolio, we start trading the market and
increasing investments.
PAGE 20
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
For our diversification strategy to work, the
investments in each of our markets should
be at the same risk level to balance the
total risk exposure. When the investments
in a new market reach the same level as the
existing portfolio, the market diversifica-
tion is higher than before and hence, the
overall risk exposure decreases, diluting
Yggdrasil’s risk profile.
Each new market supports growth in two
ways. It offers the potential of increased
investments and positive earnings without
the full impact of higher risk. Further, for
each new market added, we can increase
investments in all our markets as Yggdra-
sil’s overall risk profile is further diluted.
IT risk
As our business model is centred around
algorithms, we rely on a secure IT infra-
structure, which makes cybersecurity
paramount to our business. Our dedicated
security team manages all access control
and ensures that we do not experience
any unauthorised access, irrespective of
whether we are working from home or from
our offices in Aalborg or Tokyo.
Our Azure Cloud solution is a fundamental
part of our security strategy. By operat-
ing within Microsoft’s closed systems, we
benefit from their cybersecurity manage-
ment, a configuration that we consider
highly secure. The solution prevents
cyberattack and phishing attempts, and
any incidents of malware are promptly
reported to Microsoft using the Report
Message add-in.
We maintain our infrastructure with the
latest updates and adhere to a Zero
Trust Security Approach. This approach
mandates that all users undergo authen-
tication before gaining access. It consists
of three core principles: User verification,
device validation, and intelligent access
restriction. Additionally, team members
with higher permission levels are equipped
with Yubico Security Keys (2FA) to further
strengthen our secure position.
Our software is secured in a VPC (Virtual
Private Cloud) using Cloudflare’s indus-
try-leading NaaS stack, and access is
restricted to those who have successfully
undergone authentication using the Zero
Trust Security Approach. Furthermore,
our company resources are exclusively
accessible through company-managed
devices, which we oversee through Micro-
soft Intune.
To mitigate any risks associated with algo
-
rithmic trading, we have implemented an
automatic kill switch. Should any trading
surpass predefined risk limits, the system
will automatically shut down. Reactivation
can only be done manually by a member
of our Board of Directors.
People risk
Yggdrasil would be nothing without our
great team, and a team member leaving
the company represents a significant risk
to our business. During the financial year,
we have focused on minimising people
risk by ensuring that we have a backup for
critical team members as well as duplicate
processes for critical workflows. In the
event of a team member resigning from
their position at Yggdrasil, a well-docu-
mented plan will ensure business conti-
nuity.
Recruiting a new team member represents
another potential people-related risk, as
there is a possibility that the individual
might not align with our culture. To ensure
a successful recruitment, we conduct
several interviews involving different team
members and invite potential candidates
to visit our office to introduce them to their
tasks. This approach helps both us and
them gauge the compatibility with both
the tasks and the work environment.
Counterparty and liquidity risk
Operating our low-risk business model in
a changing world requires strong focus on
our counterparty risk and diligence around
our cashflow.
Counterparties of Yggdrasil are almost
exclusively government-backed enti
-
ties such as exchanges, clearing houses
or TSOs. Historically, such entities have
shown an exceptionally low delinquency
rate (overdue debts).
Yggdrasil does engage with private compa-
nies as counterparties, but these are debt-
ors such as our customer asset owners.
As we receive power from them and pay
them, these are our debtors rather than
they represent a financial counterparty risk.
{
“dataVolumeStored”: “530TB”
}
PAGE 21
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Liquidity risk is ever-present in markets
with volatile prices. Especially during the
financial year 2022-23, power prices were
extremely turbulent, increasing the poten-
tial of liquidity challenges. However, due to
our focus on trading in short-term markets,
over 95% of our exposure remains limited
to the following business days. Subse-
quently, transactions are cleared and
settled, enabling Yggdrasil to efficiently
reuse liquidity.
Compliance risk
Regulatory compliance is a core element
in our organisation, and we closely follow
regulatory developments applicable to our
trading activities. We must constantly be
at the forefront of legislative requirements
as well as changes or modifications to
already existing requirements. Yggdrasil’s
dedicated compliance colleague distrib-
utes any news or changes which will affect
our business and ensures that the team
understands and adheres to the regula-
tory requirements.
Market compliance
Yggdrasil trades power in three conti-
nents, and the areas differ significantly
from each other in terms of laws, regu
-
lations, and rules. Each area has its own
unique setup and even though there are
parallels between them, the areas are at
different maturity levels. In a close coop-
eration, compliance and business devel-
opment ensures a detailed understanding
of market rules, implementing them into
our trading setup.
Market conduct
Internal compliance is likewise as impor-
tant as external compliance. Hence, every-
one who is interacting with the power
markets on behalf of Yggdrasil must attend
a market conduct training session before
they are allowed at the desk. Apart from
our internal compliance education, exams
from relevant external trading venues are
required.
Compliance is located next to the power
market team and is available for any ques-
tions about regulatory affairs. In case
something unusual is identified in a market,
the power market team must report to
compliance.
Intellectual property rights
Yggdrasil is built on technology and inno-
vation, and judicial protection of our core
intangible assets, IP rights, copyrights,
trade secrets, and other intangible assets
is imperative to the existence of our busi-
ness.
The legal protection of Yggdrasil’s core
business is an ongoing focus point to
ensure that we can continue to commer-
cialise our services. In close cooperation
with external professionals, compliance
is responsible for safeguarding our assets
and frequently explores developments in
trends and regulations and possible new
ways to protect our intangible assets as
well as to detect possible hindrances.
Cash from trades executed on exchanges
is settled within days, and cash from
trades with TSOs or other counterparties
is settled within a few weeks on average.
Collateral and securities paid to counter-
parties are relatively small due to swift
cash settlement. Even in the extraordinary
market circumstances during the financial
year 2022-23, no internal liquidity issues
where observed.
Yggdrasil
Buy power
1 day ahead
Sell power
(real time)
Get cash back
one day after
Put down cash
two days ahead
Cash flow cycle
PAGE 22
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
Cultivating values and
building a global team
Our people and culture
How we work is the DNA at Yggdrasil; our values are not just
words printed on a coffee mug! They are paramount to how
we run our business, and living and preserving our great
culture is key to all of us.
We feel fortunate to have welcomed new
colleagues in our team over the past
twelve months. We are both humbled
and grateful that they have chosen to join
Yggdrasil, especially during a period where
the number of open positions exceeded
the number of candidates. We began the
financial year with 18 team members; by
the end of the financial year, our team has
grown to a total of 28 members.
Increasing our team by ten new colleagues
has required us to focus on recruiting and
onboarding. In addition to welcoming new
team members, we have devoted our
efforts to safeguarding our strong culture
and values.
As a team, we have developed our values
further, and we are proud of living our five
values in our everyday office life. Familiar-
ising potential new team members with our
PAGE 23
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
values during the recruitment process is
essential because we believe that adher-
ing to these values is equally as important
as having the right skills to become part
of our team. A comprehensive introduc-
tion to our values is part of our onboarding
process, and our values are integrated into
each talent’s development plans.
As the year is coming to an end, we are
shifting our focus from recruitment and
onboarding to developing our talents and
ensuring that everyone is enthused and
satisfied going to work.
We cherish our flat organisation where
the best argument wins, and expertise is
the deciding factor – regardless of posi-
Ann Sloth Hansen, Partner, People and Culture
{“
We have successfully maintained our
innovative startup culture and dedication
to transparency while welcoming ten new
team members from various locations
and cultural backgrounds. Everyone has
been great, and I am proud to conclude
that even though we have grown a lot, we
have grown together.
tion. However, as our team has grown, we
recognise the need for a structured team
division, and we view leadership as a skill
next to coding and market knowledge.
Our values are our guiding leadership
principles. We customise our leadership
approach to each team member, using
tailored guidance whether they are
straight from university or senior profes-
sionals, because we are all unique. Our goal
is to enable each team member to pursue
their passions and offer opportunities to
develop their skills within their areas of
interest.
Unity across cultures
Opening an office in Tokyo in Decem-
ber brought great new colleagues to the
PAGE 24
ANNUAL REPORT 2022-23YGGDRASIL BUSINESS SUMMARY
members. We want everyone in our team,
no matter their role, to benefit from their
contributions.
Our ambition is to include all our employ-
ees in our partner programme, which
encompasses warrants and shares.
Whether you are part of our analytics
team, IT team, power market team, or any
other function within our company, our
goal is to welcome everyone as a partner
from their very first day with us. At the end
team. It has been both exciting and a bit
challenging because our cultures are very
different. Hence, we focused on the inter-
cultural communication and learned about
each other’s communication preferences
to better communicate with each other.
The significant time difference between
Aalborg and Tokyo has meant early morn-
ings for our Danish team and late evenings
for our Tokyo colleagues following our
collaborative meetings.
of the 2022-2023 financial year, Yggdrasil
has 28 full-time employees, of whom 28
hold partner status.
Furthermore, we aspire to cultivate long-
term relationships with all our team
members, aiming to retain and foster the
exceptional talent that defines Yggdrasil.
Nevertheless, the unwavering determina-
tion of every team member, both in Tokyo
and in Aalborg, to ensure the success
of our expansion efforts has been truly
remarkable. The team spirit and synergies
between the two offices have exceeded all
expectations, resulting in a cohesive team
working unitedly.
Valuing our team
Yggdrasil would be nothing without our
exceptional talents and dedicated team
Overall job satisfaction
85%
89%
Influence
Mastery
86%
89%
Leadership
84%
Balance
Purpose
82%
Achievements
83%
Colleagues
88%
85%
Satisfaction score
Source: GAIS, job satisfaction survey, 03.02.2023
PAGE 25
ANNUAL REPORT 2022-23YGGDRASIL
We are committed to our five values. They
are the essence of our professional coop-
eration and how we treat each other. They
are our guideline for our daily life at the
office, and they define our approach to
power trading.
The Yggdrasil
values
Above all
we execute
Financial
performers
Algo
before ego
Data
wizards
We are
humans
BUSINESS SUMMARY
PAGE 26
ANNUAL REPORT 2022-23YGGDRASIL
In accordance with the shareholder agree-
ments for the subsidiaries Dvalin ApS and
Nidhog ApS, an event has occurred in
2020/21 which has had the outcome that
the company has purchased shares held
by minority shareholders in the subsidi-
aries at a total purchase price of DKK 6.9
million. The minority shareholders have
Uncertainties
BUSINESS SUMMARY
objected to this purchase, and the owner-
ship of the shares at year-end is therefore
legally questioned.
For accounting purposes and based on
the provisions laid down in the share
-
holder agreements, the assessment has
been made that the company exercises
control over the shares owned by minority
shareholders. Against this background, the
subsidiaries Dvalin ApS and Nidhog ApS
were recognised as wholly-owned subsid-
iaries at 1 April 2021, and the purchase
prices were recognised as liabilities.
The assessment that the company exer-
cises control over the shares owned by
minority shareholders is supported by an
updated opinion from an external lawyer.
The outcome of the dispute with the
minority shareholders may have a minor
financial impact on the accounts of
Yggdrasil.
PAGE 27
ANNUAL REPORT 2022-23YGGDRASIL
The Company
CVR No: 40 30 06 43
Established: 28 February 2019
Registered office: Aalborg
Financial period: 1 July - 30 June
Board of Directors
Søren Agersbæk Jensen
Søren Bondo Andersen
Rasmus Nordestgaard Jensen
Executive Board
Søren Agersbæk Jensen
Søren Bondo Andersen
Auditors
GOVERNANCE
Company
Information
PAGE 28
ANNUAL REPORT 2022-23YGGDRASIL
Financial
statements
1 July 2022 – 30 June 2023
PAGE 29
ANNUAL REPORT 2022-23YGGDRASIL
Consolidated statement of
comprehensive income
For the year ended 30 June 2023
TDKK Notes 2022/23 2021/22
Net income from trading financial energy derivatives 3 308,182 165,473
Gross profit 308,182 165,473
Staff costs 4 -18,923 -9,712
Administrative expenses -12,047 -6,454
Operating profit 277,212 149,307
Financial income 5 12,935 102
Financial costs 5 -4,297 -1,837
Profit before tax 285,850 147,572
Tax on profit for the year 6 -66,074 -38,074
Profit for the year 219,776 109,498
Profit for the year is attributable to:
Owners of Yggdrasil Commodities ApS 219,776 109,498
Non-controlling interests - -
Profit or loss
PAGE 30
ANNUAL REPORT 2022-23YGGDRASIL
Consolidated statement of
comprehensive income
For the year ended 30 June 2023
Comprehensive income
TDKK Notes 2022/23 2021/22
Profit for the year 219,776 109,498
Other comprehensive income that will be reclassi-
fied subsequently to the profit or loss
Value adjustment of hedging instruments 258 -1,905
Tax effect of equity adjustments -56 419
Exchange rate adjustments on translation of sub-
sidiaries
-12,573 2,450
Total comprehensive income 207,405 110,463
Total comprehensive income is attributable to:
Owners of Yggdrasil Commodities ApS 207,405 110,463
Non-controlling interests - -
PAGE 31
ANNUAL REPORT 2022-23YGGDRASIL
Consolidated Balance Sheet
For the year ended 30 June 2023
Balance sheet (asset)
TDKK Notes 30/6 2023 30/6 2022
Assets
Current assets
Receivables 16 37,881 77,177
Deposits 44,953 45,140
Other receivables 13,036 518
Total receivables 95,870 122,835
Cash and cash equivalents 8 374,974 127,047
Total current assets 470,844 249,882
Total assets 470,844 249,882
Balance sheet (eq. and liab.)
TDKK Notes 30/6 2023 30/6 2022
Equity and liabilities
Contributed capital 3,073 3,073
Hedge reserve - -202
Retained earnings 110,279 142,985
Proposed dividend for the year 240,000 -
Total equity 353,352 145,856
Credit institution - 6,000
Payables 24,192 49,812
Derivative financial instruments - 259
Income tax payable 61,150 36,810
Amounts owed to shareholders - -
Other payables 32,150 11,145
Total current liabilities 117,492 104,026
Total liabilities 117,492 104,026
Total equity and liabilities 470,844 249,882
PAGE 32
ANNUAL REPORT 2022-23YGGDRASIL
Consolidated statement of
changes in equity
Changes in equity (fin. year)
TDKK
Con-
tributed
capital
Hedge
reserve
Retained
earnings
Proposed
dividends
for the year
Total
equity
owners of
the parent
Non-con-
trolling
interests
Total
equity
Equity at 1 July 2022
-202 142,985 - 145,856 - 145,856
Profit for the year - - -20,224 240,000 219,776 - 219,776
Value adjust. of
hedging
instruments
Tax effect, equity
adjust.
Exchange rate adjust.
subsidiaries
Total comprehensive
income
Warrants 91 91 - 91
Total transactions
with shareholders
Equity at 30 June
2023
Changes in equity (com. year)
TDKK
Con-
tributed
capital
Hedge
reserve
Retained
earnings
Total equity
owners of
the parent
Non-con-
trolling
interests
Total
equity
Equity at 1 July 2021 3,073 -433 32,679 35,319 - 35,319
Transfer - 125 -125 - - -
Profit for the year - - 109,498 109,498 - 109,498
Value adjust. of hedging
instruments
Tax effect, equity adjust. - -30 449 419 - 419
Exchange rate adjust.
subsidiaries
Total comprehensive
income
Share-based payments - - 74 74 - 74
Total transactions with
shareholders
Equity at 30 June
2022
PAGE 33
ANNUAL REPORT 2022-23YGGDRASIL
Consolidated statement of cash
flows
For the year ended 30 June
Cash flows
TDKK Notes 2022/23 2021/22
Profit/loss for the year 219,776 109,498
Adjustments 11 57,527 39,883
Changes in working capital 11 38,659 -55,747
Cash flow from operating activities before finan-
cials
Paid net finance income/finance costs 6,827 -3,130
Cash flow from ordinary activities 322,789 90,505
Corporate tax paid -41,790 -10,742
Cash flow from operating activities 280,999 79,762
Sale of equity investments - -
Cash flow from investment activities - -
Loan credit institution -6,000 -
Loan from shareholders - -11,959
Cash flow from financing activities -6,000 -11,959
Changes in cash and cash equivalents 274,999 67,803
Cash and cash equivalents at 1 January 105,595 35,523
Currency adjustment -12,573 2,269
Cash and cash equivalents at 31 December 368,021 105,595
PAGE 34
ANNUAL REPORT 2022-23YGGDRASIL
Contents of the notes to the
consolidated financial statements
Overview
of notes
Summary of significant accounting policies
Estimation uncertainties and judgements
Net income from trading financial energy derivatives
Staff costs
Financial income and costs
Tax on profit for the year
Group composition
Cash and cash equivalents
Share capital
Capital management
Cash flow specifications
Changes in liabilities from financing activities
Contractual obligations, contingencies, etc.
Financial risks and the use of derivative financial instruments
Market risk
Credit risk
Liquidity risk
Financial instruments by category
Fair value measurement
Related party transactions
Subsequent events
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
35
40
41
42
44
45
46
47
48
49
50
51
52
53
54
56
57
58
59
60
61
PAGE 35
ANNUAL REPORT 2022-23YGGDRASIL
1. Summary of significant
accounting policies
The annual report for the financial year
1 July 2022 – 30 June 2023 has been
prepared in accordance with International
Financial Reporting Standards as adopted
by the EU and additional Danish disclosure
requirements. The Group is classified as a
reporting class c entity according to the
Danish Financial Statements Act.
Yggdrasil Commodities ApS’ annual report
is presented in TDKK unless otherwise
stated.
For all periods up to and including the year
ended 30 June 2023 the Group and its
subsidiaries prepared their separate and
individual financial statements in accord-
ance with IFRS.
Changes in accounting policies
The Group has previously accounted for
revenue from sale of power by applying
IFRS 15. Thus, contracts with counterpar-
ties on sale and purchase of power has
been presented on a gross basis in the
income statement as ‘Revenue from sale
of power’ and ‘Purchase of power’.
These transactions for physical delivery of
a non-financial item are considered within
the scope of IFRS 9 due to the fact that
the Group has a practice of entering into
offsetting contracts before the delivery
date. Consequently, they are measured at
fair value on initial recognition and subse-
quently measured at fair value through
profit and loss. These adjustments to fair
value are presented in the income state-
ment as “Net income from trading financial
energy derivatives”
The income statement for 2021/22 have
been restated due to this change in
accounting policies. Revenue from sale
of power amounting to TDKK 2,393,127,
purchase of power amounting to TDKK
-2,304,682 as net income from trading
commodity derivatives amounting to TDKK
77,029 has been netted and presented as
net income from trading financial energy
derivatives.
Amounts owed to third parties amount-
ing to TDKK 6,953 as of 30 June 2022 has
been reclassified to other payables in the
balance sheet.
Changes in accounting policies has no
impact on profit before tax, balance sheet
or equity.
Consolidated financial statements
The consolidated financial statements
comprise the Parent Company, Yggdra
-
sil Commodities ApS, and its subsidiar-
ies. Subsidiaries are entities controlled by
the Group. The Group ‘controls’ an entity
when it is exposed to, or has rights to, vari-
able returns from its involvement with the
entity and has the ability to affect those
returns through its power over the entity.
The financial statements of subsidiaries
are included in the consolidated finan-
cial statements from the date on which
control commences until the date on
which control ceases. On consolidation,
intra-group income and expenses, share-
holdings, intragroup balances and divi-
dends and realised and unrealised gains
and losses on intragroup transactions are
eliminated.
The Group’s consolidated financial state-
ments are presented in Danish Kroner
(DKK), which is also the Parent Company’s
functional currency. For each entity, the
Group determines the functional currency
and items included in the financial state-
ments of each entity are measured using
that functional currency.
Differences in exchange rates arising
from the translation of foreign subsidiar-
ies’ equity at the beginning of the year at
the exchange rates at the balance sheet
date and from the translation of income
statements from the average exchange
rates for the currency exchange rates at
the balance sheet date are recognised
directly in other comprehensive income
Foreign currency translation
Transactions in foreign currencies are
translated into the functional currency at
the exchange rates at the transaction date.
Monetary assets and liabilities denomi-
nated in foreign currencies are translated
into functional currency at the exchange
rates at the reporting date.
Foreign currency differences are gener-
ally recognised in profit and loss except
for certain equity instruments available
for sale, financial liabilities and hedging
instruments.
PAGE 36
ANNUAL REPORT 2022-23YGGDRASIL
Derivative financial instruments
Derivative financial instruments are
initially recognised at fair value on the date
on which a derivative contract is entered
into and are subsequently remeasured at
fair value.
Derivatives are carried as financial assets
when the fair value is positive and as finan-
cial liabilities when the fair value is nega-
tive.
The fair value adjustments of sales and
purchase commodity contracts that are
derivatives are recognised in the state-
ment of profit or loss as net income/loss
from commodity derivatives. Trading
costs and other costs directly related
to the net income are recognised corre-
spondingly.
The fair value adjustments of derivative
financial instruments, such as forward
currency contracts, that are designated
to hedge its foreign currency risks arising
from net investments in subsidiaries. are
recognised directly in equity.
Net income from trading financial
energy derivatives
The Group routinely enters into exchange
traded sale and purchase transactions for
physical delivery of energy commodities.
A considerable part of these transactions
for physical delivery of a non-financial
item are considered within the scope
of IFRS 9 due to the fact that the Group
has a practice of entering into offsetting
contracts before the delivery date. Conse-
quently, they are measured at fair value
on initial recognition and subsequently
measured at fair value through profit and
loss.
For contracts whose fair value cannot be
determined solely based on observable
market data, any difference between the
transaction price and transaction date fair
value determined by applying a valuation
model is deferred and recognized over the
term of the contract.
Income
statement
A portion of the sale and purchase trans-
actions for physical delivery of energy
commodities takes the form of contracts
that were entered into and continue to be
held for the purpose of receipt or delivery
of the physical commodity in accordance
with the Group’s expected sale, purchase
or usage requirements (“own use”) and are
not within the scope of IFRS 9. The assess
-
ment of whether a contract is deemed to
be “own use” is based on the nature of
the contract as well as facts and circum-
stances of how the contract is included in
the Group’s activities.
Staff costs
Staff expenses comprise direct wages
and salaries, pension contributions, social
security contributions, sick leave, bonuses,
and share-based payments which are
recognized in the year in which the associ
-
ated services are rendered by employees
of the Group.
Share-based payments
Employees of the Parent Company receive
remuneration in share-based payments,
whereby employees render services as
consideration for warrants (equity-settled
transactions). The cost of equity-settled
transactions is determined by the grant
date fair value using option-pricing valua-
tion model. In the financial statements the
cost is recognised in staff costs together
with a corresponding increase in equity
over the period in which the service condi-
tions are fulfilled (the vesting period). The
cumulative expense recognised for equi-
ty-settled transactions at each report-
ing date until the vesting date reflects
the extent to which the vesting period
has expired and the best estimate of the
number of equity instruments that will ulti-
mately vest. The expense or credit in the
income statement for a period represents
the movement in cumulative expenses
recognised at the beginning and at the
end of that period.
Administrative expenses
Administrative expenses comprise
expenses incurred during the year for
management and administration of the
Group, including expenses for office prem-
ises, marketing, office expenses etc.
Finance income and costs
Finance income and costs comprise
1. Summary of significant
accounting policies
PAGE 37
ANNUAL REPORT 2022-23YGGDRASIL
interest income and expense, payables
and transactions denominated in foreign
currencies, amortisation of financial assets
and liabilities as well as surcharges and
refunds under the on-account tax scheme,
etc.
Tax on profit for the year
Tax for the year comprises current tax
for the year and changes in deferred tax,
including changes in tax rates. The tax
expense relating to the profit for the year is
recognised in the income statement at the
amount attributable to the profit for the
year and directly in equity at the amount
attributable to entries directly in equity.
Balance
sheet
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 consid
-
eration.
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 representing obligations
to make lease payments and right-of-use
assets representing the right to use the
underlying assets.
The Group applies the short-term lease
recognition exemption to its short-term
leases of machinery and equipment (i.e.,
those leases that have a lease term of 12
months or less from the commencement
date and do not contain an extension or a
purchase option). It also applies the lease
of low-value assets recognition exemp-
tion to leases of office equipment that
are considered to be of low value. Lease
payments on short-term leases and leases
of low-value assets are recognised as
expense on a straight-line basis over the
lease term.
Receivables
Receivables are measured at amortised
cost.
Write-downs are made to counter losses
on the basis of expected credit losses
using the simplified expected credit loss
model.
Receivables are monitored on an ongoing
basis in accordance with the Group’s risk
policy.
Deposits and other receivables
Deposits and other receivables consist
of deposits related to trading, receivable
VAT and miscellaneous receivables. Other
receivables are measured at amortized
cost. Deposits represent the amount of
cash required for trading positions with
certain counterparties.
Prepayments
Prepayments comprise prepayment of
costs incurred relating to subsequent
financial years.
Equity
Dividends
The expected dividend payment for the
year is disclosed as a separate item under
equity.
Corporation tax and deferred tax
Current tax payable and receivable is
recognised in the balance sheet as tax
computed on the taxable income for
the year, adjusted for tax on the taxable
income of prior years and for tax paid on
account.
Deferred tax is measured using the
balance sheet liability method on all
temporary differences between the carry-
ing amount and the tax value of assets and
liabilities measured on the planned use
of the asset or settlement of the liability,
respectively. Deferred tax assets, including
the tax value of tax loss carryforwards, are
recognised at the expected value of their
utilisation within the foreseeable future;
1. Summary of significant
accounting policies
PAGE 38
ANNUAL REPORT 2022-23YGGDRASIL
either as a set-off against tax on future
income or as a set-off against deferred tax
liabilities in the same legal tax entity. Any
deferred net assets are measured at net
realisable value.
Deferred tax is measured in accordance
with the tax rules and at the tax rates
applicable at the balance sheet date when
the deferred tax is expected to crystallise
as current tax. Changes in deferred tax as
a result of changes in tax rates are recog-
nised in the income statement, statement
of other comprehensive or equity, respec-
tively.
Liabilities
Financial liabilities are recognised at the
date of borrowing at fair value, corre-
sponding to the proceeds received less
transaction costs paid. In subsequent
periods, the financial liabilities are meas-
ured at amortised cost, corresponding to
the capitalised value using the effective
interest rate. Accordingly, the difference
between cost and the nominal value is
recognised in the income statement over
the term of the loan together with interest
expenses.
Other liabilities are measured at amortised
cost, which usually corresponds to nomi-
nal value.
Fair value measurement
The Group uses fair value for certain
disclosures and measurement of finan-
cial instruments. Fair value is the price that
would be received to sell an asset or paid
to transfer a liability in an orderly transac-
tion between market participants at the
measurement date.
The fair value measurement is based on
the assumption 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 advanta-
geous market for the asset or liability. The
fair value of an asset or a liability is meas-
ured using the assumptions that market
participants would use when pricing the
asset or liability, presuming that they are
acting in their economic best interest.
The Group uses valuation techniques that
are appropriate in the circumstances and
for which sufficient data are available to
measure fair value, thus 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 are categorised
within the fair value hierarchy (levels 1, 2
and 3), described as follows, on the basis
of 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.
1. Summary of significant
accounting policies
Cash flow
statement
The cash flow statement shows the
Group’s cash flows from operating, invest-
ing and financing activities for the year, the
year’s changes in cash and cash equiva-
lents as well as the Group’s cash and cash
equivalents at the beginning and end of
the year.
Cash flows from operating activities
Cash flows from operating activities
are calculated as the profit for the year
adjusted for non-cash operating items,
changes in working capital and corpora-
tion tax paid.
Cash flows from investing activities
Cash flows from investing activities
comprise payments in connection with
acquisitions and disposals of entities and
activities, intangible assets, property, plant
and equipment and investments.
Cash flows from financing activities
Cash flows from financing activities
PAGE 39
ANNUAL REPORT 2022-23YGGDRASIL
comprise changes in size or composition of
the Group’s contributed capital and costs
in this respect as well as raising of loans,
instalments on interest-bearing debt and
distribution of dividends to owners.
Cash and cash equivalents
Cash and cash equivalents comprise cash
and short-term marketable securities with
a short term, which are easily convertible
into cash and which are subject to only an
insignificant risk of changes in value.
1. Summary of significant
accounting policies
Financial
Highlights
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 40
ANNUAL REPORT 2022-23YGGDRASIL
2. Estimation uncertainties and
judgements
Judgements
Presentation of net and gross income
Management uses significant judgments
when determining presentation of income
from complex contracts that contain
certain sales of goods or services that are
not clearly defined within the IFRS frame-
work. In this assessment, management
takes into consideration both the indi
-
vidual characteristics of the goods and
services and the nature of the promise
within the context of the contract, eval-
uating all the facts and circumstances
relating to the specific contract under the
relevant legal and regulatory framework to
determine the appropriate presentation
of income.
Estimates
Dispute investments
In accordance with the shareholder agree-
ments for the subsidiaries Dvalin ApS and
Nidhog ApS, an event has occurred which
has had the outcome that the Company
has purchased shares held by minority
shareholders in the subsidiaries at a total
purchase price of DKK 6.9 million. The
minority shareholders have objected to
this, why the ownership of the shares at
year end is therefore legally questioned.
For accounting purposes, the assess-
ment has been made that the Company,
based on the provisions laid down in the
shareholder agreements, exercises control
over the shares owned by minority share-
holders, and against this background, the
subsidiaries Dvalin ApS and Nidhog ApS
were recognised as fully-owned subsidiar-
ies at 1 April 2021, and the purchase prices
were recognised as liabilities.
The assessment that the Company exer-
cises control over the shares owned by
minority shareholders is supported by an
opinion from two external lawyers.
The outcome of the dispute with the
minority shareholders may have the
outcome that the provisions laid down in
the shareholder agreements are disre-
garded. This may have an impact on
whether the Company exercises control
over the shares owned by minority share-
holders and the purchase prices.
The consolidated income statement is
not impacted by the outcome of the legal
dispute.
The income statement for the Parent
Company can be impacted due to recog-
nition based on ownership. Recognised
results from shares acquired affect results
for the financial year 2022/23 by DKK 33.3
million and for the financial year 2021/22
by DKK 11.6 million.
PAGE 41
ANNUAL REPORT 2022-23YGGDRASIL
3. Net income from trading
financial energy derivatives
Gains and losses arising from trading with
energy commodity derivatives includ-
ing futures, options, swaps and certain
forward sales and purchases are excluded
from revenue and presented separately.
Likewise, energy commodity contracts
with physical delivery with a net settle-
ment option or past practice of settlement
of contracts in net cash or other financial
instruments are also to be excluded from
revenue since these energy commodity
contracts and treated considered within
the scope of IFRS 9 Financial instruments.
Given the nature of the company’s busi-
ness model and contracts with counter-
parties all gains and losses arising from
trading with energy commodity deriva-
tives are accounted for using IFRS 9 Finan-
cial instruments.
PAGE 42
ANNUAL REPORT 2022-23YGGDRASIL
4. Staff costs
TDKK 2022/23 2021/22
Wages and salaries 17,563 8,952
Share-based payments 91 74
Pension cost (defined contribution plans) 1,116 582
Other social security costs 153 104
Total 18,923 9,712
Average number of full time employees 24 16
Key management personnel (Others) consists of the Board of Directors and the Executive Board.
The compensation paid or payables to key management personnel for employee services is
shown below:
TDKK 2022/23
Executive
Board
Board of
Directors
Total
Wages and salaries 1,303 75 1,378
Pension cost (defined contribution plans) 122 - 122
Other personnel costs - - -
Other social security costs - - -
Total remuneration to Executive Management 1,425 75 1,500
The Executive Board and the Board of Directors are not covered by Warrant Incentive Program.
TDKK 2021/22
Executive
Board
Board of
Directors
Total
Wages and salaries 1,176 150 1,326
Pension cost (defined contribution plans) 149 - 149
Other personnel costs - - -
Other social security costs - - -
Total remuneration to Executive Management 1,325 150 1,475
The Executive Board and the Board of Directors are not covered by Warrant Incentive Program.
PAGE 43
ANNUAL REPORT 2022-23YGGDRASIL
4. Staff costs
Share-based payments
To incentivise employees the Group
established share-based payment incen-
tive plans for employees.
At 30 June 2022, the Group had estab-
lished a Warrant Incentive Program.
In March 2022 the Board of Directors
approved a share-based program which
the Company granted warrants free of
charge which give the warrant holders
right to buy a specific number of shares
in Yggdrasil at a pre-determined price
subject to the vesting conditions.
The program is classified as equity-settled
as the settlement is predetermined to be
settled in shares and with no option for
cash-settlement for neither the Company
nor the employee.
The key terms and conditions related to
vesting of the grant under this program
are as follows;
• The granted warrants vest over up till
36 tranches. The program contains
a 12-month cliff period which means
that 12/36 vest when the employee
has 12 months of seniority. After
-
wards, the warrants vest linearly
each month, i.e. if an employee has
been employed for 6 months at
the time of grant, 6 months after
the grant 6/36 of the warrants vest.
Following the cliff period, 1/36 of the
warrants vest linearly each month.
•
In the event of an exit, i.e. sale of all
or more than 50% of the outstand-
ing share capital, a sale of all or the
majority of the Group’s assets or a
listing of the Company’s shares (IPO),
all unvested warrants shall be consid-
ered fully vested.
The warrants can be exercised at the
earlier of either an exit or in December
2026.
The remaining maximum term of the
program is 4.5 years.
The fair value of warrants granted in 2023
amounts to TDKK 1.106 (2021/22: TDKK
247). No key management personnel are
included in the warrant program. The
employees that have been given warrants
have the option to buy the predefined
amount of shares at a predefined value.
Reconciliation of outstanding equity-set-
tled awards:
Employees
(number of warrants)
2022/23 2021/22
Outstanding at 1 July 17,297 -
Granted during the
year
33,953 17,297
Forfeited during the
year
-5,100 -
Outstanding at 30
June
46,150 17,297
For warrants outstanding at the end of
the year, the remaining contractual life is 1
years and 9 months.
Measurement of fair value
Key input the valuation of warrants
includes excercise prices in a range of DKK
114-377.
The fair value of granted warrants is esti-
mated using the methods used for tax
purposes taking into account the terms
and conditions upon which the warrants
were granted and an interest rate of 11%.
The total amount recognised in the income
statement during 2022/23 was TDKK 91
(2021/22: TDKK 74).
PAGE 44
ANNUAL REPORT 2022-23YGGDRASIL
5. Financial income and costs
TDKK 2022/23 2021/22
Financial income
Interest income measured at amortised cost 11,098 102
Exchange rate adjustments, net 1,837 -
Total financial income 12,935 102
Financial costs
Interest expense measured at amortised cost 2,985 957
Exchange rate adjustments, net 26 390
Other financial expenses 1,286 491
Total financial expenses 4,297 1,837
PAGE 45
ANNUAL REPORT 2022-23YGGDRASIL
6. Tax on profit for the year
TDKK 2022/23 2021/22
Current tax
Current tax for the year -66,074 -38,096
Deferred tax adjustment for the year - 23
Income tax expense -66,074 -38,074
Reconciliation of effective tax rate
TDKK 2022/23 % 2021/22 %
Tax at the Danish tax rate of 22% -62,887 22.0% -32,466 22.0%
Tax effects of amounts which are not
deductible (taxable) in calculating taxable
income:
Effect of foreign tax rates -3,183 1.1% -5,584 3.8%
Non-deductible items -7 0.0% -24 0.0%
Non-taxable income 3 0.0% - -
Income tax expense -66,074 23.1% -38,074 25.8%
PAGE 46
ANNUAL REPORT 2022-23YGGDRASIL
7. Group composition
Name/legal form
Registrered
office
Equity
interest
Thordin ApS Aalborg 100%
Dvalin ApS Aalborg *100%
Nidhog ApS Aalborg *100%
Asgard ApS (formerly operating under the name Valhall ApS) Aalborg 100%
Valhall GK Japan 100%
Future Electricity Trading (GK) Japan 100%
Japan Power Trading (GK) Japan 100%
Raijin Energy (GK) Japan 100%
Yggdrasil India India 100%
* Including minority shares not assigned due to dispute
PAGE 47
ANNUAL REPORT 2022-23YGGDRASIL
8. Cash and cash equivalents
TDKK 2022/23 2021/22
Cash at bank 318,194 69,742
Counterparty deposits which can be released with a short timeframe 49,827 35,853
Total cash at bank and cash equivalents in cash flow statement 368,021 105,595
Deposits secured for guarantees - 14,499
Purchase price for shares deposited with bank 6,953 6,953
Carrying amount at 30 June 374,974 127,047
PAGE 48
ANNUAL REPORT 2022-23YGGDRASIL
9. Share capital
30 June 2023 30 June 2022
Number of
shares
Nominal
value DKK
Number of
shares
Nominal
value DKK
The share capital comprise:
A shares 2,818,554 2,818,554 2,818,554 2,818,554
B shares 254,446 254,446 254,446 254,446
All shares are fully paid. A shares carry one vote per share and right to dividends. B shares carry no
voting right or dividends.
DKK per share 30 June 2023 30 June 2022
Total dividend paid out for the year - 3.8
Total dividend proposed for the year 85.2 -
Total dividend proposed for the year 240,000 -
PAGE 49
ANNUAL REPORT 2022-23YGGDRASIL
10. Capital management
The current level of contributed capital is
deemed to be sufficient and appropriate
to support the principal activities of the
Group.
In order to satisfy the requirements of
the counterparties in the newly entered
market the share capital has to be mini-
mum of 400,000 EUR.
During the financial year some of the
posted cash collateral with the TSO’s have
been replaced by letter of credits. Letter of
credits have increased by 4,516,000 EUR
(Bank guarantees totalled EUR 7,196,000 at
30 June 2023, 2.68m EUR FY 21/22). Letter
of credits are issued and governed by the
banking arrangements of the Yggdrasil
Group. These banking arrangements have
cross securities within the Yggdrasil Group.
Cash management is managed on a group
level and management is responsible for
maintaining a comfortable cash buffer at
all times. If necessary the Company can
procure cash or letter of credit from the
holding company.
PAGE 50
ANNUAL REPORT 2022-23YGGDRASIL
11. Cash flow specifications
TDKK 2022/23 2021/22
Other adjustments
Warrants 91 74
Financial income -12,935 -102
Financial costs 4,297 1,837
Tax on profit for the year 66,074 38,074
57,527 39,883
Changes in net working capital
Changes in receivables 28,776 -83,902
Changes in trade and other payables -4,616 42,655
Changes in deposited cash 14,499 -14,499
38,659 -55,747
PAGE 51
ANNUAL REPORT 2022-23YGGDRASIL
12. Changes in liabilities from
financing activities
TDKK
Credit
institution
Shareholder
loan
Total
2022/23
Debt as at 1 July 2022 6,000 - 6,000
Proceeds
Repayments -6,000
Changes
Cash flows -6,000 - -6,000
Currency adjustments
Other
Non-cash flows - - -
Debt as at 30 June 2023 - - -
2021/22
Debt as at 1 July 2021 6,000 11,959 17,959
Proceeds - - -
Repayments - -11,959 -11,959
Changes - - -
Cash flows - -11,959 -11,959
Currency adjustments - - -
Other - - -
Non-cash flows - - -
Debt as at 30 June 2022 6,000 - 6,000
PAGE 52
ANNUAL REPORT 2022-23YGGDRASIL
13. Contractual obligations,
contingencies, etc.
Bank guarantees
Bank guarantees totals TDKK 179,282 at 30 June
2023 (2021/22: TDKK 31,470).
Security and charges
As security for bank debt, two of the Groups
companies (Nidhog ApS & Dvalin ApS) has issued
a corporate mortgage of TDKK 6,000 in the
companies’ recievables, the fixtures and fittings,
tools and equipment and intellectual property
rights. The total value of these assets as of 30
June 2023 constitutes TDKK 30,421.
Leases
Regarding lease liabilities refer to the parent
company financial statements.
PAGE 53
ANNUAL REPORT 2022-23YGGDRASIL
14. Financial risks and the
use of derivative financial
instruments
As a result of its operations, the Group
is exposed to number of financial risks,
including commodity price, currency,
interest rate, liquidity and credit risks via
the operational entities, whom all trade in
power.
The Group has ensured that a comprehen-
sive risk framework is in place to manage
these risks.
Our growth strategy involves adding
new markets to the portfolio and stead-
ily increasing investments. Each new
market adds to the market risk, but if the
price correlation to existing markets is
low, Yggdrasil’s combined risk exposure
decreases. To limit our risk exposure when
entering a new market, we follow a well-de-
fined risk management procedure. Market
risk management is divided into the follow-
ing focus areas:
• Market diversification
• Geographical spread
• Adding new markets
•
Increasing the portfolio / investments
Market risk management
Our highest priority at Yggdrasil is to
diversify our portfolio, which will enable
us to better manage risk exposure, mini-
mise losses, and create on-going positive
returns. We monitor our power markets
carefully to prevent substantial financial
losses.
Market diversification
Market diversification is a very important
focus point in Yggdrasil’s risk manage-
ment. We focus on spreading investments
in many different power markets to avoid
that a single power market becomes too
dominant in our portfolio. Hence, for each
single market added to the portfolio, we
dilute market risk further and reduce
the potential of financial losses without
compromising the gains.
Geographical spread
Yggdrasil is active in three continents, and
trading power in markets geographically
far apart is one of the greatest strengths
in our portfolio. Power prices are highly
dependent on weather conditions, and big
leaps in prices are often caused by unfore-
seen weather changes. Hence, markets
located in the same regions are affected
by the same weather conditions, which
makes investments correlate.
Therefore, when deciding on a new market,
the graphical market location is decisive.
By spreading investments in different
continents, the risk exposure to the same
weather systems is diluted. Uncorrelated
weather conditions lead to uncorrelated
investments.
Adding new markets
To follow our growth strategy, we contin-
uously add new markets to the portfolio.
Each market has its own rules and require-
ments, so trading a new market is risky. To
manage the risk of selecting and entering
a new market, we go through some initial
steps.
Initially, it is carefully analysed if the influ-
ence of the weather is specific to the new
market only and not spilling over into our
existing markets.
Secondly, test trades are conducted in the
new market to verify specific trading rules,
the settlement process with counterpar-
ties, collateral requirements, and other
market-specific details.
Thirdly, we need to experience how the
market reacts to our trading, so we fine-
tune our trading strategies.
When the above steps have been
completed successfully, the new market
is included in the Yggdrasil portfolio.
Increasing portfolio and investments
A new market gives Yggdrasil new invest-
ment opportunities. Once a new market
is included in the Yggdrasil portfolio, we
start trading the market and increasing
investments.
For our diversification strategy to work, the
investments in each of our markets should
be at the same risk level to balance the
total risk exposure. When the investments
in the new market reach the same level as
the existing portfolio, the market diversifi-
cation is higher than before and hence, the
overall risk exposure decreases, diluting
Yggdrasil’s risk profile.
Each new market supports growth in two
ways. It offers the potential of increased
investments and positive earnings without
the full impact of higher risk. Further, for
each new market added, we can increase
investments in all our markets as Yggdra-
sil’s overall risk profile is further diluted.
PAGE 54
ANNUAL REPORT 2022-23YGGDRASIL
15. Market risk
Commodity price risk
There is a risk related to open trading positions including financial derivative contracts
due to changes in market prices. The fluctuation risk is limited due to short term positions.
The fair value of financial derivative commodity contracts is assessed at 0 based on a level
2 fair value assessment.
The open positions are settled at 1 July with net results of TDKK 587 (2021/22: TDKK -42)
whereof a negative of TDKK -38 is related to the settlement of derivative contracts (2021/22:
TDKK -219). In addition to the above daily trading positions, the subsidiary has agreed
options to supply power in a special area (other markets) until end of August. The options
are purchased close to year end, and the cost price is therefore assessed to represent fair
value and consequently a market value of DKK 0.
Foreign exchange risks
The currency risk is low due to trading are carried out in same currencies (USD, GBP, Euro,
JPY, and INR) through the operational entities, and therefore no hedging of trading trans-
actions and receivables/payables is performed.
Net equity investments in subsidiaries are partly hedged through forward currency deriv-
atives.
At 30 June, open positions including financial derivative contracts can be specified as:
2022/23 2021/22
Net assets
Derivative
contracts
Net assets
Derivative
contracts
Currency
USD 6,124 - 4,483 400
GBP 7,123 - 6,606 600
EUR 5,818 - 5,132 -
JPY 863,093 - 604,486 -
INR 23,627 - - -
PAGE 55
ANNUAL REPORT 2022-23YGGDRASIL
15. Market risk
Fair value of currency derivatives used for this hedging amounts to TDKK 0 at 30 June 2023
(30 June 2022: fair value of TDKK -394) based on a level 2 fair value assessment comprising
USD and GBP forward contracts, which falls due within 1 year from the balance sheet date.
The development can be specified as:
TDKK 2022/23 2021/22
Fair value at 1 July -259 -394
Settled during the year 259 2,040
Fair value adjustments - -1,905
Total - -259
Monetary items and sensitivity
Impact on post tax profit Impact on equity
TDKK 2022/23 2021/22 2022/23 2021/22
DKK/USD +/- 10% 3,252 2,504 3,252 2,504
DKK/GBP +/- 10% 4,789 4,467 4,789 4,467
DKK/EUR +/- 10% 3,376 2,978 3,376 2,978
DKK/JPY +/- 10% 3,178 2,480 3,178 2,480
DKK/INR +/- 10% 153 - 153 -
Interest rate risk
Due to the limited magnitude of the loans as well as the short-term nature of the business
activities the Group does not consider this risk to be significant. The Group funds the
company via equity and debt. The debt carries no or a variable interest rate and as such
interest rate risk exists. This exposure is not considered material.
PAGE 56
ANNUAL REPORT 2022-23YGGDRASIL
16. Credit risk
Credit risk
There is a risk that a counterparty to a financial
instrument is unable to fulfil its obligations and
thereby will inflict a loss on the Company.
Counterparties comprise of clearing-houses,
clearings banks, transmission system operators,
independent system operators and regional
transmission organizations. The Group uses
banks and clearings banks with an A category
rating from public rating agencies.
The credit risk of financial receivables corre-
sponds to the values of trade receivables,
deposits, other receivables and cash recog
-
nised on the balance sheet. No historical loss has
occurred and no provision for loss was recog-
nised at 30 June 2023 and at 30 June 2022.
Due to the type of counterparties and as
commodity exchanges generally settle fair
values on a daily basis, the Group considers its
credit exposure to be insignificant. Individual
counterparty’s ratings with public rating agen-
cies are supporting this as a significant part of
counterparties are rated in A category (16 out of
total 35 counterparties). Number of counterpar-
ties rated in B category are limited (6 out of total
35 counterparties). Ratings are not available for
13 counterparties.
PAGE 57
ANNUAL REPORT 2022-23YGGDRASIL
17. Liquidity risk
Liquidity risk management implies main-
taining sufficient cash and marketable
securities and the availability of funding
through an adequate amount of commit-
ted credit facilities to meet obligations
when due and to close out market posi-
tions.
Management monitors rolling forecasts of
the Group’s liquidity reserve and cash and
cash equivalents on the basis of expected
cash flows. The Group aims to diligently
monitor balance sheet liquidity ratios,
aligning them with internal and external
regulatory requirements, while proactively
developing and executing effective debt
financing plans to sustain its operations
and foster continued growth.
The tables below classify the group’s
financial liabilities and commitments into
relevant maturity groupings based on their
contractual maturities.
The amounts disclosed in the table are
the contractual undiscounted cash flows.
Balances due within 12 months equal
their carrying balances as the impact of
discounting is not significant.
Carrying
amount
Cash flows including interest
TDKK 0-1 year 1-5 years over 5 years Total
Maturities of liabilities and com-
mitments
2022/23
Derivative financial instruments:
Forward currency derivates - - - - -
Non-derivative financial
instruments:
Credit institution - - - - -
Trade payables 24,192 24,192 - - 24,192
Other payables 32,150 32,150 - - 32,150
Total 56,342 56,342 - - 56,342
2021/22
Derivative financial instruments:
Forward currency derivates 259 259 - - 259
Non-derivative financial
instruments:
Credit institution 6,000 6,161 - - 6,161
Trade payables 49,812 49,812 - - 49,812
Amounts owed to shareholders - - - - -
Other payables 11,145 11,145 - - 11,145
Total 67,216 67,377 - - 67,377
The analysis is based on contractual cash
flows including interest payments.
Fair value of trade payables and other
payables is determined to equal their
carrying amount.
The payment obligations are expected to
be settled through cash inflows from oper-
ating activities.
PAGE 58
ANNUAL REPORT 2022-23YGGDRASIL
18. Financial instruments by
category
TDKK 2022/23 2021/22
The group holds the following financial instruments:
Financial assets
Carried at amortised cost
Receivables 95,870 122,835
Cash and cash equivalents 374,974 127,047
Financial assets at amortised cost 470,844 249,882
Financial liabilities
Carried at amortised cost
Credit institutions - 6,000
Trade payables 24,192 49,812
Other payables 32,150 11,145
Financial liabilities at amortised cost 56,342 66,957
Carried at fair value through profit or loss (FVPL)
Financial derivatives - 259
Financial liabilities at fair value through profit or loss (FVPL) - 259
Total financial liabilities 56,342 67,216
Financial assets and financial liabilities above are not offset, and therefore gross amounts are
recognised in the balance sheet.
PAGE 59
ANNUAL REPORT 2022-23YGGDRASIL
19. Fair value measurement
TDKK
Level
1
Level
2
Level
3
Total
2022/23
Derivatives
measured at
fair value
Foreign ex-
change forward
- - - -
Total - - - -
2021/22
Derivatives
measured at
fair value
-
Foreign ex-
change forward
- -259 - -259
Total - -259 - -259
Fair value hierarchy
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.
The Group has not transferred between
levels of the fair value hierarchy during
2022/23.
The fair values are based on following
methods:
Level 1: Quoted (unadjusted) market prices
in active markets for identical assets or
liabilities.
Exchange-traded derivatives are valued
using closing prices provided by the
exchanges at the balance sheet date.
These derivatives are categorised within
level 1 of the fair value hierarchy. Exchange-
traded derivatives are typically considered
settled through the payment or receipt of
variation margin.
Level 2: Valuation techniques for which the
lowest level input that is significant to the
fair value measurement is directly or indi-
rectly observable.
Derivatives designated to level 2 include
power trades on markets which do not
have an intraday market, on markets with
intraday market but with low liquidity
and on markets with significant spread
between bid and ask prices. Financial
swaps and physical commodity sale and
purchase contracts including commodity
forwards and options are generally valued
using readily available information in the
public markets and if necessary, quota-
tions provided by brokers and price index
developers. These quotes are corrobo-
rated with market data and are predomi-
nately categorised within level 2 of the fair
value hierarchy.
The method applied is consistent with
prior periods
Level 3: Valuation techniques for which the
lowest level input that is significant to the
fair value measurement is unobservable.
No assets or liabilities are measured to fair
value by using level 3 inputs at 30 June
2023 or 30 June 2022.
PAGE 60
ANNUAL REPORT 2022-23YGGDRASIL
20. Related party transactions
Yggdrasil Commodities ApS’ related
parties comprise the Board of Direc
-
tors, Executive Board, their close family
members, subsidiaries (see note 7) and the
following controlling holding companies:
Søren Bondo Andersen Holding ApS
Leharparken 85
9200 Aalborg SV
Denmark
SAJ Finans ApS
Hornbækvej 6
9270 Klarup
Denmark
Transactions with related parties
Related party transactions include salaries
to Management (see note 4).
Amounts owed by and to subsidiaries
are specified in the balance sheet of the
Parent Company.
The controlling holding companies have
provided guarantees to secure loan
from credit institution amount to TDKK 0
(2021/22: TDKK 6,000).
PAGE 61
ANNUAL REPORT 2022-23YGGDRASIL
21. Subsequent events
No events have occurred after the balance
sheet date to this date that would influ-
ence the assessment and evaluation of
this annual report in any substantial way.
PAGE 62
ANNUAL REPORT 2022-23YGGDRASIL
Parent com-
pany financial
statements
1 July 2022 – 30 June 2023
PAGE 63
ANNUAL REPORT 2022-23YGGDRASIL
Parent company statement of
comprehensive income
For the year ended 30 June 2023
Profit or loss
TDKK Notes 2022/23 2021/22
Revenue 3 92,530 14,417
Staff costs 4 -16,735 -9,712
Administrative expenses -8,952 -4,844
Operating income/loss 66,843 -139
Income from equity investments in subsidiaries 167,212 109,295
Financial income 5 1,611 872
Financial costs 5 -1,033 -442
Profit before tax 234,633 109,586
Tax on profit for the year 6 -14,857 -88
Profit for the year 219,776 109,498
PAGE 64
ANNUAL REPORT 2022-23YGGDRASIL
Parent company statement of
comprehensive income
For the year ended 30 June 2023
Comprehensive income
TDKK Notes 2022/23 2021/22
Profit for the year 219,776 109,498
Other comprehensive income that will be reclassi-
fied subsequently to the profit or loss
Value adjustment of hedging instruments 259 -1,905
Tax effect of equity adjustments 57 419
Exchange rate adjustments on translation of sub-
sidiaries
-12,573 2,450
Total comprehensive income 207,519 110,463
PAGE 65
ANNUAL REPORT 2022-23YGGDRASIL
Parent company Balance Sheet
For the year ended 30 June
Balance sheet (asset)
TDKK Notes 30/6 2023 30/6 2022
Assets
Non-current assets
Equity investments in subsidiaries 7 218,566 109,716
Total non-current assets 218,566 109,716
Current assets
Deposits 253 93
Amounts owed by subsidiaries 83,662 52,893
Income tax receivable 0 600
Other receivables 762 147
Total receivables 84,678 53,733
Cash and cash equivalents 8 137,012 22,643
Total current assets 221,690 76,375
Total assets 440,255 186,092
Balance sheet (eq. and liab.)
TDKK Notes 30/6 2023 30/6 2022
Equity and liabilities
Contributed capital 10 3,073 3,073
Reserve for net revaluation under equity method 29,220 75,491
Hedge reserve - -202
Retained earnings 81,060 67,494
Proposed dividend for the year 240,000 -
Total equity 353,352 145,856
Amounts owed to subsidiaries 51,439 28,935
Derivative financial instruments - 259
Income tax payable 14,068 -
Other payables 21,396 11,042
Total current liabilities 86,903 40,236
Total liabilities 86,903 40,236
Total equity and liabilities 440,255 186,092
PAGE 66
ANNUAL REPORT 2022-23YGGDRASIL
Parent Company statement of
changes in equity
Changes in equity (fin. year)
TDKK
Con-
tributed
capital
Reserve for net
revaluation
under the
equity method
Hedge
reserve
Retained
earnings
Proposed
dividends
for the year
Total
equity
Equity at 1 July 2022 3,073 75,491 -202 67,494 - 145,856
Profit for the year - -33,698 - 13,475 240,000 219,776
Value adjust. of hedging
instruments
- - 258 - - 258
Tax effect, equity adjust. - - -56 - - -56
Exchange rate adjust. sub-
sidiaries
- -12,573 - - - -12,573
Total comprehensive
income
- -46,271 202 13,475 240,000 207,405
Warrants - - - 91 - 91
Total transactions with
shareholders
- - - 91 - -
Equity at 30 June 2023 3,073 29,220 - 81,060 240,000 353,352
Changes in equity (fin. year)
TDKK
Con-
tributed
capital
Reserve for
net revaluation
under the
equity method
Hedge
reserve
Retained
earnings
Total eq-
uity
Equity at 1 July 2021 3,073 16,246 -433 16,433 35,319
Transfer - - 125 -125 -
Profit for the year - 56,795 - 52,703 109,498
Value adjust. of hedging
instruments
- - 135 -2,040 -1,905
Tax effect, equity adjust. - - -30 449 419
Exchange rate adjust.
subsidiaries
- 2,450 - - 2,450
Total comprehensiveincome - 59,245 231 50,987 110,463
Warrants - - - 74 74
Total transactions with shareholders - - - 74 74
Equity at 30 June 2022 3,073 75,491 -202 67,494 145,856
PAGE 67
ANNUAL REPORT 2022-23YGGDRASIL
Parent company statement of cash
flows
For the year ended 30 June 2023
Cash flows
TDKK Notes 2022/23 2021/22
Profit/loss for the year 219,776 109,498
Other adjustments of non-cash operating items 9 -152,842 -109,642
Changes in working capital 9 18,048 -15,927
Cash generated from operations before
financials
84,982 -16,071
Paid net finance income/finance costs -345 -1,605
Cash flow from ordinary activities 84,637 -17,676
Paid taxes during the year -246 -
Cash flow from operating activities 84,391 -17,676
Equity investments in subsidiaries -2,120 -4,734
Dividends received 47,910 52,500
Cash flow from investment activities 45,790 47,766
Change in intercompany loan -8,265 -20,056
Repayment of loan from shareholders - -11,959
Cash flow from financing activities -8,265 -32,015
Changes in cash and cash equivalents 121,916 -1,925
Cash and cash equivalents at 1 January 1,190 3,115
Cash and cash equivalents at 31 December 8 123,106 1,190
PAGE 68
ANNUAL REPORT 2022-23YGGDRASIL
Contents of the notes to the parent
company financial statements
Overview
of notes
Summary of significant accounting policies
Estimation uncertainties and judgements
Revenue
Staff costs
Financial income and costs
Tax on profit for the year
Equity investments in subsidiaries
Cash and cash equivalents
Cash flow specifications
Changes in liabilities from financing activities
Liabilities
Contractual obligations, contingencies, etc.
Financial instruments by category
Financial risks and the use of derivative financial instruments
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
69
73
74
75
77
78
79
80
81
82
83
84
85
86
PAGE 69
ANNUAL REPORT 2022-23YGGDRASIL
1. Summary of significant
accounting policies
The annual report for the financial year
1 July 2022 – 30 June 2023 has been
prepared in accordance with International
Financial Reporting Standards as adopted
by the EU and additional Danish disclosure
requirements. The Group is classified as a
reporting class c entity according to the
Danish Financial Statements Act.
Yggdrasil Commodities ApS’ annual report
is presented in TDKK unless otherwise
stated.
For all periods up to and including the year
ended 30 June 2022 the Company and its
subsidiaries prepared their separate and
individual financial statements in accord-
ance with IFRS.
Changes in accounting policies
Amounts owed to third parties amount-
ing to TDKK 6,953 as of 30 June 2022 has
been reclassified to other payables in the
balance sheet.
Changes in accounting policies has no
impact on profit before tax, balance sheet
or equity.
Foreign currency translation
Transactions in foreign currencies are
translated into the functional currency at
the exchange rates at the transaction date.
Monetary assets and liabilities denomi-
nated in foreign currencies are translated
into functional currency at the exchange
rates at the reporting date.
Foreign currency differences are gener-
ally recognised in profit and loss except
for certain equity instruments available
for sale, financial liabilities and hedging
instruments.
Derivative financial instruments
Derivative financial instruments are
initially recognised at fair value on the date
on which a derivative contract is entered
into and are subsequently remeasured at
fair value.
Derivatives are carried as financial assets
when the fair value is positive and as finan-
cial liabilities when the fair value is nega-
tive.
The fair value adjustments of sales and
purchase commodity contracts that are
derivatives are recognised in the state-
ment of profit or loss as net income/loss
from commodity derivatives. Trading
costs and other costs directly related
to the net income are recognised corre-
spondingly.
The fair value adjustments of derivative
financial instruments, such as forward
currency contracts, that are designated
to hedge its foreign currency risks arising
from net investments in subsidiaries. are
recognised directly in equity.
Revenue
Revenue comprises management fees and
royalties from the subsidaries within the
Group.
In the process of applying IFRS 15, the
Company identifies contracts, identifies
performance obligations, determines the
transaction price, allocate the transaction
price and recognise accordingly.
Services provided to the subsidiaries typi-
cally include one performance obligation
that is recognized on a straight-line basis
as revenue over the period for which the
services are provided.
The transaction price is the contractually
agreed price excluding amounts collected
on behalf of third parties, e.g. VAT.
Staff costs
Staff expenses comprise direct wages
and salaries, pension contributions,
Income
statement
PAGE 70
ANNUAL REPORT 2022-23YGGDRASIL
1. Summary of significant
accounting policies
social security contributions, sick leave,
bonuses, and share-based payments
which are recognized in the year in which
the associated services are rendered by
employees of the Group.
Share-based payments
Employees of the Parent Company
receive remuneration in share-based
payments, whereby employees render
services as consideration for warrants
(equity-settled transactions). The
cost of equity-settled transactions is
determined by the grant date fair value
using option-pricing valuation model.
In the financial statements the cost is
recognised in staff costs together with
a corresponding increase in equity over
the period in which the service condi-
tions are fulfilled (the vesting period). The
cumulative expense recognised for equi-
ty-settled transactions at each reporting
date until the vesting date reflects the
extent to which the vesting period has
expired and the best estimate of the
number of equity instruments that will
ultimately vest. The expense or credit
in the income statement for a period
represents the movement in cumulative
expenses recognised at the beginning
and at the end of that period.
Administrative expenses
Administrative expenses comprise
expenses incurred during the year for
management and administration of the
Group, including expenses for office
premises, marketing, office expenses etc.
Finance income and costs
Finance income and costs comprise
interest income and expense, paya-
bles and transactions denominated
in foreign currencies, amortisation of
financial assets and liabilities as well
as surcharges and refunds under the
on-account tax scheme, etc.
Tax on profit for the year
Tax for the year comprises current tax
for the year and changes in deferred tax,
including changes in tax rates. The tax
expense relating to the profit for the year
is recognised in the income statement
at the amount attributable to the profit
for the year and directly in equity at the
amount attributable to entries directly in
equity.
The Company is jointly taxed with Danish
Group companies. The tax effect of the
joint taxation with the subsidiaries is
allocated to Danish enterprises showing
profits or losses in proportion to their
taxable incomes.
Balance sheet
Development projects
Costs of development at the Company’s
own expense are capitalised if the projects
are significant, clearly defined and iden-
tifiable, where the technical utilisation
degree and a potential future market or
development potential in the Company
are evidenced. It is also required that the
Company intends to use the outcome of
the project.
The cost of such projects includes direct
wages and a share of the Company’s indi-
rect costs.
Capitalised development costs are amor-
tised upon completion of the development
work on a straight-line basis over the esti-
mated useful lives.
For non-significant projects development
costs are expensed.
IT equipment and software
IT equipment and software are measured
at cost, added net revaluations and less
accumulated depreciation and impair-
ment losses. The basis of depreciation is
cost, added net revaluations and less any
expected residual value after the end of
the useful life.
Cost comprises the purchase price and
any costs directly attributable to the
acquisition until the date when the asset
is available for use.
The basis of depreciation, which is calcu-
lated as cost less any residual value, is
depreciated on a straight-line basis over
the expected useful life.
Non-significant costs are expensed.
PAGE 71
ANNUAL REPORT 2022-23YGGDRASIL
1. Summary of significant
accounting policies
Leases
The Company assesses at contract incep-
tion 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 Company applies a single recogni-
tion and measurement approach for all
leases, except for short-term leases and
leases of low-value assets. The Company
recognises lease liabilities representing
obligations to make lease payments and
right-of-use assets representing the right
to use the underlying assets.
The Company applies the short-term lease
recognition exemption to its short-term
leases of machinery and equipment (i.e.,
those leases that have a lease term of 12
months or less from the commencement
date and do not contain an extension or a
purchase option). It also applies the lease
of low-value assets recognition exemp-
tion to leases of office equipment that
are considered to be of low value. Lease
payments on short-term leases and leases
of low-value assets are recognised as
expense on a straight-line basis over the
lease term.
Investments
Equity investments in subsidiaries and
associates are measured at the propor-
tionate share of the entities’ net asset
value calculated in accordance with the
Group’s accounting policies plus or minus
unrealised intra-group gains or losses and
plus or minus the residual value of posi-
tive and negative goodwill calculated in
accordance with the acquisition method.
Equity investments in subsidiaries and
associates with negative net asset values
are measured at DKK 0, and any receiv-
ables from these entities are written
down to the extent that the receivables
are deemed irrecoverable. To the extent
that the Parent Company has a legal or
constructive obligation to cover a nega-
tive balance exceeding the receivable, the
residual amount is recognised as provi-
sions.
Receivables
Receivables are measured at amortised
cost.
Write-downs are made to counter losses
on the basis of expected credit losses
using the simplified expected credit loss
model.
Receivables are monitored on an ongoing
basis in accordance with the Company’s
risk policy.
Prepayments
Prepayments comprise prepayment of
costs incurred relating to subsequent
financial years.
Equity
Dividends
The expected dividend payment for the
year is disclosed as a separate item under
equity.
Corporation tax and deferred tax
Current tax payable and receivable is
recognised in the balance sheet as tax
computed on the taxable income for
the year, adjusted for tax on the taxable
income of prior years and for tax paid on
account.
Deferred tax is measured using the
balance sheet liability method on all
temporary differences between the carry-
ing amount and the tax value of assets and
liabilities measured on the planned use
of the asset or settlement of the liability,
respectively. Deferred tax assets, including
the tax value of tax loss carryforwards, are
recognised at the expected value of their
utilisation within the foreseeable future;
either as a set-off against tax on future
income or as a set-off against deferred tax
liabilities in the same legal tax entity. Any
deferred net assets are measured at net
realisable value.
Deferred tax is measured in accordance
with the tax rules and at the tax rates
applicable at the balance sheet date when
the deferred tax is expected to crystallise
as current tax. Changes in deferred tax as
a result of changes in tax rates are recog-
nised in the income statement, statement
of other comprehensive or equity, respec-
tively.
Liabilities
Financial liabilities are recognised at the
date of borrowing at fair value, corre-
sponding to the proceeds received less
PAGE 72
ANNUAL REPORT 2022-23YGGDRASIL
1. Summary of significant
accounting policies
transaction costs paid. In subsequent
periods, the financial liabilities are meas-
ured at amortised cost, corresponding to
the capitalised value using the effective
interest rate. Accordingly, the difference
between cost and the nominal value is
recognised in the income statement over
the term of the loan together with interest
expenses.
Other liabilities are measured at amortised
cost, which usually corresponds to nomi-
nal value.
Fair Value measurement
The Company uses fair value for certain
disclosures and measurement of financial
instruments. Fair value is the price that
would be received to sell an asset or paid
to transfer a liability in an orderly transac-
tion between market participants at the
measurement date.
The fair value measurement is based on
the assumption 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 advanta
-
geous market for the asset or liability. The
fair value of an asset or a liability is meas-
ured using the assumptions that market
participants would use when pricing the
asset or liability, presuming that they are
acting in their economic best interest.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are availa-
ble to measure fair value, thus 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 are categorised
within the fair value hierarchy (levels 1, 2
and 3), described as follows, on the basis
of the lowest level input that is signifi-
cant 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.
Cash flow
statement
The cash flow statement shows the Compa-
ny’s cash flows from operating, investing and
financing activities for the year, the year’s
changes in cash and cash equivalents as well
as the Company’s cash and cash equiva-
lents at the beginning and end of the year.
Cash flows from operating activities
Cash flows from operating activities are
calculated as the profit for the year adjusted
for non-cash operating items, changes in
working capital and corporation tax paid.
Cash flows from investing activities
Cash flows from investing activities
comprise payments in connection with
acquisitions and disposals of entities and
activities, intangible assets, property, plant
and equipment and investments.
Cash flows from investing activities
Cash flows from financing activities
comprise changes in size or composition
of the Company’s contributed capital
and costs in this respect as well as raising
of loans, instalments on interest-bear-
ing debt and distribution of dividends to
owners.
Cash and cash equivalents
Cash and cash equivalents comprise cash
and short-term marketable securities with
a short term, which are easily convertible
into cash and which are subject to only an
insignificant risk of changes in value.
PAGE 73
ANNUAL REPORT 2022-23YGGDRASIL
2. Estimation uncertainties
and judgements
Dispute investments
In accordance with the shareholder agree-
ments for the subsidiaries Dvalin ApS and
Nidhog ApS, an event has occurred which
has had the outcome that the Company
has purchased shares held by minority
shareholders in the subsidiaries at a total
purchase price of DKK 6.9 million. The
minority shareholders have objected to
this, why the ownership of the shares at
year end is therefore legally questioned.
For accounting purposes, the assess-
ment has been made that the Company,
based on the provisions laid down in the
shareholder agreements, exercises control
over the shares owned by minority share-
holders, and against this background, the
subsidiaries Dvalin ApS and Nidhog ApS
were recognised as fully-owned subsidiar-
ies at 1 April 2021, and the purchase prices
were recognised as liabilities.
The assessment that the Company exer-
cises control over the shares owned by
minority shareholders is supported by an
opinion from two external lawyers.
The outcome of the dispute with the
minority shareholders may have the
outcome that the provisions laid down in
the shareholder agreements are disre-
garded. This may have an impact on
whether the Company exercises control
over the shares owned by minority share-
holders and the purchase prices.
The consolidated income statement is
not impacted by the outcome of the legal
dispute.
The income statement for the Parent
Company can be impacted due to recog-
nition based on ownership. Recognised
results from shares acquired affect results
for the financial year 2022/23 by DKK 33.3
million and for the financial year 2021/22
by DKK 11.6 million.
PAGE 74
ANNUAL REPORT 2022-23YGGDRASIL
3. Revenue
TDKK 2022/23 2021/22
Net revenue from management fee from subsidiaries 30,102 14,417
Royalty from subsidiaries 62,428 -
Revenue 92,530 14,417
Revenue consists of management fees and
royalties to the parent’s subsidiaries and
is recognised over time.
The consideration is partly fixed and partly
dependent on financial performance in
the subsidiaries. Typically, the payment
terms are 1-30 days and do not include
financing components. Due to the nature
of the performance obligations there are
no return, refunds, warranty, or other simi-
lar obligations related to the revenue.
PAGE 75
ANNUAL REPORT 2022-23YGGDRASIL
4. Staff costs
TDKK 2022/23 2021/22
Wages and salaries 15,375 8,952
Share-based payments 91 74
Pension cost (defined contribution plans) 1,116 582
Other social security costs 153 104
Total 16,735 9,712
Average number of full time employees 22 16
Key management personnel (Others) consists of the Board of Directors and the Executive Board.
The compensation paid or payables to key management personnel for employee services is shown
below:
TDKK 2022/23
Executive
Board
Board of
Directors
Total
Wages and salaries 1,303 75 1,378
Pension costs 122 - 122
Other social security costs - - -
Total remuneration to Executive Management 1,425 75 1,500
The Executive Board and the Board of Directors are not covered by Warrant Incentive Program.
TDKK 2021/22
Executive
Board
Board of
Directors
Total
Wages and salaries 1,176 150 1,326
Pension costs 149 - 149
Other social security costs - - -
Total remuneration to Executive Management 1,325 150 1,475
PAGE 76
ANNUAL REPORT 2022-23YGGDRASIL
4. Staff costs
Share-based payments
To incentivise employees the Group
established share-based payment incen-
tive plans for employees.
At 30 June 2022, the Group had estab-
lished a Warrant Incentive Program.
In March 2022 the Board of Directors
approved a share-based program which
the Company granted warrants free of
charge which give the warrant holders
right to buy a specific number of shares
in Yggdrasil at a pre-determined price
subject to the vesting conditions.
The program is classified as equity-settled
as the settlement is predetermined to be
settled in shares and with no option for
cash-settlement for neither the Company
nor the employee.
The key terms and conditions related to
vesting of the grant under this program
are as follows;
• The granted warrants vest over up till
36 tranches. The program contains
a 12-month cliff period which means
that 12/36 vest when the employee
has 12 months of seniority. After
-
wards, the warrants vest linearly each
month, i.e. if an employee has been
employed for 6 months at the time of
grant, 6 months after the grant 6/36
of the warrants vest. Following the cliff
period, 1/36 of the warrants vest line-
arly each month.
•
In the event of an exit, i.e. sale of all
or more than 50% of the outstand-
ing share capital, a sale of all or the
majority of the Group’s assets or a
listing of the Company’s shares (IPO),
all unvested warrants shall be consid-
ered fully vested.
The warrants can be exercised at the
earlier of either an exit or in December
2026.
The remaining maximum term of the
program is 4.5 years.
The fair value of warrants granted in 2023
amounts to TDKK 1,106 (2021/22: TDKK
247). No key management personnel are
included in the warrant program. The
employees that have been given warrants
have the option to buy the predefined
amount of shares at a predefined value.
Reconciliation of outstanding equity-set-
tled awards:
Employees (number
of warrants)
2022/23 2021/22
Outstanding at 1 July 17,297 -
Granted during the
year
33,953 17,297
Forfeited during the
year
-5,100 -
Outstanding at 30
June
46,150 17,297
For warrants outstanding at the end of
the year, the remaining contractual life is 1
years and 9 months.
Measurement of fair value
Key input the valuation of warrants
includes excercise prices in a range of DKK
114-377.
The fair value of granted warrants is esti-
mated using the methods used for tax
purposes taking into account the terms
and conditions upon which the warrants
were granted and an interest rate of 11%.
The total amount recognised in the income
statement during 2022/23 was TDKK 91
(2021/22: TDKK 74).
PAGE 77
ANNUAL REPORT 2022-23YGGDRASIL
5. Financial income and costs
TDKK 2022/23 2021/22
Financial income
Interest income measured at amortised cost 688 1
Exchange rate adjustments, net 923 871
Total financial income 1,611 872
Financial costs
Interest expense measured at amortised cost 947 282
Exchange rate adjustments, net - -
Other financial expenses 86 160
Total financial expenses 1,033 442
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ANNUAL REPORT 2022-23YGGDRASIL
6. Tax on profit for the year
TDKK 2022/23 2021/22
Current tax
Current tax for the year -14,857 -88
Deferred tax adjustment for the year - -
Income tax expense -14,857 -88
Reconciliation of effective tax rate
TDKK 2022/23 % 2021/22 %
Tax at the Danish tax rate of 22% -51,619 22.0% -24,109 22.0%
Tax effects of amounts which are not
deductible (taxable) in calculating taxable
income:
Effect of foreign tax rates - 0.0% - 0.0%
Non-deductible items -25 0.0% -24 0.0%
Non-taxable income 36,787 -15.7% 24,045 -22.0%
Income tax expense -14,857 6.3% -88 0.0%
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ANNUAL REPORT 2022-23YGGDRASIL
7. Equity investments in
subsidiaries
TDKK 2022/23 2021/22
Cost at 1 July 34,225 29,491
Additions 2,120 4,734
Dispossals - -
Cost at 30 June 36,345 34,225
Value adjustments at 1 July 75,491 16,246
Profit for the year 167,212 109,295
Dividends paid -47,910 -52,500
Currency adjustments -12,573 2,450
Disposals - -
Value adjustments at 30 June 182,220 75,491
Carrying amount at 30 June 218,566 109,716
Name/legal form
Registrered
office
Equity interest
Thordin ApS Denmark 100%
Dvalin ApS Denmark *100%
Nidhog ApS Denmark *100%
Asgard ApS (formerly operating under the name Valhall ApS) Denmark 100%
Valhall GK Japan 100%
Future Electricity Trading (GK) Japan 100%
Japan Power Trading (GK) Japan 100%
Raijin Energy (GK) Japan 100%
Yggdrasil Commodities India Ptd. India 100%
* Including minority shares not assigned due to dispute
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ANNUAL REPORT 2022-23YGGDRASIL
8. Cash and cash equivalents
TDKK 2022/23 2021/22
Cash at bank 123,106 1,190
Counterparty deposits which can be released with a short timeframe - -
Total cash at bank and cash equivalents in cash flow statement 123,106 1,190
Deposits secured for guarantees - 14,499
Purchase price for shares deposited with bank 6,953 6,953
Carrying amount at 30 June 130,059 22,643
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ANNUAL REPORT 2022-23YGGDRASIL
9. Cash flow specifications
TDKK 2022/23 2021/22
Other adjustments
Warrants 91 74
Financial income -1,611 -951
Financial costs 1,033 442
Tax on profit for the year 14,857 88
Tax on profit for the year -167,212 -109,295
Adjustment of subsidiary equity value -152,842 -109,642
Changes in net working capital
Changes in receivables 148 338
Changes in trade and other payables 3,401 -1,765
Changes in deposited cash 14,499 -14,499
18,048 -15,927
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ANNUAL REPORT 2022-23YGGDRASIL
10. Changes in liabilities from
financing activities
TDKK Shareholder loan Total
2022/23
Debt as at 1 July 2022 - -
Proceeds - -
Repayments - -
Changes - -
Cash flows - -
Currency adjustments - -
Other - -
Non-cash flows - -
Debt as at 30 June 2023 - -
2021/22
Debt as at 1 July 2021 11,959 11,959
Proceeds - -
Repayments -11,959 -11,959
Changes - -
Cash flows -11,959 -11,959
Currency adjustments - -
Other - -
Non-cash flows - -
Debt as at 30 June 2022 - -
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ANNUAL REPORT 2022-23YGGDRASIL
11. Liabilities
TDKK
Carrying
amount
Cash flows
including interest
0-1 year
1-5
years
over 5
years
Total
Maturities of liabilities and commitments
2022/23
Derivative financial instruments
Forward currency derivates - - - - -
Non-derivative financial instruments:
Amounts owed to subsidiaries 51,439 51,439 - - 51,439
Other payables 21,396 21,396 - - 21,396
Total 72,835 72,835 - - 72,835
2021/22
Derivative financial instruments
Forward currency derivates 259 259 - - 259
Non-derivative financial instruments:
Amounts owed to subsidiaries 28,935 28,935 - - 28,935
Other payables 11,042 11,042 - - 11,042
Total 40,236 40,236 - - 40,236
The analysis is based on contractual cash
flows including interest payments.
Fair value of trade payables and other
payables is determined to equal their
carrying amount.
The payment obligations are expected to
be settled through cash inflows from oper-
ating activities.
Leasing
The Parent Company has a lease contract
for property with a remaining term of six
months (2021/22: six months) and aver-
age monthly lease payments of TDKK 60
(2021/22: TDKK 22.5), totalling TDKK 360
(2021/22: TDKK 135). The lease is not recog-
nised as an asset/liability as the lease
agreement is a short-term lease.
Furthermore, the Parent Company has
lease contracts regardindg equiptment
with remaining term up to 24 months
(2021/22: 21 months) and average monthly
lease payments of TDKK 34 totalling TDKK
500. The leases are not recognies as an
asset/liability as they comprise assets of
low value.
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ANNUAL REPORT 2022-23YGGDRASIL
12. Contractual obligations,
contingencies, etc.
Joint tax scheme
The Company is jointly taxed with other
Danish companies in the Group. As a
jointly taxed company, the Company has
joint unlimited liability for Danish corpo-
ration taxes and withholding taxes on
dividends, interest and royalties within
the joint taxation unit. Any subsequent
corrections of income subject to joint
taxation or with-holding taxes could result
in an increased liability for the Company.
Charges and security
The following assets have been placed
as security with bankers: Shares of
investment in certain subsidairies. The
value of these assets as of 30 June 2023
constitutes: TDKK 212,209.
Charges and security
Bank guarantees totals TDKK 166,417 at
30 June 2023 (2021/22: TDKK 31,470).
The Company has provided an unlimited
surety bond for the Group to Sydbank.
The total debt per 30 June 2023 is EUR 0.
Leases
Regarding leasing liabilities refer to
disclosures in note 11 (liabilities).
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ANNUAL REPORT 2022-23YGGDRASIL
13. Financial instruments by
category
TDKK 2022/23 2021/22
The group holds the following financial instruments:
Financial assets
Carried at amortised cost
Receivables 84,678 53,133
Cash and cash equivalents 137,012 22,643
Financial assets at amortised cost 221,690 75,776
Financial liabilities
Carried at amortised cost
Amounts owed to subsidiaries 51,439 28,935
Other payables 21,396 11,042
Financial liabilities at amortised cost 72,835 39,977
Carried at fair value through profit or loss (FVPL)
Financial derivatives - 259
Financial liabilities at fair value through profit or loss (FVPL) - 259
Total financial liabilities 72,835 40,236
Financial assets and financial liabilities above are not offset, and therefore gross amounts are
recognised in the balance sheet.
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ANNUAL REPORT 2022-23YGGDRASIL
14. Financial risks and the
use of derivative financial
instruments
The Company is exposed to a number of
financial risks via its subsidiaries who all
trade in power according to the section
above. In case equity investments in subsid-
iaries are made in other currencies than DKK,
the Company is exposed to currency risk.
This risk is partly mitigated by the use of
financial derivatives according to the above
disclosures.
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ANNUAL REPORT 2022-23YGGDRASIL
Management’s Statement
Executive Board:
Board of Directors:
PAGE 88
ANNUAL REPORT 2022-23YGGDRASIL
Independent Auditor’s Report
PAGE 89
ANNUAL REPORT 2022-23YGGDRASIL
CVR No 33 77 12 31
{
“period”: “1 July 2022 - 30 June 2023”
}
Yggdrasil Commodities
Niels Jernes Vej 10
9220 Aalborg
Denmark
CVR: DK-40300643
Annual
Report for the
financial year