GROUP ANNUAL REPORT 2012...For several years Copenhagen Group has been successful prosid-ing project work for international organizations in con ict and post-con ict areas as well

GROUP ANNUAL REPORT 2012

COPENHAGEN GROUP

The Group Annual Report is an extract of the Company Annual Report and does not include financial statements of the parent company, Copenhagen Group A/S. The financial statements of the parent company, Copenhagen Group A/S, form an integral part of the full annual report. The full annual report including the statements of the parent company has been filed with The Danish Business Authority and can be acquired from there upon request.

The English text in this document is an unau-thorised translation of the Danish original. In the event of any inconsistencies, the Danish version shall apply.

Please note that Danish decimal and digit group-ing symbols have been used in the Financial Statements.

INDEXLetter from the CEO ............................................................................................ 3

Key Figures ........................................................................................................ 6

Management´s Review .................................................................................7 - 20

Income Statement ............................................................................................ 22

Balance Sheet ...........................................................................................23 - 24

Cash Flow ........................................................................................................ 25

Statement of Change in Equity .......................................................................... 26

Notes ........................................................................................................27 - 30

Accounting Policies ...................................................................................31 - 34

Statement by the Management ......................................................................... 35

Independent Auditor’s Report ............................................................................ 36

Executive Board ............................................................................................... 37

COPENHAGEN GROUP

2012 was indeed a true turning point for Copenhagen Group. Following the challenges of the preceding year, we were able to complete a remarkable recovery which was only made possible through the efforts and dedication of every employee in Copenhagen Group. The comprehensive restructuring we initiated in 2011 focused at reducing overheads, improving profitability and strengthening liquidity, and I am proud of our team for the sacrifices they have made, and the innovative approach they have taken to solving the serious market constraints and financial challenges we were faced with. It has been a difficult turnaround process and we have made bitter sacrifices but our determi-nation has been rewarded, and together we have delivered on all the commit-ments we have made to ourselves and our stakeholders.

In 2012, we grew revenue by 9% to DKK 185m and improved EBIT by more than DKK 30m to DKK 12m, which was on par with our plans and expecta-tions. Even more importantly, with full attention given to our cash management, we have been able to reduce our Net Interest Bearing Debt from DKK 61m to DKK 19m and rebalance our equity share well above 20%. In other words, we have restored Copenhagen Group as a sound and prosperous business well prepared to exploit new opportunities.

Simultaneously, we have refocused our strategy on our core competencies and have divested business activities that have no synergies to these core functions. Going forward, Copenhagen Group will focus entirely on managing projects for the international organization community, which we have proven to do so with great success over the past several years.

Looking forward, there is no room for complacency, as our competition is ever more fierce and customer demands are relentlessly increasing. We enter 2013 well prepared to pursue many business opportunities expected to materialize in the wake of demobilization efforts in Afghanistan and the emerging and expan-sion of missions in Africa and the Middle East. Additionally, due to increased election activity around the world in the next 24 months, we are confident that several projects will present themselves in the days to come. Strategically plan-ning our approach to these opportunities will be a strong focus of our manage-ment team and project managers as we seek to ensure future profitable growth while maintaining a healthy capital structure.

As we go forward into 2013, we understand that the challenges of our past have been great lessons learned for the future and I am sincerely grateful to our employees and business partners for their efforts in achieving the results we have realized in 2012. I am confident that we are well positioned for another successful year.

Jeppe Handwerk President & CEO

Letter from the CEO

Letter from the CEO / 4

COPENHAGEN GROUP PROVIDES PROJECT MANAGEMENT IN CONFLICT AND POST-CONFLICT AREAS

COPENHAGEN GROUP

Key Figures

Key Figures /

(DKK ‘000) 2012 2011 2010 2009 2008/09

12 mths. 12 mths. 12 mths. 6 mths. 12 mths.

Income Statement

Revenue 184.838 169.119 239.019 94.522 -

Gross Profit 73.288 71.143 91.962 35.472 36.516

EBITDA 31.558 4.857 36.253 16.986 16.797

Operating profit (EBIT) 11.977 -18.703 15.829 9.449 6.642

Net Financial Expenses -7.014 -8.202 -4.193 -2.742 -1.719

Net Profit 4.881 -24.340 10.135 6.007 5.482

Balance Sheet

Fixed Assets 21.583 40.493 56.696 43.731 47.384

Total Balance 48.462 110.061 96.529 68.173 85.334

Equity 10.357 5.247 20.203 12.923 6.945

Net Interest-bearing debt (NIBD) 19.192 61.210 44.982 41.425 60.469

Cash Flow

Cash flow from operations 38.895 -16.021 29.214 23.212 3.145

Cash flow from investments -321 -6.673 -33.236 -3.901 -27.603

Cash flow from financing activities -33.741 23.447 3.365 -18.555 16.911

Employees

Average full time employees 134 149 184 148 122

Financial Ratios

Return on invested capital 24,7% Neg. 19,2% 12,3% -

Equity Share 21,4% 4,8% 20,9% 19,0% 8,1%

Return on equity 62,6% Neg. 61,2% 60,5% 116,1%

EBITDA margin 17,1% 2,9% 15,2% 18,0% -

EBIT margin 6,5% Neg. 6,6% 10,0% -

NIBD/EBITDA 0,6 12,6 1,2 2,4 3,6

Key figures are prepared in accordance with the Danish Society of Financial Analysts’ “Recommendation and key figures 2010”. The key figures are calculated as follows:

Return on Invested EBIT x 100 EBITDA x 100

Capital (ROIC): Average Balance Revenue

Equity Share: Equity end of year x 100 EBIT x 100

Balance end of year Revenue

Return on Equity: Net Profit x 100 NIBD end of year

Average Equity EBITDA

EBITDA-margin:

EBIT-margin:

NIBD/EBITDA:

6

For several years Copenhagen Group has been successful prosid-ing project work for international organizations in conflict and post-conflict areas as well as countries with civil unrest. The two largest key accounts are the United Nations (UN) and NATO with whom we have a long term relationship of prosperous business partnership.

The group’s core competence is experience in complex inter-national tenders and bidding rounds and expertise in delivering goods and services under difficult conditions in often remote and inaccessible areas. These two conditions are a common factor for most of the Group’s business areas along with high degree of con-vergence between customers and geography.

In 2012 Copenhagen Group conducted projects at a large number of locations in Africa, Middle East and Central Asia. In addition to Denmark, Copenhagen Group also has permanent establishments in Afghanistan, Kuwait and Jordan.

The projects of Copenhagen Group lie within three business lines; Copenhagen Contractors (facility management), Copenhagen Election (electoral support) and Copenhagen Global (vehicle fleet supply). In addition, the Group provides Horizontal Directional Drill-ing services in the Middle East under two subsidiary companies in Kuwait and Jordan.

The parent company of Copenhagen Group A/S provides top man-agement and shared services to Contractors, Election and Global. These shared services include tender and bidding expertise, logisti-cal support, IT and financial support (including credit facilities for project funding). The business lines on their side focus entirely on their business from an operational perspective. This dual respon-sibility grants maximum flexibility and optimizes the return on our resources. Moreover, it allows a financially sustainable build up of unique tendering competencies and other highly specialized skills.

Copenhagen Group’s business activities

Management´s Review

41% Election

30% Contractors

6% HDD

23% Global

Revenue

Our Marketplace

Copenhagen Group (Parent)Management and Shared Services

Copenhagen Contractors• Facility Management

• Maintenance and small-scale construction works

Copenhagen Election• Ballot boxes and seals

• Indelible ink for marking voters• Voting screens and voting kits

Copenhagen Global• Fleet sale of trucks to UN (Iveco)

• Armored vehicles

• Workshops (divested 2012)

HDD Kuwait• Horisontal Directional Drilling

• Pipe Jacking

HDD Jordan• Horisontal Directional Drilling

/ Management´s Review7

East Timor

Mali

Nigeria

Gabon

South Sudan Somalia

Yemen

Kuwait

Jordan

Syria

Pakistan

AfghanistanEgyptLibya

Algeria

Denmark

Morocco

Sierra Leone

Management´s Review /

COPENHAGEN FOOTPRINTCOPENHAGEN GROUP AND SUBSIDIARY COMPANIES ARE PERMANENTLY PRESENT IN:• DENMARK • JORDAN • KUWAIT • AFGHANISTANIN 2012, WE HAVE ALSO CONDUCTED BUSINESS IN 14 OTHERCOUNTRIES IN AFRICA, MIDDLE EAST AND CENTRAL ASIA.

8

2009 2010 2011 2012

Revenue 2009 - 2012

0

50

100

150

200

250

DKKm

2009 2010 2011 2012

EBITDA 2009 - 2012

0

10

15

5

20

25

30

35

40

DKKm

Successful turnaround completed In the second half of 2011, Group Management launched a num-ber of measures to prepare the company for the change in market conditions and these efforts have been successfully continued into 2012:

•Theorganizationhasbeenslimmeddownandsimplified.The number of managers has been substantially reduced and all administrative tasks have been transferred to service centers in the parent company to provide groupwide support for all business lines.

•Thefinancialfocushasbeenoncashmanagementinorderto strengthen the cash position and to reduce expensive short term debts.

•Strategynowfocusessolelyonthecorebusinessofprojectsfor international organizations and activities beyond this scope have ceased. For example, all activities in the Afghan subsidiary, IM Jensen Kabul World Wide, have been divested in 2012.

•Thegrouphasworkedtodevelop,implementanddocument processes and controls, and to incorporate them into an integrated global IT solution.

In 2012, the Copenhagen Group essentially completed the signifi-cant turnaround and refocus process that was initiated following a difficult and disappointing year in 2011. Profitability is restored, debt is reduced, and liquidity is strengthened. The group is now a solid company in terms of competencies and finances, and is well equipped to take on new challenges.

Financial Highlights

A revitalized business The past financial year showed increased activity in most parts of the business and the group’s revenue grew satisfactorily by 9% to DKK 185 million in 2012. Growth was especially driven by the Election business, which rebounded strongly after a disappointing 2011, including a number of large-scale deliveries to the elections in Egypt. Global and directional drilling in the Middle East also expe-rienced growth throughout the financial year. As planned, activities in Contractors were reduced in connection with the restructuring and downscaling of the construction business.

As a direct consequence of the group reducing capacity costs and increasing activities in the most profitable areas of business, the profit margin was restored after the disappointing results in 2011. In 2012, the group’s EBITDA totaled DKK 31.5 million, corresponding to an EBITDA margin of 17%, which is considered a satisfactory result for the operational part of the business.

Following the NATO ISAF forces’ withdrawal from Afghanistan, and as a result of the changed business focus, a number of fixed as-sets were depreciated faster than originally planned, which has had a negative impact on the result of primary operations, with EBIT at DKK 12 million.

Due to the group’s high debt at the beginning of 2012, the financial costs were high, especially in the first part of the financial year. External interest costs alone totaled DKK 5.5 million in 2012. As a result of the depreciation and amortization and high interest costs, the year’s net profit was DKK 5 million.

/ Management´s Review

Note: Restated figure of 2009 has not been audited


9

Balance and NIBD 2009-2012Total balance Net Interest-bearing Debt

0

40

60

20

80

100

120

DKKm

2009 2010 2011 2012

Capital bindings reduced In 2012, the first financial priority of Copenhagen Group was to strengthen cash management. Due caution was exercised in investments, which focused primarily on long-term strengthening of the profitable core business (especially Election) and developing IT solutions to streamline administration and support processes and controls.

Depreciation of fixed assets in Afghanistan, divestment of nonstrategic assets and a conservative investment level reduced the value of fixed assets by half during 2012.

In the past financial year, the group also focused on reducing working capital. Inventories are reduced and the payment terms with vendors have been improved. Most importantly, Copenhagen Group has largely suc-ceeded in getting customers to contribute to bridge-funding projects in the form of partial prepayments. Thus, in 2012 the group had less working capital tied up in current projects than in the past.

Through a combination of satisfactory EBITDA and improvements in working capital, operations provided a cash flow before financial items of DKK 46.0 million. Due to the high interest costs, the total cash flow from operations was DKK 38.9 million, which is considered satisfactory.

A healthy and long-term debt structure In 2011, the group was dependent on expensive and short-term mezzanine style financing, and it was a key financial goal in 2012 to settle this debt, which was fully achieved. The positive financial results in the past year have also strengthened the opportunities for securing bank financing; the group’s debt now consists solely of low-interest loans in banks and mortgage credit institu-tions, as well as subordinated loan capital from the shareholders. At the end of the financial year, more than 80% of the interestbearing debt was long-term.

Overall, the net interestbearing debt (NIBD) was reduced from DKK 61 million to DKK 19 million, corre-sponding to a gearing of just 0.6 times EBITDA. It is not an independent objective of Copenhagen Group to secure debt at this low level, but new debt is only expected for the purpose of bridge funding current pro-jects. Copenhagen Group plans to settle the subordi-nated loan capital in 2013 and to exclusively finance future projects with bank debt to reduce financial costs.

The positive result from 2012 brings equity up to DKK 10.4 million as of 31 December 2012. Combined with a significant slimming of the balance, the equity ratio increased to 21% by the end of the financial year. Including the subordinated loan capital in the solidity, this gives the shareholders a total exposure of 63% of the total balance.

2009 2010 2011 2012-20

-0

10

-10

20

30

40

DKKm

Cash flow from operating activities 2009-2012



10

At the start of 2013, Copenhagen Group faces both chal-lenges and opportunities. The withdrawal of coalition forces will significantly reduce the long-term business opportunities in Afghanistan. However, the lower volume will improve the competitive situation and thus profitability, as large established competitors shift their focus elsewhere. At the same time, the withdrawal and subsequent clean-up work will create a num-ber of interesting opportunities in the next few years.

However, it is clear that Afghanistan will gradually play a smaller role for Copenhagen Group in the future, and already in 2013, the largest share of revenue is expected to come from activities in Africa. At the start of the new financial year, both Election and Global had received many major orders, with numerous business opportunities emerging within Co-penhagen Group’s core businesses.

Overall, activity in 2013 is expected to be at the same level as in 2012 or slightly higher. There will be a transition towards business areas with lower risk and lower capital constraints, but also with generally lower profitability. Conversely, the suc-cessful work in 2012 to reduce debt and cash bindings will have a positive effect on profits. There will be less deprecia-tions and amortizations, even with a moderately increased lev-el of investment, and interest costs will be significantly lower as a direct consequence of having reduced and restructured debt. On this basis, the net profit forecast for 2013 is at least at the same level as in 2012.

Expectations for the future

Effective risk management is central to the success of Copenhagen Group, given the special markets and areas of business in which the group operates. Copenhagen Group has historically proven that the group is capable of creating spectacular profits under these condi-tions, but has also encountered reminders of the serious conse-quences of failing to identify or manage the special risks that exist in a business of this nature.

Business risks Copenhagen Group’s business model is based on the ability to carry out projects for demanding customers, often under extremely difficult conditions. To ensure the quality of project management, Copenhagen Group has worked systematically in recent years to strengthen internal processes and controls, and to develop and implement IT platforms to support this work. In 2012, Copenhagen Group and its Danish subsidi-aries also became ISO 9001 and ISO 14001 certified. The work with the group’s processes has ensured uniformity in processes, resulted in savings and ensured that projects are delivered on time.

The supplier side is also the subject of increased focus on the part of Copenhagen Group, since efficient and reliable subcontractors and forwarding agents are vital for successful projects. The company is working on establishing framework agreements with important suppliers and it has had great success with mirroring contractual terms relating to quality and delivery in agreements with suppliers. At the same time, Co-penhagen Group has established its own independent quality control for a number of key products.

Copenhagen Group is confident that the strengthened internal processes and administrative procedures have improved rather than compromised the group’s ability to meet customers’ needs with speed and agility.

Risk management

Copenhagen Global will continue to provide governmental customers with armored vehicles such as the above delivered to the Danish Embassy in Mali in early 2013.


Political risks As Copenhagen Group operates in less developed countries – often in connection with military operations – the group is exposed to frequent changes in legislation which alternately lead to either restrictions or changes in the way it runs its business (imports, mobility, etc.).

With regard to tax matters in particular, it is crucial that we act cautiously, as many activities take place in areas where the local tax authorities have not yet established tried and tested legislation and practices. Consequently, Copenhagen Group pursues an active but cautious tax policy and always seeks advice from the best available external advisers when dealing with this type of uncertainty.

Financial risks As Copenhagen Group’s business model largely builds on project-based business, there will always be periodic fluctuations in the balance and liquidity. This challenge is largely dealt with through agreements on payment terms with our customers and suppliers. It is also clear that Copenhagen Group’s improved financial position has given the group significantly easier access to attractive project-based bank financ-ing, which is sufficient to meet the intermediate financing needs.

Copenhagen Group’s business transactions take place almost exclusively in USD, EUR or DKK. There usually is high degree of currency symmetry between costs and revenue so that our business transactions in themselves do not have any significant exposure to exchange rate fluctuations. The group also has the option of loan financing for projects in the same currency as the customer is billed in, further minimizing exposure to exchange rate fluctuations. Copenhagen Group never actively participates in any form of speculation.

Since Copenhagen Group’s customers almost exclusively comprise large international organizations and western governments, the risk of major losses on debtors is low.

Strengthened internal processes and controls

have improved rather than compromised the group’s ability to meet customers’

needs with speed and agility.

Management´s Review / 12

COPENHAGEN ELECTION PROVIDED EGYPT WITH TRANSPARENT BALLOT BOXES AS WELL AS INDELIBLE INK FOR MARKING OF VOTERS

At Kandahar Airfield base, Copenhagen Contractors operate a mortuary affairs facility for NATO.

Copenhagen Contractors Since 2006, Copenhagen Contractors has delivered specialized services of high quality to NATO and to the armed forces from NATO member states. The company’s core compe-tence is facility management, but it also offers service agreements and customized solutions for both buildings and vehicles.

At Kandahar Airfield base, Copenhagen Contractors operate a large fitness center for NATO ISAF personnel and a mortuary affairs facility that supports the armed forces on the base – both of these operations have earned high levels of customer satisfaction. These multiyear contracts have required substantial investments, but provide a satisfactory return and ensure stable earnings over a multiyear period. Both contracts run at least until 2014. Alongside these activities, Copenhagen Con-tractors performs maintenance and repair tasks for facilities and vehicles, as well as electrical engineering and minor construction work in Afghanistan.

Shortly after the end of the financial year, the company was awarded a framework agree-ment by NATO, which enables the company to offer certification and repair (or scrapping) of the many containers presently found on the western

Business areas

COPENHAGEN CONTRACTORS

forces’ bases (RCRI). These containers are to be shipped out of the country in the coming years as the troops gradually withdraw from Afghanistan.

Copenhagen Contractors is well adapted to the future situation in Afghanistan, where the market is fundamentally changed and the presence of the coalition forces is reduced. Many business opportunities are expected to arise in connection with the withdrawal and the company is wellpositioned to take advantage of these opportunities. Copenhagen Contractors will continue to operate facility management for years to come, while also offering services to support the demobilization and demilitarization in Afghanistan.

Together with its continued presence in Afghan-istan, Copenhagen Contractors is also following other regions where demand for the company’s service is expected, with focus turning towards Africa and the Middle East.


Copenhagen Election Copenhagen Election provides election equip-ment and solutions for international organiza-tions. The company has specialized in the supply and production of all types of products used in elections. Copenhagen Election offers a wide selection of election materials, such as ballot boxes, voting screens, indelible ink and voter registration equipment. The company can also provide transportation, distribution and warehouse services, project management and training. The company’s overall package of products and services enables the facilitation of elections around the world.

The company can flexibly accommodate any special requirements the customer may have to ensure an optimal election process. The com-pany’s strong and carefully selected supplier network, combined with its extensive industry knowledge, means that delivery to customers is possible with short notice.

Copenhagen Election works closely with inter-national organizations that support and finance elections, and the company also delivers di-rectly to national election commissions. In early 2013, Copenhagen Election secured a new three-year longterm contract with UNDP for the delivery of election equipment.

Overall, 2012 was a strong year for Copenha-gen Election, in which the disappointing perfor-mance in 2011 was turned around and revenue more than doubled. This positive development was mainly driven by large deliveries to the Egyptian elections at the beginning of the year, where USAID sponsored the purchase of elec-tion boxes and indelible ink from Copenhagen Election. Other large and successful deliveries involved elections in Libya, Algeria and Sierra Leone, all of which contributed to the satisfac-tory revenue in 2012.

A basic condition for Copenhagen Election’s business is the dependence on external demand in the form of elections, which natu-rally varies over time. However, Copenhagen Election is confident that the product range is stronger than ever in terms of both size and quality. Investments were made in production capabilities in 2012, primarily focusing on the development of a formula for making indelible ink that meets all customer specifications and requirements. Investments in developing the product portfolio will continue in 2013.

COPENHAGEN ELECTION

Copenhagen Election is confident that

the product range is stronger than ever in terms of both size

and quality.


Copenhagen Global Copenhagen Global sells vehicles to interna-tional customers that operate in crisis or conflict areas. The company’s most important cus-tomer is the UN, but other important custom-ers include NATO and a number of countries’ foreign services. The products include trucks and four-wheel drives, the latter of which are primarily armored vehicles.

Copenhagen Global delivers vehicles from leading manufacturers, predominantly from Iveco and Toyota. Armored vehicles are deliv-ered by credible and certified partners who are able to meet the highest international quality standards. Copenhagen Global covers most of the supply chain and delivers vehicles from stock or directly from production to the final destination, often to areas with extremely chal-lenging infrastructures (primarily in Africa and Central Asia).

In 2012, Copenhagen Global entered into a framework agreement with UNPD (United Nations Procurement Division), which grants Copenhagen Global and Iveco exclusive supply of trucks for the UN’s peacekeeping forces around the world for at least three years. Other

UN organizations also have access to placing orders under this agreement.

Copenhagen Global expects strong growth in revenue in 2013 as a direct result of the agree-ments reached with the UN. Growth will pre-dominantly come from the sale of Iveco trucks to the UN; at the end of the financial year, the company had already received significant orders for delivery in 2013. Due to the much larger sales volume, a positive operating profit is expected in 2013. The company will also continue to sell armored vehicles.

At the start of the financial year, Copenhagen Global owned an Afghan subsidiary, IM Jensen Kabul, which conducted workshop activities in Kabul and at Kandahar Airfield Base (KAF). These activities came to an end in Novem-ber following two asset transfers, where all customers and assets in Kabul were sold and a small workshop at KAF was transferred to a sister company, Copenhagen Contractors A/S. IM Jensen Kabul World Wide is thus inactive and awaits the local authorities’ approval to be formally liquidated.

COPENHAGEN GLOBAL

/ Management´s Review

In 2012, Copenhagen Global and Iveco entered into a framework agreement with United Nations Procurement Division for exclusive supply of trucks to the peace-keeping missions.

17

Horizontal Directional Drilling In 2010, Copenhagen Group established a com-pany for Horizontal Directional Drilling in connection with a project in Afghanistan under Copenhagen Contractors. The company accumulated com-petencies and equipment to conduct controlled underground drilling in sandy and rocky terrain, and then applied these competencies and equipment in Kuwait, where there are major investments in infrastructure.

It took longer than planned to establish this busi-ness unit, as both the market and legislation in Kuwait proved more difficult than first anticipated. The business in Kuwait was not operational until the end of 2011, but it has now established a satisfac-tory and strong market position.

In 2012, the subsidiary in Kuwait provided a satisfactory operating profit and a strong cash flow, and the prospects for 2013 are certainly positive. The Kuwaiti market remains lucrative with favorable

prices and the company has a wide range of repeat customers in cable networks for the telecom sector, as well as in water and power supply.

Based on this emerging success in Kuwait, a deci-sion was made to enter into an extensive agree-ment to supply support to the general contractor on a major, longterm water supply project in Jordan. The Jordanian market is showing promise for the longer term and Jordan will also be making major investments in its infrastructure in the coming years. Copenhagen Group now has a permanent office in Amman, Jordan. The Jordanian company has faced considerable bureaucratic challenges and had losses in 2012, but it is expected to at least achieve a positive cash flow in 2013.

COPENHAGEN GLOBALCOPENHAGEN CONTRACTORS

Our Kuwaiti subsidiary has special competencies and equipment to conduct controlled underground drilling in sandy and rocky terrain.


The ability to attract and retain the right employees is of the utmost importance when operating in challenging environments and dealing with products where know-how and reliability are key. The specialized business areas require the company to continuously recruit talented and motivated employees within all areas of expertise. Copenhagen Group has established itself as an attractive workplace with healthy values that is well suited to its employees in every sense and will continue to be perceived as such by current and potential employees.

The group’s efforts in recent years to develop processes and documentation are aimed at ensuring uniformity in the way Copenhagen Group is perceived outwardly and in the relation-ship with our business partners, as well as at minimizing the risk of errors and misunderstandings that could be detrimental to the company.

Copenhagen Group’s core values are key to the group’s suc-cess and it is a high priority to ensure that all employees of Copenhagen Group and its subsidiaries act in accordance with our high ethical standards at all times. These same high stand-ards are expected from our suppliers and customers.

Employees

Copenhagen Group is proud of its commitment to support the UN’s Global Compact initiative. The company committed to aligning its operations and strategies with the principles of the UN Global Compact in 2009. Copenhagen Group A/S is not yet of a size whereby accounting for our Corporate Social Responsibil-ity is mandatory, but as the organization continues to grow and expand into new regions, the group has taken the principles of the Global Compact into consideration in the development of the company, both in terms of relationships with external stakehold-ers and the policies that have an impact on employees.

In March 2013, Copenhagen Group submitted its COP (Com-munication On Progress) report demonstrating focus and action in all issue areas of the Global Compact; Anti-Corruption, Human Rights, Labor and the Environment. Copenhagen Group will work to continue incorporating actions that support these princi-ples in all our business areas throughout the coming year.

No events have occurred subsequent to the end of the fiscal year that could have a significant negative impact on the group’s or the parent company’s financial position.

Social Responsibility

Events subsequent to the fiscal year

The ability to attract and retain the right employees is of the utmost importance when operating in challenging environments.


List of Subsidiaries


COPENHAGEN CONTRACTORS

IM JENSEN

COPENHAGEN ELECTION

COPENHAGEN GLOBAL

COPENHAGEN GROUP

Copenhagen Contractors A/S Denmark Reporting currency: DKK 100% owned by Copenhagen Group A/S

Copenhagen Contractors International Ltd. Kuwait Reporting currency: KWD 49% owned by Copenhagen Group A/S (100% controlled and consolidated)

Copenhagen Contractors Ltd. Jordan Reporting currency: JOD 100% owned by Copenhagen Group A/S

Copenhagen Group A/S Denmark Reporting currency: DKK Parent Company

Copenhagen Election A/S Denmark Reporting currency: DKK 100% owned by Copenhagen Group A/S

Copenhagen Global A/S Denmark Reporting currency: DKK 100% owned by Copenhagen Group A/S

IM Jensen Kabul World Wide (under liquidation) Afghanistan Reporting currency: USD 100% owned by Copenhagen Global A/S

The Group report comprises of the following companies:

COPENHAGEN CONTRACTORSCOPENHAGEN CONTRACTORS

COPENHAGEN CONTRACTORSCOPENHAGEN CONTRACTORS

20

COPENHAGEN GROUP COMPLETED A SIGNIFICANT TURNAROUND IN 2012. PROFITABILITY IS RESTORED, DEBT IS REDUCED, AND LIQUIDITY IS STRENGTHENED.

GROUP INCOME STATEMENT

Income Statement /

2012 2011

(DKK) (DKK)

Notes

Revenue 184.837.997 169.119.455

Cost of goods sold 100.627.441 84.275.982

Other external costs 10.922.892 13.700.912

Gross Profit 73.287.665 71.142.561

1 Staff costs 41.729.806 66.285.129

2 Depreciations, amortizations and write-downs 19.580.571 23.560.569

Operating profit (EBIT) 11.977.287 -18.703.137

3 Financial income 6.907 59.711

4 Financial expenses 7.021.150 8.261.549

Profit before tax 4.963.044 -26.904.975

5 Tax on profit for the year 82.117 -2.564.995

Net profit 4.880.927 -24.339.980

22

/ Balance Sheet

2012 2011

(DKK) (DKK)

Notes

6 Intellectual property 1.007.215 636.899

7 Goodwill 0 0

Intangible Assets 1.007.215 636.899

8 Land and buildings 7.574.723 17.670.690

9 Plant and machinery 9.062.040 13.678.486

10 Other plants, operating assets and furniture 2.900.192 7.109.798

11 Fixtures on leased premises 447.599 679.544

Tangible Assets 19.984.555 39.138.522

Capital shares 31.466 90.000

Deposits and securities 559.296 627.176

Financial Assets 590.762 717.176

TOTAL FIXED ASSETS 21.582.532 40.492.597

Consumables and raw materials 714.121 3.792.322

Work in Progress 8.560 21.964.925

Goods for resale 244.986 2.876.790

Prepayment for goods 1.128.522 0

Inventory 2.096.189 28.634.036

Trade Receivables 8.712.765 25.033.664

12 Contract work in progress 1.763.173 471.669

Tax receivable 0 132.000

Deferred Tax Asset 5.035.417 4.877.118

Other Receivables 2.503.902 3.697.539

Accruals 165.453 5.032.369

Receivables 18.180.709 39.244.359

Cash and Cash Equivalents 6.602.642 1.689.549

TOTAL CURRENT ASSETS 26.879.540 69.567.944

TOTAL ASSETS 48.462.071 110.060.541

Group Balance Sheet December 31

ASSETS

23

Balance Sheet /

2012 2011

(DKK) (DKK)

Notes

Share capital 6.000.001 5.714.307

Retained earnings 4.357.463 -467.236

TOTAL EQUITY 10.357.464 5.247.071

Provision for tax 723.038 0

Other provisions 185.285 427.555

TOTAL PROVISIONS 908.323 427.555

13 Sub-ordinated loan capital 20.000.000 25.000.000

Mortgage loans 1.289.275 1.350.000

Other debts 0 3.000.000

14 Non-current liabilities 21.289.275 29.350.000

14 Short term share of long term debts 30.000 23.152.543

14 Debts to banks and credit institutions 4.475.319 10.396.991

Prepayments from customers 2.929.273 13.079.993

Trade payables 5.050.034 19.033.447

Intercompany debts 0 1.167.503

Debts to associated companies 0 549.995

Tax liabilities 0 1.345.188

Other debts 3.422.382 6.310.254

Current liabilities 15.907.009 75.035.914

TOTAL LIABILITIES 37.196.284 104.385.914

TOTAL EQUITY AND LIABILITIES 48.462.071 110.060.541

15 Contingent assets and contingent liabilities

16 Assets charged or otherwise provided as security

17 Discontinued business

Group Balance Sheet December 31 - continued

EQUITY AND LIABILITIES

24

2012 2011

(DKK) (DKK)

Cash flow from operating activities Operating profit before net financial expenses and tax 11.977.287 -18.703.137

Depreciations, amortizations and write-downs 19.115.449 23.118.111

Reversal of profit and loss of fixed assets 465.122 442.458

Cash flow before change in working capital 31.557.859 5.179.794

Change in inventory 26.537.848 -19.506.395

Change in debtors 19.645.571 -5.082.745

Change in creditors -31.749.614 12.759.613

Cash flow before financial expenses 45.991.664 -6.649.733

Financial income received 6.907 59.711

Financial expenses paid -7.021.150 -8.261.549

Corporate tax paid -82.117 -1.169.853

Cash flow from operating activities 38.895.304 -16.021.424

Cash flow from investing activities Purchase of intangible assets -676.633 -696.548

Purchase of land and buildings -1.458.256 -469.064

Purchase of plant and machinery -3.132.425 -11.868.840

Purchase of vehicles and equipment -2.529.870 -892.011

Purchase of fixtures on leased premises 465 -88.382

Change in financial assets 126.414 -320.824

Sale and disposal for tangible assets 7.349.475 7.663.036

Cash flow from investing activities -320.830 -6.672.633

Cash flow from financing activities Capital increase 286.550 9.285.993

Dividends paid 0 -2.750.000

Change in sub-ordinated loan capital -5.000.000 25.000.000

Change in other financial liabilities -29.027.397 -8.089.367

Cash flow from financing activities -33.740.847 23.446.626

Exchange rate adjustment of cash and cash equivalents 79.466 -70.334

Change in cash and cash equivalents 4.913.089 682.234

Cash and cash equivalents at the beginning of the period 1.689.549 1.007.315

Cash and cash equivalents at the end of the period 6.602.642 1.689.549

Group Cash Flow Statement

/ Case Flow25

2012

(DKK)

Share Capital Retained earnings Total equity

Equity January 1st 5.714.307 -467.236 5.247.071

Net profit for the year 0 4.880.927 4.880.927

Capital increase 285.694 0 285.694

Exchange rate adjustments 0 -56.228 -56.228

Change in equity 285.694 4.824.699 5.110.393

Equity December 31st 6.000.001 4.357.463 10.357.464

2011

(DKK)

Share Capital Retained earnings Total equity

Equity January 1st 5.000.000 15.203.434 20.203.434

Net profit for the year 0 -24.339.980 -24.339.980

Capital increase 714.307 8.571.686 9.285.993

Exchange rate adjustments 0 97.624 97.624

Change in equity 714.307 -15.670.670 -14.956.363

Equity December 31st 5.714.307 -467.236 5.247.071

The company has in 2012 increased the share capital from DKK 5. 714.307 to 6.000.001 through a cash capital increase. The com-pany has in 2011 increased the share capital from DKK 5.000.000 to 5.714.307 through a cash capital raise. The company has in 2009 increased the share capital from DKK 156.231 to DKK 5.000.000. There have been no other changes to the share capital since the com-pany’s establishment

Group Statement of Change in Equity

Group Statement of Change in Equity / 26

2012 2011

(DKK) (DKK)

1. Staff Costs

Total average number of employees 134 149

Total staff costs include:

Salary 35.075.552 51.201.754

Pension contribution plans 326.788 1.319.342

Social security expenses 290.188 822.553

Other employees expenses 6.037.278 12.941.481

41.729.806 66.285.129

2. Depreciations, amortizations and write-downs

Intangible assets 310.354 242.529

Land and buildings 9.003.469 14.667.679

Plant and machinery 6.838.940 2.146.858

Vehicles and equipment 2.683.448 5.845.146

Fixtures on leased premises 220.703 215.899

Write-down on financial assets 58.534 0

Profit/loss on disposed or sold assets 465.122 442.458

19.580.571 23.560.569

3. Financial income

Interest gains, banks 0 2.428

Other financial income 6.907 57.283

6.907 59.711

4. Financial expenses

Interest expenses, banks 527.795 1.249.755

Interest expenses, other loans 5.050.425 5.589.249

Other financial expenses 735.303 1.287.203

Exchange rate loss 707.628 135.343

7.021.150 8.261.550

5. Tax on profit for the year

Calculated tax on the profit for the year 249.993 1.772.957

Adjustment of deferred tax -167.876 -4.337.952

82.117 -2.564.995

6. Intellectual property

Cost at January 1 879.428 182.879

Additions 680.670 696.548

Sale and disposals 0 0

Cost at December 31 1.560.098 879.428

Amortizations at January 1 242.529 0

Amortizations for the year 310.354 242.529

Amortizations reversed on disposed assets 0 0

Amortizations at December 31 552.883 242.529

Carrying amount at December 31 1.007.215 636.899

Group Notes

/ Group Notes27

2012 2011

(DKK) (DKK)

7. Goodwill

Cost at January 1 267.906 267.906

Additions 0 0

Sale and disposals -267.906 0

Cost at December 31 0 267.906

Amortizations at January 1 267.906 267.906

Amortizations for the year 0 0

Amortizations reversed on disposed assets -267.906 0

Depreciations at December 31 0 267.906

Carrying amount at December 31 0 0

8. Land and buildings

Cost at January 1 62.864.850 62.294.467

Exchange rate adjustment -39.002 101.320

Additions 1.497.258 469.064

Sale and disposals -9.792.071 0

Cost at December 31 54.531.034 62.864.850

Depreciations at January 1 45.194.160 30.418.677


Depreciations for the year 9.003.469 14.667.679

Depreciations reversed on disposed assets -7.157.300 0

Depreciations at December 31 46.956.311 45.194.160

Carrying amount at December 31 7.574.723 17.670.690

9. Plant and machinery

Cost at January 1 20.400.427 15.585.911

Exchange rate adjustment 0 585.248

Additions 3.132.425 12.543.381

Sale and disposals -1.059.549 -8.314.113

Cost at December 31 22.473.303 20.400.427




Depreciations reversed on disposed assets -116.037 -210.827



Group Notes - continued

Group Notes / 28

2012 2011

(DKK) (DKK)

10. Other plants, operating assets and furniture

Cost at January 1 16.245.273 16.212.529

Exchange rate adjustment 0 -54.372

Additions 2.529.870 217.471

Sale and disposals -4.716.004 -130.356

Cost at December 31 14.059.138 16.245.273


Exchange rate adjustment -169.000 -279.749


Depreciations reversed on disposed assets -490.978 -128.144



11. Fixtures on leased premises

Cost at January 1 1.060.578 957.262


Additions 0 88.382

Sale and disposals -25.400 0

Cost at December 31 988.618 1.060.578

Depreciations at January 1 381.033 122.349


Depreciations for the year 220.703 215.899

Depreciations reversed on disposed assets -14.112 0

Depreciations at December 31 541.018 381.033

Carrying amount at December 31 447.599 679.545

12. Contract Work in Progress

Current exit value of work in progress 1.763.173 2.632.812

Installment payments received 0 -2.161.143

Contract work in progress, net 1.763.173 471.669

Classification as follows:

Contract work in progress under assets 1.763.173 471.669

Prepayments received under liabilities 0 0

Contract work in progress, net 1.763.173 471.669

13. Sub-ordinated loan capital

The owners have extended a sub-ordinated loan to Copenhagen Group A/S of DKK 20.000.000. This loan falls due on June 30, 2014 and has no fixed installments through this period. This loan is sub-ordinated to all other creditors. No dividends can be issued until this loan is paid back in full.


/ Group Notes29

14. Non-current liabilities

Short term Long term 2011 total 2010 total

(DKK) (DKK) (DKK) (DKK)

Mortgage loan 30.000 1.289.275 1.319.275 1.350.000

Sub-ordinated loan capital 0 20.000.000 20.000.000 25.000.000

Other debts 0 0 0 26.152.543

Banks and credit institutions 4.475.319 0 4.475.319 10.396.991

4.505.319 21.289.275 25.794.594 62.899.534

Maturity later than 5 years 0 1.098.255 1.098.255 1.350.000

15. Contingent assets and contingent liabilities

The Company has accepted a recourse liability related to products sold. The liability amounts to max DKK 2.922.582. The Manage- ment finds that utilization of the liability will not cause a loss as the recourse liability is not expected to deviate materially from the net selling price of the products.

The company has entered lease agreements on office premises with a value of DKK 1.926.000 within the notice term.

16. Assets charged or otherwise provided as security

Guarantee has been provided as security for the consolidated entities of Copenhagen Group’s accounts with the Danske Andel- skassers Bank A/S. Copenhagen Group had a total net deposit of DKK 701.638 by December 31, 2012.

As a security for the Group’s bank liaison a company charge of DKK 11.500.000 has been claimed. The company charge covers all the company’s receivables and inventories as well as tangible and intangible assets.

The Group will frequently issue bid bonds when submitting tenders. There are no assets charged or otherwise provided as security apart from those mentioned in the Annual Report.

17. Discontinued business

Activity in the subsidiary company of IM Jensen Kabul World Wide (located in Afghanistan) has been divested in 2012 and the legal entity is under liquidation. The company contributed to the group annual report in 2011 and 2012 with the following numbers:

2012 2011

(DKK) (DKK)

Revenue 25.254.386 27.652.012

Net profit 2.927.825 70.982

Fixed Assets, December 31st 0 7.124.640

Current Assets, December 31st 1.888.103 10.911.296

Liabilities, December 31st 723.038 24.110.533

A part of the assets has been divested in a one-year earn-out model, which contributes to the group figures as an asset with a value of DKK 1.888.103.

Moreover, a provision of DKK 723.038 has been made for tax clearance in Afghanistan for the past fiscal year which is expected to fall due upon the liquidation of the Afghan legal entity of IM Jensen Kabul World Wide.


Group Notes / 30

The consolidated financial statements of Copenhagen Group A/S for the period 1 January - 31 December 2012 has been presented in accordance with the provisions of the Danish Financial State-ments Act regarding reporting class C companies.

The applied accounting policies are consistent with the previous year.

Recognition and measurement Income is recognized in the Income Statement as earned, includ-ing value adjustments of financial assets and liabilities. All expenses including depreciation/amortization and impairment losses are recognized in the Income Statement.

Assets are recognized in the balance sheet when it is probable that future economic benefits will flow to the Company and when the value of the asset can be measured reliably.

Liabilities are recognized in the balance sheet when it is probable that the future economic benefits will flow out of the Company and when the measurement of the value of the liability is reliable.

On initial recognition, assets and liabilities are recognized at cost. Subsequently, assets and liabilities are measured as described below for each item.

Certain financial assets and liabilities are measured at amortized cost where a constant effective interest is recognized over the maturity. Amortized cost is stated as original cost less any princi-pal repayments and with the addition/deduction of the cumulative amortization of any difference between cost and nominal amount.

Allowances are made for predictable losses and risks that arise before the presentation of the Annual Report and that allowances confirm or invalidate circumstances that existed at the balance sheet date.

Consolidation policies The consolidated financial statements include parent company Copenhagen Group A/S and entities in which the parent directly or indirectly holds the majority of the voting rights, or entities in which the parent through share interest or in other ways holds controlling interest. Entities in which the group holds between 20 % and 50 % of the voting rights, and moreover exercise material, however non-controlling interest are considered as associated entities.

At the consolidation homogeneous items are integrated. Intercom-pany income and costs, share interests, dividends and inter-company balances as well as actual and nonactual internal gains and losses at transactions between the consolidated entities are eliminated.

The parent’s investments in the consolidated, group entities are eliminated by the parent’s share of the group entities’ financial net asset values assessed at the time of the establishment of the group structure.

THE INCOME STATEMENT

Revenue Revenue related to sale of goods for resale and financial services is recognized in the Income Statement, if delivery and transfer of risk have taken place before the end of the year. Revenue is recognized less VAT and discounts are granted in connection with the sale.

Contract work in progress is recognized in line with the comple-tion of the particular work by which net sales are equal to market value of performed work of the year (the percentage of completion method). Net sales are recognized when income and expenses of the contract and stage of completion on the balance sheet date can be recognized reliably, and when it is probable that the financial resources and payment will reach the company.

Other operating income and expenses Other operating income and operating expenses include items of secondary nature compared to the Company’s principal activities.

Other external expenses Other external expenses include selling and distribution costs, marketing, administrative expenses, expenses related to Company premises, bad debts and costs related to operating leases etc.

Net financials Financial income and financial expenses are recognized in the Income Statement with the amounts related to the financial year. Financial income and financial expenses include interest receivable and payable, financial expenses related to finance leases, realized and unrealized gains and losses on securities, exchange gains and losses on debt and transactions denominated in foreign curren-cies, repayment of mortgage loans and charges and extra charges related to the Danish Scheme for Payment of Tax on Account etc.

Accounting Policies

/ Accouting Policies31

Tax on results for the year Tax on results for the year which comprises current tax and changes in deferred tax is recognized in the Income Statement with the portion of taxes related to the taxable income for the year whereas the portion attributable to entries on equity is recognized directly in equity.

Joint taxation The Company falls within the Danish regulation on statutory national joint taxation of the entities in the Copenhagen Group. The parent company, Copenhagen Group A/S, is managing company of the joint taxation, and thus settles all payments of taxes with the tax authorities.

The current company tax is allocated by the settlement of joint taxa-tion contribution between the jointly taxed companies proportion-ately to the taxable income. In addition, enterprises with a tax loss, receive jointly taxation contribution from enterprises that are able to make use of their tax losses for a reduction of their own tax profit.

THE BALANCE SHEET

Intangible assets Acquired software, intellectual property and goodwill is measured at cost price less accumulated amortization and is amortized by the straightline method over the expected useful life estimated to three years.

Tangible assets Buildings, leasehold improvements, plant and machinery, other fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation.

The depreciable amount is cost less expected residual value after the end of the asset’s useful life.

Cost comprises acquisition price and costs directly related to ac-quisition until the time when the Company starts using the asset.

Assets are depreciated under the straightline method over the expected useful lives of the assets. The depreciation periods are as follows:

Buildings and installations, Denmark 75 y

Buildings and installations, Afghanistan 3-5 y

Fixtures on leased premises 5 y

Plant and machinery 3-5 y

Other plants, operating assents and furniture 2-5 y

Assets with a purchase price not exceeding DKK 12.300 per unit are recognized as costs in the Income Statement in the year of acquisition.

Profits and losses arising from disposal of property, plant and equipment are stated as the difference between the selling price less the selling costs and the carrying amount of the asset at the time of the disposal. Profits and losses are recognized in the Income Statement under depreciation.

Accouting Policies / 32

THE BALANCE SHEET - continued

Financial assets Investments in group enterprises are recognized in the Income Statement as the proportionate share of the net asset value with deduction or addition of nonrealized intercompany profit and loss and amortization of goodwill.

Investments in group enterprises are recognized in the balance sheet as the proportionate share of the group enterprises’ net asset value calculated according to the accounting policies of the parent.

Net revaluation of investments in group enterprises is recognized in the Equity as revaluation reserve under the equity method to the extent when the net asset value exceeds the acquisition price.

Group enterprises with a negative financial net asset value are recognized at DKK 0. Any receivables are written down with the parent’s share of the negative financial net asset value if assessed uncollectible. Should the negative financial net asset exceed receivables, the remaining amount is recognized in provisions to the extent that the parent is liable to cover the subsidiary’s negative balance.

Acquisitions or new enterprises are recognized in the Annual Report on the day of acquisition. Sold enterprises are recognized in the Financial Statements to the day of sale.

Profit or loss from disposal of group enterprises are measured as the difference between the disposal amount and the net asset value on the day of selling including non amortized goodwill and expected costs for the disposal. Profit and loss are recognized in the Income Statement under financial income/expenses.

Inventories Inventories are measured at cost using the first-in, first-out (FIFO) formula. Where net realizable value is lower than cost, inventories are written down to the lower value.

Cost of goods for resale as well as raw materials and consumables comprises the acquisition price plus landed costs.

The net realizable value of inventories is measured as the selling price less costs related to the completion of the products and cost related to the execution of sales. Furthermore, net realizable value is determined with regard to marketability, obsolescence and develop-ment in expected selling price.

Receivables Receivables are measured at amortized cost which usually equals nominal value. Provisions made for bad debts reduce the value.

Contract work in progress Contract work in progress is measured as the current market value of work performed. Current market value is measured on the basis of stage of completion on the balance sheet date and the total expected income of the particular work in progress.

Where the current exit value of a contract cannot be measured reli-able, the current exit value is measured as the costs incurred or as net selling price, when lower.

The particular work in progress is recognized in the balance sheet under receivables or liabilities conditional on net value of selling price less on account invoices and prepayments.

Costs related to selling work and contracts are recognized in the income statement in line with payments.

Prepayments Prepayments are recognized in the Balance Sheet and comprise incurred expenses related to the following financial year.

Provisions Provisions are recognized where the entity owing to an event that had taken place at the balance sheet date at the latest has a legal or actual obligation, and when it is probable that financial advan-tages must be surrendered in order to meet the obligation. Other provisions include guarantee obligations for making good work within the guarantee period of one year. Provisions are measured and recognized on the basis of experience in guarantee work.

Dividends Dividends expected distributed for the year are shown as a sepa-rate item under equity.

Tax payable and deferred tax According to the Danish regulation on statutory national joint taxa-tion of the entities, Copenhagen Group A/S, which is managing company, takes over the liability for the joint taxation to the Danish tax authorities concurrently with the settlement of joint taxation con-tribution from the joint taxed entities to the managing company.

Current tax liabilities and current tax receivable are recognized in the Balance Sheet as tax calculated on the taxable income for the year adjusted for tax on previous years’ taxable income and taxes paid on account/prepaid.

/ Accouting Policies33

Deferred tax is measured according to the balance sheet liability method in respect of temporary differences between the carrying amount and the tax base of assets and liabilities. In cases, e.g. in respect of shares in which the statement of the tax base can be made according to alternative taxation rules, deferred tax is meas-ured on the basis of the planned use of the asset or settlement of the liability, respectively.

Deferred tax assets including the tax value of tax losses carried forward, are measured at the expected realizable value, either by elimination in tax on future earnings or by set-off against deferred tax liabilities within the same legal tax entity and jurisdiction. Any deferred net tax assets are measured at net realizable value.

Deferred tax is measured on the basis of the tax rules and tax rates in force at the balance sheet date when the deferred tax is expected to crystallize as current tax. Any changes in deferred tax as a consequence of amendments to tax rates are recognized in the Income Statement. A tax rate of 25% has been applied for the year under review.

Liabilities other than provisions Financial liabilities other than provisions are recognized initially at the proceeds received net of transaction expenses incurred. In subse-quent periods, financial liabilities other than provisions are measured at amortized cost corresponding to the capitalized value using the effective interest method; consequently the difference between the proceeds and the nominal value is recognized in the Income State-ment over the maturity period of the loan.

Other payables are measured at amortized cost corresponding to nominal value.

Translation policies Transactions denominated in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differ-ences arising between the rate on the date of transaction and the rate on the payment day are recognized in the Income Statement as financial income or financial expenses. Where foreign exchange exposures are considered cash flow hedges, value adjustments are recognized directly in equity.

Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated by applying the exchange rates at the balance sheet date. Differences arising between the rate at the balance sheet date and the rate at the date of the arising of the receivable or payable are recognized in the Income Statement under financial income and expenses.

Fixed assets purchased in foreign currencies are measured at the rate of the date of transaction.

Cash Flow Statement Cash Flow Statement includes the Company’s cash flow for the year, distributed in operations, investments and financials for the year, adjustments of cash funds and bank debt as well as cash funds and bank debt at the beginning and at the end of the year.

Cash flow from operations is assessed as profit/loss for the year adjusted for non-cash operating items, changes in working capital and settled corporation tax.

Cash flow from investments includes payments in relation to acqui-sition and selling of entities and activities as well as acquisition and selling of intangible fixed assets, tangible fixed assets and financial fixed assets.

Cash flow from financials includes changes in the sum or the make-up of share capital and related costs. Moreover, cash flow includes borrowing, interest and repayments and payment of dividend to shareholders.

Cash funds and bank debt include cash funds and shortterm investments that without obstruction can be converted into cash funds and with little risk of changes in value with deduction of bank debt.

Accouting Policies / 34

Today, the Board of Directors and the Executive Board presented the consolidated financial statements of Copenhagen Group A/S for the financial year 1 January - 31 December 2012.

The consolidated financial statements have been presented in ac-cordance with the Danish Financial Statements Act.

We find the accounting policies applied appropriate, and the con-solidated financial statements therefore gives a true and fair view of the Group’s assets, liabilities and equity, financial position and results.

In our opinion, the Management’s Review includes a true and fair description of the matters mentioned in the review.

Copenhagen, April 30, 2013

Executive Board

Board of Directors

Peter Frithjof Bang Casper Moltke-Leth Chairman Jeppe Handwerk

Statement by the Management

Jeppe Handwerk

CEO

Anders Sejersdal

CFO

Carsten Balleby

COO

/ Statement by the Management35

Report on consolidated financial statements We have audited the consolidated financial statements of Copen-hagen Group A/S for the financial year 1 January - 31 December 2012, which comprise summary of significant accounting policies, income statement, balance sheet, cash flow statement and notes for the Group. The consolidated financial statements are prepared in accordance with the Danish Financial Statements Act.

The management’s responsibility for the consolidated finan-cial statements The management is responsible for the preparation of the consoli-dates financial statements that give a true and fair view in accord-ance with the Danish Financial Statements Act and for such inter-nal control as the management determines is necessary to enable the preparation of consolidates financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on the consolidated fi-nancial statements based on our audit. We conducted our audit in accordance with international standards on auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material mis-statement in the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s presentation and

preparation of consolidated financial state¬ments that give a true and fair view in order to design audit procedures that are appropri-ate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting poli-cies used and the reasonableness of accounting estimates made by the Board of Directors and Board of Executives, as well as the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

The audit has not resulted in any qualification.

Opinion In our opinion, the consolidated financial statements give a true and fair view of the Group’s assets, liabilities and financial position at 31 December 2012 and of the results of the Group’s opera-tions and cash flow for the financial year 1 January - 31 December 2012 in accordance with the Danish Financial Statements Act.

Statement on the Management’s Review Pursuant to the Danish Financial Statements Act, we have read the management’s review. We have not performed any further pro-cedures in addition to the audit of the financial statements. On this basis, it is our opinion that the information provided in manage-ment’s review is consistent with the financial statements.

Copenhagen, April 30, 2013

CHRISTENSEN KJÆRULFF

STATSAUTORISERET REVISIONSAKTIESELSKAB

Elan Schapiro

State Authorised Public Accountant

Lars Nørgaard

State Authorised Public Accountant

Independent Auditor’s Report

To the shareholders of Copenhagen Group A/S

Independent Auditor´s Report / 36

Executive Board

Anders Sejersdal

Chief Financial Officer

Employed since 2011

Jeppe Handwerk

Chief Executive Officer

Employed since 2005 (founder)

Carsten Balleby

Chief Operational Officer

Employed since 2011

COPENHAGEN GROUP ENTERS 2013 WELL PREPARED TO PURSUE MANY BUSINESS OPPORTUNITIES EXPECTED TO MATERIALIZE IN THE WAKE OF DEMOBILIZATION EFFORTS IN AFGHANISTAN AND THE EMERGING AND EXPANSION OF MISSIONS IN AFRICA AND THE MIDDLE EAST.

/ Management Team37

Copenhagen Group A/SSankt Annae Plads 11 • DK-1250 Copenhagen K • DenmarkPhone: +45 33 93 19 88 • E-mail: [email protected]: www.cphgroup.com

Documents

GROUP ANNUAL REPORT 2012...For several years Copenhagen Group has been successful prosid-ing project work for international organizations in con ict and post-con ict areas as well