BOSCH REXROTH A/S

Telegrafvej 1
2750 Ballerup
CVR No. 82104313

Annual report 2023

The Annual General Meeting adopted the annual
report on 12.06.2024

Roland Bittenauer
Chairman of the General Meeting
BOSCH REXROTH A/S | Contents 1

Contents
Entity details 2

Statement by Management 3

Independent auditor's report 4

Management commentary 7

Income statement for 2023 11

Balance sheet at 31.12.2023 12

Statement of changes in equity for 2023 14

Notes 15

Accounting policies 19
BOSCH REXROTH A/S | Entity details 2

Entity details
Entity
BOSCH REXROTH A/S
Telegrafvej 1
2750 Ballerup

Business Registration No.: 82104313

Registered office: Ballerup
Financial year: 01.01.2023 - 31.12.2023

Board of Directors
Karl Frederik Nilner
Martino Domenico Francesco Nogara
Mette Bach Bøegh-Nielsen
Thore Pedersen
Roland Bittenauer

Executive Board
Karl Frederik Nilner

Auditors
EY Godkendt Revisionspartnerselskab​
Nørre Havnegade 43​
6400 Sønderborg​
CVR No.: 30700228
BOSCH REXROTH A/S | Statement by Management 3

Statement by Management
Today, the Board of Directors and the Executive Board have discussed and approved the annual report or Bosch
Rexroth A/S for the financial year BOSCH REXROTH A/S 01.01.2023 - 31.12.2023.

The annual report is presented in accordance with the Danish Financial Statements Act.

In our opinion, the financial statements give a true and fair view of the Entity’s financial position at 31.12.2023
and of the results of its operations for the financial year 01.01.2023 - 31.12.2023.

Further, in our opinion, the Management's review gives a fair review or the development in the Company's
operations and financial matters and the results or the Company's operations and financial position.

We recommend the annual report for adoption at the Annual General Meeting.

Ballerup, 12.06.2024

Executive Board

Karl Frederik Nilner

Board of Directors

Karl Frederik Nilner Martino Domenico Francesco Nogara

Mette Bach Bøegh-Nielsen Thore Pedersen

Roland Bittenauer
BOSCH REXROTH A/S | Independent auditor's report 4

Independent auditor's report

To the shareholders of BOSCH REXROTH A/S

Opinion
We have audited the financial statements of BOSCH REXROTH A/S for the financial year 01.01.2023 - ​
31.12.2023, which comprise the income statement, balance sheet, statement of changes in equity and ​notes,
including a summary of significant accounting policies. The financial statements are prepared in accordance with
the Danish Financial Statements Act.​

​In our opinion, the financial statements give a true and fair view of the Entity’s financial position at 31.12.2023
and of the results of its operations for the financial year 01.01.2023 - 31.12.2023 in accordance with the Danish
Financial Statements Act.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional
requirements applicable in Denmark. Our responsibilities under those standards and requirements are further
described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.​

Independence
We are independent of the Company in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements
applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code.

Management's responsibilities for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Danish Financial Statements Act and for such internal control as Management determines is
necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.​

In preparing the financial statements, Management is responsible for assessing the Company's ability to continue​
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting in preparing the financial statements unless Management either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs and the additional requirements applicable in Denmark will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.​
BOSCH REXROTH A/S | Independent auditor's report 5

As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark,
we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement​
resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery,
intentional omissions, misrepresentations or the override of internal control.​

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.​

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and​
related disclosures made by Management.​

Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing
the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to continue as a going concern.​

Evaluate the overall presentation, structure and contents of the financial statements, including the note
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that gives a true and fair view.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

Statement on the management commentary

Management is responsible for the Management's review.​

Our opinion on the financial statements does not cover the Management's review, and we do not express any
form of assurance conclusion thereon.​

In connection with our audit of the financial statements, our responsibility is to read the Management's review
and, in doing so, consider whether the Management's review is materially inconsistent with the financial
statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.​

Moreover, it is our responsibility to consider whether the Management's review provides the information
required under the Danish Financial Statements Act.

Based on the work we have performed, we conclude that the Management's review is in accordance with the
financial statements and has been prepared in accordance with the requirements of the Danish Financial
Statement Act. We did not identify any material misstatement of the Management's review.
BOSCH REXROTH A/S | Independent auditor's report 6

Sønderborg, 12.06.2024

EY Godkendt Revisionspartnerselskab
CVR No. 30700228

Karen Jørgensen
State Authorized Public Accountant
Identification No (MNE) mne40029
BOSCH REXROTH A/S | Management commentary 7

Management commentary
Financial highlights
2023 2022​ 2021​ 2020​ 2019​
DKK'000 DKK'000 DKK'000 DKK'000 DKK'000
Key figures
Revenue 350,596 364,636 328,048 308,924 412,167
Gross profit/loss 81,763 65,119 63,555 76,140 65,632
Operating profit/loss 20,121 7,718 8,351 25,477 10,176
Net financials (342) 23 (15) (3) (208)
Profit/loss from operating 19,618 7,718 8,240 8,457 10,176
activities
Profit/loss for the year 13,703 4,916 6,488 19,855 8,102
Total assets 82,709 85,714 79,306 94,083 103,701
Investments in property,​ 189 0 0 0 0
plant and equipment
Equity 42,137 33,350 34,922 48,289 28,433
Average number of 76 74 69 67 75
employees

Ratios
Operating margin 5.74 2.12 2.55 8.20 2.47
Return on assets 23.89 9.35 9.63 8.55 10.19
Return on equity (%) 36.31 14.40 15.59 51.76 28.96
Equity ratio (%) 50.95 38.91 44.03 51.33 27.42

For terms and definitions, please see the accounting policies.​

Operating margin (%):

Operating profit/loss * 100
Revenue

Return on assets (%):

Operating profit/loss * 100
Average assets

Return on equity (%):

Profit/loss for the year * 100
Average equity
BOSCH REXROTH A/S | Management commentary 8

Equity ratio (%):

Equity * 100
Total assets
BOSCH REXROTH A/S | Management commentary 9

Primary activities
The Company mainly carries on sale of Rexroth products and systems within the areas of: Mobile- and Industrial
Hydraulics, Linear Motion and Assembly Technologies and Electric Drives and Controls.

Development in activities and finances

2023 was characterized by uncertainties due to existing geopolitical tensions. The overall DCDK development has
been characterized by a positive development by the mobile application area due to the numerous sales
initiatives started in the past years, contributed to the increase of the customer projects awarded, and a positive
market trend. Differently, in the industrial application area, the company has been negative impacted by volume
reduction in the major customer for systems (ETO solutions) and delocation/uncertainties in the wind industry
sector. Far for more major discussions about possible future projects has been running in the factory automation​
area where major orders are expected in year 2024.​

The high demand of components, mainly from order backlog of 2022 and first half of 2023 together with
limitations of the supply chain determined a new increase of the lead-time of the product sold by Bosch Rexroth
and draw to some challenges in fulfilling deliveries as scheduled. The measures put in place by the delivering
plants mitigated the effects of the restrictions in the supply chain.​

The negative impact raised by the inflation and increased energy costs was partially covered by efficiency
increasing measures and changes in the pricing policies.​
​
Strategi and objectives​
Strategi
Bosch Rexroth A/S offers control solutions through the combination of peak technical performance with our
global and local experience – as well as our strong sense of responsibility.​
​
Impact on the external environment
Protection of the environment is a major objective for the Company. Our environmental policy stands for an
environmental sound assembly, and we aim with our work environment policy to create continuous
improvements in relation to our employee’s security and health.

Profit/loss for the year in relation to expected developments

The income statement for 2023 shows a profit of Mio DKK 13,7 against a profit of Mio DKK 4,9 last year, and the
balance sheet on 31 December 2023 shows equity of Mio DKK 42,1.​

The past year and follow-up on development expectations from last year.​
The overall market development in 2023 was characterized by uncertainties due to the overall political situation
in the global context and a low down of the economic cycle in the second half of the year. Furthermore, some
structural changes in some of the market the company operates, mainly in the area of industrial applications
impacted the turnover development compared to previous year. In this uncertain climate, the company close the
year with an order intake of 297 Mio DKK below the level of previous year. The turnover was also impacted of the
structural changes and overall economical uncertainties previous mentioned. Despite this overall development
we see the company has been able to work on new projects especially in the area of factory automation and
mobile applications. ​
​
The overall profit was DKK 13,7 Mio DKK which is in line with the dominant nature of the business as low risk
distributor of Bosch Rexroth products in the Danish market. The company could improve the overall result
compared to 2022 through an improved steering of the value-added business, and better gross margin driven by
BOSCH REXROTH A/S | Management commentary 10

the sales strategy put in place.

Uncertainty relating to recognition and measurement

Recognition and measurement in the Annual Report have not been subject to any uncertainty.

Outlook
The outlook for 2024 is characterized by high uncertainties due to the political tensions. The slowdown in the
economic cycle which already impacted the second half of 2023 is expected to continue in 2024. Despite this
challenging economic climate we currently expect an improvement in order intake compared to 2023 due to the
numerus sales initiatives put in place in some of the market segments the company operates. We expect an
heterogeneous development in the different market segments Bosch Rexroth operates. The turnover
development will suffer from the order on hand level of 2023 and the persisting economic downturn of the first
half year 2024. ​

Turnover is currently forecasted 322 Mio. DKK ​

- a decrease of 4,5%. ​

Result 2024 is expected to be at around 14 Mio DKK but high uncertainty persists due to the current overall
economic cycle. Furthermore there result will be steered in line with the requirements as low risk distributor.​

The company will continue in its policy of rapidly adapting to new market conditions during the full year.

Environmental performance
Protection of the environment is a major objective for the Company. Our environmental policy stands for an
environmental sound assembly and we aim with our work environment policy to create continious improvements​
in relation to our employees security and health.

Events after the balance sheet date

No events have occurred after the balance sheet date to this date, which would influence the evaluation of this ​
annual report
BOSCH REXROTH A/S | Income statement for 2023 11

Income statement for 2023

2023 2022​
Notes DKK DKK
Revenue 350,596,444 364,636,392
Other operating income 2 503,609 0
Cost of sales (245,184,631) (279,426,798)
Other external expenses (24,152,323) (20,091,012)
Gross profit/loss 81,763,099 65,118,582

Staff costs 3 (61,609,942) (57,374,429)

Depreciation, amortisation and impairment losses 4 (31,892) (26,637)
Operating profit/loss 20,121,265 7,717,516

Other financial income 5 706,916 229,926

Other financial expenses 6 (1,048,920) (207,167)
Profit/loss before tax 19,779,261 7,740,275

Tax on profit/loss for the year 7 (6,076,056) (2,824,134)

Profit/loss for the year 8 13,703,205 4,916,141
BOSCH REXROTH A/S | Balance sheet at 31.12.2023 12

Balance sheet at 31.12.2023

Assets
2023 2022​
Notes DKK DKK
Other fixtures and fittings, tools and equipment 192,630 35,510
Property, plant and equipment 9 192,630 35,510

Fixed assets 192,630 35,510

Manufactured goods and goods for resale 9,168,310 12,795,977

Inventories 9,168,310 12,795,977

Trade receivables 46,548,043 68,488,819

Contract assets 440,611 480,697
Receivables from group enterprises 22,411,685 2,205,169
Deferred tax 10 226,925 0
Other receivables 3,720,902 564,240
Tax receivable 0 1,143,123
Receivables 73,348,166 72,882,048

Current assets 82,516,476 85,678,025

Assets 82,709,106 85,713,535

BOSCH REXROTH A/S | Balance sheet at 31.12.2023 13

Equity and liabilities

2023 2022​
Notes DKK DKK
Contributed capital 11 3,500,000 3,500,000
Retained earnings 24,933,409 24,933,409
Proposed dividend 13,703,205 4,916,141
Equity 42,136,614 33,349,550

Deferred tax 10 0 552,101

Other provisions 12 633,810 1,531,211
Provisions 633,810 2,083,312

Trade payables 4,119,966 2,746,752

Payables to group enterprises 17,033,433 30,851,802
Tax payable 2,675,988 0
Other payables 16,109,295 16,682,119
Current liabilities other than provisions 39,938,682 50,280,673

Liabilities other than provisions 39,938,682 50,280,673

Equity and liabilities 82,709,106 85,713,535

Events after the balance sheet date 1

Unrecognised rental and lease commitments 13
Contingent liabilities 14
Related parties with controlling interest 15
Transactions with related parties 16
Group relations 17
BOSCH REXROTH A/S | Statement of changes in equity for 2023 14

Statement of changes in equity for

2023
Contributed Retained Proposed
capital​ earnings​ dividend​ Total​
DKK DKK DKK DKK
Equity beginning of year 3,500,000 24,933,409 4,916,141 33,349,550
Ordinary dividend paid 0 0 (4,916,141) (4,916,141)
Profit/loss for the year 0 0 13,703,205 13,703,205
Equity end of year 3,500,000 24,933,409 13,703,205 42,136,614
BOSCH REXROTH A/S | Notes 15

Notes
1 Events after the balance sheet date
No events have occurred after the balance sheet date to this date, which would influence the evaluation of this
annual report.

2 Other operating income

Other operation income consists of service to other group companies.

3 Staff costs
2023 2022​
DKK DKK
Wages and salaries 55,657,147 51,837,554
Pension costs 5,197,497 4,990,066
Other social security costs 552,645 564,432
Other staff costs 202,653 (17,623)
61,609,942 57,374,429

Average number of full-time employees 76 74

Remuneration to the Executive Board has not been disclosed in accordance with section 98 B(3) of the Danish
Financial Statements Act.

4 Depreciation, amortisation and impairment losses

2023 2022​
DKK DKK
Depreciation of property, plant and equipment 31,892 26,637
31,892 26,637

5 Other financial income

2023 2022​
DKK DKK
Financial income from group enterprises 0 39,517
Other interest income 482,029 369
Exchange rate adjustments 224,887 190,040
706,916 229,926
BOSCH REXROTH A/S | Notes 16

6 Other financial expenses

2023 2022​
DKK DKK
Financial expenses from group enterprises 123,327 0
Other interest expenses 697,818 11,974
Exchange rate adjustments 227,775 195,193
1,048,920 207,167

7 Tax on profit/loss for the year

2023 2022​
DKK DKK
Current tax 4,523,498 1,856,877
Change in deferred tax (779,026) 967,257
Adjustment concerning previous years 2,331,584 0
6,076,056 2,824,134

8 Proposed distribution of profit and loss

2023 2022​
DKK DKK
Ordinary dividend for the financial year 13,703,205 4,916,141
13,703,205 4,916,141

9 Property, plant and equipment

Other fixtures
and fittings,
tools and
equipment​
DKK
Cost beginning of year 2,731,854
Additions 189,012
Cost end of year 2,920,866
Depreciation and impairment losses beginning of year (2,696,344)
Depreciation for the year (31,892)
Depreciation and impairment losses end of year (2,728,236)
Carrying amount end of year 192,630

10 Deferred tax
2023 2022​
DKK DKK
Property, plant and equipment 105,425 (280,715)
Receivables 121,500 (130,035)
Provisions 0 (141,351)
Deferred tax 226,925 (552,101)
BOSCH REXROTH A/S | Notes 17

2023 2022​
Changes during the year DKK DKK
Beginning of year (552,101) 415,156
Recognised in the income statement 779,026 (967,257)
End of year 226,925 (552,101)

​Deferred tax assets

As of December 31, 2023, the Company has recognized deferred tax assets totaling 226,925 kr. Deferred tax asset​
relates to temporary differences in fixed assets and receivables. Management deems it likely that future taxable
profit will be available in which unused tax credits can be utilized.

11 Share capital
The Company's share capital has remained DKK 3,500,000 in the past year.

12 Other provisions
The provisions expected to be payable within 1 year is 633.810 (2022: 1.531.211)​

The Company provides warranties on some of its products and is therefore obliged to repair or replace goods
which are not satisfactory. Based on previous experience in respect of the level of repairs and returns, other
provisions have been recognised for expected warranty claims.

13 Unrecognised rental and lease commitments

2023 2022​
DKK DKK
Liabilities under rental or lease agreements until maturity in total 42,105,787 42,428,179

The company has entered into operating leases on cars, which expire in 2024-2029. The total commitments
amounts to DKK 5.469.594 (2022: DKK 3.351.676).​

The Company has entered into rent obligations, with a period of nonterminability of 3-6 months the total
commitments amount to DKK 1.653.512 (2022: DKK 1.617.172). ​

The company has also entered another rent obligation that expires 30.09.2028. The total commitment amounts
to DKK 34.982.681 (2022: DKK 37.459.331).​

Furthermore, the Company has established work- and deliverable guarantees amounting to DKK 859.529 (2022:
DKK 0) towards clients.

14 Contingent liabilities
The Entity participates in a Danish joint taxation arrangement where Robert Bosch A/S serves as the
administration company. ​

The Company is jointly taxed with the other Danish group entities. As a group entity, the Company is jointly and
severally liable with other jointly taxed group entities for payment of income taxes for the joint taxation group.​

Otherwise, the Company has not other contingent liabilities.

BOSCH REXROTH A/S | Notes 18

15 Related parties with controlling interest

Parent company:​
​Robert Bosch Holding Nederland B. V.,
​Kruisbroeksestraat 1,​
​NL-5281 RV Boxtel,​
​Netherlands

16 Transactions with related parties

​
DKK
Sale of goods to group enteties 601,521
Purchase of goods from group enteties 222,678,505
Purchase of services from group entities 9,273,730
Interest expenses to group entities 123,327
Dividend paid 4,916,141
Receivables 22,411,685
Payables 17,093,688

17 Group relations
Copies of the consolidated financial statements of Robert Bosch Gmbh may be ordered at the following address:
Robert Bosch GmbH​
Postfach 10 60 50​
70049 Stutgart​
Germany​
Bosch.com
BOSCH REXROTH A/S | Accounting policies 19

Accounting policies
Reporting class
This annual report has been prepared in accordance with the provisions of the Danish Financial Statements Act
governing reporting class C enterprises (medium).

Changes in accounting policies

The accounting policies used in the preparation of the financial statements are consistent with those of last year.

Foreign currency translation

​ n initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the ​
O
transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and ​
the date of payment are recognised in the income statement as financial income or financial expenses.​

​Receivables and payables and other monetary items denominated in foreign currencies are translated at the ​
exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date ​
and the date at which the receivable or payable arose or was recognised in the most recent financial statements ​
is recognised in the income statement as financial income or financial expenses.

Income statement
Revenue
The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition.​

Revenue from the sale of goods for resale and finished goods is recognised in the income statement when
delivery and transfer of risk has been made before year end.​

Revenue is recognised exclusive of VAT and net of discounts relating to sales.

Other operating income

Other operation income consists of service to other group companies.

Cost of sales
Raw materials and consumables include expenses relating to raw materials and consumables used in generating
the year's revenue.

Other external expenses

Other external expenses include the year's expenses relating to the Company's core activities, including expenses​
relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases,
etc.

Staff costs
Staff costs include wages and salaries, including compensated absence and pension to the Company's
employees, as well as other social security contributions, etc. The item is net of refunds from public authorities.

Depreciation, amortisation and impairment losses

The item comprises depreciation of property, plant and equipment.​
BOSCH REXROTH A/S | Accounting policies 20

The basis of depreciation, which is calculated as cost less any residual value, is depreciated on a straight line basis​
over the expected useful life. The expected useful lives of the assets are as follows:​
Other fixtures and fittings, tools and equipment: 3-15 years

Other financial income

Financial income are recognised in the income statements at the amounts that concern the financial year. Net
financials include interest income and expenses as well as allowances and surcharges under the advance-
payment-of-tax scheme, etc.

Other financial expenses

Financial expenses are recognised in the income statements at the amounts that concern the financial year. Net
financials include interest income and expenses as well as allowances and surcharges under the advance-
payment-of-tax scheme, etc.

Tax on profit/loss for the year

Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax
adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the
income statement, whereas the portion that relates to transactions taken to equity is recognised in equity.​

The Company and its Danish group entities are jointly taxed. The total Danish income tax charge is allocated
between profit/loss-making Danish entities in proportion to their taxable income (full absorption).​

Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates
applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge
according to the rates applicable to interest surcharges to the management company.

Balance sheet
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the
asset is ready for use.​
Gains or losses are calculated as the difference between the selling price less selling costs and the carrying
amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are
recognised in the income statement as other operating income or other operating expenses.

Leases
The Company has chosen IAS 17 as interpretation for classification and recognition of leases.​

Impairment of fixed assets

The carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries and
associates is assessed for impairment on an annual basis.​

Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The
carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use
(recoverable amount).​

The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is
calculated as the present value of the expected net cash flows from the use of the asset or the group of assets
BOSCH REXROTH A/S | Accounting policies 21

and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful
life.​

Previously recognised impairment losses are reversed when the reason for recognition no longer exists.
Impairment losses on goodwill are not reversed.

Inventories
Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower
than cost, inventories are written down to this lower value. The net realisable value of inventories is calculated as
the sales amount less costs of completion and expenses required to effect the sale and is determined taking into
account marketability, obsolescence and development in the expected selling price.

Receivables
Receivables are measured at amortised cost.​

The Company has chosen IAS 39 as interpretation for impairment of financial receivables.​

An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is
impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is
recognised on an individual basis.​

Receivables in respect of which there is no objective evidence of individual impairment are tested for objective
evidence of impairment on a portfolio basis. The portfolios are primarily based on the debtors' domicile and
credit ratings in line with the Company's risk management policy. The objective evidence applied to portfolios is
determined based on historical loss experience.​

Impairment losses are calculated as the difference between the carrying amount of the receivables and the
present value of the expected cash flows, including the realisable value of any collateral received. The effective
interest rate for the individual receivable or portfolio is used as discount rate.​

Cashpool is classified under intercompany receivables or payables.

Contract assets
Service supplies and contract work in progress for third parties are measured at the market value of the work
performed less progress billings. The market value is calculated based on the stage of completion at the balance
sheet date and the total expected income from the relevant contract. The stage of completion is calculated based​
on the expenses incurred relative to the expected total expenses relating to the relevant contract.​

Where the outcome of contract work in progress cannot be estimated reliably, the market value is measured at
the expenses incurred in so far as they are expected to be paid by the purchaser.​

Where the total expenses relating to the work in progress are expected to exceed the total market value, the
expected loss is recognised as a loss-making agreement under "Provisions" and is expensed in the income
statement.​

The value of work in progress less progress billings is classified as assets when the selling price exceeds progress
billings and as liabilities when progress billings exceed the market value.
BOSCH REXROTH A/S | Accounting policies 22

Deferred tax
Deferred tax is measured according to the liability method on all temporary differences between the carrying
amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary
differences relating to goodwill which is not deductible for tax purposes and on office premises and other items
where temporary differences, apart from business combinations, arise at the date of acquisition without affecting​
either profit/loss for the year or taxable income. Where alternative tax rules can be applied to determine the tax
base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability,
respectively.​

Deferred tax is measured according to 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. Deferred tax assets are recognised at the expected​
value of their utilisation; 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. Changes in deferred tax due to changes in the tax rate are recognised in the​
income statement.

Tax payable or receivable

Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for
the year, adjusted for prior-year taxes and tax paid on account.
BOSCH REXROTH A/S | Accounting policies 23

Dividend
Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting
(declaration date). Dividends expected to be distributed for the financial year are presented as a separate item
under "Equity".

Other provisions
Provisions comprise anticipated expenses relating to warranty commitments, onerous contracts, restructurings,
etc. Provisions are recognised when the Company has a legal or constructive obligation at the balance sheet date
as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation.​

Provisions are measured at net realisable value or at fair value if the obligation is expected to be settled far into
the future.

Other financial liabilities

Other liabilities are measured at net realisable value. The Company has chosen IAS 39 as interpretation for
recognition and measurement of liabilities.

Cash flow statement

With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement is prepared for the​
parent company, as its cash flows are reflected in the consolidated cash flow statement.​

Financial ratios
The financial ratios stated under "Financial highlights" have been calculated as follows:​