ANNUAL REPORT 2018 / 19

PROFILE

Rovsing A/S (Rovsing) develops, manufactures and delivers systems for functional and electrical testing of spacecrafts (primarily satellites) and their payloads.

Rovsing products and systems are used for testing of spacecraft sub-systems, including external communication connections and instruments.

The Company's products are modular and are sold either on a stand-alone basis or used as modules in system solutions, customized for the specific spacecraft application. In connection with the configuration of system solutions, third parties' products are also used, and software is configured for the individual spacecraft needs.

The products, inclusive software packages, are flexible and configurable, facilitating tailor-made customer solutions.

More specifically, Rovsing offers, the following equipment solutions:

Payload EGSE (Electrical Ground Support Equipment)
Power & Launch EGSE
Platform EGSE
Instrument EGSE
Avionics Test Beds
Central Check-out Equipment
Thermal EGSE
Real-time Simulators

In addition, Rovsing develops software solutions, including solutions based on specific customer specifications, and performs independent software verification/validation (ISVV) for critical spacerelated software developed by third parties.

Rovsing also provides engineering support for large corporations in the space industry at various locations in Europe and in South America. For more than 15 years, Rovsing has been responsible for configuration control of ground installations at the European space base CSG in Kourou in French Guiana.

The main customers of Rovsing are European and US-based space groups such as Airbus DS, Thales Alenia Space, Boeing, Lockheed Martin and their key sub-suppliers. The European Space Agency (ESA), NASA and various national space agencies in Europe are also among Rovsing's customers.

LIST OF CONTENTS

HIGHLIGHTS OF THE YEAR

The financial year 2018/19 was in line with the guided expectations, with a revenue amounting to DKK 28,2 million, compared to a revenue of DKK 25,1 million in 2017/18 corresponding to an increase of DKK 3,1 million. The increase in revenue is a result of the positive development in the Company's activity level
The EBITDA amounts to DKK 0,3 million, which is a significant improvement of DKK 4,9 million compared to 2017/18. The positive development is driven by a combination of reduced fixed costs, reduced staff costs and a focus on improving the efficiency of the ongoing projects execution and overall planning
Net cash flows from operating activities amounts to DKK 0 million in 2018/19 compared to DKK -11,0 in 2017/18, primarily driven by improved working capital and the improved result for the year
The improved financial performance is a direct result of the strategy launched in March 2018, where the turnaround process was initiated
In 2018/19, Rovsing has continued to support its Customers as an important member of all major ongoing ESA missions, delivering test- and simulation systems, individual products, software solutions, ISVV and on-site engineering services
In line with the Company's strategy, increased focus on emerging markets and USA has continued, with deliveries to Boeing and by securing the contract for Turksat 6A EPS EGSE. This marks a significant milestone for Rovsing to develop further business opportunities
In order to strengthen the capital structure, Rovsing has during 2018/19 carried out capital increases raising a total amount of DKK 4,6 million. The capital increases have been subscribed by way of conversion of debt from a Convertible Credit Facility and by a directed share issue. Following the capital increases, Rovsing has fully repaid the Convertible Credit Facility (DKK 2,6 million)
In conclusion, the Company has continued its positive development, which is reflected in improved key figures and overall performance. In line with Rovsing's strategy, 2018/19 has been a vital step in strengthening the Company's foundation for future growth

FINANCIAL HIGHLIGHTS AND RATIOS

INCOME STATEMENT	2014/15	2015/16	2016/17	2017/18	2018/19
DKK'000
Revenue	19,636	26,632	38,968	25,127	28,184
Earnings before interest, taxes, depreciation and
amortisation, EBITDA	-3,340	-2,120	1,260	-4,513	341
Operating profit (EBIT)	-11,584	-13,772	-1,921	-7,722	-2,929
Financial income and expenses, net	-668	-347	-1,344	-1,553	-767
Profit/loss for the year	-10,940	-11,094	-2,675	-9,912	-4,040
BALANCE SHEET
Non-current assets	42,325	28,511	25,741	23,268	20,209
Current assets	14,197	12,984	15,718	12,634	14,265
Total assets	56,522	41,495	41,459	35,902	34,474
Equity	27,064	16,326	18,217	18,210	18,560
Non-current liabilities	9,592	0	0	4,000	4,080
Current liabilities	19,866	25,169	23,243	13,692	11,834
Total equity and liabilities	56,522	41,495	41,459	35,902	34,474

CASH FLOW STATEMENT
Cash flow from operating activities	959	5,116	-5,038	-11,032	11
Cash flow from investing activities	-3,567	-5,780	-1,329	-1,578	-1,040
Cash flow from financing activities	3,319	-282	7,552	11,561	1,109
Total cash flow	711	-946	1,185	-1,049	81

KEY FIGURES
EBITDA margin, %	-17.0	-8.0	3.2	-18.0	1.2
EBIT margin, %	-59.0	-51.7	-4.9	-30.7	-10.4
Return on equity, %	-34.5	-47.5	-15.3	-39,1	-18.0
Earnings per share (EPS)	-0.04	-0.04	-0.01	-0.03	-0.01
Cash flow per share (CFPS)	-0.06	-0.06	-0.04	-0.04	-0.01
Dividends per share of DKK 0.05	-	-	-	-	-
Pay-out ratio, %	-	-	-	-	-
Equity per share, DKK	0.09	0.05	0.05	0.04	0.04
Solvency, %	47.9	39.3	43.9	50.7	53.8
Average number of shares (1,000 shares)	285,851	300,344	316,778	380,140	429,844
Number of shares at year-end (1,000 shares)	299,511	302,011	333,212	404,854	457,881

The key figures are calculated in accordance with the recommendations issued by the Danish Society of Financial Analysts ("Finansforeningen") in 2015.

Rovsing's financial year is from 1 July to 30 June.

CORPORATE INFORMATION

The Company

Rovsing A/S Dyregårdsvej 2 2740 Skovlunde, Denmark

Phone:	+45 44 200 800
Fax:	+45 44 200 801
Website:	www.rovsing.dk
E-mail:	[email protected]

Company reg. (CVR) no.: 16 13 90 84 Date of incorporation: 20 May 1992 Municipality of registered office: Ballerup, Denmark

Board of Directors

Michael Hove (Chairman) Flemming Hynkemejer Ulrich Beck Jakob Have

Executive Management

Hjalti Pall Thorvardarson, CEO Sigurd Hundrup, CFO

Auditors

BDO Statsautoriseret revisionsaktieselskab Birk Centerpark 30 7400 Herning, Denmark

Annual General Meeting

The annual general meeting will be held on 21 October 2019 at 16:00 at Dyregårdsvej 2, 2740 Skovlunde, Denmark.

MANAGEMENTS' REVIEW

OPERATIONAL REVIEW

At DKK 28,2 million, Rovsing's revenue increased with DKK 3,1 million, compared to the previous financial year. The Company's earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to DKK 0,3 million, which was an improvement of DKK 4,9 million compared to the previous year.

Tax for the year was DKK -0,3 million compared to DKK -0,6 million previous year.

The profit/loss after tax was DKK -4,0 million from a loss of DKK 9,9 million in 2017/18. The positive development is driven by a combination of reduced fixed costs, reduced staff costs and a focus on improving the efficiency of the ongoing projects execution and overall planning.

The realised revenue and EBITDA of DKK 28,2 million and DKK 0,3 million, respectively were in line with the guidance to the market during the financial year announced by the Company in the interim financial statement for the last quarters of the financial year 2018/19.

Management considers the development in revenue, EBITDA and profit and loss for the financial year a satisfactory step in the right direction for the ongoing turnaround process.

The European market

In the financial year 2018/19, Rovsing has been able to realise the projected level of activity in the market. With the projected lower level of ESA activity in 2018/19, it was a strategic focus to diversify the Company's market share with higher intake from non-ESA activities. The European institutional market remains the most important market to Rovsing, however in line with the Company's strategy, growth and mitigation of ESA activity fluctuations will be sought from increased activities in the USA and emerging markets while utilizing our core competencies.

These efforts bore fruit in September 2018, with the securing of a contract for providing the Turksat-6A Electrical Power Subsystem (EPS) EGSE to Tübitak Uzay, a Turkish national aerospace institute. Rovsing provides a test suite of hardware and software for supporting satellite assembly, integration and verification by means of Solar Array simulation, Deployment simulation, Battery simulation and conditioning, Load simulation and Umbilical launch support.

The T6A EPS EGSE is based on Rovsing key products such as the RO-5100 SAS Module, R0- 1010 and RO-1100 SLP Modules, RO-2000 range MASC products as well as the Rovsing EGSE Controller SW Suite. By the end of 2018/19 the team was preparing for Test Readiness Review with delivery planned for the autumn 2019.

Rovsing continued multiple activities for the MetOp-SG programme, with ISVV work for the MetOp-SG platform and instruments continuing in 2018/19. The ISVV work is planned to run until end mid-2020. Rovsing has delivered the EGSE Controller Software for the MetOp-SG RF Suitcase to AstriPolska, this work was finalized in spring 2019 with the contract now in warranty phase. For Honeywell in Scotland, Rovsing has delivered three sets of Interface Front-End Equipment in January and March of 2019, for usage in the MetOp-SG RF SCOEs.

ESA, with prime contractor Airbus DS, is providing the European Service Module (ESM) with power, propulsion and life support functions to NASA's Orion spacecraft that will send astronauts to the moon and into deep space. Rovsing remains a vital supplier for the programme with the provision of the Solar Array Wing Front-End (SAW FEE), with three systems already delivered and deployed in Europe and USA, Rovsing secured a contract in January 2019 for delivering a fourth system to Airbus DS in Bremen (autumn 2019) which will be used to qualify the upcoming ESMs. The ESM programme will continue for years to come and Rovsing anticipate extensions to the programme support service contracts for the SAW FEEs and also previously delivered PCDU EGSEs.

The ESA SW development project related to the European Ground Systems Common Core (EGS-CC) has laid dormant for all of 2018/19 due to delays in the programme which meant that Rovsing's work has not been able to continue.

With the longstanding background expertise with refurbishments for Copernicus and Galileo programmes, Rovsing proposed and was awarded a study by ESA in February 2019 for evaluating the feasibility of reusing existing ESA owned EGSE for new applications with refurbishment and tailoring.

Further in 2018/19 in the field of refurbishments Rovsing performed evaluation, repair and requalification of equipment used for Galileo for customer SSTL.

A number of programmes returned in 2018/19 to add equipment to already delivered systems with Rovsign delivering elements for a 3rd set for the ExoMars DH SCOE, an additional Discrete FrontEnd for EUCLID RF Suitcase and upgraded Latching Current Limiters for the EarthCARE PISA.

Together with CRITICAL Software S.A. from Portugal, Rovsing was selected by ESA in May 2019 to adapt ESA's ISVV processes to current software development practices.

The SETTERS and CSG service contracts continued in 2018/19 for end customer CNES with Rovsing teams deployed in Toulouse and Kourou.

Based on the upcoming European market outlook it is Rovsing's assessment that the level of the ESA activities will continue its long-term increasing trend. As projected the number of new projects was lower in first half of 2018/19 than what has been the case in recent years. However, a number of large programmes are on the horizon such as the Galileo Transition Satellites, new batch of Copernicus missions, Mars Sample Return and multiple national programmes for earth observation and telecom. The ESA Ministerial Conference in November 2019 will mark a key political milestone to launch these large programmes and secure the budget contributions from the member states.

The US market

Rovsing's activities on the US market mostly take place in cooperation with the Company's US partner Kratos RT Logic in Colorado Springs.

In a partnership with RT Logic, Rovsing has been supporting Boeing Space Systems by designing the new Solar Array Simulator test system for their factory in Los Angeles. The delivery of the first 4 systems was performed in early 2019, with the commissioning of the systems and training of Boeing staff performed in early April 2019.

Rovsing proceeded throughout the year to explore further opportunities with US customers, positioning the Company to be able to bid on upcoming missions and making Rovsing's products and solutions known in the US market. Moving forward the US market remains a growth opportunity of strategic focus for the Company.

Emerging space markets

During 2018/19, Rovsing has not had major focus on opportunities in the Chinese market due to the escalating trade situation between the USA and China. Moving forward, if the situation improves between USA and China then Rovsing will again increase focus on the Chinese market. In the meantime, Rovsing continues to monitor Chinese space market segments.

By winning the contract on Turksat 6A, Rovsing has developed a strong competitive position in emerging and ambitious space markets with their indigenous space programmes. Those markets are closely monitored with their increasing space budgets.

Product development and production

In the financial year 2018/19, Rovsing continued to improve the product base and related logistics, production and testing environments. Management sees time and cost-effective production and testing as a vital part of the foundation for Rovsing's test systems and product offerings and to secure Rovsing's ability to deliver according to plan, quality and within budgeted prices.

New product developments are part of Rovsing's strategic roadmap, with focus on building increased scalability such that our already modular products can be better address the widening range of satellite architectures. Traditionally, our product range is aimed at larger institutional and commercial satellites with high capability and power needs. Anticipating the increased focus on diverse deployments in the space segment, Rovsing's development roadmap accommodates scaling down to smaller satellites and constellations as well as scaling up to higher power demands called upon by electrical propulsion enabled satellites and larger manned missions.

Capital increases in 2018/19

In October 2018, the share capital was increased by DKK 210,517 nominal value or 4,210,349 shares of DKK 0.095 each by conversion of a convertible credit line.

In November 2018, the share capital was increased by DKK 298,236 nominal value or 5,964,736 shares of DKK 0.083826 each by conversion of a convertible credit line.

In February 2019, the share capital was increased by DKK 360,205 nominal value or 7,204,092 shares of DKK 0.083286 by conversion of a convertible credit line. Further in February 2019, the share capital was increased by DKK 1,782,375 nominal value or 35,647,499 shares from a directed share issue.

The capital increases carried out in 2018/19 are in line with Rovsing's strategy which aims to improve the capital structure and reduce debt.

Organisation and management

By the end of the financial year 2018/19, Rovsing employed a total of 23 employees, counted on a full-time-equivalent basis. Most employees were employed at the Company's head office in Skovlunde, Denmark, but the Company also has employees in Kourou, French Guiana, Toulouse, France and in Bremen, Germany where they provide support and consultancy services.

At the Company's annual general meeting in October 2018 Michael Hove, Flemming Hynkemejer and Ulrich Beck were reelected to the Board of Directors, while Jakob Have was elected as new member succeeding Jørgen Hauglund.

Incentive schemes

Rovsing has, to a certain degree, used share-based incentive schemes as part of compensation packages for members of the Board of Directors, members of the management team and other staff.

At the end of the financial year 2018/19 there were 55.800.000 warrants. For additional information about the Company's share-based incentive schemes, please see note 6 to the financial statements on page 40.

The Board of Directors consider share-based incentive schemes as relevant and effective incentives that allow the Company to reward good performance, retain key persons and at the same time secure alignment of interests between managers and shareholders. Therefore, it is expected that share-based incentives, such as warrants, will be used more in the future as part of the compensation packages for members of the management group and members of the Board of Directors.

ROVSING'S STRATEGY

With the new management in 2018 and with support from the renewed Board of Directors, the Company has embarked on a turnaround process, with a focus in 2017/18 to lay the groundwork, by bringing down the overall cost base, adapting the organization and sharpening the competitiveness of the Company. Now, in 2018/19 the outcomes of the process improvements have started to take effect which can be seen in the increased revenue, EBITDA performance and other key figures.

Management and the Board of Directors have continued the iterative strategic work based on the foundation of the strategic plan laid out in 2017/18 and 2018/19, maintaining a focus on the next steps and future growth opportunities along the Company's development path towards strengthening Rovsing as a key agile high-tech SME in the Space & Defense Industry. Providing our customers with the innovative test and simulations products and systems they require, supporting their critical path, which is constantly challenged by need to reduce time-to-operation cycles.

An Agile and Customer focused High-Tech SME

Rovsing has an established track record, being involved as reliable supplier in almost every major European Institutional Space Programmes in the past decade. The Company is positioned as a first or second tier supplier to all European Large-Scale Integrators (LSIs/OEMs).

Rovsing has operated as a classical technology and customer driven SME. Our customers from Space Agencies and Institutions to LSIs act in a dynamic and challenging high tech environment. Rovsing has the expertise to provide first class products and services to ensure seamless performance for our customers critical systems and infrastructure. Our customers are to a large extent requirements and process driven and have difficulties with swiftly adapting and anticipating challenges. Herein lays Rovsing's asset, being an agile, dynamic expert, we can anticipate, react and create solutions in hours or days which would normally bind our customers for weeks or months.

With best-in-class services, cost-effective and efficient products and systems, we evoke customer satisfaction and trust. By continuing our R&D focus and anticipating the technical developments and challenges, which our customers face now and in the years to come, we are able to center our product developments at the heart of their critical path in test and simulation capabilities.

Skills and Expertise

Rovsing is driven by the expertise and engagement of our employees, this is the core of the Company. In the turnaround process our core has never been more challenged nor been more important. Streamlining and reducing cost across all segments also requires intense involvement and engagement from the employees. This means not only going the extra mile to ensure our customers satisfaction but also leaving no idea of improvement unheard.

Rovsing's success is based on the talent of the employees and we strive to make the working environment agile, providing flexibility to our employee's needs. We maintain a high level oftrust that the same flexibility flows back to ensure we overcome the challenges at hand and that the commitment to improve and grow as both engineers and as a Company, is a shared vision between the entire staff.

Strengthening our Strategic position and Growth

Rovsing has successfully performed a wide range of contracts and activities. This, together with a track record and reputation provides a baseline to ensure and expand the Company's competitive position in a strong competitive market environment, driven by time-to-market, cost structure and quality. Rovsing must continuously work on improving our basis of quality and competitiveness.

Our marketplace is a rapidly growing global market. Ongoing investment cycles require Rovsing to establish solid and growing footprints beyond the European institutional environment. Further building our foothold in the US and emerging markets remains essential together with developing and investing in our product and service portfolio with focus on a harmonized, scalable offering which can support both new and traditional aerospace customers.

Rovsing understands and acts in a way that our Strategic Programme must develop and increase the Company's value. This requires continuous interaction with customers, suppliers and the shareholders and financial community. Management and the Board of Directors are committed to facilitate the reputation of trust and growth into the future of Rovsing.

Company

1. Rovsing Mission

10 • To enable our aerospace customers to verify with confidence that they will perform in all scenarios once deployed, by supplying them with innovative test & simulation tools

2. Vision – Rovsing 2021 Strategic Program

• Rovsing will develop into a strong and agile high-tech SME, recognized as a key player in aerospace with key expertise in the Space & Defense industry

3. Values

Innovation & quality in development and implementation work
Customer satisfaction
Continuous and stable business growth
Attractive workplace and good working environment

4. Management, Leadership & Organisation

CEO with prime space industry expertise, sharp CFO & lean management team;
Board of Directors with financial and industrial expertise, and competences in strategy, turnaround, and profitable growth;
Improved accountability and focus on financial performance in project planning and resource allocation throughout the organization

5. Rovsing's core skills

Analog & Digital electronics;
Embedded & System software;
Project management & Process competence;
Product quality and reliability;
Responsiveness to customers Product Life Cycle and industrial challenges

6. Product Range / Portfolio

High-tech modular product portfolio and expertise (2018/19):

Test systems & Products (64%)
Software Verification (ISVV) (9%)
On-site engineering Services (27%)

Grow Top Line

7. Market expansion focus

Make products & expertise known worldwide
Expand in the US through local partners and increased presence
Establish further foothold in emerging markets
Strengthen preferred supplier status with ESA, EU national agencies and LSI's
Pursue opportunities with NASA and other major non-EU space agencies
Refurbishment and repurposing of proven assets
Expand support for professional small satellite programmes & constellations
Leverage competences and product portfolio in the growing Military/Security segment

8. Market sizes

Global market of Electrical Ground Support Equipment

Equipment: USD 100m p.a.
ESA ESGE market: EUR 40m p.a.
An average of 135 satellite (> 50kg) launches per year expected until 2025

9. Product development focus

Focus R&D on standard products, reduce complexity while offering improved scalability for both traditional and new customers; increase the digital footprint,
Focus on profitable implementation and configurable S/W for customized systems
Capture ESA/EU/DK funding opportunities to accelerate product development roadmap
Strategic focus on suppliers and synergies to seek cost optimisation

10. Financials

Actual performance 2018/2019:

Revenue: DKK 28,2 million
EBITDA: DKK 0,3 million

Financial guidance 2019/2020:

Revenue: DKK 28-30 million
EBITDA: DKK 1 to 2 million

FINANCIAL REVIEW

Income statement

Revenue amounted to DKK 28,2 million in 2018/19, an increase of DKK 3,1 million, on 2017/18 revenue. Part of the increase compared to the previous financial year was due to the current execution of the significant contract for the delivery of a Power EGSE system in Turkey.

A Gross profit of DKK 18,6 million (2017/18 DKK 18,7 million) combined with significant decline in staff costs of DKK 3,7 compared to last financial year is the primarily reason for the improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) in 2018/19.

The above development in revenue and reduced staff costs led to an EBITDA of DKK 0,3 million, from DKK -4,5 million in 2017/18.

Depreciation, amortisation and impairment amounted to DKK 3,3 million in 2018/19, against DKK 3,2 million in 2017/18.

Financial items

Overall, net financial expenses amounted to DKK 0,7 million compared to DKK 1,6 million in 2017/18. The decrease in financial items can be attributed to the improved funding structure of the Company with completed capital increases during the year combined with replacement of loans with high interest during last financial year.

Profit/loss before tax

The Company recorded a loss before tax of DKK 3,7 million in 2018/19, which was an improvement of DKK 5,6 million compared to the year before.

Tax

Tax for the year amounted to a cost of DKK 0,3 million in 2018/19, compared to a cost of DKK 0,6 million in the preceding financial year. The tax consists of current tax (income) of DKK 0,2 million, which relates to reimbursement under section 8x of the Danish Tax Assessment Act (TAA). The deferred net tax asset amounts to DKK 2,5 million at 30 June 2019. Rovsing expects to be able to utilize the tax asset within the next five years.

Profit/loss for the year and comprehensive income

The Company reported a loss for 2018/19 of DKK 4,0 million, against a loss of DKK 9,9 million in the preceding financial year.

Balance sheet

Assets

At the end of 2018/19, total assets amounted to DKK 34,5 million, against DKK 35,9 million at 30 June 2018.

Intangible assets amounted to DKK 17,4 million at 30 June 2019, down by DKK 2,1 million on 30 June 2018. The decrease was due to ordinary depreciation and amortisation of DKK 3,1 million, DKK 0,7 million associated with further development of the SAS product and DKK 0,3 million associated with the finalization of a cofunded ESA project.

Deferred tax assets amounted to DKK 2,5 million, against a tax asset of DKK 3,1 million previous year.

Inventories amounted to DKK 2,8 million, representing a year-on-year increase of DKK 1,7 million. The increase was primarily owing to building up of a stock of SAS products to be delivered in the next financial year.

At 30 June 2019, trade receivables and contract work in progress combined amounted to DKK 9,2 million, which was DKK 1,3 million less than previous year.

Current assets, except cash, amounted to DKK 14,0 million, an increase from DKK 12,5 million at 30 June 2018.

Liabilities and equity

Equity amounted to DKK 18,6 million at 30 June 2019, against DKK 18,2 million at 30 June 2018. During the year the equity increased with DKK 4,6 million form capital increases and an adverse effect from loss for the year of DKK 4,0 million and DKK 0,2 million related to costs from capital increases. Rovsing holds 143,659 of the Company's own shares with a nominal value of DKK 7,183.

The Company's funds tied up in working capital were improved with DKK 0,5 million compared to last year.

The Company drew DKK 1,6 million on the available convertible credit facility during the year. Three times during the year the capital was increased by way of converting debt to share capital equal to a total nominal value of DKK 1,5 million. In February 2019 the Company repaid DKK 2,6 million in loans, which was equal to the outstanding balance on the convertible credit facility. At year end the outstanding amount on the convertible credit facility is zero.

Cash flow statement

Total cash flow from operations were net cash 0f DKK 0,6 million in 2018/19, against a net cash outflow of DKK 11,0 million in the preceding year.

Cash flow from operating activities after interest and tax reimbursement was DKK 0 million (DKK -11 million in 2017/18) and cash flow from investing activities was DKK -1,0 million against DKK -1,6 million in the previous year.

Cash flow from operations before changes in working capital was improved with DKK 4,3 million and cash flow from working capital was improved with DKK 7,2 million compared to last year. The improvement covers a decrease in cash flow from net receivables of DKK 2,0 million compared to last year and an improvement in cash flow from net payables of DKK 9,2 million compared to last year, mainly due to loans paid to related parties during 2017/18.

Cash flows from operating activities were negatively impacted by DKK 1,7 from funds tied up in inventories mainly due to build of SAS products to be delivered in 2019/20.

This cash outflow of DKK -1,0 million in the year was covered by means of capital increases in the form of share issues in October 2018, November 2018 and February 2019 which was subscribed for by conversion of debt. Further in February 2019 the Company received DKK 3,1 million in proceeds from a directed share issue. Out of the proceed from the share issue DKK 2,6 million was used to repay the outstanding amount on the convertible credit line with FormueNord.

Funding of the Company's operations

The liquidity situation during the 2018/19 financial year improved compared to the previous year, however the liquidity situation remains a focus point at the end of the financial year due to funds tied up in working capital, especially inventories and work in progress. Management and the Board of Directors continue to seek options for improving the Company's working capital.

Under the current rules for listed companies, Rovsing may issue new shares for up to 20% of the Company's existing share capital within a financial year. Within this framework, the size of a potential capital increase will be assessed relative to the immediate liquidity requirement, the capital aspects of the Company's strategy and investor appetite for buying Rovsing shares.

Should Rovsing carry out a capital increase, the contributed capital would be expected to be used partly for investing in commercial initiatives aimed at consolidating the Company's growth and competitiveness and as a general liquidity buffer. Reference is made to the section on the Company's risk factors on page 18, which describes risk associated with the Company's liquidity.

DIVIDENDS

The Board of Directors recommends to the annual general meeting that no dividend be declared in respect of the 2018/19 financial year.

OUTLOOK FOR 2019/20

Considering the above developments, the Company's new strategy, the completed sourcing process and the expected order intake for 2019/20 management expects for the financial year 2019/20 a revenue of around DKK 28-30 million and an EBITDA of around DKK 1 to 2 million.

EVENTS AFTER THE REPORTING PERIOD

After the balance sheet date, no events have occurred that materially affect the Company's financial position other than the events described in the Management's review.

SIGNIFICANT ACCOUNTING ESTIMATES

For a description of items involving significant recognition and measurement uncertainties, see note 2 to the financial statements.

SHAREHOLDER INFORMATION

Rovsing's shares are listed on Nasdaq OMX Copenhagen and traded under the abbreviation ROV and ISIN code DK0060400398. The Company's share capital has a total nominal value of tDKK 22.894 and is divided into 457.881.131 shares of DKK 0.05 each. No shares carry any special rights.

Outstanding shares	No. of shares
Beginning of year	404,854,455
Share issue by debt
conversion	17,379,177
Share issue	35,647,499
End of year	457,881,131

Share price

The highest and lowest prices of Rovsing shares in 2018/19 were DKK 0.1310 and 0.06, respectively. At the end of the financial year, the share price was DKK 0.070. At 30 June 2019, Rovsing had a market capitalisation of DKK 32.1 million.

Share liquidity

The average daily turnover in 2018/19 was 943.993 shares with an average of 16 transactions per day.

Shareholders

Rovsing has a total of 4.063 registered shareholders. 97.4 % of the shares in Rovsing are registered in the name of the holder.

The table below shows the composition of Rovsing's shareholders.

Shareholders	No. of	%
	shares
CATPEN A/S	31,372,834	6.85
Other shareholders	426,508,297	93.15
Total	457,881,131	100.0

Employee shares

No employee shares were granted in 2018/19.

Warrant schemes

In the period until 27 October 2022, the Board of Directors is authorized to issue warrants for board members and/or employees. The Board of Directors may issue warrants with a nominal value up to DKK 2.750.000 in the Company, corresponding to 55.800.000 warrants of DKK 0.05 each.

Dividend policy

Historically, the Company has paid dividends and made distributions, but the Board of Directors presently has no plans to pay dividends or make distributions in the foreseeable future.

Authorities granted to the Board of Directors

Authorities granted to the Board of Directors are set out in articles 5 and 6 of the articles of association.

The articles of association are found on the Company's website www.rovsing.dk under "Investor relations" and "Corporate Governance".

Financial reporting to shareholders

The Company publishes an Annual Report, an interim half year Report and interim Management Statements in Q1 and Q3. These reports and statements are published through NASDAQ OMX Copenhagen.

Annual General Meeting

The annual general meeting of Rovsing will be held on 21 October 2019 at 16:00 at the Company's premises at Dyregårdsvej 2, DK-2740 Skovlunde. The general meeting shall be convened by the Board of Directors not more than five weeks and not less than three weeks before the general meeting by publication of an announcement to NASDAQ OMX Copenhagen, on the Company's website www.rovsing.dk and by e-mail to shareholders recorded in the register of shareholders who have so requested.

Amendments to articles of association

Resolutions on any amendment to the articles of association shall be passed by a majority of twothirds of the votes cast as well as of the voting share capital represented at the general meeting. Proposals to amend the articles of association must be submitted in writing to the Company not later than six weeks before the date of the general meeting.

Financial calendar

13 September 2019, publication of annual report for 2018/19.

21 October 2019, Annual General Meeting regarding financial year 2018/19.

18 November 2019, publication of interim report for Q1 2019/20.

17 February 2020, publication of interim report for H1 2019/20.

13 May 2020, publication of interim report for Q3 2019/20.

11 September 2020, publication of annual report for 2019/20

Issued Company Announcements

Announcement no 292 - 15 May 2019 Interim Management Statement Q3 2018/2019

Announcement no 291 - 21 February 2019 Repayment of Convertible Credit Facility

Announcement no 290 - 21 February 2019 Directed share issue in Rovsing A/S

Announcement no 289 - 20 February 2019 Change in number of shares and votes in Rovsing A/S

Announcement no 288 - 18 February 2019 Interim Report first half year 2018/2019

Announcement no 287 - 7 January 2019 Changes to the Financial Calendar 2018/2019

Announcement no 286 - 16 November 2018Interim Management Statement Q1 2018/2019

Announcement no 285 - 16 November 2018 Change in number of shares and votes in Rovsing A/S

Announcement no 284 - 22 October 2018 Minutes of the General Meeting 2017-2018 Announcement no 283 - 19 October 2018 Change in number of shares and votes in Rovsing A/S

Announcement no 282 - 21 September 2018 Rovsing signs a significant contract for delivery of Power EGSE in Turkey

Announcement no 281 - 14 September 2018 Notice to General Meeting

Announcement no 280 - 14 September 2018 Rovsing A/S releases its Annual Report 2017/18

Registrar

Computershare A/S Kongevejen 418 DK-2840 Holte

Investor relations contacts

Hjalti Pall Thorvardarson, CEO Tel: +45 53 39 18 88 E-mail: [email protected]

Michael Hove, Chairman Tel. +45 28 12 66 09 E-mail: [email protected]

CORPORATE GOVERNANCE

Rovsing's Board of Directors regularly reviews the Company's corporate governance and strives to follow the recommendations of the Committee on Corporate Governance.

www.corporategovernance.dk).

The Company has resolved not to follow all the recommendations of the Committee of Corporate Governance, as the Board of Directors finds it appropriate to organize the Company's governance differently in some respects due to Rovsing's specific circumstances.

Certain of the recommendations with which the Board of Directors has resolved not to comply are described below. For a full report on the status of the Company's compliance with the recommendations, please refer to the corporate governance report published on Rovsing's website under "Investor Relations" and "Corporate Governance". http://rovsing.dk/wpcontent/uploads/2019/09/Corporate_governance_ 2018_19.pdf .

Recommendation regarding election of vicechairman

According to section 2.3.1 of the recommendations, the Board of Directors is recommended to appoint a vice-chairman. Due to the limited size of the Company, the Board of Directors has not considered it necessary so far to appoint a vice-chairman.

Recommendation regarding the composition and organization of the Board of Directors

According to section 3.1.2 of the recommendations, the Board of Directors annually should discuss the company's activities to ensure a diversity relevant to the company in its management levels and develops and adopt a diversity policy. The Chairman of the Board of Directors assesses in consultation with the Executive Board what competencies the Board of Directors must have and recommend suitable candidates for election at the General Meeting.

Recommendation regarding board committees

According to section 3.4.3 of the recommendations, the Board of Directors is to set up an audit committee. The Board of Directors has decided that the functions of an audit committee will be undertaken by the full Board of Directors, see section 31(5) of the Danish Auditors' Act. In the opinion of the Board of Directors, its members possess sufficient knowledge of the Company's accounting and auditing aspects.

According to section 3.4.6 of the recommendations, the Board of Directors is recommended to establish a nomination committee. Due to the size of the Company, the Board of Directors has decided that the functions of a nomination committee will be undertaken by the Company's Chairman in collaboration with the other board members.

According to section 3.4.7 of the recommendations, the Board of Directors is recommended to establish a remuneration committee. Due to the size of the Company, the Board of Directors has decided that the functions of a remuneration committee will be undertaken by the full Board of Directors as the board members are deemed to possess the requisite knowledge and experience to do so.

Recommendation regarding evaluation of the work of the Board of Directors and the Executive Board

According to section 3.5.1 of the recommendations, the Board of Directors is recommended to establish an evaluation procedure for an annual assessment of the overall board and individual members. The Board's selfevaluation is organised based on the numbers and the needs of the company.

Recommendation regarding remuneration in the form of share options

According to section 4.1.3 of the recommendations, the remuneration of the Board of Directors should not include share options. The Board of Directors at Rovsing does not follow this recommendation as the Board of Directors are all participants in the Company's incentive warrant programme.

Management and organisation

Rovsing has two management bodies – the Board of Directors and the Executive Management. The general meeting elects the Board of Directors, which acts as the supreme authority of the Company between general meetings. The Board of Directors is the supervisory management body of the Company, which undertakes the employment of the Executive Management. The role of the Board of Directors is to supervise the Company's activities, development and management. The Executive Management is in charge of the day-today management and operation of the Company and must comply with the guidelines given by the Board of Directors.

Pursuant to the Company's articles of association, the Board of Directors must be composed of three to seven members. The Board of Directors is currently composed of four members, elected for a term of one year. The aim is for the Board of Directors to be composed of persons who possess the necessary skills for performing their duties and have an in-depth understanding of the Company's business affairs. In this respect, the Board of Directors considers the following skills to be important: Insight into the institutional and commercial aerospace market, experience in development, manufacturing and sale of advanced test equipment, experience in international project sales and the related legal aspects, and management experience from a listed company.

The Board members' shareholdings through controlled companies and/or held personally are set out on page 54-55.

The remuneration of the Board of Directors for 2018/19 was unchanged at DKK 100,000. The Chairman receives 200% of the basic fee.

The remuneration of the Executive Management consists of a fixed salary and incentive programmes in the form of a cash bonus and warrants. The weighting of the individual remuneration elements is intended to support the Company's positive performance in the short and long term. The cash bonus is performance-based relative to the annual budget to promote the Executive Management's focus on both revenue and costs. The vesting of warrants is based on the CEO's and CFO's employment with the Company and is described in more detail in note 6 to the financial statements.

Internal control and risk management

Rovsing's internal control systems and procedures in relation to financial reporting are to contribute to ensuring that the financial statements give a true and fair view of the Company's financial position and are free from material misstatement.

Rovsing's Board of Directors is responsible for the establishment and approval of an effective internal control and follow-up system for purposes of the Company's risk management, including relevant guidelines, policies and significant accounting principles.

The Executive Management is responsible for risk management and maintaining an efficient control system, considering applicable legislation and other internal guidelines and procedures. Risk management is focused on risk identification, probability and impact assessment, and risk mitigation measures. The purpose of control activities is to prevent, detect and correct any errors or irregularities. The activities have been integrated in Rovsing's accounting and reporting procedures. These activities include procedures for verification, authorization, approval, reconciliation, result analysis, IT application controls, and general IT controls.

Detailed monthly accounting data are prepared, analysed and monitored at entity and Company level. Rovsing's integrated IT controls and general controls contribute to ensuring that the financial statements give a true and fair view. Reporting instructions, including estimation and close-ofmonth procedures, are updated and implemented on a regular basis. Combined with other policies, these are available to all relevant employees.

Any control weaknesses identified by internal control or external auditors are presented to the Board of Directors, which oversees that Management implements the necessary measures to remedy the weaknesses in a timely manner.

CSR, HUMAN RIGHTS AND CLIMATE CHANGE MITIGATION

Description of Rovsing's business model

Operationally, the structure is that there is only one company that operates with a high degree of operational independence.

The majority of revenue is generated in Europe and derives from sales of products and systems for functional and electrical testing of spacecrafts (primarily satellites) and their payloads for professional clients. The company has no sales to individuals. The company's activities are generally conducted in accordance with internationally recognized quality standards.

The company's purchasing of components comprises a very large number of products purchased from suppliers primarily in Denmark and Europe. The hallmark of these products is that they are manufactured by reputable high-quality technical manufacturers.

Due to the Company's size and short chain of command, the Company does not have a written policy on human rights, social and employees' relation, anticorruption and business ethics and environment and climate, but rather the Company's policy on these issues are reflected below.

Human Rights

We believe that discrimination against employees is the most significant risk in relation to human rights. This can affect our ability to attract and retain employees as well as affect our reputation.

Rovsing supports, respects and respects the international human rights contained in the Convention on Human Rights. This means, among other things, that the company works to ensure equal opportunities regardless of gender, religion, origin or sexual orientation. The company does not accept forced labour or child labour.

It is the company's policy that employees' free choice of trade unions and their right to participate in collective bargaining are respected, as are the applicable laws and standards in respective countries regarding working hours and wages.

No human rights violations have been found in Rovsing in 2018-19.

Social and employee relations

The most significant risks to employees are that employees do not feel that they are motivated by working at Rovsing, which however is not currently the case.

In Rovsing, we believe that results are created through people. We strive to be a responsible employer that ensures proper employment, healthy and safe working conditions and a motivating work environment for our employees. The company ensures, inter alia, through the development and maintenance of employees' knowledge and skills, that the company continues to have a high efficiency, that innovative products and solutions can be produced and that the products manufactured are competitive in the selected markets. The presence of the necessary qualifications is ensured, among other things through targeted training of employees as well as collaboration with external partners. The company has a strong focus on the development of new products and product concepts, and a considerable amount has been used in 2018/19. This is planned to continue for the current year.

Anti-corruption and business ethics

We consider that the most significant risk is if an employee chooses to use gifts or other means to unduly influence a stakeholder. This may also be the case if the employee is unduly influenced by a stakeholder. It can have consequences for our reputation.

Over the years, we have built a reputation as a company that maintains a high degree of integrity and ethical conduct. We combat all forms of corruption, including bribery and facilitation payments, by informing our employees of our zerotolerance policy regarding bribery and corruption. No corruption and bribery offenses have been found in Rovsing in 2018/19.

Environment and climate

We believe that the most significant risk is that we use materials in our production that unnecessarily harm the environment. Furthermore, it can be a risk if our production of products has processes or approaches that may unduly impact the environment. We are aware that this risk can have consequences for the local environment as well as have consequences for our reputation.

It is the company's goal to strive for a production that limits the climate impact through the use of environmentally friendly processes. This includes choice of materials that are as reusable as possible, but also that the various processes are gentle on the environment.

In addition, environmental considerations are included as part of the company's innovation processes and business strategy.

RISK FACTORS

The risk factors below are not listed in any order of priority according to significance or probability. It is not possible to quantify the significance to Rovsing of each individual risk factor as each of the risk factors mentioned below may materialise individually or simultaneously to a greater or lesser degree and have a material adverse effect on Rovsing's business, operating profit and financial position.

RISKS RELATED TO THE COMPANY

The Company's earnings expectations are subject to considerable uncertainty

The Company's expectations for the future are based on a number of assumptions. If these assumptions are not met, in whole or in part, the Company's future results may deviate considerably from the expectations, which may have a material adverse effect on the Company's operations, results and financial position.

Liquidity risk

The Company's liquidity position has improved during 2018/19 compared to previous financial year as a consequence of completed directed share issues and by way of being able to draw upon a convertible bond facility.

Liquidity problems due to late payment by customers

The aerospace market is characterised by very late payments by customers from time to time. Such delays may adversely affect the Company's liquidity and increase the risks related thereto, as discussed above. Delayed deliveries to or approvals from customers may have a similar effect.

The Company is dependent on a few large customers

Rovsing is dependent on a few large and longstanding customers. The European Space Agency, ESA (end customer), typically delegates the overall responsibility for a space programme to the largest European space companies – Airbus Defense & Space, Thales Alenia Space or OHB ("Prime Contractors") – through contracts.

Although, when awarding a contract to a Prime Contractor, ESA also requires an open competitive process in the selection of subcontractors, it is crucial for the Company's future development in the space industry to maintain its good relations with these Prime Contractors. There can be no assurance of this, and the opposite scenario could lead to a loss of future orders and materially affect the Company's future earnings and results.

Technological developments may impair the Company's competitiveness

Even though the Company is not dependent on individual technologies or processes, technological developments may occur in the future which may impair the Company's competitiveness, including if the Company's fails to maintain a certain level of investment in the maintenance and development of its current intellectual property rights or faces difficulty to source parts.

Tenders may be unsuccessful

The Company's large customers launch a limited number of calls for tenders a year. The outcome of these tenders will have a not insignificant impact on the Company's revenue, earnings and future competitiveness. The outcome of such tenders depends on various factors which are beyond the Company's control, including the quality and price offered by the other tenderers. As there are only a few calls for tenders, there is a risk of losing more than expected or them all, which will materially affect the Company's future results.

The Company is not yet ISO-certified and is therefore facing a risk of being rejected for that reason as supplier to certain customers in the commercial space industry, and this may have a negative impact on the Company's future development opportunities.

Lack of contract opportunities due to fully allocated return quota

For each ESA programme, a ratio applies to the aggregate contract amount permitted in each participating member state. There is a risk that other Danish businesses are awarded so many contracts under a programme that it reduces Rovsing's contract opportunities under that programme.

Risk of infringement of intellectual property rights

Rovsing's products are developed from scratch, despite this, there is a risk that the products will infringe third party rights, including patent rights. Such infringement may involve substantial claims from the rightsholders and/or cause rightsholders to obtain injunctions against supply of the products containing the infringing material, which may materially affect Rovsing's results.

Fixed-price contracts may involve losses

Although Rovsing has switched to basing its deliveries on standard products, Rovsing remains a development business which, in some tenders, has to prepare estimates of the resources required to perform the individual contracts. There is a risk that Rovsing underestimates the (development) costs associated with existing or future projects and therefore cannot achieve the budgeted contribution margins and/or incurs losses in connection with projects.

Insufficient insurance cover

There is no guarantee that the insurance cover acquired is sufficient to compensate for a loss arising due to a claim, including especially a product liability claim. The Company strives to minimise its exposure by way of its general terms of sale and delivery and its commercial liability and product liability insurance, but there is no certainty that all situations have been agreed in such a way as to prevent an error from having a negative impact on the Company's earnings.

In addition, a loss for which the Company is liable or jointly liable may potentially damage the Company's opportunities to enter into future contracts, as the Company's business concept involves protecting customers against such losses.

Wrong assessment of market penetration time and demand in new markets

Penetration of new markets involves a number of uncertainties – not least in terms of market penetration time. The Company has significant references from the space industry but does not yet possess detailed knowledge of all markets as regards applications. Both the penetration time and the fact that services provided by the Company are often competing with internal resources of other companies, are subject to uncertainty. These factors may materially affect the Company's future revenue and earnings.

Trade restrictions may impact future business

A delivery to one market, e.g. the Chinese market, may affect the possibilities for supplying to other markets, e.g. the USA. Rovsing monitors the

Restrictions on export bonds to certain countries can impact the Company's ability to enter into new business markets.

Accumulation of application know-how may be affected by lack of recruitment

The Company's strategy is initially to accumulate market knowledge, technical skills and marketing skills in the global aerospace market, primarily through recruitment at the board, management, engineer and sales level. When entering new market areas, the headcount will increase with a resulting risk that capacity adjustment problems may arise.

There is a risk that the Company will not succeed in balancing the capacity to ensure coherence between the contracts concluded and availability of sufficient capacity in terms of both quality and quantity, which may affect the Company's future revenue and results.

The Company is dependent on key persons

As a knowledge-based business, the future development of the Company relies on contributions from current and future employees. The Company's employees are its greatest asset. The Company's ability to attract, retain and develop talented employees is therefore considered essential to the Company's future activities, results and financial position.

The Company's development to date in respect of management, development and marketing has been driven extensively by individuals. A loss of one or more of these employees may have a material adverse effect on the Company's business. However, there can be no assurance that this will not happen.

Unsatisfactory contribution margins of products and services may impact results

The Company's earnings rely strongly on its ability to secure satisfactory contribution margins of its contracts.

The contribution margin depends on the Company's ability to maintain a high level of expertise within its product areas and its possibilities for reusing product developments.

A lack of the same will have negative consequences.

Capitalised development costs, product rights and/or tax assets may be written off

In its annual report for 2018/19, Rovsing capitalised development costs and product rights totaling DKK 17,4 million and a tax asset of DKK 2,5 million. There is a risk that the products developed cannot be sold to the extent expected and/or that the Company does not generate a profit in the coming financial years, and that the capitalised development costs, product rights and/or tax asset will be written off in connection with future financial statements. Such a scenario will affect Rovsing's results and balance sheet.

Exchange rate risk

In the space industry, the Company's contracts are primarily concluded in EUR or USD. As the Danish krone is pegged to the Euro, the exchange rate risk in this connection is low. However, exchange rate risk occurs while the Company has entered into contracts in USD.

INDUSTRY SPECIFIC RISK

Competitors may drive the Company out of the market

The Company is competing in an ever-changing market with a large number of development businesses in Europe, including a few in Denmark.

As the Company's customers increasingly use standard products, there is a risk that one or more competitors develop competing standard products which become market leading. This and/or the general competition from other development businesses may entail a substantial reduction of the Company's revenue and may in that case materially affect the Company's results going forward.

Aerospace market may be affected by ESA membership

The Company's market segment mainly consists of the institutional European aerospace market and exclusively exists owing to Denmark's ESA membership.

If Denmark terminates its membership or reduces its contribution considerably, a very substantial part of Rovsing's market will cease to exist, and this will have a very significant impact on the Company's activities, results and financial position. Changes to the geographical return rules may affect the Company's earnings. Lastly, stricter enforcement of the rules, e.g. so that the four large countries (Great Britain, France, Italy and Germany) of ESA's 22-member states gain a larger portion of the contracts, will make the market conditions much more difficult. This also involves a risk to the Company's future development in the European space industry.

At a meeting of ministers in December 2016, Denmark confirmed its continued ESA membership and participation in optional programmes for the period 2017 - 2019 for an aggregate amount of DKK 350 million. This combined with the mandatory membership fee brings Denmark's contribution to ESA programmes to approximately DKK 227 million a year, which is largely unchanged on the year before.

Hence, there are currently no signs that Denmark is about to withdraw from the ESA collaboration.

Nor are there any signs that the geographical return rules will be abolished or that ESA will apply the return rule more arbitrarily in the future, but there is not guarantee of that. There is a risk that changed political priorities may materially affect the member states' funding of ESA programmes, which in that case will affect the Company's prospective income and have a material adverse impact on results.

In 2016 and earlier, ESA commenced discussions with the delegates of the member states regarding a different procurement policy for its future programmes, and during 2017 ESA completed a pilot project with the new procurement policy for the FLEX and PLATO programmes.

Although there are no indications that this new procurement policy will have a negative impact on the geographical return rules, or that ESA will apply the return rules more arbitrarily in the future, there is no guarantee of that.

ESA contracts involve a process in which the individual companies that have submitted bids for the individual project are assessed, and the individual project participants are subsequently selected. A kick-off meeting is held where the selected project participant receives an approval to commence the project, but the actual contract is signed at a later point in time. This process involves a risk that the contracts are never signed and that only the approved part is completed. Rovsing has never experienced a situation where a kicked off contract was not completed, but there is no guarantee that this will not happen. In that case, such a process may involve substantial losses for the Company.

The next Ministerial Conference of ESA is planned for November 2019. Currently, there is no sign that the planned programmes and activities might have any negative indication on Rovsing, but rather is expected to provide further opportunities.

Complaint costs

In connection with the development and delivery of Rovsing's high-tech solutions, extensive testing is often conducted in collaboration with customers. However, there is a risk that the products contain defects that are not detected during testing. This may subsequently result in complaint costs.

MANAGEMENT STATEMENT

The Board of Directors and the Executive Management today considered and adopted the annual report of Rovsing A/S for the financial year 1 July 2018 to 30 June 2019. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies. The Management's review is also presented in accordance with Danish disclosure requirements for listed companies.

We consider the accounting policies applied to be appropriate. Accordingly, the financial statements give a true and fair view of the Company's assets, liabilities and financial position at 30 June 2019 and of the Company's activities and cash flows for the financial year 1 July 2018 to 30 June 2019.

We believe that the Management's review includes a fair review of developments in the Company's activities and finances, results for the year and the Company's financial position in general as well as a fair description of the principal risks and uncertainties to which the Company is exposed.

We recommend that the annual report be approved at the Annual General Meeting.

Skovlunde, 13 September 2019

Executive Management

Hjalti Pall Thorvardarson (CEO)

Sigurd Hundrup (CFO)

Board of Directors

Michael Hove (Chairman)

Flemming Hynkemejer Ulrich Beck Jakob Have

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Rovsing A/S

Opinion

We have audited the Financial Statements of Rovsing A/S for the financial year 1 July 2018 – 30 June 2019, which comprise income and comprehensive statement, balance sheet, statement of changes in equity, cash flow statement, notes, including summary of significant accounting policies. The Financial Statements are prepared in accordance with the International Financial Reporting Standards as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act.

In our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 30 June 2019, and of the results of the Company operations and cash flows for the financial year 1 July 2018 – 30 June 2019 in accordance with the International Financial Reporting Standards as adopted by the EU and additional requirements under the Danish Financial Statements Act.

Our opinion is consistent with our audit report to the Audit Committee and the Board of Directors.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

To the best of our belief we have not performed any prohibited non-audit services, as stated in Art. 5 (1) of EU Regulation no. 537/2014.

We were first time appointed auditors of Rovsing A/S on 25 October 2013 for the financial year 2013/14. We were re-appointed annually by a resolution of the General Meeting for a total continuous engagement period of six years up to and including the financial year 2018/19.

Emphasis of Matter in the Financial Statements

We draw attention to note 2 Financial estimates and assessments in the Financial Statements describing the uncertainty attached to the valuation of the intangible fixed assets and the recognized tax asset. The value of the recognized intangible fixed assets and the recognized deferred tax asset depends on the Company being able to realize Management's expectations for improvement of activities and results. Actual results will probably differ from the expected results because assumed events often do not happen as expected and, therefore, the valuation of the recognized intangible fixed assets and the recognized deferred tax assets is subject to considerable uncertainty. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the financial year 2018/19. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our auditor's opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of intangible fixed assets, including impairment test

The carrying amount of intangible fixed assets is DKK 17.4 m and is subject to significant estimates. Reference is made to the Financial Statements, page 27 in the Balance Sheet, page 37, note 2 "Intangible fixed assets", and page 34-35 "Accounting policies".

Management's assessment of the value is based on the current value of expected future cash flows and depends basically on two parametres: the sum of the Company's future profits and the minimum return on interest requirement made by an investor providing capital to the Company.

Our audit

Our most significant audit procedures in relation to valuation of completed development projects, including impairment test, were:

We have examined the model used by Management for determination of the assessed value, including the key assumptions included in the model,

We have verified the intrinsic numerical coherence of the model used by Management to determine the assessed value,

We have verified that estimates of the Company's future profits, included in the model, are based on reasonable and provable assumptions that represent Management's best estimate,

We have assessed the discounting factor used in relation to a market requirement,

We have assessed the adequacy of additional information in the Financial Statements relating to the impairment test.

Valuation of deferred tax asset

The carrying amount of deferred tax asset is DKK 2.5 m and is subject to significant estimates. Reference is made to the Financial Statements, page 27 in the Balance Sheet, page 37, note 2 "Deferred tax", and page 34 "Accounting policies".

Management's assessment of the value is based on budgets and forecasts. The deferred tax asset is recognised on the basis of expected tax profits in the coming 5 years.

Our audit

Our most significant audit procedures in relation to valuation of deferred tax asset were:

We have examined the budget for the financial year 2019/20 and Management's forecast for the following years, We have verified the intrinsic numerical coherence of the budget prepared,

We have verified that estimates of the Company's future tax profits, included in the model, are based on reasonable and provable assumptions that represent Management's best estimate,

We have assessed the adequacy of additional information in the Financial Statements relating to additional information on the valuation of deferred tax asset.

Statement on Management's Review

Management is responsible for Management's Review, which is presented at pages 6 to 20 in the Financial Statements.

Our opinion on the Financial Statements does not cover Management's Review, and we do not express any form of assurance conclusion thereon.

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

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

Based on the work we have performed, we conclude that Management's Review is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of Management's Review.

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 International Financial Reporting Standards as adopted by the EU and additional requirements under 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 Financial Statements

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

As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism 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 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.

We also submit a statement to those charged with governance that we have met relevant ethical requirements relating to independence and inform of all relations and other matters which may reasonably be conceived to influence our independence and, where relevant, associated security measures.

Based on the matters communicated to the Management we determine which matters were the most significant in connection with the audit of the Financial Statements for the period under review and consequently became the Key Audit Matters. We describe these matters in our Independent Auditor's Report, unless legal or other regulatory requirements prevent the publication of the matter, or in the very rare cases where we determine that the matter should not be communicated in our Independent Auditor's Report, because the negative consequences could reasonably be expected to be of more critical importance than the advantages that such communication would bring to the public interest.

Herning, 13 September 2019

BDO Statsautoriseret revisionsaktieselskab CVR no. 20 22 26 70

Steen Pedersen State Authorised Public Accountant MNE no. mne23302

INCOME AND COMPREHENSIVE INCOME STATEMENT

Note	INCOME AND COMPREHENSIVE INCOME STATEMENT	2018/19	2017/18
	DKK'000
3	Revenue	28,184	25,127
	Production costs, external	-9,597	-6,393
	Gross profit/loss	18,586	18,734
4	Other external expenses	-3,160	-4,451
5, 6	Staff costs	-15,085	-18,796
	Operating profit before depreciation and amortisation (EBITDA)	341	-4,513
7, 8	Depreciation, amortisation and impairment	-3,270	-3,209
	Operating profit/loss (EBIT)	-2,929	-7,722
9	Financial income	43	49
10	Financial expenses	-810	-1,603
	Profit/loss before tax	-3,696	-9,275
11	Tax on profit/loss for the year	-344	-636
	Net profit	-4,040	-9,912
	Comprehensive income	-4,040	-9,912
	Allocation of profit/loss:
	Shareholders of Rovsing A/S	-4,040	-9,912
	Retained earnings	-4,040	-9,912
12	Earnings per share
	Earnings per share (EPS Basic)	-0,01	-0,03
	Earnings per share (EPS-D)	-0,01	-0,03

BALANCE SHEET

Note	BALANCE SHEET, ASSETS	2018/19	2017/18
	DKK'000

	Non-current assets
	Intangible assets
13	Completed development projects	16,274	16,636
13	Patents and licenses	1,078	1,359
13	Development projects in progress	0	1,442
		17,352	19,437
	Property, plant and equipment
14	Other fixtures and fittings, tools and equipment	121	267
		121	267

	Other non-current assets
	Tax	236	484
15	Deferred tax	2,500	3,080
		2,736	3,564
	Total non-current assets	20,209	23,268
	Current assets
	Inventories	2,810	1,090
16	Trade receivables	1,428	4,394
17	Contract work in progress	7,750	6,125
	Tax	484	206
	Other receivables	1,004	299
	Prepaid expenses	565	378
	Cash	224	143
	Total current assets	14,265	12,634
	TOTAL ASSETS	34,474	35,902

BALANCE SHEET

Note	BALANCE SHEET, EQUITY AND LIABILITIES	2018/19	2017/18
	DKK'000
18	Equity
	Share capital	22,894	20,243
	Reserves for development costs	3,215	2,399
	Retained earnings	-7,550	-4,433
	Total equity	18,560	18,210

	Non current liabilities
19	Bond loans	4,080	4,000
	Total non-current liabilities	4,080	4,000
	Current liabilities
	Credit institutions	6,326	7,107
19	Convertible credit facility	0	2,500
17	Prepayments, customers	396	100
	Trade payables	2,550	639
20	Other payables	2,562	3,004
21	Provisions	0	342
	Total current liabilities	11,834	13,692
	Total liabilities	15,914	17,692
	TOTAL EQUITY AND LIABILITIES	34,474	35,902

STATEMENT OF CHANGES IN EQUITY

Note STATEMENT OF CHANGES IN

EQUITY

DKK'000

2017/18	SHARE CAPITAL	RESERVES FOR DEVELOP MENT COSTS	RETAINED EARNINGS	TOTAL
Equity at 1 July 2017	16,661	938	618	18,217
Comprehensive income for the period
Comprehensive income	0	0	-9,912	-9,912
Transferred between reserves	0	1,461	-1,461	0
Total comprehensive income for the period	0	1,461	-11,373	-9,912
Other transactions
Issue of new shares upon exercise of warrants	250	0	0	250
Share issue	2,335	0	4,651	6,986
Share issue by debt conversion*)	997	0	1,814	2,811
Costs emission	0	0	-238	-238
Warrant programme	0	0	95	95
Total transactions with owners	3,582	0	6,322	9,903
Equity at 30 June 2018	20,243	2,399	-4,433	18,210

*) The conversion of debt to shares was completed on 5 December 2017 and part of the directed share issue also completed on 5 December 2017.

2018/19	SHARE CAPITAL	RESERVES FOR DEVELOP MENT COSTS	RETAINED EARNINGS	TOTAL
Equity at 1 July 2018	20,243	2,399	-4,433	18,210
Comprehensive income for the period
Comprehensive income	0	0	-4,040	-4,040
Transferred between reserves	0	816	-816	0
Total comprehensive income for the period	0	816	-4,856	-4,040
Other transactions
Share issue	1,782	0	1,268	3,050
Share issue by debt conversion*)	869	0	631	1,500
Costs emission	0	0	-159	-159
Total transactions with owners	2,651	0	1,739	4,391
Equity at 30 June 2019	22,894	3,215	-7,550	18,560

*) The conversion of debt to shares was completed on 19 October 2018, 18 November 2018 and 19 February 2019 respectively.

CASH FLOW STATEMENT

Note	CASH FLOW STATEMENT	2018/19	2017/18
	DKK'000
	Profit/loss for the year	-4,040	-9,912
	Adjustment for non-cash operating items etc.:
8	Depreciation, amortisation and impairment	3,270	3,209
26	Other non-cash operating items, net	-262	199
9	Financial income	-43	-49
10	Financial expenses	810	1,603
11	Tax on profit/loss for the year	344	636
	Cash flows from operations before changes in working capital	79	-4,314
27	Change in working capital	492	-6,662
	Cash flow from operations	572	-10,976
	Interest receivable	43	49
	Interest payable	-810	-1,603
	Tax reimbursement	206	1,497
	Cash flow from operating activities	11	-11,032
13	Acquisition of intangible assets	-1,376	-2,198
	Received development subsidies	337	620
14	Acquisition of property, plant and equipment	0	0
	Cash flow from investing activities	-1,040	-1,578
	Debt raised	-781	1,850
	Repayment of debt with credit institutions	-2,500	-97
	Capital increase, net proceeds from issue	4,550	9,796
	Warrants, employees	0	250
	Costs emission	-159	-238
	Cash flow from financing activities	1,109	11,561
	Net cash flow for the period	81	-1,049
	Cash, beginning of year	143	1,192
	Cash, end of year	224	143

OVERVIEW OF NOTES TO THE FINANCIAL STATEMENTS

Note		Note
1	Accounting policies	14	Property, plant and equipment
2	Accounting estimates and judgments	15	Deferred tax
3	Revenue	16	Receivables
4	Expenses for auditors appointed by the general meeting	17	Contract work in progress
5	Staff costs	18	Equity
6	Share-based payment	19	Bond loans
7	Research and development costs	20	Other payables
8	Depreciation, amortisation and impairment	21	Provisions
9	Financial income	22	Financial risks and financial instruments
10	Financial expenses	23	Contingent assets and liabilities
11	Tax on profit/loss for the year	24	Collateral
12	Earnings per share	25	Operating rental and lease commitments
13	Intangible assets	26	Non-cash transactions
		27	Working capital changes
		28	Related party transactions

NOTE 1. ACCOUNTING POLICIES

The annual report for 2018/19, which comprises the Company's financial statements, has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and additional Danish disclosure requirements for listed companies.

The accounting policies are consistent with those applied in 2017/18.

The annual report is presented in DKK thousands (DKK '000).

Relevant new accounting standards

The annual report is presented in accordance with the standards (IFRS/IAS) and interpretations (IFRIC) applicable for financial years beginning on 1 July 2018 or later.

Rovsing has implemented the following new and amended standards and interpretations that have entered into force in the financial year:

IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers

Effect of IFRS 9:

IFRS 9 Financial Instruments, which replaces IAS 39, introduces a more logical approach to the classification of financial assets driven by the company's business model and the underlying cash flow characteristics. At the same time, a new impairment model for all financial assets is introduced. The implementation of IFRS 9 has not had a significant effect, so no changes have been made to Rovsings equity as per 1 July 2018 and there has been no effect on clarification of financial assets or liabilities.

Effect of IFRS 15:

Rovsing has implemented IFRS 15 on revenue from contracts with customers. The implementation has led to a review of the company's processes and agreements with customers. In continuation of this, it is the overall assessment that there is no significant effect on recognition and measurement of revenue.

New standards and interpretations not yet adopted

The IASB has issued a number of new amended standards and interpretations that are not mandatory for the financial statements for 2018/19. Some of which have not yet been endorsed by the EU. Rovsing A/S expects to adopt the standards and interpretations when they become mandatory. None of these are expected to have a significant impact on recognition and measurement but may lead to further disclosures in the notes.

IFRS 16

Rovsing implements at 1 July 2019 IFRS 16, which changes accounting policies for leasing, where only financial leasing contracts are recognized on the balance sheet. As of 1 July 2019, all leasing and lease contracts on the balance sheet are recognized with a leasing asset (the right to use the asset) and a lease obligation, respectively. Rovsing has chosen to use the modified retrospective transition method, for which no comparison of comparative figures has been made. Excluded from recognition, however, are leasing and lease agreements for small assets and agreements with short maturities (under 1 year). Leasing assets are depreciated over the life expectancy of the asset. For the calculation of the current value of operational lease commitments, an alternative borrowing rate is used as the leaseholder's marginal borrowing interest. As per 30 June 2019, the total operational leasing contracts in Rovsing totaled a present value of approx. DKK 2,5 million corresponding to approx. 7% of the total balance sheet total in Rovsing. Implementation of IFRS 16 as per 1 July 2019 is expected to improve EBITDA by approx. DKK 1 million.

Foreign currency translation

Rovsing uses DKK as it's functional and presentation currency.

On initial recognition, transactions denominated in foreign currency are translated at the exchange rate ruling on the transaction date. Foreign exchange differences arising between the exchange rate at the transaction date and at the date of payment are recognised in the income statement under financial income or expenses.

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

Revenue

Income from the sale of goods and services is recognised in the income statement when each of the separate performance obligations are satisfied. Revenue is recognised excluding VAT and taxes and net of discounts related to sales.

The percentage of completion for projects is determined on the basis of expenses incurred to date for engineering hours etc. associated with developing, manufacturing and installing the product relative to the expected overall expenses for completion of the projects.

Production costs, external

Other operating costs include cost of goods sold and other external costs incurred to generate the revenue for the year.

Other operating income

Other operating income includes grants, which are recognised in step with completion of the activity eligible for grant.

Other external costs

Other external costs comprise expenses for distribution, sale, marketing, administration, premises, etc.

Warrants

For equity-settled stock options and warrants, the fair value is measured at the grant date and recognised in the income statement under staff costs over the vesting period. The balancing item is recognised directly in equity.

On initial recognition of the stock options, the number of options expected to vest is estimated. Subsequently, adjustment is made only for changes in the number of employees estimated to become entitled to options or warrants.

The fair value is determined according to the Black-Scholes method.

Rental and lease matters

Rental obligations and obligations under operating leases are recognised in the income statement on a straight-line basis over the terms of the leases.

Financial income and expenses

Financial income and expenses include interest income and expenses, exchange gains and losses on securities, payables and transactions in foreign currencies, amortisation of financial assets and liabilities.

Tax

Tax on the profit/loss for the year, consisting of the year's current tax, movements in deferred tax and any prior-year adjustments, is recognised in the income statement as regards the amount that can be attributed to the profit/loss for the year and posted in other comprehensive income or directly in equity as regards the amount that can be attributed to movements in equity.

Deferred tax is measured in accordance with the balance sheet liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities.

The tax value of tax losses carried forward is included in the statement of the deferred tax if the loss is likely to be utilised.

Deferred tax is measured on the basis of the tax regulations and rates that apply at the balance sheet date and are expected to apply at the time when the deferred tax is expected to crystallise as current tax.

Changes in deferred tax due to changes in the tax rates are recognised in the income statement as regards the share that relates to the net profit or loss for the year, whereas the share that relates to entries directly in equity is taken to other comprehensive income or directly to equity.

Intangible assets

Intangible assets recognised in the balance sheet are measured at the lower of cost less accumulated amortisation and the recoverable amount.

Investments in development comprise costs and wages directly attributable to the Company's development activities.

Development projects which are clearly defined and identifiable, where the level of technical utilisation, sufficient resources and a potential future market or business opportunity for the Company can be demonstrated, and where the intention is to manufacture, market or utilise the project, are recognised as intangible assets if the cost can be reliably measured, and there is sufficient certainty that the future earnings can cover production and sales costs, administrative expenses and investments in development.

After completion of the development work, development costs are amortised on a straight-line basis over the estimated useful life.

Grants received to cover capitalised development costs are recognised as reduction in the cost of the development asset when the development asset is ready for use and is recognised in the profit & loss as the developed asset is amortised.

Other development costs are recognised in the income statement as incurred.

The usual amortisation period is three to ten years. Acquired rights are amortised over ten years.

Impairment of intangible assets

Development projects in progress are tested for impairment annually by comparing the carrying amounts of the assets with their recoverable amounts. Other development projects are reviewed on an ongoing basis to determine whether there are any indications of impairment in excess of the amount provided for by normal depreciation. If there is an indication that an asset may be impaired, it is tested for impairment.

If the carrying amount of development projects exceeds their recoverable amount, the carrying amount is written down to the recoverable amount.

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation. Depreciation is charged on a straight-line basis over the expected useful lives of the assets.

Tools and equipment and software are depreciated over three to five years.

Software is measured at cost less accumulated depreciation.

Software is depreciated using the straight-line method over its expected useful life, estimated at three to five years. The assets' residual values and useful lives are assessed annually and adjusted, if appropriate, at each balance sheet date. Gains or losses on the disposal or removal of assets are recognised in the income statement under the same items as the related assets.

Impairment of property, plant and equipment

Depreciable assets are reviewed on an ongoing basis to determine any indications of impairment in excess of what is expressed in the normal depreciation of assets. If there is an indication that an asset may be impaired, it is tested for impairment. Where the recoverable amount is lower than the carrying amount, the value is written down to the lower recoverable amount.

Inventories

Inventories are measured at the lower of cost in accordance with the FIFO (first in, first out) method and the net realisable value. Goods for resale are measured at cost, comprising the purchase price plus delivery costs.

The net realisable value of inventories is calculated as the sales amount less costs of completion and costs necessary to make the sale and is determined taking into account marketability, obsolescence and development in expected selling price.

Receivables

Receivables are measured at amortised cost. Provision is made for bad debts. The company's revenue is generated on relatively few customers and in recent periods there have been no losses on receivables. Therefore, no credit loss is included in the calculation of the loss risk on receivables

Contract work in progress

Contract work in progress is measured at the selling price of the production performed. The selling price is calculated with due consideration to costs of completion as basis for estimation of delivered performance obligations, adjusted for any ascertained losses.

On-account payments received are deducted from the item contract work in progress. On account payments received over and beyond the completed part of the project are calculated separately for

each contract and recognised in the item prepayments from customers.

Prepayments

Prepayments comprise costs incurred relating to subsequent financial years.

Pension obligations

Contributions to defined contribution plans are expensed as incurred.

Other provisions

Other provisions are recognised when, as a consequence of an event occurring before or at the balance sheet date, the Company has a legal or constructive obligation, and it is probable that there may be an outflow of economic benefits to meet the obligation.

Current liabilities

Current liabilities, which comprise loans, trade payables and other payables, are measured at amortised cost.

Deferred income

Deferred income comprises payments received relating to income in subsequent financial years.

Cash flow statement

The Company's cash flow statement shows the cash flows for the year, broken down by operating, investing and financing activities, and the year's changes in cash and cash equivalents as well as cash and cash equivalents at the beginning and end of the year.

Cash flows from operating activities are calculated indirectly as the profit or loss for the year, adjusted for non-cash operating items, financial items paid and tax paid.

Working capital includes current assets less current liabilities, exclusive of the items included in cash. Cash flows from investing activities comprise the acquisition and disposal of intangible assets, property, plant and equipment and financial assets as well as the purchase of short-term securities.

Cash flows from financing activities comprise the raising of loans and repayment of interest-bearing debt and contribution of capital through share issues.

Cash and cash equivalents comprise deposits with banks.

NOTE 2. ACCOUNTING ESTIMATES AND JUDGMENTS

Intangible assets

For each project, Management assesses whether the criteria for recognition as intangible assets are met. Completed development projects and product rights are tested annually for indication of impairment. If impairment is identified, an impairment test is performed for the individual development projects.

The carrying amount of completed development projects is DKK 16,3 million (2017/18: DKK 16,6 million).

Development projects in progress are subject to an annual impairment test. The impairment test is made on the basis of various factors, including the future use of the projects, the present value of the expected future earnings and other risks. For Rovsing, the measurement of development projects may to a substantial extent be affected by material changes to the estimates and assumptions on which the calculation of the values is based.

Contract work in progress

Contract work in progress and ongoing service contracts include non-invoiced services with a value of DKK 7,8 million (2017/18: DKK 6,1 million), which is recognised on the basis of an assessment of the percentage of completion of the delivered service. This assessment is based on the value of fees calculated using standard hourly rates. The fee value is adjusted to match the value calculated according to an estimated percentage of completion. This is part of the ongoing financial management process, and previously made estimates of the percentage of completion are regularly followed up, which reduces uncertainty associated with the calculation of the percentage of completion. See note 17.

Funding in 2019/20

In 2019/20, the existing short-term funding facility provided by Jyske Bank as well as two medium term bond loans and a convertible bond loan are expected to be part of the Company's funding structure.

The liquidity situation during the 2018/19 financial year improved compared to the previous year, however the liquidity situation is still tight at the end of the financial year primarily due to high procurement cost and staggered milestones payments and funds tied up in working capital, especially work in progress and inventories.

Deferred tax

Rovsing recognises deferred tax assets, including the value of tax-loss carry forwards, if Management considers it likely that there will be sufficient taxable income in future. This assessment is based on budgets and business plans for the coming years and is inherently subject to a high degree of uncertainty. See note 15.

3	REVENUE	2018/19	2017/18
	DKK'000

Revenue, sale of services 28,184 25,127

Revenue for the year and previously year consists exclusively of exports. Revenue from one customer exceeds 37% of the total revenue in 2018/19. Approximately 64% of the Company's revenue in 2018/19 is generated from the sale of the Company's developed products and systems, 9% of the Company's revenue is generated from Software Verification (ISVV) and 27% of the revenue is generated from Onsite engineering Services. tDKK 1.329 of the revenue in 2018/19 is due to changes in work in progress (t.DKK -9 in 2017/18).

EXPENSES FOR AUDITORS APPOINTED BY THE GENERAL MEETING	2018/19	2017/18
DKK'000
Audit of financial statements	280	236
Audit fee for other services	0	0
	280	236

STAFF COSTS	2018/19	2017/18
DKK'000
Wages and salaries	13,075	16,770
Pension contribution	350	297
Other social security costs	1,558	1,419
Share-based payment	0	95
Other staff costs	102	213

	15,085	18,796

The item includes:
Remuneration of the Executive Management	1,980	1,761
Share-based payments, Executive Management	0	95
Pension to the Executive Management	69	35
Remuneration of the Board of Directors	567	508
Share-based payments, Board of Directors	0	0

Average number of full-time employees	24	32

The Company's Executive Management has a bonus scheme based on achieved revenue and EBITDA. In addition, the Executive Management has an incentive programme, under which warrants vest on the basis of the Executive Management member's employment with the Company.

The service contract with the CEO may be terminated by the CEO giving three months' notice and by the Company giving 6 months' notice.

No remuneration has been agreed in connection with the CEO's potential resignation, and there are no special severance provisions for the CEO in connection with a takeover of the Company.

6 SHARE-BASED PAYMENT

Rovsing A/S has a warrant incentive programme for the Company's Board of Directors, CEO and CFO. The programme comprises a total of 55,800,000 warrants. Each warrant entitles the holder to buy one share of DKK 0,10 each in Rovsing A/S.

The outstanding warrants for the CEO and CFO equal 1.2% of the share capital if all warrants are exercised. The vesting of warrants for the CEO and CFO is based on employment with the Company. For the CEO and CFO 1,500,000 warrants vest after 12 months' employment, another 1.500.000 warrants vest after 24 months' employment and, finally, another 1,500,000 warrants vest after 36 months' employment. The warrants are issued with an exercise price of DKK 0,10 each.

The outstanding warrants for the Board of Directors equal 9.0% of the share capital if all warrants are exercised.The vesting of warrants for the Board of Directors is based on association with the Company. For the Board of Directors 16.201.389 warrants vest after 12 months' tenure, another 13,869,414 warrants vest after 24 months' tenure and, finally, another 11,158,836 warrants vest after 36 months' tenure. The warrants are issued with an exercise price of DKK 0.10 each.

In 2018/19 the costs recognised in the income statement relating to warrants is DKK 0 (2017/18: DKK 95 thousand).

The calculation of fair value using the Black-Scholes model is made on the assumption of a volatility of 10%, a dividend payout ratio of 0% and an annual risk-free interest rate of 0.25%.

Specification of outstanding warrants:

Number of exercisable options:	Executive Management	Other employees	Not allocated	Board of Directors	Total	Exercise price per warrant	Fair value per war rant

Outstanding at 1 July 2018	5,676,722	1,373,715	3,145,346	45,604,217	55,800,000	0.10	0.05
Reallocated in 2018/19:	0	3,145,645	1,229,182	-4,374,528	0	-	-
Exercised	0	0	0	0	0	-	-
Lapsed	0	0	0	0	0	-	-
Outstanding at 30 June 2019	5,676,722	4,519,061	4,374,528	41,229,689	55,800,000	0.10	0.05

7 RESEARCH AND DEVELOPMENT COSTS	2018/19	2017/18
DKK'000
Research and development costs incurred	1,376	1,578
Development costs recognised as intangible assets	-1,376	-1,578
Amortisation and impairment of recognised development costs	2,843	2,740
Development costs for the year recognised in the income statement	2,843	2,740

8 DEPRECIATION, AMORTISATION AND IMPAIRMENT 2018/19 2017/18 DKK'000 Amortisation, completed development projects 2,843 2,740 Amortisation, patents and licenses 281 322 Impairment, patents and licenses 0 0 Depreciation, other fixtures and fittings, tools and equipment 146 147 3,270 3,209

2019/19		9
	DKK'000
43	Exchange rate adjustments
43

		10
738	Interest, banks, etc.
	Exchange rate adjustments
	2018/19 72	FINANCIAL INCOME FINANCIAL EXPENSES DKK'000

810 1,603

11	TAX ON PROFIT/LOSS FOR THE YEAR	2018/19	2017/18
	DKK'000

	Current tax	236	484
	Prior period adjustments	0	9
	Deferred tax	-580	-1,129
	Tax on profit/loss for the year	-344	-636

	Computed tax of profit/loss before tax	22.0 %	22.0 %

		2018/19	2017/18
	Tax on profit/loss for the year is explained as follows:
	Computed tax 22% of profit/loss before tax for the year	813	2,041
	Tax effect of:
	Unrecognised deferred tax asset	-1,191	-2,703
	Other non-deductible costs	-1	-26
	Tax on cost charged to equity	35	52
	Tax for the year	-344	-636

12	EARNINGS PER SHARE	2018/19	2017/18
	DKK'000
	Profit/loss for the year	-4,040	-9,912
	Average number of issued shares (1,000)	429,844	380,140
	Earnings per share, (EPS Basic), of DKK 0.05 each	-0,01	-0.03

13 INTANGIBLE ASSETS

2018/19	Patents and licenses	Completed development projects	Develop ment projects in progress	Total
DKK'000
Cost at 1 July 2018	22,350	29,365	1,442	53,157
Additions	0	0	1,376	1,376

Cost at 30 June 2019	22,350	29,365	2,818	54,533
Reclassification		2,481	-2,481	0
Development grants received			-337	-337
Cost at 30 June 2019	22,350	31,846	0	54,197

Amortisation and impairment at 1 July 2018	-20,991	-12,729	0	-33,720
Amortisation	-281	-2,843	0	-3,124
Impairment	0	0	0	0

Amortisation and impairment at 30 June 2019	-21,272	-15,572	0	-36,845

Carrying amount at 30 June 2019	1,078	16,274	0	17,352

All intangible assets are considered to have a limited useful life.

At 30 June 2019, Management performed an impairment test of the carrying amount of intangible assets. Assets are written down to the lower of the recoverable amount and the carrying amount. The recoverable amount in this year's test is based on the value in use of the expected cash flow on the basis of budgets and forecasts for the future.

As described in the Management's review, future earnings are substantially associated with product rights and own products. The size of the earnings and their timing are subject to considerable uncertainty. See "Risk factors" in the Management's review for more details.

2017/18	Patents and licenses	Completed development projects	Development projects in progress	Total
DKK'000
Cost at 1 July 2017	22,350	29,229	0	51,579
Additions	0	0	2,198	2,198

Cost at 30 June 2018	22,350	29,229	2,198	53,777
Reclassification	0	136	-136	0
Development grants received	0	0	-620	-620
Cost at 30 June 2018	22,350	29,365	1,442	53,157
Amortisation and impairment at 1 July 2017	-20,669	-9,989	0	-30,658
Amortisation	-322	-2,740	0	-3,062
Impairment	0	0	0	0

Amortisation and impairment at 30 June 2018	-20,991	-12,729	0	-33,720
Carrying amount at 30 June 2018	1,359	16,636	1,442	19,437

14 PROPERTY, PLANT AND EQUIPMENT

2018/19	Other fixtures and fittings, tools and equipment	Total

DKK'000
Cost at 1 July 2018	607	607
Additions during the year	0	0
Disposals at cost	0	0

Cost at 30 June 2019	607	607

Depreciation and impairment at 1	-340	-304
July 2018
Depreciation for the year	-146	-146
Disposals	0	0

Depreciation and impairment at 30 June 2019	-486	-486

Carrying amount at 30 June 2019	121	121

The Company does not hold assets under finance leases.

DEFERRED TAX	2018/19	2017/18

Deferred tax asset at 1 July	-3,080	-4,199
Change in deferred tax for the year	-611	-1,574
Prior period adjustment	0	-10
Unrecognised deferred tax asset	611	1,996
Write-down of tax asset pursuant to expected realisation (3-5 years)	580	707
Deferred tax asset at 30 June	-2,500	-3,080
Deferred tax in the Company is specified as follows:
DKK'000	2018/19	2017/18
Intangible assets	3,116	3,575
Property, plant and equipment	-63	-31
Current assets	3,774	3,569
Prepaid grants	0	0
Tax loss carry-forwards	-18,248	-17,923
Non-recognised share of tax asset	8,921	7,730
Deferred tax asset at 30 June	-2,500	-3,080

Tax losses relate to specific matters and late organisational adjustments. Utilisation of the tax losses is not time-limited. The tax losses are expected to be utilised in future positive earnings within a five-year period.

RECEIVABLES	2018/19	2017/18
DKK'000
Trade receivables	1,428	4,394
Write-downs to cover losses	0	0
	1,428	4,394
Other receivables	1,004	299
	2,433	4,692
Receivables for which no write-downs have been made to cover losses:
Due within 1-30 days	2,400	3,212
Due within 30-90 days	33	1.182
Due after 90 days	0	0

	2,433	4,394

		2018/19	2017/18
	Carrying amount of receivables by currency:
	DKK	1,004	0
	USD	99	697
	EUR	1,330	3,696
		2,433	4,394
17	CONTRACT WORK IN PROGRESS	2018/19	2017/18
	DKK'000
	Contract work in progress, selling price	63,528	60,084
	Invoiced contract work in progress	-56,174	-54,059
		7,354	6,025
	recognised as follows:
	Contract work in progress (assets)	7,750	6,125
	Prepayments, customers (liability)	396	100
		7,354	6,025
	Contract work in progress at cost	46,375	43,861

The remaining value of work in progress is t.DKK is 6,231.

18 EQUITY

Capital management

The Company's formal external capital adequacy requirement is limited to the Company's share capital, which is significantly lower than the Company's equity. The Company regularly assesses the need for adjusting the capital structure so that it complies with the applicable rules and matches the business foundation and scope of activity. Rovsing holds 143,659 of the Company's own shares with a nominal value of DKK 7,183.

The Company's solvency ratio stood at 53.8 at 30 June 2019 (30 June 2018: 50.7).

Share capital	2018/19	2017/18
Development in no. of shares (1,000)
No. of shares, beginning of year	404,854	333,212
Issue of new shares	53,027	66,642
Exercise of warrants	0	5,000
No. of shares, end of year	457,881	404,854
Share capital, DKK'000	22,894	20,243

The share capital is divided into 457,881,131 shares (2017/18: 404,854,455 shares) with a nominal value of DKK 0.05 each. The shares are fully paid up, and no shares carry any special rights. No shares are subject to restrictions on transferability or voting rights.

In October 2018, the share capital was increased by DKK 210,517 nominal value or 4,210,349 shares of DKK 0.095004 each by conversion of a convertible credit line. In November 2018, the share capital was increased by DKK 298,236 nominal value or 5,964,736 shares of DKK 0.083826 each by conversion of a convertible credit line.

Presently there are 55.800.000 outstanding warrants.

19 BOND LOANS

The Company has issued DKK 4,0 million in bond loans with no conversion rights. The bond loans mature 31 December 2020 with a rate of allowance of 5%. The interest is 8% pro anno.

Furthermore the Company has a remaining loan facility of convertible notes of DKK 3,375 million at 30 June 2019. DKK 3,375 remains undrawn of the facility as per 30 June 2019. The facility can be drawn in tranches of DKK 0,625 million per month and is running until 31 October 2019. During the period until 5 December 2019 the creditor may convert the bond loan to shares.

For more information on the convertible credit facility see the Companys' homepage http://rovsing.dk/investor relation/convertible-credit-facility/

Rovsing has an option to repay the convertible loan at a rate of 108 or to issue new shares. The conversion price is 90% of the volume weighted average price of the shares during five trading days prior to the conversion date.

20 OTHER PAYABLES

	2018/19	2017/2018

Staff costs	2,160	2,268
Other accrued expenses	401	736
	2,561	3,004

PROVISIONS	2018/19	2017/18

Provisions at 1 July	342	250
Provisions made during the year	-342	92
Provisions at 30 June	0	342

Which break down as follows:
Non-current liabilities	0	0
Current liabilities	0	342
	0	342

In 2014/15 the Company made a provision of DKK 250,000 for a claim raised by the French authorities, claiming that the Company's share of the social costs should be increased with EUR 70,000. The authorities find that the Company does not meet the requirements for standard exemption for certain social benefits. In a court case in 2016, the court rejected the claim submitted by the French authorities. In December 2018 the claim was outdated, and the provision has during the year been reversed.

22 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS

The Company is exposed to a number of financial risks, the most important of which are foreign currency and interest rate risk, liquidity risk and credit risk.

The Company does not actively speculate in financial risk, and accordingly, the financial strategy aims exclusively to manage and mitigate financial risks that arise as a consequence of the Company's operations, investments and financing.

Foreign currency risk

Most of the Company's contracts are invoiced in EUR or USD. As the Danish krone is pegged to EUR, the Company's EUR risk is considered minimal. Risk attaching to USD is assessed in an ongoing process, as a result of which in 2018/19 the Company did not use financial instruments to hedge its foreign currency risk. The Company monitors developments in EUR/USD/DKK and regularly assesses whether to hedge its exposure to EUR and USD.

Foreign currency exposure:

	Nominal position
	Cash and	Financial
	receivables	liabilities
EUR/DKK	1.412	187
EUR/USD	140	0
	1.553	187

Interest rate risk

The Company had net payables to credit institutions of DKK 6,3 million at 30 June 2019. The debt carries a floating interest rate based on the money market rate. Interest rates paid in 2018/19 ranged from 4,2% -to 6,125 %. The Company had net payables to bond holders of DKK 4.0 million at 30 June 2019 with a fixed interest rate of 8%.

Based on recognised financial assets and liabilities at 30 June 2019, without considering repayments, loans raised and the like in 2018/19, a 1% increase in interest rates would raise the Company's expenses by DKK 0.1 million. A 1% decline in interest rates would result in a correspondingly lower interest expense.

The Company has not used financial instruments to hedge expected developments in interest rates.

Liquidity risk

Significant, unforeseen liquidity fluctuations are primarily associated with the commercial risks referred to in the section "Risk factors" and breaching of milestones in contracts. The Company aims to have sufficient cash resources to allow it to operate adequately in case of unforeseen fluctuations in liquidity. The Company regularly assesses its cash resources relative to budgets and forecasts for cash flows in future periods. The Company's liquidity reserve, consisting of cash and unutilised credit facilities, is modest relative to the expected cash flows in 2019/20. In 2019/20, the Company expects to continue to use export guarantees to fund certain projects. It should be noted that export guarantees are granted on a project by project basis and there can be no assurance that future projects may obtain export guarantee funding.

Credit risk

As a result of the Company's operations and funding activities, the Company is exposed to credit risk. The Company's credit risks are related to trade receivables and cash. No credit risk is considered to exist in relation to cash as the counterparty is Jyske Bank. Payables to the counterparty exceed cash deposits with the counterparty.

Most of the Company's revenue derives from ESA space industry projects. ESA is the joint-European development organisation for various space programmes. ESA's 22-member states (including Denmark) together funds the activities of ESA. The credit risk associated with ESA is considered minimal. The remaining part of the Company's revenue derives from large, wellconsolidated international companies, for which the credit risk is considered minimal.

		Due
2018/19	Due within	between 1	Due after 5		Carrying
	1 year	and 5 years	years	Total	amount
DKK'000

Cash	224			224	224
Trade receivables	1,428			1,428	1,428
Other receivables (current)	1,488			1,488	1,488
Other receivables (non
current)		236		236	236
Total loans and receivables	3,140	236		3,376	3,376

Credit institutions, floating	-6,326			-6,326	-6,326
rate
Bond loan		-4,080		-4,080	-4,080
Trade payables	-2,550			-2,550	-2,550
Other payables	-2,562			-2,562	-2,562
Financial liabilities measured at amortised cost	-11,438	-4,080		-15,518	-15,518

The Company's financial assets liabilities fall due as follows:

Financial liabilities measured at amortised cost	-10,751	-6,500		-17,251	-17,251
Other payables	-3,004			-3,004	-3,004
Trade payables	-639			-639	-639
Convertible loan		-2,500		-2,500	-2,500
Bond loan		-4,000		-4,000	-4,000
Credit institutions, floating rate	-7,107			-7,107	-7,107
Total loans and receivables	5,041	484		5,525	5,525
Other receivables (non-current)		484		484	484
Other receivables (current)	505			505	505
Trade receivables	4,394			4,394	4,393
Cash	143			143	143
DKK'000
2017/18	1 year	and 5 years	years	Total	amount
	Due within	between 1	Due after 5		Carrying
NOTES		Due

23 CONTINGENT ASSETS AND LIABILITIES

The Company has made agreements on public research and development grants. Grants are disbursed either on the basis of costs actually incurred or when the Company delivers on agreed project milestones, which are approved by the granting authority. In two of the agreements, the Company has a repayment obligation if its actual project costs prove to be lower than estimated in the agreements. However, in such cases it is up to the granting authority to decide whether it wishes partial repayment of grants disbursed.

The Company has a co-funding obligation in the agreements to the effect that the Company must pay about 50% of the estimated costs. Costs for completing project deliveries, over and beyond the estimated costs in the agreements, must be borne by the Company.

24 COLLATERAL

A floating charge in the amount of DKK 9.25 million has been issued as collateral for credit facilities with a credit institution. The floating charge comprises a charge on goodwill and rights pursuant to the Danish Patents Act, the Danish Trademarks Act, the Danish Design Act, the Danish Utility Models Act, the Danish Registered Designs Act, the Danish Copyright Act and the Danish Act on Protection of the Topographies of Semiconductor Products. Furthermore, the floating charge comprises tools, inventories and unsecured claims arising from the sale of goods and services. The total carrying amount of the floating charge was DKK 24,2 million at 30 June 2019.

25 OPERATING RENTAL AND LEASE COMMITMENTS

The Company leases property and tools and equipment under operating leases. The lease period for tools is typically between 3 and 5 years with a renewal option on expiry. No conditional lease payments are payable under the leases.

In 2018/19, DKK 1,1 million (2017/18: DKK 1.3 million) was recognised in the income statement regarding operating leases.

	Rent obligations	2018/19	2017/18
	DKK'000
	Due within 1 year	925	915
	Due between 1 and 5 years	1,002	1,906
	Due after 5 years	0	0

		1,927	2,821
	Other commitments	2018/19	2017/18
	DKK'000
	Due within 1 year	165	170
	Due between 1 and 5 years	391	551
	Due after 5 years	0	0
		556	721
26	NON-CASH TRANSACTIONS	2018/19	2017/18
	DKK'000
	Provisions	-342	92
	Financial items	80	12
	Share-based payment	0	95
		-262	199
27	WORKING CAPITAL CHANGES	2017/18	2017/18
	Receivables	-1,273	733
	Current liabilities	1,765	-7,395
		492	-6,662

28 RELATED PARTY TRANSACTIONS

The Company has no related parties with a controlling interest.

The Company's related parties also comprise the members of the Board of Directors and Executive Management as well as these persons' family members. Further, related parties comprise companies in which the above-mentioned persons have significant interests.

⁵⁴ BOARD OF DIRECTORS

MICHAEL HOVE (BORN 1971)

Elected to the Board of Directors in October 2017. Took over the chairmanship in January 2018.

Position: Founder and owner of MH Investment ApS.

Educational background from Copenhagen Business School as economist.

Main directorships:

Chairman of the board of Dalhoff, Larsen & Horneman (DLH) A/S
Chairman of the board of directors of Antique 89 A/S
Managing partner & owner MH Investment ApS

Shareholding at 30 June 2018: 11,566,900 shares.

Shareholding at 30 June 2019: 11,566,900 shares.

Number of warrants at 30 June 2019: 22,701,734.

JAKOB HAVE (BORN 1981)

Elected to the Board of Directors in October 2018.

Position: CFO Micro Matic A/S,

Educational background: MSc in Business Administration and Auditing from Copenhagen Business School as economist.

Jakob Have has extensive experience from a number of international companies and industries and has in-depth knowledge of strategic development, M&A and accounting and finance matters.

Main directorships:

Member of the board of Directors Dalhoff, Larsen & Horneman (DLH) A/S

Shareholding at 30 June 2019: 1,500,000 shares.

Number of warrants at 30 June 2019: 3,000,000.

FLEMMING HYNKEMEJER (BORN 1966)

Elected to the Board of Directors in October 2017.

Educational background: B. Sc. E.E and MBA.

Flemming has had a long-time career in among others Bang & Olufsen A/S, TDC A/S, CEO of Dansk Kabel TV A/S, Triax A/S and RTX A/S.

Main directorships:

Chairman of the board of directors of EC Power A/S
Member of the board of directors of Dali A/S

Shareholding at 30 June 2018: 2,836,879 shares.

Shareholding at 30 June 2019: 1,436,879 shares.

Number of warrants at 30 June 2018: 5,553,368.

ULRICH BECK (BORN 1964)

Elected to the Board of Directors in October 2017.

Position: Airbus Vice President Public Procurement Policy, Airbus Defense and Space

Ulrich has had more than 25 years of experience and expertise in Aerospace, Defense and Space Industry, in Senior Management positions as for Strategy, international Sales and Business Development, International Compliance Officer, transnational Merger Integration or as Chief Financial and Information Officer (as in Spain for development and industrial set up of Airbus Helicopters). Various Financial Management positions at operations, engineering program and corporate level. M&A, Transaction Management and Industrial Strategy projects.

Main directorships:

Member of the board of directors of Access e.V. and Access Technology GmbH, Institute for Material Sciences and Technology (associated with the RWTH Technical University of Aachen)
Member of the senate of DGLR German Society for Aerospace and Space, AIEE
Senior Member of AIAA American Institute of Aerospace and Aeronautics
Certified Board Member and Financial Expert (by Deutsche Börse AG), Member of related associations

Shareholding at 30 June 2018: 2,482,270 shares.

Shareholding at 30 June 2019: 2,482,270 shares.

Number of warrants at 30 June 2018: 7,774,823.

DEFINITION OF RATIOS

Ratio No. of shares, end of period	Explanation The total number of outstanding shares at any given time, exclusive of the Company's treasury shares.
Cash flow per share (DKK)	Cash flows from operating activities divided by average number of shares.
EBITDA margin (profit margin before depreciation and amortisation) (%)	Earnings before interest, tax depreciation and amortisation as a percentage of revenue.
EBIT margin (profit margin) (%)	Earnings before interest and tax as a percentage of revenue.
Equity ratio	Equity, end of year, as a percentage of total assets.
Return on equity (%)	Profit/loss for the year after tax divided by average equity.
Average no. of outstanding shares (1,000)	Average number of outstanding shares at any given time.
Net asset value per share (DKK)	Equity at year-end divided by number of shares at year-end.
Payout ratio (%)	Total dividends distributed divided by profit/loss for the year.
Earnings per share (DKK)	The Company's share of profit/loss for the year divided by average no. of shares.
Solvency ratio (%)	Traditional way of expressing the Company's financial strength.
Dividend per share of DKK 0.05	Dividend payment in Danish kroner per share.

GLOSSARY

Term Explanation

Application	Specific use of a product
Airbus Defense & Space	French, German, British and Spanish company operating in the
	defense, space and telecommunications industry
Check-out system	System for testing and controlling a satellite or instrument
DSTE	Digital Simulation & Test Equipment
ESA	The European Space Agency
ESRO (European Space Research	Organisation preceding ESA
Organisation)
ESTEC	European Space Research and Technology Centre
Galileo	European satellite navigation system similar to the GPS system
	in the USA
Industrial collaboration agreement	Agreement signed by non-Danish suppliers of defense material
	to Denmark with the Danish Enterprise and Construction
	Agency to ensure that the supplier undertakes in return to
	acquire defense material manufactured by Danish companies.
ISVV (Independent Software Verification	Independent verification and validation of software
& Validation)
Kick-Off	Kick-Off meeting to start up a project
Command control system	Guidance system
Critical software	Software, the failure or breakdown of which may cause loss of
	life, loss of spacecraft or loss of performance of the planned
	task, or software for which error rectification may prove very
	costly.
Lockheed Martin	US company operating in the defense and space industry
Counter-purchase obligation	Obligation on a non-Danish supplier of defense material to the
	Danish Armed Forces to buy defense-related equipment from
	Danish companies.
Outsourcing	The outsourcing of part of or a whole assignment with a
	subcontractor
Prime Contractor	The company with the main responsibility for carrying out a
	major ESA project
Project manager	Person in charge of carrying out a project
Thales Alenia Space	European space and defense industry company
EGSE	Electrical Ground Support Equipment
RF Suitcases	Radio Frequently test equipment for testing satellite
	communication links
Power SCOE	Special Checkout Equipment for testing satellite power
	systems
SAS	Solar Array Simulator
SLP	Second Level Protection
SSTL	Surrey Satellite Technology Ltd
MetOp-SG	Meteorological Operational Satellite - Second Generation

Rovsing A/S

Dyregårdsvej 2 2740 Skovlunde, Denmark Company reg. (CVR) no. 16 13 90 84 Tel: +45 +45 44 200 800 Fax: (+45) 45 44 200 801 Website: www.rovsing.dk

AI Terminal

Rovsing

3458_10-k_2019-09-13_5d1a35c1-aa91-443f-b27d-afc4d6b02a23.pdf

ANNUAL REPORT 2018 / 19

PROFILE

LIST OF CONTENTS

HIGHLIGHTS OF THE YEAR

FINANCIAL HIGHLIGHTS AND RATIOS

CORPORATE INFORMATION

The Company

Board of Directors

Executive Management

Auditors

Annual General Meeting

MANAGEMENTS' REVIEW

OPERATIONAL REVIEW

The European market

The US market

Emerging space markets

Product development and production

Capital increases in 2018/19

Organisation and management

Incentive schemes

ROVSING'S STRATEGY

An Agile and Customer focused High-Tech SME

Skills and Expertise

Strengthening our Strategic position and Growth

Company

1. Rovsing Mission

2. Vision – Rovsing 2021 Strategic Program

3. Values

4. Management, Leadership & Organisation

5. Rovsing's core skills

6. Product Range / Portfolio

Grow Top Line

7. Market expansion focus

8. Market sizes

9. Product development focus

10. Financials

Actual performance 2018/2019:

Financial guidance 2019/2020:

FINANCIAL REVIEW

Income statement

Financial items

Profit/loss before tax

Tax

Profit/loss for the year and comprehensive income

Balance sheet

Assets

Liabilities and equity

Cash flow statement

Funding of the Company's operations

DIVIDENDS

OUTLOOK FOR 2019/20

EVENTS AFTER THE REPORTING PERIOD

SIGNIFICANT ACCOUNTING ESTIMATES

SHAREHOLDER INFORMATION

Share price

Share liquidity

Shareholders

Employee shares

Warrant schemes

Dividend policy

Authorities granted to the Board of Directors

Financial reporting to shareholders

Annual General Meeting

Amendments to articles of association

Financial calendar

Issued Company Announcements

Registrar

Investor relations contacts

CORPORATE GOVERNANCE

Recommendation regarding election of vicechairman

Recommendation regarding the composition and organization of the Board of Directors

Recommendation regarding board committees

Recommendation regarding evaluation of the work of the Board of Directors and the Executive Board

Recommendation regarding remuneration in the form of share options

Management and organisation

Internal control and risk management

CSR, HUMAN RIGHTS AND CLIMATE CHANGE MITIGATION