In the financial year 2010 Fritz Hansen recorded a net turnover of DKK 401m, equal to the net turnover in 2009.

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1 PRESS RELEASE ANNUAL ACCOUNTS FOR FRITZ HANSEN A/S, 2010 March 2011 In the financial year 2010 Fritz Hansen recorded a net turnover of DKK 401m, equal to the net turnover in "Fritz Hansen saw the bottom of the market in mid 2010 and has since noted a moderate optimism in all markets, especially the Far East which has developed favourably. Turnover and profit were slightly above budget, but we are still not satisfied with the result - we expect improvements for 2011." Say's Fritz Hansen's President and CEO Jacob Holm. Operating profit was DKK 23.1m compared with DKK 10.1m in Profit ratio was thus 5.8% and an improvement compared with 2.5% in "We have reached a stage when we sense growth potential again, and we expect to have a higher Fritz Hansen activity level, both in terms of finding new growth markets and making further investments in selected markets." Say's Jacob Holm. "Here, I think especially on the scheduled opening of our large joint shop and showroom in cooperation with our UK dealer Skandium in London (W1) for which we have great expectations in 2011". Jacob Holm continues. The recent international crisis has also shown us that financial strength and critical mass is necessary in the future in order to have attractive operations. With this in mind, Fritz Hansen acquired the rights to the KAISER idell lighting series, designed by German designer Christian Dell in the 1920s. "KAISER idell is the perfect match for Fritz Hansen in terms of design and markets. We have an established network of partners all over the world, which enables us to successfully introduce KAISER idell as a new family member. We see other obvious consolidation potential in the design furniture market, and we are open to any chance that may turn up, either as acquisitions or mergers." Say's Jacob Holm. Fritz Hansen's furniture is sold primarily through dealers and especially through their 140 shop-inshops which are special Fritz Hansen-only areas in the furniture stores. "We are pleased to note that our shop-in-shop partners perform very well and grow faster at the moment than our other customers - the mutual loyalty and strong product brand have shown us the way out of the crisis." Jacob Holm concludes. For further information please contact: Jacob Holm, CEO, tel

2 FRITZ HANSEN A/S CVR NO ANNUAL REPORT FOR 1 JANUARY - 31 DECEMBER

3 CONTENTS Page Company Details 1 Management's Statement on the Annual Report 2 Independent Auditor s Report 3 Management s Review 5 Accounting Policies 9 Income Statement 14 Balance Sheet 15 Statement of Changes in Equity 17 Cash Flow Statement 18 Notes 19

4 COMPANY DETAILS Company Fritz Hansen A/S Allerødvej 8, 3450 Allerød Municipality of reg. office: Allerød Founded: Financial year: Calendar year Central Business Registration: No Telephone No , Internet: Shareholder Skandinavisk Holding A/S Sydmarken 42, DK-2860 Søborg Supervisory Board Jørgen Tandrup, Chairman Henning Kruse Petersen, Deputy Chairman Anders Jørn Knutsen Anders Obel Per-Olav Larsen * Annette Overgaard * Marianne Thompson * *) Employee board member Executive Board Jacob Holm, Chief Executive Officer Lars Torp Madsen, Chief Financial Officer Peter Rathsach, Executive Vice President, Sales & Brand Management Company Auditors PricewaterhouseCoopers, Statsautoriseret Revisionsaktieselskab Subsidiaries Fritz Hansen Inc., USA (100% owned) Fritz Hansen Republic Store Århus ApS (100% owned) Adopted at the Annual General Meeting on 15 March 2011 Chairman 1

5 STATEMENT BY MANAGEMENT ON THE ANNUAL REPORT The Executive and Supervisory Boards have today considered and adopted the Annual Report of Fritz Hansen A/S for the financial year 1 January - 31 December The Annual Report is prepared in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements and the Consolidated Financial Statements give a true and fair view of the Company s assets and liabilities as well as the Group s financial position at 31 December 2010 and of the results and cash flows for In our opinion Management s Review includes a true and fair account of the matters addressed as well as a description of the most significant risks and elements of uncertainty facing the Company. We recommend that the Annual Report be adopted at the Annual General Meeting. Allerød, 15 March Executive Board Jacob Holm Lars Torp Madsen Peter Rathsach (Chief Executive Officer) Supervisory Board Jørgen Tandrup Henning Kruse Petersen Anders Obel Chairman Deputy Chairman Anders Jørn Knutsen Per-Olav Larsen Annette Overgaard Marianne Thompson 2

6 INDEPENDENT AUDITOR S REPORT TO THE SHAREHOLDER OF FRITZ HANSEN A/S We have audited the Financial Statements, the Consolidated Financial Statement and Management s Review of Fritz Hansen A/S for the financial year 1 January 31 December The Financial Statements and the Consolidated Financial Statements comprise Income Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement, Notes and Accounting Policies. The Financial Statements, the Consolidated Financial Statements and Management s Review are prepared in accordance with the Danish Financial Statements Act. Management s Responsibility Management is responsible for the preparation and fair presentation of the Financial Statements and the Consolidated Financial Statements in accordance with the Danish Financial Statements Act. The responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Financial Statements and Consolidated Financial Statements that are free from material misstatements, whether due to fraud or error. The responsibility also includes selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Furthermore, Management is responsible for preparing a Management s Review that includes a true and fair account in accordance with the Danish Financial Statements Act. Auditor s Responsibility and the Conducted Audit Our responsibility is to express an opinion on the Financial Statements, the Consolidated Financial Statements and Management s Review based on our audit. We conducted our audit in accordance with Danish Auditing Standards. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the Financial Statements, the Consolidated Financial Statements and Management s Review are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements, the Consolidated Financial Statements and Management s Review. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the Financial Statements, the Consolidated Financial Statements and Management s Review, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the Financial Statements and the Consolidated Financial Statements and to the preparation of a Management s Review that includes a true and fair account in order to design audit procedures that are 3

7 appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the Financial Statements, the Consolidated Financial Statements and Management s Review. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit has not resulted in any qualification. Opinion In our opinion, the Financial Statements and the Consolidated Financial Statements give a true and fair view of the financial position of the Company and the Group at 31 December 2010 and of the results of the Company and the Group operations and cash flows for the financial year 1 January December 2010 in accordance with the Danish Financial Statements Act, and Management s Review includes a true and fair account in accordance with the Danish Financial Statements Act. Copenhagen, 15 March 2011 PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab Torben Jensen State Authorises Public Accountant Henrik Jensen State Authorises Public Accountant 4

8 MANAGEMENT S REVIEW Group Chart Fritz Hansen A/S Fritz Hansen Inc., USA (100%) Fritz Hansen Republic Store Århus ApS (100%) Group financial highlights 2006/ / * DKK'000 DKK'000 DKK'000 DKK'000 DKK'000 Key Figures Income Statement: Revenue EBITDA EBIT Net Financials Profit/Loss for the year Balance Sheet: Inventories Trade Receivables Equity Balance sheet total Investments Average operating assets Ratios in % Profit Margin Return on Capital Employed Return on Equity Equity ratio (%) Employees: Average number of full-time employees *) Only comprise 6 months, i.e. the period of conversion 1 July December Comparison figures for preceding years not corrected. 5

9 MANAGEMENT S REVIEW (CONTINUED) Primary Activity The Company manufactures timeless high-quality designer furniture that has been developed in co-operation with established Danish and international architects and designers. Development in activities and financial position Financial development Pretax profit is DKK 5 million. Turnover and profit met with the budget expectations for the accounting yer. The year's cash from from operating activities are DKK 35 million. Investments The Group has not made any investments apart from the normal and ongoing replacement of plant equipment. Capital resources The Group is self-supporting and part of the Skandinavisk Holding Group. It is recommended to the Annual General Meeting that dividend of DKK 9 million should be paid. New products, research and development activities The Group s development costs in the period totalled DKK 5,9 million. Events after the balance sheet date No events have occurred after the balance sheet date to this date which would significantly influence the assessment of this Annual Report. Outlook & Expectations Moderate growth in turnover and higher results are expexted for the coming year. Special risks General risks The Group s primary operating risks relate to the general economic developments as its sale of furniture depends heavily on the financial performance development of our customers, who are primarily located in in Western Europe, Japan and the USA. 6

10 MANAGEMENT S REVIEW (CONTINUED) Financial risks As a consequence of its operations, investments and financing, the Group is exposed to changes in the level of interest and exchange rates. The Group pursues a policy under which currency exposure, interest rate exposure and credit risks only arise from commercial affairs and conditions. The Group s application of derivative financial instruments is governed by a written policy adopted by the Supervisory Board and by internal business procedures which determine the maximum amounts allowed and what types of derivatives financial instruments may be applied. Currency exposure The Group s activities are affected by exchange rate fluctuations because revenue is primarily invoiced in foreign currencies whereas costs, including wages and salaries, are incurred in Danish kroner. 21% of the Group s revenue originates from currencies other than Danish kroner, with the primary source being euro. The Group s currency exposure is primarily hedged by matching payments received and made in the same currency and by applying forward exchange contracts or short selling. It is the Group s exchange rate policy to hedge 80% of estimated currency risks at the beginning of every calendar year if they amount to at least DKK 20 million. Euro currency risks, however, are not hedged. At financial year end DKK 71 million was borrowed in foreign currency to cover future revenues. Interest Rate Exposure The Group's net interest-bearing debt, which has been calculated as mortage debt and bank debt less holdings of negotiable securities and cash funds, has gone down from DKK 45 million to DKK 21 million in the year. The interest bearing debt is raised in Danish kroner, euro, GBP, USD and YEN. Based on the net debt at the end of the financial year, an increase of one percentage point in the general interest level would cause the Group s annual pre-tax interest expenses to increase by max. DKK 0.1 million. The Group does not hedge the interest rate exposure as it is considered insignificant and, accordingly, not profitable. Credit risks Credit risks related to financial assets correspond to the values recognised in the balance sheet. The Group is not exposed to major risk from a single customer or business partner. As a consequence of the Group s credit risk policy, all major customers and other business partners are rated on a current basis. 7

11 MANAGEMENT S REVIEW (CONTINUED) Intellectual capital resources It is material for Fritz Hansen A/S continued growth to attract and retain competent and highly skilled employees holding expertise within furniture design and quality. Environmental performance Fritz Hansen A/S is conscious of the environment green-minded and makes an ongoing effort to reduce the environmental impact of its operating activities. The Group is not obliged to prepare green accounts Overall CSR mission & ambition "Show the world how sustainability, quality and exclusive design are all part o the same solution ". We believe that sustainability, quality and design are all equally important. We will strive to make our activities as environmentally and socially sustainable as possible, while maintaining quality and design at the highest level. That's what we call "Sustainable Quality". Our four Focus Areas: Long lasting products We want out products to last and be used for the longest time. Reducing toxic chemicals: We want to reduce off-gassing and exposure to toxic chemicals for our employees, Customers and other stakeholders. Responsible sourcing: We will prioritize materials that provide a reduced environmental impact from responsible suppliers who care about their employees and surroundings as much as we do. Reducing CO2 emissions: We will focus on the areas where we can achieve the right balance between our efforts and the impact on the environment. Read more about CSR and the statutory statement of Corporate Social Responsibility: 8

12 ACCOUNTING POLICIES The Annual Report of Fritz Hansen A/S has been prepared in accordance with the provisions of the Danish Financial Statements Act governing reporting class C enterprises (large). The Annual Report of Fritz Hansen A/S and its subsidiary are included in the consolidated financial statements of Skandinavisk Holding A/S, Søborg. The accounting policies applied for this Annual Report are consistent with those applied last year. Generally about Recognition and Measurement Income is recognised in the income statement when earned. Costs incurred to earn revenues for the year, including amortisation, depreciation, impairment losses and provisions as well as reversals resulting from changed accounting estimates of amounts previously recognised in the income statement, are also recognised. Assets are recognised in the balance sheet when it is probable as a result of a prior event that future economic benefits will flow to the Group, and the value of the assets can be measured reliably. Liabilities are recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a prior event, and it is probable that future economic benefits will flow out of the Group, and the value of the liabilities can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Gains, losses and risks that arise before the time of presentation of the Annual Report and that confirm or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and measurement. Consolidated Financial Statements The Consolidated Financial Statements comprise Fritz Hansen A/S (Parent Company), Fritz Hansen Republic Store Århus ApS and Fritz Hansen Inc. (subsidiary), see group chart on page 5. Control is achieved by the Parent Company, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence. 9

13 ACCOUNTING POLICIES (CONTINUED) Principles of Consolidation The Consolidated Financial Statements are prepared on the basis of the Financial Statements of Fritz Hansen A/S and its subsidiary. The Consolidated Financial Statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits on transactions between the consolidated enterprises are limited. The financial statements used for consolidation have been prepared applying the Group s accounting policies. Foreign currency conversion On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Exchange differences that arise between the rate at the transaction date and that in effect at the payment date as well as exchange adjustments of accounts denominated in foreign currencies using the balance sheet date exchange rate are recognised as financial income or expenses. The foreign subsidiary s income statement is translated into Danish kroner at average exchange rates. Balance sheet items are translated using the exchange rates at the balance sheet date. Exchange differences arising on the translation of the subsidiary s equity at the beginning of the year at the balance sheet date exchange rates and on the exchange adjustment of the income statement from average rates to the exchange rates at the balance sheet date are recognised directly in equity. Derivative financial instruments Forward exchange contracts, which primarily consist of raising loans in foreign currencies, entered into to hedge future revenues and expenses are measured at fair value at the balance sheet date, and value adjustments are recognised directly in equity. Income and expenses regarding such hedging transactions are transferred from equity upon realisation and recognised under the same financial statements item as the hedged amount. Revenue Revenue from invoiced sales is recognised in the income statement if delivery to the buyer has taken place prior to financial year end and if revenue can be stated reliably and receipt is expected. Revenue is recognised net of VAT and duties. Income taxes and deferred tax The Parent Company is jointly taxed with Chr. Augustinus Fabrikkers Aktieselskab and a number of other group enterprises. Estimated tax on the profit for the year, which comprises current tax and change in deferred tax, is recognised in the income statement calculated under the liability method. Deferred tax is provided for at 25% on the difference between carrying amount and tax base. 10

14 ACCOUNTING POLICIES (CONTINUED) Tax is paid to the Parent Company and is therefore recognised as payables to group enterprises. Intangible assets Intangible assets are measured at cost net of accumulated amortisation and impairment losses. Intangible assets are amortised on a straight-line basis over the assets estimated useful life, which is five years for goodwill. The period of amortisation for goodwill is determined based on Management s experience in the Company s business areas, and Management considers it to reflect the best estimate of the useful life of goodwill. Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and recoverable amounts. Land is not depreciated. Cost comprises the acquisition price and costs directly attributable to the acquisition until the time when the asset is ready to be put into operation. The basis of depreciation is cost with addition of any revaluations and less estimated residual value after the end of useful life. Straight-line depreciation is made on the basis of the following estimated useful lives of the assets, however, no more than the following: Goodwill Land and buildings: Buildings Installations Plant and machinery: Manufacturing machinery Tools Other fixtures and fittings, tools and equipment: Factory and warehouse equipment Transport vehicles Office furniture and machinery IT equipment and software Leasehold improvements 5 years 33 years 10 years 10 years 3 years 10 years 5 years 5 years 3 years 5 years It software costing less than DKK 1 million are also recognised. Any attributable costs are recognised in the total cost of IT software and related development costs. Gains and losses on current replacement of property, plant and equipment are recognised in the income statement. Intangible assets and property, plant and equipment are depreciated to recoverable amount if it is lower than the carrying amount. Recoverable amount is calculated as the higher of net selling price and capital value. 11

15 ACCOUNTING POLICIES (CONTINUED) Fixed Asses Investments Investments in subsidiaries are measured in the Parent Company under the equity method, ie that the proportionate share of the enterprises equity less unrealised intra-group profits. The proportionate share of these enterprises profit/loss after elimination of intra-group profits and less amortisation of goodwill is recognised in the income statement. Inventories Raw materials, consumables and goods for resale are measured at the lower of cost calculated under the FIFO method and net realisable value. Finished goods and work in progress are measured at the cost of direct materials and labour with addition of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour as well as maintenance and depreciation of machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and Management. The net realisable value of inventories is calculated as the expected sales sum less completion costs and expenses necessary to make the sale and is determined allowing for marketability and obsolescence. Receivables Receivables are measured at their estimated realisable value based on an individual assessment. Write-down is made for bad and doubtful debts. Equity - Dividends Proposed dividends are recognised as a liability at the time of adoption at the Annual General Meeting. Dividends expected to be distributed for the year are disclosed as a separate equity item. Financial liabilities Fixed-interest loans, such as mortgage loans and loans with credit institutions, intended to be held to maturity are recognised, at the time of contracting the debt, at the proceeds received net of transaction expenses. Subsequently, the loans are measured at amortised cost equal to the capitalised value using the effective interest method; the difference between the proceeds and the nominal value (capital loss) is recognised in the income statement over the loan period. CASH FLOW STATEMENT The cash flow statement is presented using the indirect method and shows the year s consolidated cash flows from operating, investing and financial activities, the year s changes in cash and cash equivalents as well as the Group s cash and cash equivalents at the beginning and the end of the financial year. 12

16 ACCOUNTING POLICIES (CONTINUED) Cash flows from operating activities Cash flows from operating activities are calculated on the basis of earnings before depreciation and amortisation adjusted for changes in working capital, payments relating to financial items as well as income tax paid. Cash flows from investing activities Cash flows from investing activities comprise payments in connection with the purchase and sale of property, plant and equipment as well as fixed asset investments. Upon the acquisition and sale of enterprises, cash flows are adjusted for additions to and disposals of assets and liabilities. Costs is stated at acquisition price adjusted for cash and cash equivalents received. Cash flows from financing activities Cash flows from financing activities comprise changes in the size or composition of share capital and related expenses, borrowing, instalments on interest-bearing debt as well as payment of dividends. Cash and cash equivalents Cash and cash equivalents include cash at bank and in hand and short-term bank debt. Segment information Segment information is provided for geographical markets (primary segment). Since the Company has only one business area, no segment information has been provided for the secondary segment. Segment disclosures are stated based on the Company s financial reporting and comply with the applied accounting policies. Ratios The ratios have been compiled in accordance with Recommendation & Ratios issued by the Danish Society of Financial Analysts. Profit Margin = Operating profit/loss x 100 Revenue Return on capital employed(roce) = Profit/loss from primary activities x 100 Average operating assets Average operating assets = Operating assets are balance sheet total less cash at bank and in hand and non-interest bearing debt. Equity ratio = Equity x 100 Balance sheet total Return on equity = Net profit/loss for the year x 100 Average equity 13

17 INCOME STATEMENT 1 JANUARY - 31 DECEMBER Parent Company Group DKK'000 DKK'000 Note DKK'000 DKK' Revenue Change in inventories of finished goods and work in progress Raw materials, consumables and purchased goods Other external expenses Staff costs Profit before depreciation, amortisation & impairment losses (EBITDA) Amortisation, depreciation & impairment losses Operating profit/loss (EBIT) Income from investment in subsidiaries after tax Profit bef. financial income & expenses Financial income Financial expenses Profit/loss before tax Tax on profit/loss for the year NET PROFIT FOR THE YEAR Proposed distribution of profit/loss Net profit for the year Entries recognised directly in equity Transferred from Retained Earnings For disposition Retained Earnings Proposed dividends for the year

18 BALANCE SHEET AT 31. DECEMBER Parent Company Group DKK'000 DKK'000 Note DKK'000 DKK' Goodwill Intangible Assets Land and buildings Plant and Machinery Other fixtures and fittings, tools and equipment Property, plant and equipment in progress Fixed assets investments Deferred tax assets Deposits Investments in subsidiaries Fixed assets investments FIXED ASSETS Inventories Trade receivables Receivables from group enterprises Other receivables Prepayments Receivables Cash at bank and in hand CURRENT ASSETS ASSETS

19 BALANCE SHEET AT 31. DECEMBER Parent Company Group DKK'000 DKK'000 Note DKK'000 DKK' Share Capital Other reserves Retained Earnings Proposed dividends for the financial year EQUITY Mortgage debt Long-term debt Short-term part of long-term debt Bank debt Trade payables Payables to group enterprises Prepayments Short-Term debt DEBT EQUITY AND LIABILITIES Currency, interest and credit exposure 16 Contingent liabilities, etc. 17 Related parties 18 16

20 STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 1 JANUARY - 31 DECEMBER Share capital DKK'000 Other reserves DKK'000 Net reevaluation DKK'000 Proposed dividends DKK'000 Total DKK'000 Equity at 1 January Dividends paid Net profit for the year Exchange adjustments, subsidiaries Net adjustments, hedging instruments Equity at 31 December Share capital consists of 4 shares at DKK' share at DKK' Total There have been no capital increases or reductions in the last five years. 17

21 CASH FLOW STATEMENT FOR THE PERIOD 1 JANUARY - 31 DECEMBER Group DKK'000 DKK'000 Profit for the year before amortisation, depreciation and Impairment losses Change in inventories Change in receivables Change in trade payables & other payables from operating activities Cash flow from operating activities before net financials and tax Interest income etc Interest expenses etc Corporation tax paid Cash flow from ordinary activities Acquisition of property, plant and equipment Acquisition of fixed assets investments Sale of property, plant and equipment - - Sale of fixed assets investments Cash flow from investing activities Instalments on long-term debt Dividends paid to shareholders in the Parent Company - - Cash flow from financing activities The year's cash flow Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December Cash at bank and in hand Short-term bank debt Cash (Cash pool arrangement at fellow subsidiary) included in: - Receivables from group enterprises - Payables to group enterprises Cash and cash equivalents at 31 December

22 NOTES Parent Company Group DKK'000 DKK'000 DKK'000 DKK' Segment information Revenue Geographical primary segment Europe Rest of the world Changes in inventories of finished goods and work in progress, etc Changes in inventories of finished goods and work in progress Other operating invome Other external expenses This item included the following fee to the auditors appointed at the General Meeting Statutory audit Other services

23 NOTES (CONTINUED) Parent Company Group DKK'000 DKK'000 DKK'000 DKK' Staff costs Total salaries and remuneration, etc., are distributed as follows: Wages and salaries Pension costs and other social security costs Supervisory Board Executive Board Average number of employees Amortisation, depreciation and impairment losses Goodwill Land and buildings Plant and machinery Other fixtures & fittings, tools & equipment Profit from investment in subsidiaries after tax Fritz Hansen Inc. USA Fritz Hansen Republic Store Århus ApS Adjustment of internal profit Financial income Interest income, banks Interest income, other Exchange gains Interest income, other, includes interest income of DKK 111k from Fritz Hansen Inc. 20

24 NOTES (CONTINUED) Parent Company Group DKK'000 DKK'000 DKK'000 DKK' Financial expenses Interest expenses, banks Interest expenses, other Cash discounts granted Exchange loss Tax on profit/loss for the year Current tax Adjustment of deferred tax Intangible assets DKK'000 DKK'000 DKK'000 DKK'000 Goodwill Cost at 1 January Additions Cost at 31 January Amortisation & impairment losses 1 Jan Amortisation Amortisation & impairment losses 31 Dec Carrying amount at 31 Dec

25 NOTES (CONTINUED) 11. Property, plant and equipment Parent Company Other fixtures Property, and plant and Land & fittings equipment build- Plant & and and assets ings machinery equipment in progress Total DKK'000 DKK'000 DKK'000 DKK'000 DKK'000 Cost at 1 January Additions Disposal Cost at 31 December Depreciation & impairment losses 1 Jan Depreciation Depreciation relating to disposals for the year Depreciation & impairment losses 31 Dec Carrying amount at 31 Dec Carrying amount at 31 Dec The value of land and buildings according to the latest public assessment is DKK 149 million. The value of land and buildings includes DKK 5 million relating to capitalised interest, which is considered part of the building s cost. The carrying amount of capitalised interest is DKK 3.3 million. 22

26 NOTES (CONTINUED) 11. Property, plant and equipment (continued) Group Other fixtures Property, and plant and Land & fittings equipment build- Plant & and and assets ings machinery equipment in progress Total DKK'000 DKK'000 DKK'000 DKK'000 DKK'000 Cost at 1 January Additions Disposals Cost at 31 December Depreciation & impairment losses at 1 Jan Depreciation Depreciation relating to disposals for the year Depreciation & impairment losses at 31 Dec Carrying amount at 31 Dec Carrying amount at 31 Dec

27 NOTES (CONTINUED) 12. Fixed asset investments Investment in group enterprises Parent Company 2010 DKK' DKK'000 Cost at 1 January Additions 80 - Cost at 31 December Value adjustment at 1 January Exchange adjustments, beginning of year 48-9 Net profit for the year Exchange adjustment of profit for the year -2-2 Value adjustment at 31 December Internal profit Negative share capital is deducted in "Receivables from group enterprises" Carrying amount at 31 December Name registered Reg. address Voting/ownership share Fritz Hansen Inc. New York City, USA 100% Fritz Hansen Republic Store Århus ApS Århus, Denmark 100% 13. Inventories Parent Company Group DKK'000 DKK'000 DKK'000 DKK' Raw materials and consumables Work in progress Finished goods IPO addition

28 NOTES (CONTINUED) 14. Prepayments Parent Company Group DKK'000 DKK'000 DKK'000 DKK' Prepaid rent Other prepayments Cash at bank and in hand At 31 December 2010 amounts are included in the cash pool arrangement with the Parent Company, Skandinavisk Holding A/S. The net amount is recognised in Receivables from group enterprises and Payables to group enterprises. 16. Currency, Interest and Credit Exposure Trade Receivables The credit period for trade receivables varies by market from 30 days to 90 days. The credit period for trade receivables is free of interest. Mortgage Debt The Group's mortage debt has an average term of 9 years with an average fixed interest of 4,1%. After five years, DKK'000 of the long-term debt falls due for payment. Bank debt The bank debt consists of ordinary credits. The average term is one year. The rate of interest averaged 1.1% at 31 December Derivative financial instruments: There are no forward exchange contracts at 31 December Foreign currency loans of DKK 63 million have been raised to ensure expected future sales in foreign currency. 25

29 17. Contingent Liabilities Rental and lease commitments The Company has assumed rental and lease commitments with payments of DKK 14.4 million in the period of nonterminability. In the financial year 2011 payments amount to DKK 7.7 million. The balance of DKK 6.7 million is due for payment in the financial years 2012 to The commitments relate primarily to leases of showrooms and motor vehicles. Assets charged and provision of security Mortgage deeds registered to the mortgager of DKK 75,670k have been recorded on the Company s properties with the Land Registry; of this, DKK 21,850k remains with the Company, whereas DKK 53,820k has been provided as security for long-term debt. The company has guaranteed payments of DKK'000 relating to rental agreements and customs clearance abroad. 18. Related Parties Related parties of Fritz Hansen A/S comprise the following: The Company s shareholder, Skandinavisk Holding A/S. Controlling influence Skandinavisk Holding A/S, which holds 100% of the share capital. Transactions with related parties There have only been limited trade transactions with related parties. No transactions have been carried out with the members of Executive and Supervisory Boards in 2010, apart from remuneration to these members. 26