Cash flows used in operating activities converts items in the Statement of Profit or Loss from the accrual basis
of accounting to the cash basis of accounting. Non-cash items such as foreign exchange gains and losses,
depreciation, amortization, and changes in working capital are reversed from the net result for the year and
actual cash receipts and payments are included.
Cash flows from investing activities shows payments related primarily to the purchase of licenses and property,
plant, and equipment and sale of activity.
Cash flows from financing activities shows proceeds from share issuance, borrowings, net of transaction costs,
repayment of debt, and lease payments.
Discontinued operations
Discontinued operations in 2022 are excluded from the results of continuing operations and are presented as a
single amount as profit or loss after tax from discontinued operations in the statement of profit or loss.
Additional disclosures are provided in Note 1.7. All other notes to the financial statements include amounts for
continuing operations, unless indicated otherwise.
Segment information
The Company is managed and operated as one business unit that is reflected in the internal reporting. No
separate lines of business or separate business entities have been identified with respect to any product
candidate or geographical market and no segment information is currently disclosed in the internal reporting.
1.4 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
The use of reasonable estimates and judgements is an essential part of the preparation of the financial
statements. Given the uncertainties inherent in the Company’s business activities, Management must make
certain significant accounting estimates and judgements, which affect the application of accounting policies and
therefore the reported amounts of assets, liabilities, expenses, and disclosures in the consolidated financial
statements and parent company financial statements. The significant accounting estimates and judgements
identified are those that have a significant risk of resulting in a material adjustment to the financial statements.
Management bases its estimates on historical experience, assumptions, and information currently available and
deemed to be reasonable at the time the financial statements are prepared. However, actual amounts may
differ from the estimated amounts as more detailed information becomes available. Estimates and assumptions
are reviewed on an ongoing basis and, if necessary, changes are recognized in the period in which the estimate
is revised. Management has made significant accounting estimates and judgements in the following areas,
which are further presented in each note to the relevant financial statement line items:
•
Estimate of inputs and assumptions used in share-based compensation valuation models (Note
2.5)
•
Judgement regarding the recognition of deferred tax assets related to taxable losses to be carried
forward (Note 2.7)
Please refer to the specific referenced notes for further information on the significant accounting estimates and
judgements as well as assumptions applied.
1.5 NEW IFRS STANDARDS APPLICABLE TO THE COMPANY
The Company has implemented the standards and amendments that are effective for the financial year 2023.
The new standards and amendments have not affected the Company’s recognition or measurement for 2023,
nor are they expected to have significant future impact.
The IASB has issued a number of new standards and updated some existing standards, which are effective for
accounting periods beginning January 1, 2024 or later. Therefore, they are not incorporated in these financial
statements. There are no standards presently known that are not yet effective and that would be expected to
have a material impact on our current or future reporting periods.
1.6 SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
In May 2023, Orphazyme agreed with the plaintiffs on the US Security class action case to settle the case by
Orphazyme paying a settlement amount. A written settlement document was filed by the parties to the Court
which was approved in October 2023. Following the approval there has been a general 100-day objection
period, where the consortia behind the class action could object to the settlement amount. The court did not
receive any objections and the case was finally closed early February 2024. The settlement amount was USD
2,5 million of which USD 0,5 million was covered by insurance leaving a net amount of USD 2 million which
was already paid in November 2023.
No other significant events after the reporting period to disclose.
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