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2022-01-01 2022-12-31 fsa:FixturesFittingsToolsAndEquipmentMember 18212099 2022-01-01 2022-12-31 fsa:LeaseholdImprovementsMember 18212099 2022-01-01 2022-12-31 fsa:PropertyPlantAndEquipmentInProgressMember 18212099 2022-01-01 2022-12-31 fsa:PrepaymentsForPropertyPlantAndEquipmentMember cmn:ConsolidatedMember 18212099 2022-01-01 2022-12-31 fsa:PrepaymentsForPropertyPlantAndEquipmentMember 18212099 2022-01-01 2022-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2021-01-01 2021-12-31 fsa:InvestmentsInGroupEnterprisesMember 18212099 2022-01-01 2022-12-31 relatedEntityIdentifier_asso_list_1 fsa:SubsidiaryMember 18212099 2022-01-01 2022-12-31 fsa:DepositsLongtermInvestmentsAndReceivablesMember cmn:ConsolidatedMember 18212099 2022-01-01 2022-12-31 fsa:OtherReceivablesMember cmn:ConsolidatedMember iso4217:DKK pure Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2022-01-01 2021-01-01 2022-12-31 2021-12-31 18212099 estron a/s Industrivej 5 8653 Silkeborg Silkeborg 86848877 www.estron.dk info@estron.dk PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Jens Chr. Skous Vej 1 8000 Aarhus C Denmark 89 32 00 00 aarhus@pwc.dk 2023-04-26 Anne Kristine Jørsboe Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning The Executive Board and Board of Directors have today considered and adopted the Consolidated Financial Statements and Parent Company Financial Statements of estron a/s for the financial year 1 January - 31 December 2022. 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 financial position at 31 December 2022 of the Company and the Group and of the results of the Company and Group operations for 2022. In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review. We recommend that the Consolidated Financial Statements and Parent Company Financial Statements be adopted at the Annual General Meeting. 2023-04-26 Silkeborg Peter Lyhne Uhrenholt CEO Anders Schnettler Kristensen Chairman Thomas Marstrand Vice chairman Allan Sørrig Dodt Sune Lilbæk Kasper Sandø Jensen To the shareholder of estron a/s Opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2022 and of the results of the Group’s and the Parent Company’s operations for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of estron a/s for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company (”the Financial Statements”). 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 Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Group´s and the Parent 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 Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. 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 judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group´s and the Parent 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 Group´s and the Parent 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 Group and the Parent 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. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 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. Management is responsible for Management’s Review. 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, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Aarhus C 2023-04-26 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Christian Roding State Authorised Public Accountant mne33714 1776000 17649000 -1055000 -491000 5000 14333000 27777000 41996000 66596000 49053000 6850000 7722000 232 243 40.8 27.7 2.7 38.7 64.3 52.6 41.7 85.6 55.0 48.7 0.0 38.0 Key activities The Group's main activity consists of design, development and production of wire solutions and connectors for the hearing aid industry as well as cables and sockets for the worldwide audio and security industries. Development in the year The income statement of the Group for 2022 shows a profit of DKK 22,877,134, and at 31 December 2022 the balance sheet of the Group shows positive equity of DKK 47,823,770. Results for the year are considered more than satisfactory. It has been a year in which the Covid-19 pandemic has been less restrictive on operations while there has been a catch-up by many customers to reduce their supply chain risk. The production in Vietnam has therefore been operating at maximum level to secure deliveries to customers, which has generated a significant onboarding of operators. In addition, estron has opened a new production site in Fresnillo, Mexico, which is in the phase of implementation and ramping up. estron has continued an unchanged level of investments in product development, production facilities and machinery to support all customers with the needed production capacity. The shares of estron a/s were sold to the private equity fund Erhvervsinvest and the transaction was closed 3 February 2023. Management continues unchanged while the Board of Directors has been changed. Special risks - operating risks and financial risks Targets and expectations for the year ahead In 2023, estron expects the gross profit to be lower compared to 2022, which is due to the global economic situation with high inflation rates and hence a reduced purchasing power from end-consumers. Further, 2022 was positively impacted by an out of the ordinary catch-up effect from many of the customers due to corona. End of year, it is though expected that the organisation will be ramping up again to meet expected growth in 2024. Demand for the Group's products and solutions is expected to grow steadily in the years to come. This applies to all the Group's segments/industries. As a consequence of the anticipated lower gross profit, the net profit in 2023 is expected to be lower than 2022. Uncertainty relating to recognition and measurement There has been no uncertainty regarding recognition and measurement in the Annual Report. Unusual events The financial position at 31 December 2022 of the Group and the results of the activities and cash flows of the Group for the financial year for 2022 have not been affected by any unusual events. Subsequent events No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. 80620167 61662838 46214414 32880522 45620418 39054716 25961908 21574359 4661525 3985049 2368348 1792158 30338224 18623073 17884158 9514005 0 0 9403623 8363379 4468220 1167726 2559697 969975 3665186 1871802 3189528 1490938 31141258 17918997 26657950 17356421 8264124 2544754 3780816 1982178 22877134 15374243 22877134 15374243 10000000 0 0 10500000 9366559 7747058 3510575 -2872815 1286032 1361039 1286032 1361039 1286032 1361039 1286032 1361039 9759517 8650259 4628643 3595802 126769 0 126769 0 883241 323252 768508 162026 601883 1850970 601883 1850970 11371410 10824481 6125803 5608798 15609787 12021757 11882839 7770454 8951056 5799397 5019379 2610334 8601405 5118608 8409647 5056739 9686506 11100453 9686506 11113481 2615964 4718133 233701 3111661 61182297 54352064 42295656 42701376 74366926 67205618 80359725 70922214 0 0 30554734 21153501 429687 570534 0 0 97500 97500 97500 97500 527187 668034 30652234 21251001 13184629 12853554 38064069 28220838 33162248 22939762 25311865 15437527 250658 0 250658 0 1355664 1706704 597314 514354 13908792 17525290 10768179 14739496 14111257 13887012 6215612 12524353 500000 500000 500000 500000 0 0 21314488 11913255 762644 797652 0 69682 0 10500000 0 10500000 1570001 217249 0 217249 1570001 217249 0 217249 9759000 13012000 9759000 13012000 1359572 2596473 1359572 2596473 11118572 15608473 11118572 15608473 3253000 3253000 3253000 3253000 1029119 392472 10726728 5387014 741069 1001673 741069 1001673 500000 500000 500000 500000 46561126 23571670 26009282 12386385 47823770 35369322 47823770 35369322 3806105 6209708 3700434 6084364 5025290 5153721 2996152 4001119 13854583 16010574 21417383 19727170 24973155 31619047 32535955 35335643 74366926 67205618 80359725 70922214 500000 797652 23571670 10500000 500000 11913255 69682 12386385 10500000 0 19653 0 0 0 0 19653 0 0 0 0 0 -10500000 0 0 0 0 -10500000 0 0 -10000000 0 0 0 0 -10000000 0 0 0 10000000 0 0 0 0 10000000 0 0 34674 0 0 0 34674 0 0 0 0 -89335 0 0 0 0 -89335 0 0 0 0 112322 0 0 0 0 112322 0 0 0 22877134 0 0 9366559 0 13510575 0 500000 762644 46561126 0 500000 21314488 0 26009282 0 36838174 32372113 21919984 18335096 4318453 3819253 3068425 2776574 1020559 816188 447011 343885 3443232 2047162 526488 118804 45620418 39054716 25961908 21574359 447 339 65 32 416894 342713 416894 342713 4204706 3504411 1945534 1513232 39925 137925 5920 -63787 15545 2951 12357 240 4452675 1164775 2547340 969735 81569 109973 81569 109973 1147950 802031 702956 756746 2435667 959798 2405003 624219 3665186 1871802 3189528 1490938 7067509 2549968 4248723 1987392 1196615 -5214 -467907 -5214 8264124 2544754 3780816 1982178 5474827 4780919 917 1317464 1317464 -1124257 -975577 5668951 5122806 4113788 3419880 917 416894 416894 -148680 4382919 3836774 1286032 1286032 Amortised over 3-7 years 28511215 15510998 0 0 1198976 764639 1850970 1850970 724483 0 0 0 4595854 2753631 149140 149140 806318 801227 11607914 11607914 -986955 -952950 0 0 0 0 -12857001 -12857001 32844597 17311679 149140 149140 2005294 1565866 601883 601883 19860956 11915196 0 0 875724 602613 0 0 238723 -9973 -561 -561 -3014 -3014 0 0 3932431 1724843 22932 22932 249343 197759 0 0 -947030 -947030 0 0 0 0 0 0 23085080 12683036 22371 22371 1122053 797358 0 0 9759517 4628643 126769 126769 883241 768508 601883 601883 3-5 years 4 years 4-5 years 3-5 years 4 years 4-5 years 4641495 9240246 0 -4598751 4641495 4641495 16512006 2586936 0 4598751 34674 1579261 9403623 8062609 0 -232493 -37064 -83058 25913239 16512006 Vietnam Estron Company Ltd Ho Chi Minh City 100 570534 97500 97500 -140847 0 429687 97500 97500 Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Deferred tax liabilities at 1 January 217,249 84,712 Amounts recognised in the income statement for the year 1,196,615 -5,214 Amounts recognised in equity for the year -94,521 137,751 Deferred tax liabilities at 31 December 1,319,343 217,249 Deferred tax liabilities at 1 January 217,249 222,463 Amounts recognised in the income statement for the year -467,907 -5,214 Amounts recognised in equity for the year 0 137,751 Deferred tax liabilities at 31 December -250,658 217,249 0 0 0 0 9759000 13012000 9759000 13012000 0 0 0 0 9759000 13012000 9759000 13012000 0 0 0 0 1359572 2596473 1359572 2596473 Payments due within 1 year are recognised in short-term debt. Other debt is recognised in long-term debt. The debt falls due for payment as specified below: Charges and security Rental and lease obligations Lease obligations under operating leases. Total future lease payments: Within 1 year 55,156 31,956 55,156 31,956 Between 1 and 5 years 47,890 74,506 47,890 74,506 103,046 106,462 103,046 106,462 The Company has a rent obligation which includes an obligation of 2.0 years' rent, corresponding to DKK 1,310k, in case of termination. Other contingent liabilities The Danish group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. Moreover, the Danish group companies are jointly and severally liable for Danish withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent adjustments of corporation taxes and withholding taxes may increase the Company's liability. The Group has a rent obligation which includes an obligation of 2.0 years' rent in case of termination. The annual obligation constitutes DKK 1,404k and the total obligation constitutes DKK 1,946k. The Company is included in the Group Annual Report of the Parent Company of the largest and smallest group: Name Place of registered office EH 03-02-2023 A/S Silkeborg The Annual Report of estron a/s for 2022 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C. The Consolidated Financial Statements and the Parent Company Financial Statements for 2022 are presented in DKK. 1 With reference to section 86(4) of the Danish Financial Statements Act and to the cash flow statement included in the consolidated financial statements of EH 03-02-2023 A/S , the Company has not prepared a cash flow statement. Revenues are recognised in the income statement as earned. Furthermore, value adjustments of financial assets and liabilities measured at fair value or amortised cost are recognised. Moreover, all expenses incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changed accounting estimates of amounts that have previously been recognised in the income statement. Assets are recognised in the balance sheet when it is probable that future economic benefits attributable to the asset will flow to the Company, and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow out of the Company, and the value of the liability can be measured reliably. Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Basis of consolidation The Consolidated Financial Statements comprise the Parent Company, estron a/s, and subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or in which the Parent Company, through share ownership or otherwise, exercises control. Enterprises in which the Group holds between 20% and 50% of the votes and exercises significant influence but not control are classified as associates. On consolidation, items of a uniform nature are combined. Elimination is made of intercompany income and expenses, shareholdings, dividends and accounts as well as of realised and unrealised profits and losses on transactions between the consolidated enterprises. The Parent Company's investments in the consolidated subsidiaries are set off against the Parent Company's share of the net asset value of subsidiaries stated at the time of consolidation. Leases in terms of which the Group assumes substantially all the risks and rewards of ownership (finance leases) are recognised in the balance sheet at the lower of the fair value of the leased asset and the net present value of the lease payments computed by applying the interest rate implicit in the lease or an alternative borrowing rate as the discount rate. Assets acquired under finance leases are depreciated and written down for impairment under the same policy as determined for the other fixed assets of the Group. The remaining lease obligation is capitalised and recognised in the balance sheet under debt, and the interest element on the lease payments is charged over the lease term to the income statement. All other leases are considered operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the lease term. Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of future cash flows, the value adjustments are recognised directly in equity. Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the rates at the time when the receivable or the debt arose are recognised in financial income and expenses in the income statement. Changes in the fair values of financial instruments that are designated and qualify as fair value hedges of a recognised asset or a recognised liability are recognised in the income statement as are any changes in the fair value of the hedged asset or the hedged liability related to the hedged risk. Changes in the fair values of derivative financial instruments that are designated and qualify as hedges of expected future transactions are recognised in the fair value reserve under equity as regards the effective portion of the hedge. The ineffective portion is recognised in the income statement. If the hedged transaction results in an asset or a liability, the amount deferred in equity is transferred from equity and recognised in the cost of the asset or the liability, respectively. If the hedged transaction results in an income or an expense, the amount deferred in equity is transferred from equity to the income statement in the period in which the hedged transaction is recognised. The amount is recognised in the same item as the hedged transaction. Revenue from the sale of goods is recognised when the risks and rewards relating to the goods sold have been transferred to the purchaser, the revenue can be measured reliably and it is probable that the economic benefits relating to the sale will flow to the Group. Revenue is measured at the consideration received and is recognised exclusive of VAT and net of discounts relating to sales. Expenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve the consolidated revenue for the year. Other external expenses comprise indirect production costs and expenses for premises, sales as well as office expenses, etc. With reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a summary of revenue, other operating income, expenses for raw materials and consumables and other external expenses. Staff costs include wages and salaries including compensated absence and pensions as well as other social security contributions etc. made to the entity's employees. The item is net of refunds made by public authorities. Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment. Other operating income and other operating expenses comprise items of a secondary nature to the main activities of the Group, including gains and losses on the sale of intangible assets and property, plant and equipment. The item “Income from investments in subsidiaries” in the income statement includes the proportionate share of the profit for the year. Financial income and expenses are recognised in the income statement at the amounts relating to the financial year. Tax for the year consists of current tax for the year and deferred tax for the year. The tax attributable to the profit for year is recognised in the income statement, whereas the tax attributable to equity transactions is recognised directly in equity. Any changes in deferred tax due to changes to tax rates are recognised in the income statement. Patents and licences are measured at cost less accumulated amortisation and less any accumulated impairment losses or at a lower value in use. Patents are amortised over the remaining patent period, and licences are amortised over the licence period; however not exceeding 7 years.Development costs and costs relating to rights developed by the Company are recognised in the income statement as costs in the year of acquisition. Property, plant and equipment are measured at cost less accumulated depreciation and less any accumulated impairment losses. Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the asset is ready for use. Depreciation based on cost reduced by any residual value is calculated on a straight-line basis over the expected useful lives of the assets, which are: Plant and machinery 3-5 years Other fixtures and fittings, tools and equipment 4 years Leasehold improvements The fixed assets’ residual values are determined at nil. 4-5 years Depreciation period and residual value are reassessed annually. The carrying amounts of intangible assets and property, plant and equipment and investments are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation. If so, the asset is written down to its lower recoverable amount. Investments in subsidiaries are recognised and measured under the equity method. The item “Investments in subsidiaries” in the balance sheet include the proportionate ownership share of the net asset value of the enterprises calculated on the basis of the fair values of identifiable net assets at the time of acquisition with deduction or addition of unrealised intercompany profits or losses and with addition of the remaining value of any increases in value and goodwill calculated at the time of acquisition of the enterprises. The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to “Reserve for net revaluation under the equity method“ under equity. The reserve is reduced by dividend distributed to the Parent Company and adjusted for other equity movements in the subsidiaries. Subsidiaries with a negative net asset value are recognised at DKK 0. Any legal or constructive obligation of the Parent Company to cover the negative balance of the enterprise is recognised in provisions. Other fixed asset investments consist of deposits. Inventories are measured at the lower of cost under the FIFO method and net realisable value. The net realisable value of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with deduction of selling expenses and costs of completion. The net realisable value is determined allowing for marketability, obsolescence and development in expected selling price. The cost of goods for resale, raw materials and consumables equals landed cost. The cost of finished goods and work in progress comprises the cost of raw materials, consumables and direct labour. Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which corresponds to nominal value less provisions for bad debts. Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest. Dividend distribution proposed by Management for the year is disclosed as a separate Dividend item. Deferred income tax is measured using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes on the basis of the intended use of the asset and settlement of the liability, respectively. Deferred tax assets are measured at the value at which the asset is expected to be realised, either by elimination in tax on future earnings or by set-off against deferred tax liabilities within the same legal tax entity. Deferred tax is measured on the basis of the tax rules and tax rates that will be effective under the legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. Any changes in deferred tax due to changes to tax rates are recognised in the income statement or in equity if the deferred tax relates to items recognised in equity. Current tax liabilities and receivables are recognised in the balance sheet as the expected taxable income for the year adjusted for tax on taxable incomes for prior years and tax paid on account. Extra payments and repayment under the on-account taxation scheme are recognised in the income statement in financial income and expenses. Debts are measured at amortised cost, substantially corresponding to nominal value. Return on assets Profit before financials x 100 / Total assets at year end Solvency ratio Equity at year end x 100 / Total assets at year end Return on equity Net profit for the year x 100 / Average equity