Årsrapport33771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 Hellerup2020-09-012019-09-012021-08-312020-08-3137404241AB Neo A/SSkjernvej426920Videbæk2016-01-22Ringkøbing-Skjern97 17 33 00www.ab-neo.comEY Godkendt Revisionspartnerselskab30700228Dalgasgade27, 3. sal7400HerningDanmark2021-12-21Jakob ØstervangRegnskabsklasse C, mellemstor virksomhedRevisionspåtegningThe Executive Board and Board of Directors have today considered and adopted the Annual Report of AB Neo A/S for the financial year 1 September 2020 - 31 August 2021.The Annual Report is prepared in accordance with the Danish Financial Statements Act.In our opinion the Financial Statements give a true and fair view of the financial position at 31 August 2021 of the Company and of the results of the Company operations and cash flows for 2020/21.In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review.We recommend that the Annual Report be adopted at the Annual General Meeting.Videbæk2021-12-21Dennis JørgensenExecutive OfficerScott Michael GurvisChairmanJosé Jorge NobreDeputy ChairmanJakob ØstervangTo the Shareholder of AB Neo A/SIn our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 August 2021 and of the results of the Company’s operations and cash flows for the financial year 1 September 2020 - 31 August 2021 in accordance with the Danish Financial Statements Act. We have audited the Financial Statements of AB Neo A/S for the financial year 1 September 2020 - 31 August 2021, which comprise income statement, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant accounting policies (”the Financial Statements”). We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 Financials Statements Act. Based on the work we have performed, in our view, 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 in Management’s Review. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 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 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. Herning2021-12-21Herning2021-12-21EY Godkendt RevisionspartnerselskabKarsten MehlsenState Authorised Public Accountantmne18473Seen over a five-year period, the development of the Company is described by the following financial highlights: 14147000161770004604000-86000-1600024000-106000-9000110470001256700035950001258930009774900085707000836960007264900060082000420100090180008762000-21139000-2188000-1655000-6430000-18355000-21321000-2319000-178500012264000-10170000-2029000-1233300011937000-4674000-33400005078000Årets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likviderÅrets forskydning i likvider4638318.51811.216.65.472.369.266.574.370.19.622.514.118.96.2Key activities The company’s business activities consist of production and sale of high-end quality feed products for young and sensitive animals. Development in the year The income statement of the Company for 2020/21 shows a profit of DKK 10,546,839, and at 31 August 2021 the balance sheet of the Company shows equity of DKK 115,407,541. We have had a good momentum and sales growth for our key products in core export markets. Our result has been negative effected of the close down of the Danish mink industry, the increased sea freight costs and the difficult market situation for pig farmers in Europe. At the same time the company has continued to invest in people and products for further growth, and Covid-19 has delayed sales on new market. Special risks The company has no special risks apart from normal business risk in feed industry. The company continuously works on elimination risks and heightened quality standards and meet the criteria of the feed safety standard GMP+. External environment The company has no special impact on external environment. The company is committed to work on optimizing and reducing impact on the external environment. Outlook and expectations For the coming financial year 2021/22 the company expects sales growth, and higher earnings compared to financial year 2020/21. The Company will continue to invest in production facilities, product development and technologies for future growth. Subsequent events No other significant events have occurred subsequent to the financial year-end.5722467764481535349719772905456086203108225734136323902720124104926858572045613546533271857112999694597874810546839212069635079166622916670073148593875120864801482304137928129374490556120027020396619225646209345159356446131875724583659436228492241924392110222187318237843412115144145963002803402527208765733729613469078942963746261853161851793910231740292076503159563238151512731500000500000500000500000-30690114910610104363771115407541104863771184324813933501843248139335074556878612126745568786121263490000297000025223791206269119915911975002009657545142431417237397649348567623664348442312449452556101595632381515127315000000104363771-393501054683908660500000-306911491061010546839212069631159196114215012-222365063065810-9770638487785049268585420464-1835603847224759906973319000-617425735153247642991918354529113900112000-6316019-1824252940534392767000-79409212348431341700010142126157653-4973305-1233262311937413185179396580526618531618517939618531618517939321336242712667922524351527081585918400800349719772905456061512736561273656158837495489173862031082257345392-218068046542262858572045625010365734884450764243864478940299969459787481450000015865613145000001586561382708347271738115000015865619420834885829950791667007314Amortised over 2-10 years 10 years 4182822961005061116451339175792090552438800-9519700-3729674479383863095611323034646550905396962456352531625893005972420563-9519700-372967686570956975596611121379281296120026619225775230803055215Depreciated over 5-50 years 5-12 years 3-12 years 31594193280146761762999915906426Prepayments consist of prepaid expenses concerning rent, insurance premiums, subscriptions etc.1054683921206963Provision for deferred tax at 1 September 1,393,350 1,133,486 Amounts recognised in the income statement for the year 450,764 243,864 Amounts recognised in equity for the year (residual) -866 16,000 Provision for deferred tax at 31 August 1,843,248 1,393,3500-492685857204568506410822073429996945978748-5303093-995219-1727043214798413409542581188-39350-222365063065810Contingent liabilities The company has concluded regular forward puchase contracts for raw materials.Basis Controlling interest Associated British Foods Plc, London. Participating interest Ownership The following shareholder is recorded in the Company's register of shareholders as holding at least 5% of the votes or at least 5% of the share capital: ABF Overseas Limited, London.The company is included in the group annual report of the parent company. Name Place of registered office Associated British Foods Plc, London. (største koncern udelad hvis samme som mindste) No. 293262 at Weston Centre, 10 Grosvenor Street, London W1K 4QY (mindste koncern) The Annual Report of AB Neo A/S for 2020/21 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C. The accounting policies applied remain unchanged from last year. The Financial Statements for 2020/21 are presented in DKK. The company has adjusted opening values within note 6 for Property, plant and equipment. The adjustment is correcting last financial year change of accounting for finance leases. Cost 1st September are increased by DKK 2,5M and depreciations 1st September are increased by 2,6M. The net effect DKK 0,1M is offset against finance lease liabilities. The adjustment has no effect on last year result or equity.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.At inception of a contract, the Company assesses whether a contract is, or contains, a lease. Acontract is, or contains, a lease if the contract conveys the right to control the use of an identifiedasset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company uses the definition of a lease in IFRS 16 At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any leaseincentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: - fixed payments, including in-substance fixed payments; - variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; - amounts expected to be payable under a residual value guarantee; and - the exercise price under a purchase option that the Company is reasonably certain to exercise,lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount ofthe right-of-use asset has been reduced to zero. The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company recognises the lease payments associated with these leases as an expense 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. Fixed assets acquired in foreign currencies are measured at the transaction date rates.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 retained earnings 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. Changes in the fair values of financial instruments that are designated and qualify as hedges of net investments in independent foreign subsidiaries or associates are recognised directly in equity as regards the effective portion of the hedge, whereas the ineffective portion is recognised in the income statement.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 expenses comprise wages and salaries.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 Company, including gains and losses on the sale of intangible assets and property, plant and equipment.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 changes in deferred tax for the year. The tax attributable to the profit for the year is recognised in the income statement, whereas the tax attributable to equity transactions is recognised directly in equity.Goodwill acquired is measured at cost less accumulated amortisation. Goodwill is amortised on a straight-line basis over its useful life, which is assessed at 10 years. Other intangible assets acquired is measured at cost less accumulated amortisation. Know-how and brand is amortised on a straight-line basis over its useful life, which is assessed at 2-10 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. Useful life of intangible assets are based on history and strategic expectations for the future.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: Buildings 5-50 years Plant and machinery 5-12 years Other fixtures and fittings, tools and equipment 3-12 years The fixed assets’ residual values are determined at nil. Depreciation period and residual value are reassessed annually.The carrying amounts of intangible assets and property, plant and equipment 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.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. 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 with addition of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour as well as maintenance and depreciation of the machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and management.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 insurance premiums, subscriptions etc.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.The cash flow statement shows the Company´s cash flows for the year broken down by operating, investing and financing activities, changes for the year in cash and cash equivalents as well as the Company´s cash and cash equivalents at the beginning and end of the year. Cash flows from operating activities Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working capital and non-cash operating items such as depreciation, amortisation and impairment losses, and provisions. Working capital comprises current assets less short-term debt excluding items included in cash and cash equivalents. Cash flows from investing activities Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant and equipment as well as fixed asset investments. Cash flows from financing activities Cash flows from financing activities comprise cash flows from the raising and repayment of long-term debt as well as payments to and from shareholders. Cash and cash equivalents The cash flow statement cannot be immediately derived from the published financial records.Cash and cash equivalents comprise ”Cash at bank and in hand”.The share capital consists of 500,000 shares of a nominal value of DKK 1. 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