Årsrapport 58466816 B.S. Danmark A/S Østergade 33 1100 København K 2019-01-01 2018-01-01 2019-12-31 2018-12-31 58466816 B.S. Danmark A/S Østergade 33, 3 1100 København K Copenhagen 70 25 22 26 33 11 45 53 www.thebodyshop.dk KPMG P/S Statsautoriseret Revisionspartnerselskab 25578198 Dampfærgevej 28 2100 København Ø Danmark 2020-08-18 Andrew Liam McCrea Regnskabsklasse B 1 Revisionspåtegning The Executive Board and Board of Directors have today considered and adopted the Annual Report of B.S. Danmark A/S for the financial year 1 January - 31 December 2019. 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 December 2019 of the Company and of the results of the Company operations for 2019. We recommend that the Annual Report be adopted at the Annual General Meeting. Copenhagen 2020-08-18 Kay Mikael Berg Andrew Liam McCrea Chairman Kay Mikael Berg Alexis Tchikladze To the Shareholder of B.S. Danmark A/S We have audited the Financial Statements of B.S. Danmark A/S for the financial year 1 January - 31 December 2018, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The Financial Statements are 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 of the Company at 31 December 2019 and of the results of the Company’s operations for the financial year 1 January - 31 December 2019 in accordance with the Danish Financial Statements Act. We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the ”Auditor’s responsibilities for the audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. København Ø 2020-08-18 København Ø 2020-08-18 KPMG P/S Statsautoriseret Revisionspartnerselskab Klaus Rytz State Authorised Public Accountant mne33205 21639270 28941974 20557652 28580409 -661207 431175 100343 0 1642482 -69610 121608 68652 1520874 -138262 335008 -548974 1185866 410712 1185866 410712 0 1471 130000 40 12628 66724 142628 68235 1225334 794251 119996 116292 36550 0 1381880 910543 2787231 3213054 2787231 3213054 4311739 4191832 3848261 2638996 2430064 3211296 17003363 14522656 352739 1545229 863222 1198230 352783 2226661 21002171 22704072 8978478 12407765 33828910 37750833 38140649 41942665 523000 523000 523000 523000 20605286 19419420 21128286 19942420 206192 133119 206192 133119 339417 0 339417 0 402464 3515592 2506814 2747452 8442861 11000244 5114615 4603838 16466754 21867126 16806171 21867126 38140649 41942665 523000 19419420 1185866 523000 20605286 The on-going Corona crisis will have a negative impact on our 2020 sales and result. The extent of this impact is still not fully clear and will depend on government intervention and our customers’ behaviour. The Body Shop Danmark A/S sells and markets products for skin, hair and body care as well as cosmetics. Sales take place through 3 channels: company stores, franchise stores and e-commerce. The company's head office is situated in Copenhagen. 100 % of all purchases for resale are made through the mother company in Great Britain. 19123756 27761123 992268 911654 436352 562622 5276 -654990 20557652 28580409 59 74 Staff costs does not include remuneration of the Company's Executive Board, and Company's Board of Directors, as they are not remunerated by the Company. Board members are remunerated by other group company and costs are reimbursed as a part of Transfer pricing adjustment. 81004 26196 40604 42456 121608 68652 0 0 335008 448708 0 -997682 335008 -548974 43757 5821948 6182138 0 2 0 -38942 -300000 -131015 4815 5521950 6051123 42286 5821906 6115414 1471 390044 54096 -38942 -300000 -131015 0 -520000 0 4815 5391950 6038495 0 130000 12628 14846134 658342 0 0 0 36550 -2984034 -91953 0 11862100 566389 36550 14051883 542050 0 1537702 64003 0 -2832065 -91897 0 -2120754 -67763 0 10636766 446393 0 1225334 119996 36550 3213054 -425823 2787231 339417 0 339417 0 Rental and lease obligations Rental and lease obligations under operating leases. Total future lease payments: Within 1 year 9.872.892 9.853.357 Between 1 and 5 years 11.964.230 21.472.163 After 5 years 0 229.834 21.837.122 31.555.354 Other contingent liabilities The Body Shop International Group operates in a wide variety of jurisdictions, in some of which the tax law is subject to varying interpretations and potentially inconsistent enforcement. As a result, there can be practical uncertainties in applying tax legislation to The Body Shop International Group’s activities. Whilst the Body Shop International Group considers that it operates in accordance with applicable tax law, there are potential tax exposures in respect of its operations. Basis Controlling interest The Body Shop Worldwide Limited, United Kingdom Parent Company Natura & Co Holding S.A., Brazil Ultimate Parent Company The company is included in the group annual report of the parent company and the ultimate parent company. Name Place of registered office The Body Shop Worldwide Limited West Sussex, United Kingdom The Group Annual Report of The Body Shop Worldwide Limited may be obtained at the following address: Watersmead Littlehampton BN17 6LS West Sussex United Kingdom The Annual Report of B.S. Danmark A/S for 2019 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to enterprises of reporting class B as well as selected rules applying to reporting class C. The accounting policies applied remain unchanged from last year. The Financial Statements for 2019 are presented in DKK. 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. 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. Income from the sale of goods for resale and finished goods, is recognised in revenue provided that delivery and transfer of risk to the buyer have taken place. Revenue is recognised exclusive of VAT and net of discounts relating to sales. Cost of goods includes the materials and consumables used in generating the year's revenue. 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 as well as payroll expenses. 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. Financial income and expenses are recognised in the income statement at the amounts relating to the financial year. Financial income and expenses comprise of interest, realised and unrealised exchange adjustments, amortisation of mortgage loans as well as extra payments and repayment under the on-account tax scheme. 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. Property, plant and equipment are measured at cost less accumulated depreciation and less any accumulated impairment losses. The depreciable amount is cost less the expected residual value at the end of the useful life. Land is not depreciated. Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the asset is available for use. The cost of self-constructed assets comprises direct and indirect expenses for labour, materials, components and sub-suppliers. Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. Gains or losses from the disposal of property, plant and equipment are stated as the difference between the selling price less selling costs and the carrying amount at the time of the sale. Gains or losses are recognised in the income statement as other operating income or other operating expenses. Leased property, plant and equipment that meet the criteria for finance leases are presented in the financial statements in the same way as owned assets. 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: Other fixtures and fittings, tools and equipment 5-10 years Leasehold improvements 4-7 years Depreciation period and residual value are reassessed annually. The carrying amount of intangible assets and property, plant and equipment as well as equity investments in group entities and associates is subject to an annual test for indications of impairment other than the decrease in value reflected by depreciation or amortisation. Impairment tests are conducted of individual assets or groups of assets when there is an indication that they may be impaired. Write-down is made to the recoverable amount if this is lower than the carrying amount. The recoverable amount is the higher of an asset's net selling price and its value in use. The value in use is determined as the present value of the forecast net cash flows from the use of the asset or the group of assets, including forecast net cash flows from the disposal of the asset or the group of assets efter the end of the useful life. Fixed asset investments consist of rent deposits measured at cost. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. Goods for resale and raw materials and consumables are measured at cost, comprising purchase price plus delivery costs. The net realisable value of inventories is calculated as the sales amount less costs of completion and costs necessary to make the sale and is determined taking into account marketability, obsolescence and development in expected selling price. Receivables are measured at amortised cost. Write-down is made for bad debt losses where there is an objective indication that a receivable or a portfolio of receivables has been impaired. If there is an objective indication that an individual receivable has been impaired, write-down is made on an individuel basis. Write-downs are calculated as the difference between the carrying amount of receivables and the present value of forecast cash flows, including the realisable value of any collateral received. The effective interest rate for the individuel receivable or portfolio is used as discount rate. Prepayments comprise prepaid expenses concerning subsequent financial year. Provisions are recognised when - in consequence of an event occurred before or on the balance sheet date - the Company has a legal or constructive obligation and it is probable that economic benefits must be given up to settle the obligation. Other provisions include warranty obligations in respect of repair work within the warranty period. Provisions are measured and recognised based on experience with guarantee work. Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax value of assets and liabilities measured on the planned use of the asset or settlement of the liability, respectively. Deferred tax assets, including the tax value of tax loss carryforwards, are recognised at the expected value of their utilisation within the foreseeable future, either as a set-off against tax on future income or as a set-off against deferred tax liabilities. Deferred tax is measured in accordance with the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. In cases where the computation of the tax value may be made according to alternative tax rules, deferred tax is measured on the basis of the planned use of the asset or settlement of the liability, respectively. Changes in deferred tax due to changes in tax rates are recognised in the income statement. For the current year, the current tax rate is 22%. 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. Financial liabilities are measured at amortised cost, substantially corresponding to nominal value. Deferred income comprises payments received in respect of income in subsequent years. intangible assets are recognised at cost less accumulated amortisation and impairment losses. Amortisation is allocated on a straight-line basis over the expected useful life of the asset. Expected useful lives are calculated as follows: Software 3-5 years Renting rights 3-5 years Goodwill 20 years The expected useful life of goodwill is based on Management's experience and concluded agreements. Due to the fact that renting rights is not reduced over time, the measurement will be based on cost less any accumulated impairment losses. The carrying amount of goodwill is assessed on an ongoing basis and is written down in the income statement when the carrying amount exceeds estimated future income from the activity to which the goodwill relates. 58466816 2019-01-01 e:ContributedCapitalMember 58466816 2019-12-31 e:ContributedCapitalMember 58466816 2019-01-01 e:RetainedEarningsMember 58466816 2019-01-01 2019-12-31 e:RetainedEarningsMember 58466816 2019-12-31 e:RetainedEarningsMember 58466816 2019-12-31 e:OtherLongtermPayablesMember 58466816 2019-01-01 2019-12-31 58466816 2019-01-01 2019-12-31 1 58466816 2019-01-01 2019-12-31 1 58466816 2019-01-01 2019-12-31 2 58466816 2019-01-01 2019-12-31 3 58466816 2019-01-01 2019-12-31 1 58466816 2018-01-01 2018-12-31 58466816 2019-01-01 2019-12-31 e:RetainedEarningsMember 58466816 2018-01-01 2018-12-31 e:RetainedEarningsMember 58466816 2018-12-31 58466816 2019-12-31 58466816 2019-01-01 e:FixturesFittingsToolsAndEquipmentMember 58466816 2019-01-01 2019-12-31 e:FixturesFittingsToolsAndEquipmentMember 58466816 2019-12-31 e:FixturesFittingsToolsAndEquipmentMember 58466816 2019-01-01 e:LeaseholdImprovementsMember 58466816 2019-01-01 2019-12-31 e:LeaseholdImprovementsMember 58466816 2019-12-31 e:LeaseholdImprovementsMember 58466816 2019-01-01 e:PropertyPlantAndEquipmentInProgressMember 58466816 2019-01-01 2019-12-31 e:PropertyPlantAndEquipmentInProgressMember 58466816 2019-12-31 e:PropertyPlantAndEquipmentInProgressMember 58466816 2019-01-01 e:DepositsLongtermInvestmentsAndReceivablesMember 58466816 2019-01-01 2019-12-31 e:DepositsLongtermInvestmentsAndReceivablesMember 58466816 2019-12-31 e:DepositsLongtermInvestmentsAndReceivablesMember 58466816 2018-12-31 e:OtherLongtermPayablesMember 58466816 2019-01-01 e:GoodwillMember 58466816 2019-01-01 2019-12-31 e:GoodwillMember 58466816 2019-12-31 e:GoodwillMember 58466816 2019-01-01 e:AcquiredLicencesMember 58466816 2019-01-01 2019-12-31 e:AcquiredLicencesMember 58466816 2019-12-31 e:AcquiredLicencesMember 58466816 2019-01-01 e:AcquiredOtherSimilarRightsMember 58466816 2019-01-01 2019-12-31 e:AcquiredOtherSimilarRightsMember 58466816 2019-12-31 e:AcquiredOtherSimilarRightsMember iso4217:DKK xbrli:pure