truefalseBrian KlugeÅrsrapport25578198KPMGØstre Havnegade 22DDK-9000 Aalborg2022-01-012022-12-312021-01-012021-12-312023-06-062023-06-0615512415CCL Label A/SNyagervej 112605BrøndbyDKDenmark1960-02-27BrøndbyKPMG25578198Steffen S. Hansenmne32737statsaut. revisorØstre Havnegade22D9000AalborgDKDenmark45707077602023-06-06Regnskabsklasse C, mellemstor virksomhedfalsefalseRevisionspåtegningThe Board of Directors and the Executive Board have today discussed and approved the annual report of CCL Label A/S for the financial year 1 January – 31 December 2022.The annual report has been prepared in accordance with the Danish Financial Statements Act.We recommend that the annual report be approved at the annual general meeting.Brøndby,Brian KlugeLee Gerard PretsellChairmanGünther Johann BirknerJesper HolmMartin Aron RasmussenHasse VadTo the shareholders of CCL Label A/SOpinionBasis for OpinionWe 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' 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.Aalborg,4974000031062000329390004842500052038000Operating profit/loss3263000-305300025220001251200013468000-3663000-3718000-785000-8434000-11234000279530002635290005295000031680002041000590040000563453000552137000364865000186701000356212000328259000309345000256395000-8151000029020001253500046650001952800021205000000.33.47.28.282.718.73.6-86.160.458.35670.3-43.7155142145145157Financial instruments The Company's goals and policies for management of financial risks The Company's risk exposure During recent years, the majority of the production equipment was replaced with newer and more effective equipment. These investments will ensure that CCL in the future is competitive. Investments will remain at the same level during the years to come. CCL Label A/S has continuously given product development high priority and developed several new products during the year. Product development is carried out by the Company and in cooperation with its customers to ensure a successful outcome for the products developed. As a Canadian-owned company, we are in full compliance with Bill 198. Activities are primarily settled in DKK, EUR and SEK. Foreign exchange translations are deemed not to have any significant impact on results.497404693106159815190466911855731286793249959503263210-305290945903790296850082603221421-21499412604166726764822713052850683676409380299525599731261780359-2353702-17482202795343326352857919435438870790650665655059925942060437661041773711147710341407103854035627305932991962387750473278155268002844894459444894459461030661030686106583927645041596545039417650700320050911797075513009381877594437120932485757278171522819252949131903533503240627917043218910031122791982702755007306275301228934110837843495895328927072028812982521758303697354335235590040173563453205130000001300000034321201331525858035621201332825858058822714770839588227147708391475244881520076311033904040855262523422338371022634995300342720207362211950242474995680421401784161552279458892304237865900401735634532051300000031525858002795343313000000343212013Software Goodwill Software is measured at cost less accumulated amortisation and is amortised on a straight-line basis over the useful life. Expected useful life of software is up to 10 years. On initial recognition, intangible assets are measured at cost. Goodwill is amortised on a straight-line basis over the estimated useful life determined on the basis of Management's experience within the individual business areas. Amortisation is provided on a straight-line basis over 10 years. Goodwill has arisen in connection with strategic acquisition, and therefore goodwill is amortised over 10 years on the basis of Management's experience in the relevant area of business. Gains and losses on the disposal of intangible assets are determined as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses are recognised in the income statement as other operating income or other operating costs, respectively.15514227953433263528579Control Related party transactions CCL Label A/S' related parties comprise the following: CCL International Inc. 111 Gordon Baker Road, Suite 801, Onratio Canada. CCL International Inc. holds the majority of the contributed capital in the Company. CCL Label A/S is part of the consolidated financial statements of CCL Industries Inc., which is the smallest and largest group, in which the Company is included as a subsidiary. The consolidated financial statements of CCL Industries Inc. can be obtained by contacting the Company or at the following website: www.cclind.com/investors/investor-home. Receivables from and payables to group entities are disclosed in the balance sheet, and interest expense in note 3.In our opinion, the financial statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2022 and of the results of the Company's operations for the financial year 1 January – 31 December 2022. Further, in our opinion, the Management's review gives a fair review of the development in the Company's activities and financial matters, of the results for the year and of the Company's financial position.We have audited the financial statements of CCL Label A/S for the financial year 1 January – 31 December 2022 comprising 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 Company's assets, liabilities and financial position at 31 December 2022 and of the results of the Company's operations for the financial year 1 January – 31 December 2022 in accordance with the Danish Financial Statements Act.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 that 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 as to 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 in Denmark will always detect a material misstatement when it exists. Misstatements may 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 financial statement users made 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 company 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.Management is responsible for the Management's review. Our opinion on the financial statements does not cover the 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 the Management's review and, in doing so, consider whether the 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 the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the 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 of the Management's review. The financial ratios have been calculated as follows: Return on invested capital Operating profit/loss * 100 Average invested capital Return on equity Profit/loss from ordinary activities after tax x 100 Average equity Solvency ratio Equity ex. non-controlling interests at year-end x 100 Total equity and liabilities at year-endThe Company principal activities are production and sale of labels, inserts and carton.The Company's income statement for 2022 shows a profit of DKK 27,953,433 as against DKK 263,528,579 in 2021 due to lower dividend from subsidiaries. The development in operating profit is positive. Equity in the Company's balance sheet at 31 December 2022 stood at DKK 356,212,013 as against DKK 328,258,580 at 31 December 2021.Due to the global raw material shortage situation and war in Europe, the outlook is subject to a higher degree of uncertainty, but Management still expects to report positive earnings due to its strong business model, which is supported by its operations and pipeline at the time of finalising the annual report.The primary intellectual capital of CCL Label A/S is its employees and their knowledge. No events have occurred after the balance sheet date of material importance to the annual report for 2022. The annual report of CCL Label A/S for 2022 has been prepared in accordance with the provisions applying to reporting class C medium-sized entities under the Danish Financial Statements Act.The accounting policies used in the preparation of the financial statements are consistent with those of last year.Pursuant to section 112(1) of the Danish Financial Statements Act, no consolidated financial statements have been prepared. The financial statements of CCL Label A/S and group entities are included in the consolidated financial statements of CCL Industries Inc., Willowdale, Ontario, Canada.Pursuant to section 86(4) of the Danish Financial Statements Act, no cash flow statement has been prepared. The Company's cash flows are included in the cash flow statement in the consolidated financial statements of CCL Industries Inc., Willowdale, Ontario, Canada.On initial recognition, transactions denominated in foreign currencies are translated at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables, payables and other monetary items denominated in foreign currencies are translated at the exchange rates at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the latest financial statements is recognised in the income statement as financial income or financial expenses. Fixed assets acquired in foreign currencies are translated at the exchange rates at the transaction dates.In accordance with section 32 of the Danish Financial Statements Act, revenue and production costs are aggregated in the financial statement caption "Gross profit".Income from the sale of goods is recognised in revenue when delivery and transfer of risk to the buyer have taken place, and the income may be measured reliably and is expected to be received. The date of transfer of the most significant benefits and risks is determined using standard Incoterms® 2020. Revenue is meaured ex VAT, taxes and discounts in relation to the sale.Production costs comprise costs, including depreciation, amortisation, wages and salaries, incurred to generate revenue for the year. Such costs include direct and indirect costs for raw materials and consumables, wages and salaries, rent and leases and depreciation of production plant.Costs incurred in distributing goods sold during the year and in conducting sales campaigns, etc. during the year are recognised as distribution costs. Also, costs relating to sales staff, advertising, exhibition and depreciation are recognised as distribution costs.Administrative expenses comprise expenses incurred during the year for management and administration of the Company, including expenses for administrative staff, Management, office premises, office expenses, depreciation and amortisation.Other operating income comprises items secondary to the activities of the entity, including gains on the disposal of intangible assets and property, plant and equipment.Other operating costs comprise items secondary to the activities of the entity, including losses on the disposal of intangible assets and property, plant and equipment.Financial income and expenses comprise interest income and expense, financial costs regarding finance leases, gains and losses on securities, payables and transactions denominated in foreign currencies, amortisation of financial assets and liabilities as well as surcharges and refunds under the on-account tax scheme, etc. Dividends from equity investments in group entities measured at cost are recognised as income in the Parent Company's income statement in the financial year when the dividends are declared.  In case of indication of impairment, an impairment test is conducted.Tax for the year comprises current corporation tax for the year and changes in deferred tax, including changes in tax rates. The tax expense relating to the profit/loss for the year is recognised in the income statement, and the tax expense relating to amounts directly recognised in equity is recognised directly in equity.Land and buildings, plant and machinery and fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses.  Cost comprises the purchase price and any costs directly attributable to the acquisition until the date on which the asset is available for use. Indirect production overheads and borrowing costs are not recognised in cost. The basis of depreciation is cost less any projected residual value after the end of the useful life. Depreciation is provided on a straight-line basis over the estimated useful life. The estimated useful lives are as follows: The useful life and residual value are reassessed annually. Changes are treated as accounting estimates, and the effect on depreciation is recognised prospectively. Land is not depreciated. Depreciation is recognised in the income statement as production costs, distribution costs and administrative expenses, respectively. Gains and losses on 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 date of disposal. Gains and losses are recognised in the income statement as other operating income or other operating costs, respectively.Production buildings 25-40 years Plant and machinery 3-10 years Fixtures and fittings, tools and equipment 3-10 years Leasehold improvements 2-5 yearsAll leases are operating leases. Payments relating to operating leases and other leases are recognised in the income statement over the term of the lease. The Company's total obligation relating to operating leases and other leases is disclosed as contractual obligations, etc.Equity investments in group entities and participating interests (including associates) are measured at cost. In case of indication of impairment, an impairment test is conducted. When cost exceeds recoverable amount, write-down is made to this lower value. The cost is reduced by dividends received exceeding accumulated earnings after the acquisition date. Deposits are recognised at amortised cost.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 after the end of the useful life.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. Finished goods and work in progress are measured at cost, comprising the cost of raw materials, consumables, direct wages and salaries and indirect production overheads. Indirect production overheads comprise indirect materials and wages and salaries as well as the maintenance of depreciation of production machinery, buildings and equipment as well as factory administration and management. Borrowing costs are not included in cost. 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 based on an individual assessment of receivables.Prepayments comprise prepayment of costs incurred relating to subsequent financial years.Current tax payable and receivable is recognised in the balance sheet as tax computed on the taxable income for the year, adjusted for tax on the taxable income of prior years and for tax paid on account. 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 based on the planned use of the asset or settlement of the liability. However, deferred tax is not recognised on temporary differences relating to goodwill non-deductible for tax purposes and on office premises and other items where the temporary differences arise at the date of acquisition without affecting either profit/loss or taxable income. 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 in the same legal tax entity. Any deferred net assets are measured at net realisable value. 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. Changes in deferred tax as a result of changes in tax rates are recognised in the income statement or equity, respectively.Financial liabilities are recognised at cost at the date of borrowing, corresponding to the proceeds received less transaction costs paid. In subsequent periods, the financial liabilities are measured at amortised cost using the effective interest method. Accordingly, the difference between cost and the nominal value is recognised in the income statement over the term of the loan together with interest expenses. Other liabilities are measured at net realisable value. The liability in relation to frozen holiday funds is measured at net realisable value, including indexation. Indexation adjustments are recognised as interest expense in the income statement.Wages and salaries 81,020,891 72,240,224 Pensions 3,577,890 2,936,223 Other social security costs 4,645,895 4,977,293 Other staff costs 5,138,522 2,447,470 94,383,198 82,601,210 Production 66,540,137 63,736,323 Distribution 11,961,006 5,730,835 Administration 15,882,055 13,134,052 94,383,198 82,601,210 In accordance with section 98b(3) of the Danish Financial Statements Act, remuneration of the Excutive Board and the Board of Directors has not been disclosed.DKK 2022 2021 Interest expense to group entities 1,822,526 1,953,550 Other financial expenses 1,414,717 1,684,948 Exchange losses 439,166 164,497 3,676,409 3,802,995 DKK Goodwill Software Total Cost at 1 January 2022 1,943,534 7,198,526 9,142,060 Additions for the year 0 3,855,562 3,855,562 Disposals for the year 0 -178,224 -178,224 Cost at 31 December 2022 1,943,534 10,875,864 12,819,398 Amortisation and impairment losses at 1 January 2022 -1,554,827 -1,543,467 -3,098,294 Amortisation for the year -194,353 -267,331 -461,684 Amortisation and impairment losses at 31 December 2022 -1,749,180 -1,810,798 -3,559,978 Carrying amount at 31 December 2022 194,354 9,065,066 9,259,420DKK Land and buildings Plant and machinery Fixtures and fittings, tools and equipment Leasehold improve-ments Total Cost at 1 January 2022 41,401,320 143,881,401 14,954,218 1,098,611 201,335,550 Additions for the year 0 2,345,286 515,223 41,545 2,902,054 Cost at 31 December 2022 41,401,320 146,226,687 15,469,441 1,140,156 204,237,604 Depreciation and impairment losses at 1 January 2022 -30,253,610 -105,341,045 -11,962,256 -1,098,611 -148,655,522 Depreciation for the year -729,973 -6,744,932 -776,592 -2,770 -8,254,267 Depreciation and impairment losses at 31 December 2022 -30,983,583 -112,085,977 -12,738,848 -1,101,381 -156,909,789 Carrying amount at 31 December 2022 10,417,737 34,140,710 2,730,593 38,775 47,327,815 Name/legal form Registered office Voting rights and ownership interest Equity Profit/loss for the year Group entities: DKK DKK Syrinx Holding Germany GmbH (consolidated) Holzkirchen, Germany 100% 1,159,459,110 117,312,496 CCL Specialty Cartons ApS Hørsholm, Denmark 100% 50,521,341 12,286,186 CCL Label Völkermarkt GmbH Völkermarkt, Austria 1% 289,778,408 28,668,386 1,499,758,859 158,267,068Prepayments comprise prepayment of costs incurred relating to subsequent financial years, including insurance, prepaid rent and other costs.Contributed capital consists of: One share of nom. DKK 3,000,000 One share of nom. DKK 2,700,000 One share of nom. DKK 300,000 One share of nom. DKK 6,000,000 One share of nom. DKK 500,000 One share of nom. DKK 500,000DKK 31/12 2022 31/12 2021 Deferred tax at 1 January 4,770,839 4,094,292 Deferred tax for the year 1,111,432 676,547 5,882,271 4,770,839The provision for deferred tax relates to deferred tax on goodwill, property, plant and equipment and inventories.Intercompany loan falls due in 2024 and is therefore presented as non-current liabilities.At the balance sheet date, operating lease liabilities amounted to DKK 1,138 thousand, of which DKK 513 thousand falls due within the initial year. The leases come with periods of interminability of up to 36 months. At the balance sheet date, rental obligations amounted to DKK 3,588 thousand for the period of interminability. The tenancy agreement comes with a period of interminability of up to 12 months.No assets have been provided as collateral to the Company's bankers.155124152022-01-012022-12-31155124152022-01-012022-12-311155124152021-01-012021-12-31155124152021-12-31155124152022-01-012022-12-31g:PreviousYearMember155124152022-01-012022-12-31g:TwoYearsAgoMember155124152022-01-012022-12-31g:ThreeYearsAgoMember155124152022-01-012022-12-31g:FourYearsAgoMember155124152022-12-31155124152022-12-31g:PreviousYearMember155124152022-12-31g:TwoYearsAgoMember155124152022-12-31g:ThreeYearsAgoMember155124152022-12-31g:FourYearsAgoMember155124152022-01-012022-12-312155124152022-01-012022-12-312g:PreviousYearMember155124152022-01-012022-12-312g:TwoYearsAgoMember155124152022-01-012022-12-312g:ThreeYearsAgoMember155124152022-01-012022-12-312g:FourYearsAgoMember155124152022-01-012022-12-311155124152022-01-012022-12-311155124152022-01-012022-12-312155124152022-01-012022-12-3110155124152022-01-012022-12-3111155124152022-01-012022-12-3112155124152022-01-012022-12-31c:ContributedCapitalMember155124152022-01-01c:ContributedCapitalMember155124152022-12-31c:ContributedCapitalMember155124152022-01-012022-12-31c:RetainedEarningsMember155124152022-01-01c:RetainedEarningsMember155124152022-12-31c:RetainedEarningsMember155124152022-01-012022-12-31c:RetainedEarningsMember155124152021-01-012021-12-31c:RetainedEarningsMemberxbrli:pureiso4217:DKKiso4217:DKK