Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2021-01-01 2021-12-31 2020-01-01 2020-12-31 41852119 Tetra Pak Processing Systems A/S Søren Nymarks Vej 13 8270 Højbjerg 1957-11-22 Aarhus 89393939 SEB Bank EY Godkendt Revisionspartnerselskab 30700228 Værkmestergade 25 8100 Aarhus C 2022-05-31 Steen Ruge Thomsen Regnskabsklasse C, stor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2022-03-15 2022-03-15 CaseWare Working Papers Højbjerg Steen Ruge Thomsen Lars Peter Lindstrøm Chair Rolf Brandhøj Overgaard Monica Pedersen Steen Ruge Thomsen Kresten Mogensen Hjortsballe Elsebeth Christina Andersen elected by the employees Christoffer Lykke Andersen elected by the employees Niels Glahn Sabroe elected by the employees Kenneth Tilsted Christensen elected by the employees Aarhus Kim R. Mortensen State Authorised Public Accountant mne18513 1212646000 842152000 822722000 50264000 30382000 23844000 -3531000 -4538000 -6073000 -6428000 -4989000 34295000 21490000 -50248000 63107000 67810000 69852000 40904000 50802000 Non-current assets Non-current assets Non-current assets Non-current assets Non-current assets 525900000 468713000 526776000 366943000 426967000 Current assets Current assets Current assets Current assets Current assets 596628000 407847000 477769000 105732000 48838000 27348000 40611000 86021000 72703000 -10001000 -12027000 0 0 0 -3060000 -1072000 550000 505000 4066000 Total cash flows Total cash flows Total cash flows Total cash flows Total cash flows 5.1 6.4 4.1 3.7 2.9 19.9 19.3 20.5 24.3 21.6 9.8 13.8 10 6.9 4.2 33.5 43.2 44.4 56.4 -92.2 421 319 299 1125847000 1231636000 902140000 993749000 223707000 237887000 122354000 108979000 46165000 50741000 1815000 1232000 0 303000 57003000 79096000 3000 2755000 3534000 7293000 53472000 74558000 -808000 16328000 54280000 58230000 16468000 15806000 16821000 20654000 2823000 2410000 12513000 15349000 13094000 11959000 152000 202000 1236000 1430000 63107000 67810000 63107000 67810000 100594000 90714000 148210000 89906000 26566000 25966000 7963000 12226000 283333000 218812000 35291000 34149000 44347000 28026000 112165000 147058000 48866000 35945000 908000 673000 241577000 245851000 990000 4050000 525900000 468713000 589007000 536523000 12000000 12000000 93732000 93732000 54280000 58230000 160012000 163962000 5067000 4468000 156000 286000 12430000 16555000 0 33583000 17653000 54892000 6935000 6364000 1456000 355000 11530000 12348000 116719000 118122000 148840000 30495000 4983000 23996000 93264000 92348000 27615000 33641000 411342000 317669000 589007000 536523000 12000000 93732000 0 0 58230000 12000000 93732000 58230000 0 54280000 0 58230000 12000000 93732000 54280000 54280000 58230000 13059000 44840000 -81429000 100308000 -14090000 203378000 3000 2755000 3534000 7293000 10020000 18725000 -27641000 180115000 10001000 12027000 4487000 1257000 -5514000 -10770000 58230000 0 0 -1501000 -100000000 179780000 -9829000 -7029000 31737000 -3036000 -33583000 20929000 30095000 -170417000 -3060000 -1072000 4050000 5122000 990000 4050000 0 397000 18307000 14976000 18307000 15373000 18307000 15373000 2000 71000 0 1441000 1000 1243000 2292000 3187000 180000 90000 547000 814000 515000 3202000 10592000 24876000 598000 -9012000 -11998000 464000 -808000 16328000 72279000 30052000 4673000 46980000 35463000 835000 1430000 2719000 4078000 2197000 2039000 5118000 0 125000 0 0 1589000 26397000 764000 0 0 -927000 0 0 6000 1240000 0 -319000 74071000 34130000 5281000 22628000 41057000 835000 1236000 56473000 9398000 2263000 31631000 23504000 633000 0 1130000 7911000 1784000 2479000 4953000 50000 0 0 0 1589000 23995000 494000 0 0 57603000 17309000 2458000 10115000 27963000 683000 0 16468000 16821000 2823000 12513000 13094000 152000 1236000 94790000 108444000 12000 A 12000000 12000000 12000000 11000000 11000000 11000000 0 1000000 0 0 12000000 12000000 11000000 11000000 4468000 13480000 5067000 4468000 252338000 259857000 20211000 22724000 10684000 8239000 283233000 290820000 406 427 299000 299000 14000 6000 113000 167000 467000 413000 54280000 58230000 18307000 15373000 1815000 929000 -3000 -2755000 -3534000 -7293000 -808000 16328000 64521000 -26465000 20594000 34076000 20363000 -39675000 -17139000 92000 990000 4050000 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Tetra Pak Processing Systems A/S for the financial year 1 January - 31 December 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 of the Company at 31 December 2021 and of the results of the Company's operations and cash flows for the financial year 1 January - 31 December 2021. Further, in our opinion, the Management's review gives a fair review of the development in the Company's operations and financial matters and the results of the Company's operations and financial position. We recommend that the annual report be approved at the annual general meeting. To the shareholders of Tetra Pak Processing Systems A/S We have audited the financial statements of Tetra Pak Processing Systems A/S for the financial year 1 January - 31 December 2021, which comprise income statement, balance sheet, statement of changes in equity, cash flow statement 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 2021 and of the results of the Company's operations as well as the cash flows for the financial year 1 January - 31 December 2021 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence 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. 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 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 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 the 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 note 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 Statement Act. We did not identify any material misstatement of the Management's review. The financial ratios stated under "Financial highlights" have been calculated as follows: Ordinary operating profit/loss Profit/loss before financial items adjusted for other operating income and other operating expenses Operating margin Operating profit/loss (EBIT) x 100 Revenue Gross margin Gross profit/loss x 100 Revenue Return on assets Profit/loss from operating activites x 100 Average assets Return on equity Profit/loss after tax x 100 Average equity The Company's business activities are production, design and sale of production lines, machinery, equipment and spare parts for the ice cream industry, high shear mixers, high-tech filtrations systems and membranes for Food and Beverage industry. The income statement for 2021 shows a profit of DKK 54,280 thousand against a profit of DKK 58,230 thousand last year, and the balance sheet at 31 December 2021 shows equity of DKK 160,012 thousand. The financial performance is in line with our expectations stated in the annual report for 2020 and is considered satisfactory. The company's business area places particularly high demands on the knowledge resources relating to employees and business processes, in order to be able to retain the competitive power, it is decisive that the company can recruit and retain employees, both with a high educational level and employees with technical experience. This has been succeeded to a wide extent by means of an active and attractive staff policy. Statutory reporting on social responsibility statement, cf. FSA §99a Human Rights and Anti-Corruption The Tetra Pak Group is a signatory to the UN Global Compact, which entails that Tetra Pak Processing Systems A/S naturally is committed to implement and promote the principles in our business practice, e.g. by respecting the human rights and having a zero tolerance in relation to corruption and bribery. The most material risk to the company is connected to our suppliers, with whom we actively engage to ensure the compliance with both our Code of Business Conduct as well as national legislation and internationally recognized conventions. During 2021, we have continued follow-up activities with suppliers as well as promoted the ethical standards of our Code of Conduct among both suppliers and employees. No breaches to the Code of Conduct have been reported in 2021. We will continue to have this as our focus for the coming years. Environment and Climate TPPS A/S most material risks related to negative impacts on environmental and climate issues are within water & energy consumption and waste Part of the Tetra Pak Group’s 2030 Strategy is based on a commitment to a low-carbon circular economy. This is of course also the objective of Tetra Pak Processing System A/S and we strive for a sustainable future by adhering completely to the Group’s environmental strategy. The main environmental and climate focus for Tetra Pak Processing Systems A/S during 2021 has been to provide Processing Solutions to our customer’s, enabling their operations towards minimal water and energy consumption and minimum waste. For 2021 we have launched number of improvements on our Processing Solutions equipment, within the areas of minimizing waste, water and energy consumption. We will continue to have this as our focus for the coming years. Social and Employee matters The biggest asset of Tetra Pak Processing Systems A/S is our people, and our purpose is to be a modern and attractive employer that takes care of our employees and nourishes talent. To that end, we are driving actions to ensure a diverse workforce and an inclusive culture, where all employees can thrive. The main risk to our employees is potential accidents when dealing with chemicals and heavy machinery. To mitigate this risk, we actively work on safeguarding our employees by promoting Occupational Health & Safety (OHS) and wellbeing, as well as rolling out initiatives aimed at ensuring fewer accidents. In 2021, the organization wide Culture Change program was continued, which focuses on improved awareness of the above risk. Furthermore, all employees have been reminded and debriefed regarding our OHS policy and all new employees must undertake basic OHS trainings. Our objective of protecting our employees is now more important than ever in the current COVID-19 pandemic. In this context, extraordinary measures have been needed to ensure that we can continue this progress. This includes adapting our facilities to the circumstances by following the authorities' guidelines and providing our employees with the appropriate protective equipment. These efforts have contributed to safeguard the health of our employees and, consequently, keep the infections to a minimum. We will continue to have this as our focus for the coming years. The Board has set a target for the underrepresented gender on the Board at 20% or 1 out of 5 members elected by the general meeting. The ambition was to reach this target before the end of 2025. In 2021, new board members were elected, and there are now 1 women in the board out of 5 members (excluding elected by the employees), why the target figure has been reached. For management executives other than the Board, females represent 22% and males 78%. The gender ratio is considered equivalent to the total gender composition in the Company. Tetra Pak Processing Systems A/S follow the Group’s consolidated statement regarding diversity: “Our desired future state: …, we created a ‘desired future state’, which describes a respectful and inclusive work environment, company-wide engagement and dialogue around diversity and its value, and an organization whose diversity reflects our business and consumers. We have put in place a detailed baseline that will allow us to monitor our progress as we implement our action plan. Our work will focus on increasing flexible working arrangements, manager training, training around career development and increasing the focus on diversity and inclusion in our talent review and recruiting process. We will also improve how we communicate around these issues both internally and externally." The purpose of our data ethics guidelines, are to guide our users on data ethics considerations when collecting, sharing and using data. We strive to pay special attention to the data ethics issues such that our activities are in compliance with regulation. The policy is aimed at customers, current and potential partners, as well as employees. It is essential that these parties and the outside world trust our way of using data. In case we use third party data, it is expected by the third party that data ethical considerations, and if possible, a data ethic policy are integrated. We strive to ensure that employees are well-informed about data ethics and that they handle data correctly. We will continuously support the understanding of the importance of data ethics No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. The activities of Tetra Pak Processing Systems A/S for 2022 are expected to be above 2021. As a consequences of the increased geopolitical uncertainty and rising commodity prices, etc. there is increased uncertainty about setting expectations for 2022. Sales Volume is expected to increase. We expect an impact of the operations to be from minus 5 to plus 5 million. The annual report of Tetra Pak Processing Systems A/S for 2021 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Some financial items has been reclassified. The comparable figures have been adjusted. There are few accounts which have been reclassified. Comparitive figures have been adjusted as well. In accordance with the Danish Business Authority’s clarification in May 2021, financial statement items regarding equity investments in associates have been renamed to equity investments in participating interests as the financial statement items must be designated as such when the entity only holds equity investments in associates. Reporting currency The financial statements are presented in Danish thousand kroner (DKK'000). On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate 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 and payables and other monetary items denominated in foreign currencies are translated at the exchange rate 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 most recent financial statements is recognised in the income statement as financial income or financial expenses. On initial recognition, derivative financial instruments are recognised at cost in the balance sheet and are subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are presented as separate items in the balance sheet. Fair value adjustments of derivative financial instruments designated and qualifying as hedging of future assets or liabilities are recognised as separate items in the balance sheet and in the hedging reserve under equity. If the forecast transaction results in the recognition of assets or liabilities, amounts previously recognised in equity are transferred to the cost of the asset or liability, respectively. If the forecast transaction results in income or expenses, amounts previously recognised in equity are transferred to the income statement in the period in which the hedged item affects the income statement. The Company has chosen IFRS 15 as interpretation for revenue recognition. Revenue from contracts with customers comprises sales of products and income from construction contracts: • Revenue from the sale of products is recognised at the point in time when the control of products is transferred to the customer, which is generally upon delivery. • Income from construction contracts involving a high degree of customization is recognized as revenue by reference to the stage of completion. Accordingly, revenue corresponds to the market value of contract work performed during the year (percentage-of-completion method). Revenue from contracts with customers is measured at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those products. Amounts disclosed as net revenue exclude discounts, VAT and other duties. The Group considers whether contracts include other promises that constitute separate performance obligations and to which a portion of the transaction price needs to be allocated. In determining the transaction price, the Group considers the effects of variable consideration. No element of financing is deemed present, as payment is generally received as cash - on delivery or up to 60-90 days of credit. Variable consideration: The Group pays various discounts depending on the nature of the customer and business. Customer discounts comprise off-invoice discounts, volume- and activity-related discounts, including specific promotion prices offered. Off-invoice discounts arise from sales transactions where the customer immediately receives a reduction in the sales price. This also includes cash discounts and incentives for early payments. Volume- and activity-related discounts is a broad term covering incentives for customers to sustain business with the Group over a longer time and may be related to a current campaign or a sales target measured in volumes or total value. Examples include discounts paid as a lump sum, discounts for meeting all or certain sales targets or for exceeding targets, or progressive discounts offered in step with increasing sales to a customer. Production costs comprise costs incurred in generating the revenue for the year. Such costs include direct and indirect costs of raw materials, consumables and production staff, rent and leases, as well as depreciation on production plant. Production costs also include research and development costs that do not qualify for capitalisation and amortisation of capitalised development costs. Distribution costs comprise costs related to the distribution of goods sold in the year and to sales campaigns, etc. carried out in the year, including costs related to sales staff, advertising, exhibitions and amortisation/depreciation. Sales and marketing costs are recognised in the income statement when the Company obtains control of the sales or marketing product. Administrative expenses include expenses incurred in the year for company management and administration, including expenses relating to administrative staff, Management, office premises and expenses as well as amortisation/depreciation of assets used for administrative purposes. Other operating income and operating expenses comprise items of a secondary nature relative to the Company's core activities, including gains or losses on the sale of non-current assets. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. The basis of amortisation/depreciation, which is calculated as cost less any residual value, is amortised/depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Goodwill 10 years years Land and buildings 25 years years Plant and machinery 5-20 years years Other fixtures and fittings, tools and equipment 3-5 years years Leasehold improvements 5 years Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. Financial income and expenses are recognised in the income statement at the amounts that relate to the financial year. The items comprise interest income and expenses, e.g. from group entities and associates, financial expenses relating to finance leases, exchange gains and losses and amortisation of financial assets and liabilities. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. The Company and its Danish group entities are jointly taxed. The Danish income tax charge is allocated between profit making and loss making Danish entities in proportion to their taxable income. Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge according to the rates applicable to interest surcharges to the management company. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. The Company has chosen IFRS 16 as interpretation for classification and recognition of leases. Lease assets are “right-of-use-assets” arising from lease agreements. Lease assets are initially measured at cost comprising the following: • the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received • any initial direct costs • restoration costs. The lease assets are depreciated on a straight-line basis over the shorter period of the assets useful life and the lease term in the contract. The lease assets can be adjusted due to modifications to the lease agreement or reassessment of the lease term. The depreciation periods are as follows: • Property 1-6 years • Cars and trucks 1-3 years Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases with a term of 12 month or less, while low value assets comprise assets with a value below EUR 5 thousand. On initial recognition, lease commitments are measured at the present value of the future lease payments discounted by an incremental borrowing rate. The lease commitment is measured at amortised cost according to the effective interest method. The lease commitment is recalculated when the underlying contractual cash flows change due to changes in an index or an interest rate if the Group's estimate of a residual value guarantee changes or if the Group changes its assessment of whether call options, extension options or termination options can reasonably be expected to be exercised. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. 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. The net realisable value of inventories is calculated as the sales amount less costs of completion and expenses required to effect the sale and is determined taking into account marketability, obsolescence and development in the expected selling price. The cost of raw materials and consumables comprises the cost of acquisition plus delivery costs. The cost of finished goods and work in progress includes the cost of raw materials, consumables, direct labour and indirect production overheads. Indirect production overheads include the indirect cost of material and labour as well as maintenance and depreciation of production machinery, buildings and equipment and expenses relating to plant administration and management. Borrowing costs are not recognised in the cost price. Receivables are measured at amortised cost less write-down of expected losses, based on an individual assesment. The Company has chosen IAS 39 as interpretation for impairment of financial receivables. Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. Service supplies and contract work in progress for third parties are measured at the market value of the work performed less progress billings. The market value is calculated based on the stage of completion at the balance sheet date and the total expected income from the relevant contract. The stage of completion is calculated based on the expenses incurred relative to the expected total expenses relating to the relevant contract. Where the outcome of contract work in progress cannot be estimated reliably, the market value is measured at the expenses incurred in so far as they are expected to be paid by the purchaser. Where the total expenses relating to the work in progress are expected to exceed the total market value, the expected loss is recognised as a loss-making agreement under "Provisions" and is expensed in the income statement. The value of work in progress less progress billings is classified as assets when the selling price exceeds progress billings and as liabilities when progress billings exceed the market value. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprise cash and short term securities which are readily convertible into cash and subject only to minor risks of changes in value. Proposed dividends Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Provisions comprise anticipated expenses relating to warranty commitments, onerous contracts, restructurings, etc. Provisions are recognised when the Company has a legal or constructive obligation at the balance sheet date as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Provisions are measured at net realisable value or at fair value if the obligation is expected to be settled far into the future. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to 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. Deferred tax assets are recognised at the expected value of their utilisation; 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. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. As management company for all the entities in the joint taxation arrangement, the parent company is liable for payment of the group companies' income taxes vis à vis the tax authorities as the group companies pay their joint taxation contributions. Joint taxation contributions payable or receivable are recognised in the balance sheet as receivables or payables to group entities. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at amortized cost, which is essentially equivalent to the net realisable value. Lease liabilities Lease liabilities are measured at the net present value of the remaining lease payments including any guaranteed residual value based on the interest rate implicit in the lease. Prepayments from customers are recognised in liabilities. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. The cash flow statement shows the Company's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year. Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital, received/paid interests and corporate income tax. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities and of intangible assets, property, plant and equipment and investments. Cash flows from financing activities comprise changes in the size or composition of the Company's share capital and related expenses as well as raising of loans, repayment of interest bearing debt including lease liabilities and payment of dividends to shareholders. Cash and cash equivalents comprise cash and bank deposits. Segment information is given for revenue broken down by type of products. The segmentation is in accordance with the entity's internal financial management. Breakdown of revenue by business segment: Sales of goods/machinery 554,566 702,019 Sales of customized machines 173,144 152,337 Aftersales, services & consumables 398,183 377,281 1,125,893 1,231,637 Amortisation/depreciation of intangible assets and property, plant and equipment is recognised in the income statement under the following items: Production costs 4,967 4,171 Distribution costs 6,096 5,119 Administrative expenses 7,244 6,083 18,307 15,373 The provision for deferred tax primarily relates to timing differences in respect of inventory, intangible assets and property, plant and equipment. By reference to section 98b(3), (ii), of the Danish Financial Statements Act, remuneration to Management is not disclosed. Other contingent liabilities As management company, the Company is taxed on a joint basis with other Danish Group entities. The Company is jointly and severally liable with other jointlyt taxed group entities for payment of income taxes and withholding taxes. The company's bank has provided a gurantee of a total of t.DKK 1,672 (2020: t.DKK 2,479), which can be attributed primarely to work in progress. Parties exercising control Related party Domicile Basis for control Tetra Laval International SA Pully, Switzerland Participating interest Information about consolidated financial statements Parent Domicile Requisitioning of the parent company's consolidated financial statements Tetra Laval International SA Pully, Switzerland Avenue Général-Guisan 70, 1009 Pully, Switzerland Related party transactions Tetra Pak Processing Systems A/S was engaged in the below related party transactions: DKK'000 2021 2020 Sale of goods and services to affiliated companies 953,195 996,303 Acquisition of goods and services from affiliated companies 204,218 124,001 Sale of services (administrative fee and allocated costs) to affiliated companies 77,561 64,141 Acquisition of services (administrative fee and allocated costs) from affiliated companies 8,222 51 Royalty income from affiliated companies 2,552 2,361 Interest income from affiliated companies 2 71 Interest expenses to affiliated companies 2,292 3,187 Receivables from affiliated companies 112,165 147,958 Payables to affiliated companies 148,140 30,495 Dividends to parent 58,230 0 Ownership The following shareholders are registered in the Company's register of shareholders as holding minimum 5% of the votes or minimum 5% of the share capital: Name Domicile Tetra Laval International SA Avenue Général-Guisan 70, 1009 Pully, Switzerland 41852119 2021-01-01 2021-12-31 41852119 2021-01-01 41852119 2020-12-31 41852119 2021-12-31 41852119 2020-01-01 41852119 2021-01-01 2021-12-31 1 41852119 2021-01-01 2021-12-31 2 41852119 2021-01-01 2021-12-31 3 41852119 2021-01-01 2021-12-31 4 41852119 2021-01-01 2021-12-31 5 41852119 2021-01-01 2021-12-31 6 41852119 2021-01-01 2021-12-31 7 41852119 2021-01-01 2021-12-31 8 41852119 2021-01-01 2021-12-31 9 41852119 2021-12-31 1 41852119 2021-01-01 2021-12-31 1 41852119 2021-01-01 2021-12-31 1 41852119 2021-01-01 2021-12-31 e:ProposedDividendRecognisedInEquityMember 41852119 2020-01-01 2020-12-31 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