Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2024-01-01 2024-12-31 2023-01-01 2023-12-31 32440355 KM Rustfri A/S Gammel Rønbjergvej 2 a 7800 Skive 2009-08-28 Skive EY Godkendt Revisionspartnerselskab 30700228 Værkmestergade 25 8100 Aarhus C 2025-05-30 Claus Bang Christiansen Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion 2025-05-30 2025-05-30 CaseWare Working Papers Skive Peter Melgaard Skelkjær Wolf Ehrenberg Chairman Thomas Harry Otto Erhorn Harry Ehrenberg Michael Lund Rauff Finnerup Aarhus Tom B. Lassen State Authorised Public Accountant mne24820 1012577 -1638071 1445245 1110232 2526755 2512857 -2959423 -5261160 8810 350871 1525718 1734805 -4476331 -6645094 -980790 -1458577 -3495541 -5186517 579218 0 579218 0 8818981 9318823 20894173 25048873 155701 296081 1788882 0 31657737 34663777 32236955 34663777 819001 1044418 1164190 1647047 9761073 8052467 11744264 10743932 5304402 4909044 236289 154276 1086723 0 58841 29477 288924 343066 283373 197281 7258552 5633144 1418634 778502 20421450 17155578 52658405 51819355 500000 500000 0 0 12117038 15612579 12617038 16112579 0 103900 0 103900 3076053 3272418 4339267 5198086 571977 569829 7987297 9040333 1150389 1309888 25141147 22006532 2683379 1376618 1418801 415850 1660354 1453655 32054070 26562543 40041367 35602876 52658405 51819355 500000 0 1249096 500000 19050000 0 500000 0 -500000 -5186517 -19050000 19050000 500000 0 15612579 -3495541 500000 0 12117038 30492 583948 1495226 1150857 -921949 -1429200 0 -29377 58841 0 -3495541 -5186517 707104 707104 127886 127886 579218 12167602 60465669 1156773 0 0 55698 59414 1788882 0 544660 0 0 111180 -152867 41687 0 12278782 59823840 1257874 1788882 2848779 35416796 860692 0 459889 4323686 127662 0 0 545863 0 0 -151133 264952 -113819 0 3459801 38929667 1102173 0 8818981 20894173 155701 1788882 9786480 3274117 198064 3076053 2300476 5291592 952325 4339267 554303 571977 0 571977 0 18745341 17760664 1893412 1779767 323280 507667 22037 32575 20984070 20080673 20984070 20080673 49 52 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of KM Rustfri A/S for the financial year 1 January - 31 December 2024. 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 2024 and of the results of the Company's operations for the financial year 1 January - 31 December 2024. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of KM Rustfri A/S We have audited the financial statements of KM Rustfri A/S for the financial year 1 January - 31 December 2024, 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 2024 and of the results of the Company's operations for the financial year 1 January - 31 December 2024 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 Company's purpose is to develop and produce dairy fittings and customize deep drawing products in stainless steel. The income statement for 2024 shows a loss of DKK 3,496 thousand against a loss of DKK 5,187 thousand last year, and the balance sheet at 31 December 2024 shows equity of DKK 12,617 thousand. The income statement for 2024 shows a loss of DKK 3,495 thousand against a loss of DKK 5,187 thousand last year, and the balance sheet on 31 December 2024 shows an equity of DKK 12,617 thousand. Compared to expectations for 2024, the development in the result confirms that the company is following the strategy for 2026. Revenue has increased by 7,7% compared to 2023 and compared with expectation an increase of +3%. We have seen a change in product mix from Deep Draw products into Fittings that has impacted on our contribution margin. In 2024 a new ERP-system has been implemented with the expectations to bring on a more transparent cost price for our products. The cost cutting program and the development of tools for new products has been running for the whole year and will continue also going forward. The result for 2024 is still a loss, according to plan, and it has brought us closer to the break-even point for the company. No events materially affecting the Company's financial position have occurred after the financial year-end. With the initiated investments, optimizations, and expansion of the product range and increasing demand from internal customers the company expects to improve its profitability by approximately 1-3 MDKK compared to 2024. The annual report of KM Rustfri A/S for 2024 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to class B entities. Reporting currency The financial statements are presented in Danish kroner (DKK). 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. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income is recognised in revenue when the most significant rewards and risks have been transferred to the buyer and provided the income can be measured reliably and payment is expected to be received. The date of the transfer of the most significant rewards and risks is based on standardised terms of delivery based on Incoterms® 2010. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. The items revenue, production costs and other operating income have been aggregated into one item in the income statement called gross profit/loss in accordance with section 32 of the Danish Financial Statements Act. 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 comprise research and development costs that do not qualify for capitalisation and amortisation of capitalised development costs. Also, provision for losses on construction contracts is recognised. 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. Costs related to sales and marketing are recognised in the income statement when the Company obtains control over 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 comprise items of a secondary nature relative to the Company's core activities, including gains on the sale of fixed assets. 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: Acquired intangible assets 3 years Land and buildings 20 years Plant and machinery 5-15 years Fixtures and fittings, other plant and equipment 2-15 years Financial income and expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest income and expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. 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 entity is jointly taxed with other group entities. The total Danish income tax charge is allocated between profit/loss-making Danish entities in proportion to their taxable income (full absorption). 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. Other intangible assets include software licences and projects. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. 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 IAS 17 as interpretation for classification and recognition of leases. On initial recognition, leases for assets that transfer substantially all the risks and rewards incident to the ownership to the Company (finance leases) are measured in the balance sheet at the lower of fair value and the present value of the future lease payments. In calculating the net present value, the interest rate implicit in the lease or the incremental borrowing rate is used as the discount factor. Assets held under finance leases are subsequently accounted for in the same way as the Company's other assets. The capitalised residual lease liability is recognised in the balance sheet as a liability, and the interest element of the lease payment is recognised in the income statement over the term of the lease. The carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. 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. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Receivables in respect of which there is no objective evidence of individual impairment are tested for objective evidence of impairment on a portfolio basis. The portfolios are primarily based on the debtors' domicile and credit ratings in line with the Company's risk management policy. The objective evidence applied to portfolios is determined based on historical loss experience. 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. The effective interest rate for the individual receivable or portfolio is used as discount rate. 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. 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. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. 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. The Company has chosen IAS 39 as interpretation for liabilities. 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 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. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. Staff costs are recognised as follows in the financial statements: Production costs 19,766,251 18,766,245 Distribution costs 732,181 664,200 Administrative expenses 485,638 650,228 20,984,070 20,080,673 Other contingent liabilities The Company is jointly taxed with Damstahl a/s, which acts as management company, and has limited and alternative liability together with other jointly taxed group entities for payment of income taxes for income year 2019 onwards as well as withholding taxes on interest, royalties and dividends. Other lease liabilities: DKK 2024 2023 Lease liabilities 0 18,000 The Company has deposited owner mortgages and indemnity letters, which provide mortgages on land and buildings with DKK 24,600 thousand as security for the Company's bank debt. The carrying amount of land and buildings totalled DKK 8,819 thousand at 31 December 2024. Significant influence Related party Domicile Basis for significant influence Damstahl a/s Skanderborg, Danmark Ownership Armaturenwerk Hötensleben GmbH Hötensleben, Germany Ownership 32440355 2024-01-01 2024-12-31 32440355 2023-01-01 2023-12-31 32440355 2023-12-31 32440355 2024-12-31 32440355 2024-01-01 2024-12-31 1 32440355 2024-01-01 2024-12-31 2 32440355 2024-01-01 2024-12-31 3 32440355 2024-01-01 2024-12-31 4 32440355 2024-01-01 2024-12-31 1 32440355 2024-01-01 2024-12-31 1 32440355 2024-01-01 2024-12-31 e:AcquiredIntangibleAssetsMember 32440355 2024-12-31 e:AcquiredIntangibleAssetsMember 32440355 2024-01-01 e:LandAndBuildingsMember 32440355 2024-01-01 2024-12-31 e:LandAndBuildingsMember 32440355 2024-12-31 e:LandAndBuildingsMember 32440355 2024-01-01 e:PlantAndMachineryMember 32440355 2024-01-01 2024-12-31 e:PlantAndMachineryMember 32440355 2024-12-31 e:PlantAndMachineryMember 32440355 2024-01-01 e:FixturesFittingsToolsAndEquipmentMember 32440355 2024-01-01 2024-12-31 e:FixturesFittingsToolsAndEquipmentMember 32440355 2024-12-31 e:FixturesFittingsToolsAndEquipmentMember 32440355 2024-01-01 e:PropertyPlantAndEquipmentInProgressMember 32440355 2024-01-01 2024-12-31 e:PropertyPlantAndEquipmentInProgressMember 32440355 2024-12-31 e:PropertyPlantAndEquipmentInProgressMember 32440355 2023-01-01 e:ContributedCapitalMember 32440355 2023-01-01 2023-12-31 e:ContributedCapitalMember 32440355 2024-01-01 e:ContributedCapitalMember 32440355 2024-12-31 e:ContributedCapitalMember 32440355 2024-01-01 e:SharePremiumMember 32440355 2024-12-31 e:SharePremiumMember 32440355 2023-01-01 e:SharePremiumMember 32440355 2023-01-01 2023-12-31 e:SharePremiumMember 32440355 2024-01-01 e:RetainedEarningsMember 32440355 2024-01-01 2024-12-31 e:RetainedEarningsMember 32440355 2024-12-31 e:RetainedEarningsMember 32440355 2023-01-01 e:RetainedEarningsMember 32440355 2023-01-01 2023-12-31 e:RetainedEarningsMember 32440355 2024-12-31 e:LongtermMortgageLoansMember 32440355 2024-12-31 e:LongtermLeaseCommitmentsMember 32440355 2024-12-31 e:OtherLongtermPayablesMember iso4217:DKK xbrli:pure