xbrli:pureiso4217:DKK105044732022-01-012022-12-31cmn:ConsolidatedMember105044732022-01-012022-12-311cmn:ConsolidatedMember105044732022-01-012022-12-311cmn:ConsolidatedMember105044732022-01-012022-12-312cmn:ConsolidatedMember105044732022-01-012022-12-311105044732022-01-012022-12-312105044732022-01-012022-12-313105044732022-01-012022-12-314105044732022-01-012022-12-315105044732022-01-012022-12-316105044732022-01-012022-12-31105044732021-01-012021-12-31cmn:ConsolidatedMember105044732021-01-012021-12-31105044732022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember105044732022-01-012022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember105044732021-01-012021-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember105044732022-01-012022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember105044732022-01-012022-12-31fsa:RetainedEarningsMember105044732022-01-012022-12-31fsa:RetainedEarningsMember105044732021-01-012021-12-31fsa:RetainedEarningsMember105044732022-12-31cmn:ConsolidatedMember105044732021-12-31cmn:ConsolidatedMember105044732022-12-31105044732021-12-31105044732022-01-01cmn:ConsolidatedMember105044732021-01-01cmn:ConsolidatedMember105044732022-01-01fsa:ContributedCapitalMembercmn:ConsolidatedMember105044732022-01-01fsa:RetainedEarningsMembercmn:ConsolidatedMember105044732022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember105044732022-12-31fsa:RetainedEarningsMembercmn:ConsolidatedMember105044732022-01-01fsa:ContributedCapitalMember105044732022-01-01fsa:ReserveForNetRevaluationAccordingToEquityMethodMember105044732022-01-01fsa:ReserveForDevelopmentExpenditureMember105044732022-01-01fsa:RetainedEarningsMember105044732022-01-01105044732022-12-31fsa:ContributedCapitalMember105044732022-12-31fsa:ReserveForNetRevaluationAccordingToEquityMethodMember105044732022-12-31fsa:ReserveForDevelopmentExpenditureMember105044732022-12-31fsa:RetainedEarningsMember105044732022-01-012022-12-31fsa:ContributedCapitalMembercmn:ConsolidatedMember105044732022-01-012022-12-31fsa:ContributedCapitalMember105044732022-01-012022-12-31fsa:ReserveForDevelopmentExpenditureMember105044732022-01-012022-12-312cmn:ConsolidatedMember105044732021-01-012021-12-312cmn:ConsolidatedMemberGrundlag for konklusionKonklusion2023-06-212023-06-2133963556Deloitte Statsautoriseret RevisionspartnerselskabRevisionspåtegningRegnskabsklasse C, stor virksomhed2021-12-312021-01-0133963556Weidekampsgade 6Deloitte Statsautoriseret Revisionspartnerselskab2300 København S2022-12-312022-01-01Dinex A/S10504473ÅrsrapportOdense51005Tværkajen, Postboks 10MiddelfartMiddelfart5500<br /><br />39FynsvejThe Board of Directors and the Executive Board have today considered and approved the annual report of Dinex A/S for the financial year 01.01.2022 - 31.12.2022.The annual report is presented in accordance with the Danish Financial Statements Act.In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year
01.01.2022 - 31.12.2022.We believe that the management commentary contains a fair review of the affairs and conditions referred to therein.We recommend the annual report for adoption at the Annual General Meeting.MiddelfartTorben Staal DinesenMichael StormNiels ThorborgTorben Staal DinesenJens Prytz SørensenJørn Tolstrup RohdeBirgit Bæk ThomsenCarsten Riisberg LundTo the shareholders of Dinex A/SWe have audited the consolidated financial statements and the parent financial statements of Dinex A/S for the financial year 01.01.2022 - 31.12.2022, which comprise the income statement, balance sheet, statement of changes in equity and notes, including a
summary of significant accounting policies, for the Group as well as the Parent, and the consolidated cash flow statement. The consolidated financial statements and the parent financial statements
are prepared in accordance with the
Danish Financial Statements Act.
In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31.12.2022 and of the results of their operations and the consolidated cash flows for the financial year 01.01.2022 - 31.12.2022 in accordance
with the Danish Financial Statements Act.We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional
requirements
applicable in Denmark. Our responsibilities under those standards and requirements are further
described in the "Auditor’s responsibilities for the audit of the consolidated financial statements and the parent financial statements" section of this auditor’s
report. We are independent of the Group 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.Management is responsible for the preparation of consolidated financial statements and parent 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 consolidated financial statements and parent financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group's and the Entity’s ability to continue
as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate
the Entity or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements and parent 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:<br />Identify and assess the risks of material misstatement of the consolidated financial statements and the parent 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.
<br />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 Group's and the Entity’s internal control.
<br />Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by Management.
<br />Conclude on the appropriateness of Management’s use of the going concern basis of accounting in
preparing the consolidated financial statements and the parent 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 Group's and the Entity’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 consolidated financial statements and the parent 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
Group and the Entity to cease to continue as a going concern.
<br />Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures
in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and
events in a manner that gives a true and fair view.<br />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 commentary.
Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management
commentary and, in doing so, consider whether the management commentary is materially inconsistent with
the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Moreover, it is our responsibility to consider whether the management commentary provides the information
required under the Danish Financial Statements Act.<br />Based on the work we have performed, we conclude that the management commentary is in accordance with
the consolidated financial statements and the parent 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 commentary.OdenseBo Damgaard Hansenmne34543State Authorised Public AccountantFinancial highlights2022
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DKK'000Key figuresRevenue2,218,9002,193,8191,727,4181,525,4181,231,649Gross profit/loss527,158533,278405,053429,922389,060EBITDA267,816323,112230,095208,282183,135Operating profit/loss198,493256,953169,133151,261150,883Net financials(66,791)(53,591)(42,926)(22,255)(46,138)Profit/loss before tax 122,446206,232125,487128,037104,270Profit/loss for the year84,274165,921107,087113,144101,298Balance sheet total1,851,1651,697,8501,437,2251,332,1881,145,629Investments in property, plant and equipment101,067112,843106,70872,56467,393Equity342,989249,969276,557311,527200,232Equity incl minority interests and subordinated loan542,988449,969476,557511,528400,232Average invested capital incl. goodwill1,244,6551,055,363972,742950,229766,887Net interest-bearing debt781,055601,072543,600499,166443,923RatiosGross margin (%)23.7624.3123.4528.1831.59EBITDA margin (%)12.1014.7013.3013.7014.90Net margin (%)3.807.566.207.428.22Return on invested capital
incl. goodwill (%)6.7715.7211.0111.9113.21Financial gearing 2.282.401.971.602.22Return on equity (%)28.4263.0236.4244.2266.25Equity ratio incl. subordinated loan (%)29.3026.5033.2038.4034.90Equity ratio (%)18.5314.7219.2423.3817.48Net interest-bearing debt to EBITDA2.901.902.402.402.40Financial highlights are defined and calculated in accordance with the current version of "Recommendations &
Ratios" issued by the CFA Society Denmark.Gross margin (%)
:Gross profit/loss * 100
RevenueEBITDA margin (%):EBITDA * 100
RevenueNet margin (%)
:
Profit/loss for the year * 100
RevenueReturn on invested capital incl. goodwill (%)
:Profit/loss for the year * 100
Average invested capital incl. goodwillFinancial gearing :Net interest-bearing debt
EquityReturn on equity (%)
:Profit/loss for the year * 100
Average equityEquity ratio incl. subordinated loan (%):Equity + subordinated loan* 100
Balance sheet totalEquity ratio (%)
:Equity * 100
Balance sheet totalNet interest-bearing debt to EBITDA(%):Net interest-bearing debt, net * 100
EBITDAPrimary activitiesThe primary activity of the Dinex A/S Group is development, production and sales of exhaust and emission
systems for trucks and industrial machines.Development in activities and financesCustomers in the Dinex Group are separated in two main segments - AEM customers (spare parts wholesalers) and OEM customers (manufacturers of diesel-powered vehicles - On Road and Off Road). The split in turnover between AEM 25% and OEM 75% is at the same level as in 2021.
The operating profit (EBIT) of the Group was DKK 198.494 thousand against DKK 256.954 thousand in 2021. The result before tax for the Group was DKK 122.446 thousand against DKK 206.222 thousand in 2021. The year-end total net result after tax for the Group was DKK 84.274 thousand against DKK 165.921 thousand in 2021.
EBITDA amounts to DKK 267 million and has decreased compared to the 2021 level. The result was affected by 3 main reasons
1) slow re-opening in China post COVID-19,
2) Russia’s invasion in Ukraine,
3) high inflation and economic market turbulence impacting the currency rates negatively.
Despite the challenges Dinex opened a new factory in China to produce high silicon power diesel particle filters where some of China’s leading engine manufacturers will start production in 2023.
The factory in India expanded its production to accommodate a higher demand with our customers. Furthermore, we saw an increase of our activities in the Turkish factory and its customers.
Dinex furthermore keeps on investing in R & D and new technologies which is the reason for increasing the costs in 2022.
Profit/loss for the year in relation to expected developmentsIn the outlook for 2022 Dinex expected to reach an EBITDA margin of 14-17%. The actual EBITDA margin for 2022 reached 12.1%, which is lower due to the increasing costs, however efforts has been initiated to come back to EBITDA margins above 16%Unusual circumstances affecting recognition and measurementThe revenue and the result in 2022 was affected by Russia’s invasion in Ukraine, re-opening in China after Covid-19 and the economic market turbulence, but beside this no unusual conditions have been noted in the actual financial year, which might have influenced this annual report positively or negatively.
In 2022 the group has identified accounting errors relating to prior years. Refer to section “material errors in previous years” under accounting policies for further details.
OutlookWe expect 2023 to recover from 2022 due to China abandoning their Zero-Covid strategy, stabilizing energy prices, and exploitation and expansion of the well-established global footprint. We expect long-term profitable growth driven by European, Chinese, Indian OEM market and AEM market growth in the US driven by the new after-market product portfolio, but also foresee that the global economy and thereby our business growth and earnings will be negatively impacted by the challenging macroeconomics environment and potential recession. As mentioned below we expect to continue our ownership in Russia. The activity level and earnings in Russia have been declining during 2022 but are expected to be maintained at the current level as a minimum.
The EBITDA margin, excluding special items, is expected to reach a level in the range of 16-17% as a result of increased revenue, exploitation of footprint, continued focus on efficiency, investment in future technology and a mix of cost reduction programs.
There will be a negative financial impact from the increased interest rates because of the currently high debt towards our banks.
The level of investments in production machinery, technology and development projects are planned to be on a continued reasonable level in 2023 with focus on operational improvements
Management estimates that the Group will achieve a turnover of 2,5 billion DKK and an EBITDA level of 16% in 2023 despite the continuing challenges in the macroeconomic environment.
Business in Russia
Everyone in and around Dinex is naturally affected by the situation in Ukraine, and distance themselves from the actions of the Russian regime. Therefore, it is crucial for Dinex that we can act in a way that is as little advantageous to the regime as possible. Since the invasion of Ukraine, we have canceled all new investments, cancelled Group development projects related to Russian customers, and we have reduced our local involvement to a minimum, which we will continue to do.
We support and follow all sanctions and political initiatives against the Russian regime, just as we comply with the EU’s principles on so-called dual-use products. We have also made donations to Ukrainian humanitarian causes. For the time being we have decided to retain ownership of our Russian subsidiary, but in accordance with EU sanctions, we have relinquished all daily operational management involvement in our Russian business. There are no support, collaboration or guidance provided by any Group or Headquarter functions to the local management team, and communication is limited to monthly reporting of financial and performance metrics, thus the Dinex Group is assuming a role of passive owners. However, the company is still subject to Dinex’ ethical guidelines, which among other things state that the company may not deliver for military purposes.
While certainly a difficult decision to take, ethically and commercially, it is our clear belief that maintaining passive ownership is the right thing to do. Our Russian subsidiary operates independently with local organization and supply chain. Therefore, it is our conclusion after thorough evaluation that leaving Russia will in any case result in continued operation under Russian ownership, with our factories and intellectual property rights being nationalized and/or transferred to the benefit of local players. The outcome would thus have no effect on the continued local operations or on the taxes collected by the Russian government as a result, and in addition, the earnings from sales to Russian customers would remain in Russian hands rather than being directed out of the country. In other words, this controlled scale-down of involvement is what Dinex believe is the right way to react under current circumstances.
We respect that it for some may seem like a controversial and unpopular decision, but we have thoroughly evaluated the ethical and commercial outcomes of all potential strategies, just as we have consulted with the Confederation of Danish Industry (DI).
Our Russian subsidiary is a manufacturing company that produces exhaust systems with catalytic technologies for heavy-duty applications (trucks, etc.) in accordance with the EURO 5 emission standards. Direct customers of the company are exclusively local Russian manufacturers of commercial vehicles, and the systems are used exclusively in commercial vehicles where they serve the sole purpose of reducing environmentally harmful pollutants in the exhaust from diesel and gas engines in accordance with civilian Russian on-road emission legislation. For this reason, Dinex’ products are more expensive and technically complicated than regular exhaust components, they require regular servicing, and upon malfunctioning they will have a vastly negative effect on vehicle performance. Thus Dinex’ products serve no military purposes, and Dinex does not and has never delivered to the Russian military.
We can summarize our rationale behind the decision to maintain our passive ownership with the following arguments:
• Since the invasion of Ukraine, we have canceled all new investments and development projects related to the Russian business.
• We have reduced our involvement to a minimum.
• We support and follow all sanctions and political initiatives against the Russian regime, just as we comply with the EU principles on so-called dual-use products.
• We have made donations to Ukrainian humanitarian causes.
Particular risks
Business risks
Dinex primarily produces goods that are sold in a regulated emission market where governments and agencies control the emission standards. Sudden unexpected changes in emission standards can affect sales volume negatively for Dinex; sudden stricter emission standards require a development process before new emission products can be sold, and a sudden roll-back in emission standards requires change in production plans, product portfolio and similar.
Dinex has invested in a Joint Venture in China with a Chinese manufacturer as well as a Joint Venture in India. The return on the investments is highly dependent of the development in the Chinese and Indian market for emission products.
Russian business
The board of directors recognizes the risks associated with the decision on passive ownership, particularly with regards to:
• Damage to reputation as well as risk for employees who may be exposed to critical publicity. We try to mitigate this risk by openly communicating the reasons behind our decision and guiding our employees on how to respond constructively and fact based to critical comments.
• Nationalization of the Russian subsidiary, resulting in loss of physical assets, intellectual property and/or legal action against our Russian employees. We seek to mitigate this risk by maintaining passive ownership and allowing continued, independent operation without contributing with any development, support, or management of the business.
Credit risk
The credit risks of the Group are primarily related to trade receivables, which at the end of 2022 were DKK 390.887 thousand against DKK 372.758 thousand in 2021. The customers can be grouped into two main categories, one being very large OEM manufactures with strong financial figures and the second being a diversified portfolio of smaller aftermarket customers. Historic losses are very limited, which also was the case in 2022.
Currency and interest risks
The consolidated financial statements are influenced by changes in exchange rates, as the result and equity of the subsidiaries are converted into Danish kroner at year-end based on average and year-end rates. Transactions are mainly in USD, CNY, INR, RUB and EURO. It’s not the company policy to hedge against currency risks.
The currency risk of the Group is mainly managed through matching incoming and outgoing payment currencies, whereas active hedging using e.g. instruments is only used to a limited extent in line with the established policy. In connection with considerations about the future financing structure of the Dinex Group, Management has examined various possibilities of covering the risks connected with loan financing, cash flow in foreign currency and the related interest costs. In 2022, a total net exchange loss of DKK 14.694 thousand is realized, against a net loss of DKK 14.879 thousand in 2021. The exchange loss is mainly driven by loss in Turkish Lire.
Dinex’s operation in Turkey is not affected by the fact that Turkey is seen as a country with Hyperinflation, as the functional and reporting currency is EUR.
Intellectual capital resources
The employees in the Dinex Group cover a wide field. At year-end, the Group had 1.890 employees, including 71 in Denmark. We continue to utilize the knowledge within the group, and have currently also 5 expats in US to assist the growth potential of the US market.
Research and development activitiesThe company’s total costs for R&D make up approx. 1,4% of the revenue. We have, as in previous years, invested significantly in future technology in line with emission requirements to support the strategy and not at least meet the customer’s demand. Statutory report on corporate social responsibilityDinex’ main contribution to society is found in its development, production, and sale of Exhaust AfterTreatment Solutions for Heavy Duty applications. Dinex’ technologies are today in use by Aftermarket and OEM customers in Europe, North America and Asia where they in compliance with local emission legislation is actively contributing to the reduction of harmful pollutants, such as ultra-fine particles and NOX-gasses in the exhaust gas of internal combustion engines operating on Diesel and Natural Gas fuels. Dinex’ technologies are already compatible with future low-carbon fuels such as bio-diesel, HVO and synthetic fuels.
In 2022 Dinex has initiated several product innovation projects to secure our future societal contribution to the market trends of cleaner transportation and low-carbon fuels. Several technology concepts for the upcoming Euro 7 emission standards expected to be in force in the EU by 2027 have been validated and further development is on-going in collaboration with a number of interested vehicle and engine manufacturers. To contribute to decarbonization of the transport sector, Dinex is also active within development of solutions for Hydrogen applications, both Hydrogen Combustion Engines and Fuel Cell Electric Vehicles.
Our CSR focus in 2022 – activities and results
To organize its activities within CSR and Sustainability, Dinex published very early 2022 the first dedicated Sustainability Policy, defining it’s overall targets and outlining 4 areas of specific focus:
1. Sustainable use of materials (environmental and indirect carbon footprint concerns)
2. Sustainable consumption of resources (environmental and direct carbon footprint concerns)
3. Socially sustainable employer (mainly employee relations and well-being concerns)
4. Partnerships for sustainability (mainly supply chain, societal and product concerns)
Within the framework of this policy Dinex has started collecting data from all it’s global sites and defining activities to improve the footprint of its operations. The majority of data points are in line with UN Sustainable Development Goals, and the result of these first-year actions will be published in the Group’s first ESG report on the year 2022, available during 2023.
Within the framework of this policy Dinex has started collecting data from all it’s global sites and defining activities to improve the footprint of its operations. The majority of data points are in line with UN Sustainable Development Goals, and the result of these first-year actions will be published in the Group’s first ESG report on the year 2022, available during 2023.
1. Sustainable use of materials (environment)
The primary risk of our material consumption, both direct (product-related) and indirect (process consumables) is if we:
• Consume materials inefficiently.
• Fail to reuse materials that are still usable for alternative purposes.
• Fail to recycle waste materials in the most environmentally friendly way.
• Consume materials with a higher environmental or climate impact when alternatives are available.
The effect of such risks can lead to a higher environmental impact and an increased indirect carbon footprint. It can also lead to reputational damage, criticism by stakeholders, and failure to comply to legal and customer expectations.
Dinex complies to all legal obligations in its daily handling of waste materials. Moreover, as an example of our continuous strive towards improvements, the environmental management system of all production units is certified according to ISO 14001 which ensures that key trends within use and consumption of materials are monitored, and that reduction targets and activities are constantly defined.
A focus area of 2022 has been the use of packing materials with a higher degree of sustainable properties. We have ensured that all cardboard and wooden pallets sourced by Dinex originate from FSC-marked sources. Furthermore, we have replaced internal packing of Particulate Filters with so-called plastic foam bags. These special bags are 100% recyclable as plastic waste and has a Life Cycle Carbon Footprint which is 31% lower than that of cardboard-based internal packing.
Another initiative that has been started in 2022 is the reuse of wasted or redundant materials. A project group coordinated by Group management is constantly monitoring local stocks of unused materials and are together with local management teams and stakeholders finding alternative uses for these materials in active production series, to avoid wasting them and reduce our own need for acquisition of new materials.
A final highlight of environmental focus is in our new production site in India, which has been ramping up production during 2022. The process of the site is highly water consuming, but to avoid high amounts of wastewater a zero-discharge Effluent Treatment Plant (ETP) has been installed. This solution separates solid compounds from any processed water, and the remaining water is evaporated with no environmental effect.
2. Sustainable consumption of resources (climate)
Resource consumption is traced in Dinex in the form of mainly usage of electricity, fuels, and services such as transportation and travelling. The primary risk of our resource consumption is if we increase our emissions of greenhouse gasses.
In 2022 we established our first global tracing of greenhouse gas emissions within Scope 1 and 2, and partially of Scope 3 for Transportation of goods. Dinex Group emitted globally in 2021 a total of 20.902 ton of CO2 within these categories, and in line with our Sustainability Policy we have an ambition to reduce our footprint by 10% year over year.
We have managed to achieve a reduction in 2022 of 3% of Scope 1 and 2 CO2-emissions:
The reduction is to be evaluated in the light of:
• Ramp-Up of a new production plant in India in the beginning of 2022, which has a very high energy consumption for producing catalytically coated filters and catalysts.
• Transfer of energy intensive production series from Finland which historically has a very low carbon intensity of electricity, to production sites which has to rely on natural gas to produce the same amount of energy. The transfer is however expected to have a positive impact on Scope 3 emissions, due to being closer to customers and thereby reducing intercompany freight.
• A general increased level of activity overall in Dinex, resulting in more employees. Scope 1 and 2 emissions is projected to drop by 16% per FTE.
To further reduce the overall consumption of energy, Dinex has introduced 10 Energy Laws which has been pushed to all employees. These Energy Laws are being audited quarterly to ensure compliance and to identify areas of further improvement and has generally resulted in a better awareness among employees. An example of a direct effect that has already kicked in, is a 14% reduction in electricity consumption in the Headquarter of Dinex in Denmark. Furthermore, many sites has achieved a reduction of Natural Gas consumption between 15% and 50%.
The 2 major production sites of Dinex: Turkey and Latvia, which combined employs nearly half of the Groups total employees, has both invested in Heat Recovery systems which will further be able to reduce consumption of energy for heating purposes. Additionally, nearly all lighting in all sites has been converted to low-energy LED sources, and further optimizations has been identified for action during 2023.
Socially sustainable employer (human rights and resources)
As an employer who prioritizes and strives towards what we refer to as “social sustainability”, a Dinex’ aim is not only to ensure a decent workplace, but also a workplace which motivates, engages and develops its employees. The primary risks if we fail to do so is if we:
• Fail to comply to Ethical policy and Code of Conduct of decent employment.
• Loose employees due to lack of satisfaction with the conditions of employment or the work environment.
• Gain a poor reputation as an employer, affecting our ability to attract future need competences.
Dinex respects human rights, including gender, race, color, religion or belief, political opinion, sexual orientation, age, disability and national, social, or ethnic origin. In order to mitigate the risk, the Group has an open communication culture, conducts subsidiary-visits and urges for any critical circumstances to be notified to Group Management. Human rights are handled within the guidelines of the Group Code of Conduct.
The Group endorses the protection of internationally proclaimed human rights, and anyone who works directly or indirectly for Dinex Group should be entitled to his or her human rights.
The Group does not allow modern slavery, i.e., servitude and forced or compulsory labor and human trafficking. It is confirmed that the Group Management for this reporting year is not aware of examples of human rights violations and do not expect this in the years to come.
In 2022 a new revised grievance system (Whistle Blower) has been introduced which makes it easier for all employees, external partners, and stakeholders to report concerns over breaches of legal obligations or company policies. The system is publicly available from Dinex’ website.
A high focus in Dinex during 2022 has been placed in promoting Engagement initiatives. Our local HR organizations has been actively organizing social events and happenings to promote a healthier work culture and the results has been a more stable work force in especially our biggest production unit in Turkey. Additionally, more effort has been put into expanding the Dinex University where employees are developing new skills and gaining new competences. One example is a “Next Generation Leadership” training program, with the aim of supporting 15 employees who have no or little Leadership experience, but who recently gained this responsibility.
4. Partnerships for sustainability (supply chain, society, and innovations)
The primary risks if Dinex does not comply to its responsibility as a partner for promoting and enabling practices for aiding the sustainable agenda, is:
• If we do not support our customers’ ambitions within sustainability.
• If we do not manage to push our suppliers to support our ambitions within sustainability.
• If we do not support local initiatives for sustainability in the local communities in which we operate.
• If we do not manage to develop technological solutions to support future trends within cleaner and greener mobility.
Dinex’ customers have a long history of setting ambitious demands to its suppliers for aiding sustainability. Our European OEM customers are all part of the Global Automotive Sustainability Guiding Principles, which requires Dinex to report and document its compliance annually in an online Self-Assessment Questionnaire. Dinex is in compliance with version 4.0 of this questionnaire, which at the time of this writing is in progress of being updated to version 5.0 with further requirements. Dinex has no knowledge of being non-compliant to any customer requirements on sustainability.
To ensure commitment to ambitious sustainability targets among our suppliers, a revised Supplier Code of Conduct was introduced in 2022 and the majority of our key suppliers has already committed to this updated version, while the remaining are expected to commit in 2023.
Dinex’ deep involvement in technological trends within clean and green mobility is driving several innovation projects with select customers for innovations such as Euro 7 emissions solutions, solutions for Hydrogen Combustion Engines, and Hydrogen Fuel Cells. Furthermore Dinex’ emission solutions have been validated for compatibility with Biofuel-blends (HVO fuel) of up to 100%. Finally, Dinex is actively promoting a technology-neutral approach to decarbonization of the global transport industry, by promoting Life-Cycle Analysis approach and technology insight in social media and public events.
Work environment
The unexpected turnover of employees has remained stably low at group level in 2022 and even slightly reduced to 1,3% against the 1,5% from 2021. The same case is seen on sickness, which is also stabile low at a satisfactory level.
During 2022 a dedicated Global Health & Safety organization has been established which coordinates activities for the removal of risks and prevention of work-related accidents across all sites in the Group. This has led to an improvement in the Total Recordable Incident Rate (TRIR).
More focus has been placed in Work Ergonomics after a pre-study in our production site in USA and Latvia which revealed several areas for improvement. The learnings gathered and activities to improve work conditions for employees revealed during this study will be spread out to all locations during 2023.
Circularity through Reconditioning and Remanufacturing
Dinex sees the need for contributing to the reduction of environmental and climate footprint of the transport industry, and one way to do this is through the prolonging of lifetime and full functionality of exhaust systems.
It is a known issue in the industry that Diesel Particulate Filters over time will require more frequent cleaning and back pressure will increase, resulting in higher fuel consumption and higher CO2 emissions. Reconditioning is a method to restore these filters to near full functionality, thus indirectly contributing to lower CO2-emissions from vehicle fuel consumption and avoiding emissions and environmental impact from production of new filters. In 2022 Dinex has increased it’s Reconditioning service by over 70% compared to 2021.
Furthermore, Euro 6 Emission solutions are complex to produce and requires a high amount of energy, large amounts of stainless steel, and certain rare earth minerals. Upon failure the systems are not built for repairment, which has given growth for a separate remanufacturing industry in Europe. Dinex is supporting this industry with technical guidance and supply of components that enable repair of these systems, rather than replacement of the entire system. In 2022 Dinex has increased its sales of Euro 6 Remanufacturing components by over 40% compared to 2021.
All components supplied in the Reconditioning and Remanufacturing program is fully Type approved and in compliance with Euro 6 legislation.
Looking ahead
2023 will be a year where Dinex will focus even more intensively on raising competences in the group. The trends that have been started in 2022, with more focus on engagement and competence development will be intensified with more activities and training offerings to employees.
We see a growing need for standardizing critical knowledge in the Group in order to make our local entities work smarter, better aligned, and benefitting from global best practices. We have introduced a tool in 2022 called “The Process House” which organizes all Group-related critical knowledge, and the activities and plans are in place to make this tool to be the center of all standardization and training of basic and process-related Group-knowledge in 2023.
On Environmental and Climate initiatives Dinex will continue to pursue the 10% YoY reduction in Greenhouse Gas emissions in 2023 and aspire for Net Zero in 2040. The ongoing work will benefit highly from the learnings collected during 2022, which was the first year that the Dinex Group started collecting and consolidating key Environmental, Climate and Social KPIs from all local entities. There is better and more thorough insight into the drivers of emissions and critical areas to focus on for all sites which can be used to identify next year’s more effectively local reduction initiatives together with local management teams.
On an overall Group level, the first conducted round of energy audits has revealed common improvement points for majority of sites within:
• Knowledge of, and action against off-working hours energy consumption
• Awareness of central ventilation system effectiveness and flow control
• Training of new employee in energy awareness in Dinex
Despite of a challenging market and geopolitical situation, Dinex finds it important also to start defining the more long-term ambitions for its reduction of Climate Footprint towards 2030, to prepare for upcoming investments and serve as an input to more strategic decisions.
Statutory report on Anti-corruption
Dinex operates with local entities in 15 countries globally, some in regions where certain common business culture is different from that of western ethics and morality, resulting in a potential risk of corrupt behavior. For this reason, we have mandatory onboarding of all new employees to introduce our corporate policies – specifically our Code of Conduct and External Relations Policy – in which we take a clear stand as having zero-tolerance to any form of gifts, cash-payments, kick-back, or other types of services and practices with the clear intention of affecting decision making through unfair trade practices.
All Dinex employees are expected to refrain from using such practices, reject such if offered to themselves by either customers, suppliers, or other internal and external parties, and furthermore to report any knowledge about situations of non-compliance to Group Management.
We also welcome any external parties that gain knowledge of non-compliant practices involving the Dinex Group, to report such knowledge to the Group Management. Doing so has been made easier and more accessible by the revised Whistleblower / Grievance system introduced in 2022. The system is publicly available through the Dinex website (www.dinex.net), and using it will result in an anonymized (if the reporter wishes to) message to the local general manager of the entity involved, with a copy shared to the Group CHRO.
Further activities in 2023 to mitigate risks within this area are all related to a better structure of our onboarding and training processes.
Statutory report on the underrepresented genderAs a part of our strive to become a socially sustainable employer, it is the policy of the Dinex Group to offer an inclusive and diverse working environment where everyone can fully exercise their professional competences to contribute to our company without putting any restrictions to their whole self. Diversity and inclusion drive value for Dinex by enabling a diverse line of thoughts and innovations, and leads to better, more nuanced decisions and risk-management. We actively combat discrimination and aspire to promote equal treatment in all global operations in which we operate.
As a result of this policy, we consider diversity as a strength, and all Dinex staff is recruited based on (in prioritized sequence):
• Professional skills without regard to religion, race, gender, handicap, sexual orientation or age.
• The demography of the team for which we are hiring, and how the candidate will aid the balance and strengthen the team through diversity.
This applies to the management levels as well as all other employees in the organization.
In total the Dinex Group is in 2022 comprised of 17% females, which is a slight setback compared to 2021 with 18% females. Specifically for the White-Collar group of employees, which counts 336 individuals, we have however seen a positive trend with an increase to 41% compared to 35% in 2021.
Across all organization levels we are a total of 115 managers, of which 22% are female. The Dinex Board of Directors remains unchanged and consists of 6 members of which 1 is a female. Our ambition is that the gender composition of our Board of Directors, should reflect the composition of female managers in the organization, which we consider as fulfilled.
Our Statutory target for gender representation in the Board is to increase the share of female Board member from 17% to 33% by 2025 which in turn would reflect a balanced Board as per the official guidance of the Danish Business Authority.
Dinex acknowledges that the automotive industry is dominated by men, and it is in general difficult to find suitable female candidates for all positions, and in all regions of the world as well, as Dinex will not compromise the professional qualifications for such a candidacy. We will nevertheless aspire towards a target of 30% females in all managerial levels in 2025.
Statutory report on data ethics policyDinex takes its responsibility as data controller seriously, as we want to be perceived as a respected, competent, and proper business partner who complies with current legislation and follows developments in good data ethics.
The 3 principles of the Dinex policy on data ethics and responsible handling of personal data:
1. Respect for the privacy of grant recipients, applicants and employees is a fundamental value.
2. All Dinex employees who access personal data, proprietary knowledge, trade secrets etc., have signed a declaration of confidentiality. Any such data is always kept to a minimum in order to fulfil the purpose, is stored securely, kept accurate, retained for no longer than necessary, and is only used for a specific and legitimate business.
3. Dinex only discloses the applicants’ data to authorities if there is an obligation to do so according to legislation and authority decisions.
The Group recognizes that our most effective tool to prevent improper data handling, is to train our employees, and has therefore in 2022 intensified its focus on teaching good data practices among employees. We have conducted several online, interactive training modules teaching the risks of improper data handling, which are mandatory for all employees to complete and pass. To verify the efficiency of these training courses we regularly test employees’ awareness of threats by sending out false requests to select groups of employees and register their actions to those. This is an initiate that will be ongoing throughout 2023 as well.
Events after the balance sheet dateWe are not aware of events subsequent to 31 December 2022, which are expected to have a material impact on the Group’s annual report. 22189000002193819000226445000148589000169174200016605410002195910001304070005271580005332780006854000181820001503450001257280003459100027716000182770000162691000116363000868440001415800016453000178538000110370000970800043590001984930002569530003443800013992000-92550003537000-925500035370006790001115000121910001104500067470000553740003571700027986000122447000206231000852630001645320003088300037212000989000-1390000729000030980008427400016592100084274000020000000084274000-34079000842740001659220001983900064435000020000000084274000-3407800049793000458790002787600022466000116910001149100036019000347610003070900037354000975030009213100065918000674810002513650001170340000127000000183560000171932000146090001290700041587000386760004055000429700086484000568630005629960005115050002890900018381000486700006263800048670000626380002229000236200001055000282460002953700079145000945370001049569000959242000739644000698173000114439600010451040002028370001703960003205000191200045750000322190007030000166599000153998000555790002183900041518600035661300059487000237510003908870003727580005268000678800010378800070674000165500067720004539100025915000151550002053300044090004738000555221000489880000291420000229434000141114000153184000153184000-22015600070008000111152100099967700035091400025319300018511650001697850000149531000012982970002250000225000022500002250000340739000247719000-30484000-10268600034298900024996900022500002643830002666330002250000340739000342973000249969000225000032041000046659000-102686000266633000225000032358500047622000-30484000290400002999600084510007664000376000597000294160003059300084510007664000200000000200000000200000000200000000363350003921600012300000015324300014100000014200000011271000696900099280004824000370606000399428000350928000346824000693490007063900036000000589430006822140004841890006667400004984220002264480002776370009727000163980000500000000500000001571300017650000114430000117745000194350001941600011081540001017860000792958000693840000147876000014172880001143886000104066400018511650001697850000149531000012982970000-16664000-166640000-1666400000-1666400008746000874600000873000087300006932100066154000-221000-19000-158960000-3562000Currency adjustments-24509000-11068000841240003084580006790001115000-49218000-40491000-49005000-30251000-13420000238831000-24437000-22264000-103229000-11281500064740001379000462700000-2602000-116565000-136302000-129985000102529000198026000484189000-80111000-533780000-160000000117915000270811000-120700003733400001411140001531840001 Unusual circumstancesThe Russian sales and manufacturing subsidiary produces exhaust systems with catalytic technologies for heavy-duty applications (trucks, etc.). Based on the previous setup and to continue compliance with EU sanctions, the operational management of the Russian business is handed over to local management. However, the passive ownership and the control over the Russian company has been maintained and therefore the subsidiary is fully consolidated within Dinex Group financial statements.
At the balance sheet date, the Russian subsidiary is recognised in the consolidated financial statements with assets totalling DKK 155m and in the financial statements with net assets totalling DKK 100m.
The Russian subsidiary’s profit for 2022 accounts for a considerable share of the Group’s and the Parent’s results. The activity level and earnings in Russia have been declining during the financial year but are expected to be maintained at the current level as a minimum.
The Group has carried out an impairment test that supports the valuation of the Russian subsidiary. Assumptions of the impairment test are based on Management’s budget for 2023 and forecast with annual growth of 5% until 2027. No growth in the terminal period has been assumed. The exchange rate used in forecast for 2024-27 is assumed to be unchanged at the budget level for 2023 at 0,128. A discount rate of 19% was used for the impairment test.
The impairment test does not show any indication of impairment.
As it appears from the general media coverage and as also stated in the management commentary, due to the geopolitical situation, there is a risk associated with the Group’s net assets in Russia.
2 Events after the balance sheet dateReferring to note 1, Dinex is closely following the development in Ukraine and comply with sanctions decided by US/EU against Russia. Dinex has and will continue to adapt the business and management setup on an ongoing basis, taking into account increased requirements and continuous tightening of sanctions in Russia.
In addition, no events have occurred after the balance sheet date to this date which would influence the evaluation of the annual report.
Begivenheder efter balancedagen - Indsæt beskrivelse.3 Revenue2022
DKK'0002021
DKK'000Europe616,519656,247Turkey and middle east788,374753,831Russia365,021436,688Asia 265,828159,417Other183,158187,636Total revenue by geographical market2,218,9002,193,819AEM557,790545,899OEM1,661,1101,647,920Total revenue by activity 2,218,9002,193,8191 Revenue2022
DKK'0002021
DKK'000Europe226,445148,589Total revenue by geographical market226,445148,589AEM225,577148,240OEM868349Total revenue by activity 226,445148,5894 Fees to the auditor appointed by the Annual General Meeting2022
DKK'0002021
DKK'000Statutory audit services1,3041,008Other assurance engagements016Tax services1,5112482,8151,2725 Staff costs2022
DKK'0002021
DKK'000Wages and salaries223,822160,835Pension costs5,8969,599Other social security costs40,20933,956269,927204,390Average number of full-time employees1,8901,626Remuneration
of
Manage-ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Total amount for management categories6,7785,5296,7785,5292 Staff costs2022
DKK'0002021
DKK'000Wages and salaries89,15949,572Pension costs4,3624,433Other social security costs2414,19193,76258,196Average number of full-time employees7184Remuneration
of Manage- ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Total amount for management categories6,7785,5296,7785,529189016267184Remuneration
of
Manage-ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Total amount for management categories6,7785,5296,7785,529Remuneration
of Manage- ment
2022
DKK'000Remuneration
of Manage- ment
2021
DKK'000Total amount for management categories6,7785,5296,7785,52967780005529000677800055290006 Depreciation, amortisation and impairment losses2022
DKK'0002021
DKK'000Amortisation of intangible assets18,76918,824Depreciation on property, plant and equipment51,47648,630Profit/loss from sale of intangible assets and property, plant and equipment(924)(1,299)69,32166,1553 Depreciation, amortisation and impairment losses2022
DKK'0002021
DKK'000Amortisation of intangible assets12,39614,628Depreciation on property, plant and equipment4,1923,991Profit/loss from sale of intangible assets and property, plant and equipment(13)016,57518,6197 Other operating incomeConsist of profit from sales of assets. Further more the Group has received around DKK 5 million in compensation related to COVID-19 in 2021. The compensation received are mainly to cover cost and salary. All compensation is received outside Denmark. 4 Other operating incomeOther operating incomce consist of received management fee, royalties, it-fee and other administrational intercompany charges. Further more other operating income consist of sales of assets. 8 Other financial income2022
DKK'0002021
DKK'000Other interest income6791,1156791,1155 Other financial income2022
DKK'0002021
DKK'000Financial income from group enterprises6,7357,518Exchange rate adjustments5,4563,52712,19111,0459 Other financial expenses2022
DKK'0002021
DKK'000Other interest expenses49,21840,496Exchange rate adjustments18,25214,87867,47055,3742022
DKK'0002021
DKK'000Other interest expenses49,21840,496Exchange rate adjustments18,25214,87867,47055,374<br />6 Other financial expenses2022
DKK'0002021
DKK'000Financial expenses from group enterprises1,4191,857Other interest expenses34,29826,12935,71727,986<br />2022
DKK'0002021
DKK'000Financial expenses from group enterprises1,4191,857Other interest expenses34,29826,12935,71727,98610 Tax on profit/loss for the year2022
DKK'0002021
DKK'000Current tax31,43327,516Change in deferred tax(550)4,866Adjustment concerning previous years04,83030,88337,2127 Tax on profit/loss for the year2022
DKK'0002021
DKK'000Change in deferred tax787(1,623)Adjustment concerning previous years202233989(1,390)11 Proposed distribution of profit/loss2022
DKK'0002021
DKK'000Extraordinary dividend distributed in the financial year0200,000Retained earnings84,274(34,079)84,274165,9218 Proposed distribution of profit and loss2022
DKK'0002021
DKK'000Extraordinary dividend distributed in the financial year0200,000Retained earnings84,274(34,078)84,274165,92212 Intangible assetsCompleted development projects
DKK'000Acquired licences
DKK'000Development projects in progress
DKK'000Cost beginning of year133,43234,02734,761Exchange rate adjustments1,605(67)(47)Transfers9,2950(9,295)Additions9,5572,98411,896Disposals00(1,296)Cost end of year153,88936,94436,019Amortisation and impairment losses beginning of year(87,553)(22,536)0Exchange rate adjustments(523)320Amortisation for the year(16,020)(2,749)0Amortisation and impairment losses end of year(104,096)(25,253)0Carrying amount end of year49,79311,69136,019Completed development projects
DKK'000Acquired licences
DKK'000Development projects in progress
DKK'000Cost beginning of year133,43234,02734,761Exchange rate adjustments1,605(67)(47)Transfers9,2950(9,295)Additions9,5572,98411,896Disposals00(1,296)Cost end of year153,88936,94436,019Amortisation and impairment losses beginning of year(87,553)(22,536)0Exchange rate adjustments(523)320Amortisation for the year(16,020)(2,749)0Amortisation and impairment losses end of year(104,096)(25,253)0Carrying amount end of year49,79311,69136,019<br />9 Intangible assetsCompleted development projects
DKK'000Acquired concessions
DKK'000Development projects in progress
DKK'000Cost beginning of year89,46519,33137,354Transfers14,2180(14,218)Additions1,9781,2827,573Cost end of year105,66120,61330,709Amortisation and impairment losses beginning of year(66,999)(11,670)0Amortisation for the year(10,786)(1,610)0Amortisation and impairment losses end of year(77,785)(13,280)0Carrying amount end of year27,8767,33330,709<br />Completed development projects
DKK'000Acquired concessions
DKK'000Development projects in progress
DKK'000Cost beginning of year89,46519,33137,354Transfers14,2180(14,218)Additions1,9781,2827,573Cost end of year105,66120,61330,709Amortisation and impairment losses beginning of year(66,999)(11,670)0Amortisation for the year(10,786)(1,610)0Amortisation and impairment losses end of year(77,785)(13,280)0Carrying amount end of year27,8767,33330,70913 Development projectsDevelopment projects are recognized on the basis of expected future exploitation and when potential future market or technology in the business can be established.
Current advanced development projects include, among other things stage V after-treatment technologies for the European off-road market, BSVI, CEV-V and CPCB+ after-treatment technologies for the Indian market, and finanlly improvements to CN6 after-treatment systems and component technologies for the Chines markets.
All the projects share the view that they reflect current and future environmental requirements for the respective markets and are thus considered a prerequisite for the future economic growth in these markets.
Through the company's long estabilshed know-how in emission technologies and it advanced test centerfacilities they consider the development projects technically feasible to complete and intend to utilize future technology in the respective markets where they already have established sales channels and unique customer relations.
The valuation of the recognized development projects is based on the actual costs incurred for the development projects. The time registration of employees involved in the development projects considers it reliable and possible to measure the costs attributable to the individual projects. 10 Development projectsDevelopment projects are recognized on the basis of expected future exploitation and when potential future market or technology in the business can be established.
Current advanced development projects include, among other things stage V after-treatment technologies for the
European off-road market, BSVI, CEV-V and CPCB+ after-treatment technologies for the Indian market, and finanlly improvements to CN6 after-treatment systems and component technologies for the Chines markets.
All the projects share the view that they reflect current and future environmental requirements for the respective markets and are thus considered a prerequisite for the future economic growth in these markets.
Through the company's long estabilshed know-how in emission technologies and it advanced test centerfacilities they consider the development projects technically feasible to complete and intend to utilize future technology in the respective markets where they already have established sales channels and unique customer relations.
The valuation of the recognized development projects is based on the actual costs incurred for the development projects. The time registration of employees involved in the development projects considers it reliable and possible to measure the costs attributable to the individual projects.
14 Property, plant and equipmentLand and buildings
DKK'000Investment property
DKK'000Plant and machinery
DKK'000Other fixtures and fittings, tools and equipment
DKK'000Property, plant and equipment in progress
DKK'000Cost beginning of year174,119127,000449,799112,25856,863Exchange rate adjustments87901,289(53)451Transfers127,000(127,000)000Additions14,174043,76013,96331,332Disposals(118)0(17,794)(3,636)(2,162)Cost end of year316,0540477,054122,53286,484Depreciation and impairment losses beginning of year(57,085)0(277,867)(73,582)0Exchange rate adjustments1300(982)670Depreciation for the year(7,849)0(33,732)(9,895)0Reversal regarding disposals115019,0872,4650Depreciation and impairment losses end of year(64,689)0(293,494)(80,945)0Carrying amount end of year251,3650183,56041,58786,484Recognised assets not owned by Entity0012,43535011 Property, plant and equipmentPlant and machinery
DKK'000Other fixtures and fittings, tools and equipment
DKK'000Leasehold improvements
DKK'000Cost beginning of year75,21213,2849,467Additions4,5078619,352Cost end of year79,71914,14518,819Depreciation and impairment losses beginning of year(62,305)(8,987)(8,290)Depreciation for the year(2,805)(1,103)(284)Depreciation and impairment losses end of year(65,110)(10,090)(8,574)Carrying amount end of year14,6094,05510,245Recognised assets not owned by entity10,3110015 Financial assetsInvestments in associates
DKK'000Other receivables
DKK'000Deferred tax
DKK'000Cost beginning of year29,4592,36229,537Disposals0(133)(1,291)Cost end of year29,4592,22928,246Revaluations beginning of year33,17900Exchange rate adjustments(86)00Share of profit/loss for the year(9,255)00Dividend(4,627)00Revaluations end of year19,21100Carrying amount end of year48,6702,22928,246
AssociatesRegistered inOwnership
%JV Dinex Tongda Emission Solutions Co.China50JV Active Dinex Emission Solutions Pvt. Ltd.India5012 Financial assetsInvestments in group enterprises
DKK'000Investments in associates
DKK'000Cost beginning of year624,98426,857Additions52,3300Cost end of year677,31426,857Revaluations beginning of year270,56535,781Exchange rate adjustments8,866(86)Share of profit/loss for the year91,322(9,255)Adjustment of intra-group profits(7,716)0Dividend(39,452)(4,627)Revaluations end of year323,58521,813Carrying amount end of year1,000,89948,670A specification of investments in subsidiaries is evident from the notes to the consolidated financial statements.
For further information on the valuation and recognition of the Russian subsidiary please refer to note 1. Investments in
associatesRegistered inCorporate
formOwnership
%Dinex Tongda Emission Solution Co. Ltd.ChinaLtd.50.00Active Dinex Emission Solutions Private LimitedIndiaLimited50.0016 Deferred tax 2022
DKK'0002021
DKK'000Intangible assets14,29614,767Property, plant and equipment26,34626,633Inventories1,202(727)Receivables(769)(2,076)Liabilities other than provisions(9,872)(4,884)Tax losses carried forward(31,157)(31,945)Other taxable temporary differences748(1,309)Deferred tax794459
Changes during the year2022
DKK'0002021
DKK'000Beginning of year459(2,579)Recognised in the income statement5504,866Other changes(215)(1,828)End of year794459Deferred tax has been recognised in the balance sheet as follows2022
DKK'0002021
DKK'000
Deferred tax assets(28,246)(29,537)
Deferred tax liabilities29,04029,996794459Deferred tax assets
Deferred tax assets is recognized for all non-utilized tax losses to the extent that it is considered likely that tax profits will be realized within a foreseeable period of years in which the losses can be offset/used. Determination of the amount that may be recognized for Deferred tax assets shall be based on estimates of the probable date and size of future taxable profits. Further more Deferred taxes are primarily due to unutilized taxation in Denmark and the United States of America.
United States of America is a primary growth market in 2023 and 2024, which is why the unutilized taxation is expected to be utilized in connection with positive earnings in the coming years. 17 PrepaymentsConsists of prepayments regarding insurance, marketing etc.13 PrepaymentsPrepayments primarily comprise insurance, software licenses and lease payments. 18 Contributed capitalNumberPar value
DKK'000Nominal
value
DKK'000Recorded par
value
DKK'000Shares2,250,0001.002,2502,2502,250,0002,2502,25019 Other provisions Consists of expected cost related to litigation.20 Non-current liabilities other than provisionsDue within 12
months
2022
DKK'000Due within 12
months
2021
DKK'000Due after
more than 12
months
2022
DKK'000Outstanding
after 5 years
2022
DKK'000Subordinate loan capital00200,000200,000Mortgage debt2,8912,94436,33527,503Bank loans61,79764,155123,0000Lease liabilities4,6613,54011,271069,34970,639370,606227,50315 Non-current liabilities other than provisionsDue within 12
months
2022
DKK'000Due within 12
months
2021
DKK'000Due after
more than 12
months
2022
DKK'000Outstanding
after 5 years
2022
DKK'000Subordinate loan capital00200,000200,000Bank loans36,00057,737141,0000Lease liabilities01,2069,928036,00058,943350,928200,00021 Changes in working capital2022
DKK'0002021
DKK'000Increase/decrease in inventories(58,574)(69,155)Increase/decrease in receivables(45,864)(42,258)Increase/decrease in trade payables etc.(54,522)107,851(158,960)(3,562)22 Unrecognised rental and lease commitments2022
DKK'0002021
DKK'000Total liabilities under rental or lease agreements until maturity 72,303108,43416 Unrecognised rental and lease commitments2022
DKK'0002021
DKK'000Total liabilities under rental or lease agreements until maturity 50,06839,857Of this, liabilities under rental or lease agreements with group enterprises 47,90735,98723 Contingent liabilitiesThe group is engaged in some legal cases. It is management expectations that the outcome of theese cases are reflected in the financial statement. 17 Contingent liabilitiesThe Entity participates in a Danish joint taxation arrangement where 3C Holding 2021 ApS serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Entity is
therefore liable for income taxes etc for the jointly taxed entities, and for obligations, if any, relating to the
withholding of tax on interest, royalties and dividend for the jointly taxed entities. The jointly taxed entities'
total known net liability under the joint taxation arrangement is disclosed in the administration company's
financial statements.
The company is engaged in some legal cases. It is management expectations that the outcome of theese cases are reflected in the financial statement. 24 Transactions with related partiesInformations about transactions with
related parties are only listed in the annual report if these transactions
have not been carried out on a market term basis. There have not been conducted such transactions in the
financial year.20 Transactions with related partiesThere have not been transactions with related parties which have not been carried out on a market term
basis. 25
Group relationsName and registered office of the Parent preparing consolidated financial statements for the largest group:
3C Holding 2021 ApS, OdenseName and registered office of the Parent preparing consolidated financial statements for the smallest group:
Dinex A/S, Middelfart26 SubsidiariesRegistered inCorporate
formOwnership
%Dinex Exhausts Ltd.EnglandLtd.100.0Dinex Latvia SIALatviaSia.100.0Dinex Italia SRLItalySRL100.0Dinex Polska Sp. z.o.o PolandSp. z.o.o100.0Dinex Iberica Sistemas de escape, S.L.USpainS.L.U.100.0Dinex France SAS FranceSAS100.0Dinex Deutschland GmbHGermanyGmbH100.0Dinex Emission Inc.USAInc.100.0Dinex RUS LLCRussiaLLC100.0Dinex Emission Solutions India Pvt. LtdIndiaPvt. Ltd100.0Dinex Egzoz Ve Emisyon A.S TurkeyA.S.100.0Dinex Emission System Changzhou Co., Ltd ChinaCo., Ltd100.0Dinex Balkan D.O.O. Serbia D.O.O.100.0Dinex Ejendomme ApSDenmarkApS100.0Dinex Finland OY FinlandOY100.03C Fynsvej A/S Denmark A/S100.0Dinex DPF Technology co.ltd. ChangzhouCo. LTD.100.0083606000163944000733300076610001024500011770001000899000895549000280088000211136000323585000303746000476220004665900061056000506610000963000-963000014 Deferred tax2022
DKK'0002021
DKK'000Intangible assets14,31214,614Property, plant and equipment(1,266)(1,376)Liabilities other than provisions(309)(900)Tax losses carried forward(5,437)(5,827)Other taxable temporary differences1,1511,153Deferred tax8,4517,664
Changes during the year2022
DKK'0002021
DKK'000Beginning of year7,6646,984Recognised in the income statement787(1,623)Prior year adjustments02,303End of year8,4517,664<br />14 Deferred tax18 Assets charged and collateralBank loans are secured by mortagaging of stocks in subsiduariry with a booked amount off 108mDKK. 19 Related parties with controlling interest
This annual report has been presented in accordance with the provisions of the Danish Financial Statements Act
governing reporting class C enterprises (large).The accounting policies applied to these consolidated financial statements and parent financial statements are consistent with those applied last year.falseMaterial errors in previous yearsManagement has in the financial year observed a systematical error in the accounting system related to inventory in a subsidiary. Furthermore, a lost arbitration case related to agent commission and error in tax calculation in subsidiaries has been recognized. According to management the errors relates to prior years.
The accumulated error is DKK -16,6 million net of tax (tax effect is DKK 9.9 million) and is adjusted on equity at the beginning of the year and corrected in relevant years. The error effect profit after tax negatively in 2021 with DKK -7,4 million (2020: DKK -4,0 million), (2019: DKK -3,9 million), (2018: DKK -1,3 million) and is recognized in the relevant years. Comparative figures and financial highlights under management commentary are restated.
Summary of numbers effected from the 2021 annual report.
- Income after tax DKK -7.4 million
- Income tax payable DKK -9,7 million
- Other payables DKK 21,1 million
- Inventories DKK 5.4 million
- Total assets DKK -5.4 million
- Equity DKK -16.6 million (accumulated error)
- Total Liabilities DKK -5.4 million
Recognition and measurementAssets are recognised in the balance sheet when it is probable as a result of a prior event that future economic
benefits will flow to the Entity, and the value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a
result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the
value of the liability can be measured reliably.
On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial
recognition is effected as described below for each financial statement item.
Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm
or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and
measurement.
Income is recognised in the income statement when earned, whereas costs are recognised by the amounts
attributable to this financial year. <br />Consolidated financial statementsThe consolidated financial statements comprise the Parent and the group enterprises (subsidiaries) that are controlled by the Parent. Control is achieved by the Parent, either directly or indirectly, holding more than 50% of the voting rights or in any other way possibly or actually exercising controlling influence.
Enterprises in which the Group, directly or indirectly, holds between 20% and 50% of the voting rights and exercises significant, but not controlling influence, are regarded as associates.<br />Basis of consolidationThe consolidated financial statements are prepared on the basis of the financial statements of the Parent and its subsidiaries. The consolidated financial statements are prepared by combining uniform items. On consolidation, intra-group income and expenses, intra-group accounts and dividends as well as profits and losses on transactions between the consolidated enterprises are eliminated. The financial statements used for consolidation have been prepared applying the Group’s accounting policies.
Subsidiaries’ financial statement items are recognised in full in the consolidated financial statements. Minority interests’ pro rata shares of the profit/loss and the net assets are disclosed as separate items in Management's proposal for the distribution of net profit/loss and equity, respectively.
Investments in subsidiaries are offset at the pro rata share of such subsidiaries’ net assets at the takeover date, with net assets having been calculated at fair value.Business combinationsNewly acquired or newly established enterprises are recognised in the financial statements from the time
of acquiring or establishing such enterprises. Divested or wound-up enterprises are recognised in the income
statement up to the time of their divestment or winding-up.
The purchase method is applied at the acquisition of new enterprises, under which identifiable assets and
liabilities of these enterprises are measured at fair value at the acquisition date. Provisions for costs of
restructuring of the enterprise acquired are only made in so far as such restructuring was decided by the
enterprise acquired prior to acquisition. Allowance is made for the tax effect of restatements.Positive differences in amount (goodwill) between cost of the acquired share and fair value of the assets
and liabilities taken over are recognised under intangible assets, and they are amortised systematically over
the income statement based on an individual assessment of their useful lives. If the useful life cannot be
estimated reliably, it is fixed at 10 years. Useful life is reassessed annually. Negative balances (negative
goodwill) are recognised as income in the income statement.Profit or loss from divestment of enterprisesProfits or losses from divestment or winding-up of enterprises are calculated as the difference between selling
price or settlement price and the carrying amount of the net assets at the time of divestment and winding-up, including any non-amortised goodwill and estimated selling or winding-up expenses.Foreign currency translationOn initial recognition, foreign currency transactions are translated applying the exchange rate at the
transaction
date. Receivables, payables and other monetary items denominated in foreign currencies that
have not been
settled at the balance sheet date are translated using the exchange rate at the balance
sheet date. Exchange
differences that arise between the rate at the transaction date and the rate in effect
at the payment date, or the
rate at the balance sheet date, are recognised in the income statement as
financial income or financial expenses.
Property, plant and equipment, intangible assets, inventories and
other non-monetary assets that have been
purchased in foreign currencies are translated using historical
rates.
When recognising foreign subsidiaries and associates that are independent entities, the income statements
are translated at average exchange rates for the months that do not significantly deviate from the rates at
the
transaction date. Balance sheet items are translated using the exchange rates at the balance sheet date. Goodwill is considered belonging to the independent foreign entity and is translated using the exchange
rate at the
balance sheet date. Exchange differences arising out of the translation of foreign subsidiaries’
equity at the
beginning of the year at the balance sheet date exchange rates and out of the translation of income statements
from average rates to the exchange rates at the balance sheet date are classified
directly as equity.
Exchange adjustments of outstanding accounts with independent foreign subsidiaries, which are considered
part of the total investment in the subsidiary in question, are classified directly as equity.
Transactions in Russian Rubles are translated using exchange rates published by the Reuters. Transactions in rubles were translated using the exchange rates at the balance sheet date for balance sheet items, and the periodic average exchange rates for items of the income statement. When recognising foreign subsidiaries that are integral entities, monetary assets and liabilities are
translated
using the exchange rates at the balance sheet date. Non-monetary assets and liabilities are
translated at the
exchange rate at the time of acquisition or the time of any subsequent revaluation or writedown.
The items of the
income statement are translated at the average rates of the months; however, items
deriving from non-monetary
assets and liabilities are translated using the historical rates applicable to the
relevant non-monetary items.Derivative financial instrumentsOn initial recognition in the balance sheet, derivative financial instruments are measured at cost and
subsequently at fair value. Derivative financial instruments are recognised under other receivables or other
payables.
Changes in the fair value of derivative financial instruments classified as and complying with the
requirements
for hedging the fair value of a recognised asset or a recognised liability are recorded in the
income statement
together with changes in the value of the hedged asset or the hedged liability.
Changes in the fair value of derivative financial instruments classified as and complying with the
requirements
for hedging future transactions are recognised directly in equity. When the hedged transactions
are realised, the
accumulated changes are recognised as part of cost of the relevant financial statement
items.
For derivative financial instruments that do not comply with the requirements for being treated as hedging
instruments, changes in fair value are recognised currently in the income statement as financial income or
financial expenses.Changes in the fair value of derivative financial instruments applied for hedging net investments in
independent
foreign subsidiaries or associates are classified directly as equity.RevenueRevenue from the sale of manufactured goods and goods for resale is recognised in the income statement
when delivery is made and risk has passed to the buyer. Revenue is recognised net of VAT, duties and
sales
discounts and is measured at fair value of the consideration fixed.
Production costsProduction: Production costs comprise expenses incurred to earn revenue for the financial
year.
Production costs comprise direct and indirect costs for raw materials and consumables, wages and
salaries,
rent and lease, and amortisation, depreciation and impairment losses relating to intangible
assets and property,
plant and equipment included in the production process. In addition, the item includes
ordinary writedown of
inventories.
Cost of sales also includes research costs of development projects that do not meet the criteria for recongnition in the balance sheet, and amortization of recongnized development projects. In addition, provisions for
loss on contract work in progress are recognized.
Distribution costsDistribution costs comprise costs incurred for sale and distribution of the Entity’s products, including wages
and salaries for sales staff, advertising costs, travelling and entertainment expenses, etc., and amortisation,
depreciation and impairment losses relating to intangible assets and property, plant and
equipment involved in
the distribution process.Administrative expensesAdministrative expenses comprise expenses incurred for the Entity’s administrative functions, including wages
and salaries for administrative staff and Management, stationery and office supplies, and amortisation,
depreciation and impairment losses relating to intangible assets and property, plant and equipment used for
administration of the Entity.Other operating incomeOther operating income comprises income of a secondary nature as viewed in relation to the Entity’s primary
activities, further more it consist of management fee to group enterprises in the parent comapny.Other operating expensesOther operating expenses comprise expenses of a secondary nature as viewed in relation to the Entity’s
primary
activities.Income from investments in group enterprisesIncome from investments in group enterprises comprises the pro rata share of the individual enterprises’ profit/loss after full elimination of intra-group profits or losses.
<br />Income from investments in associatesIncome from investments in associates comprises the pro rata share of the individual
associates’
profit/loss after pro rata elimination of intra-group profits or losses.
Other financial incomeOther financial income comprises dividends etc. received on other investments, interest income, including
interest income on receivables from group enterprises, net capital or exchange gains on securities, payables
and transactions in foreign currencies, amortisation of financial assets, and tax relief under the Danish
Tax Prepayment Scheme etc.Other financial expensesOther financial expenses comprise interest expenses, including interest expenses on payables to group
enterprises, net capital or exchange losses on securities, payables and transactions in foreign currencies,
amortisation of financial liabilities, and tax surcharge under the Danish Tax Prepayment Scheme etc.Tax on profit/loss for the yearTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in the
income statement by the portion attributable to the profit for the year and recognised directly in equity by
the
portion attributable to entries directly in equity.The Parent is jointly taxed with all of its Danish group enterprises. The current Danish income tax is allocated
among
the jointly taxed entities proportionally to their taxable income (full allocation with a refund
concerning tax losses).Other taxesThe item includes tax amounts calculated on a basis other than income for the year, which are not refunded
to the Entity.Intellectual property rights etc.Intellectual property rights etc. comprise development projects completed and in progress with related
intellectual property rights, acquired intellectual property rights and prepayments for intangible assets.Development projects on clearly defined and identifiable products and processes, for which the technical rate
of utilisation, adequate resources and a potential future market or development opportunity in the enterprise
can be established, and where the intention is to manufacture, market or apply the product or process in
question, are recognised as intangible assets. Other development costs are recognised as costs in the income
statement as incurred. When recognising development projects as intangible assets, an amount equalling
the costs incurred less deferred tax is taken to equity under reserve for development costs that is reduced
as the development projects are amortised and written down.
The cost of development projects comprises costs such as salaries and amortisation that are directly and
indirectly attributable to the development projects.
Completed development projects are amortised on a straight-line basis using their estimated useful lives
which are determined based on a specific assessment of each development project. If the useful life cannot
be estimated reliably, it is fixed at 10 years. For development projects protected by intellectual property
rights,
the maximum period of amortisation is the remaining duration of the relevant rights. The amortisation
periods
used are 5-20 years. Intellectual property rights acquired are measured at cost less accumulated amortisation. Patents are
amortised
on a straight-line basis over their remaining duration, and licences are amortised on a straight-line basis over the term of the agreement.
Intellectual property rights etc. are written down to the lower of recoverable amount and carrying amount.Property, plant and equipment
Cost comprises the acquisition price, costs directly attributable to the acquisition and preparation costs of
the
asset until the time when it is ready to be put into operation. For self-constructed assets, cost comprises
direct
and indirect costs of materials, components, subsuppliers and labour costs. For assets held under
finance
leases, cost is the lower of the asset’s fair value and present value of future lease payments.
The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line
depreciation is made on the basis of the following estimated useful lives of the assets:Useful life
Buildings40 yearsPlant and machinery3-25 yearsOther fixtures and fittings, tools and equipment3-15 yearsLeasehold improvements5-10 yearsFor leasehold improvements and assets subject to finance leases, the depreciation period cannot exceed
the contract period.
Estimated useful lives and residual values are reassessed annually.
Items of property, plant and equipment are written down to the lower of recoverable amount and carrying
amount.Investment propertyOn initial recognition, investment properties are measured at cost consisting of the acquisition price of the
properties plus directly related acquisition costs.
Subsequent to initial recognition, investment properties are measured at fair value which is equivalent to the
amount at which the individual property may be sold to an independent buyer at the balance sheet date.Fair value is determined by applying the yield-based model as the calculated value in use of expected cash flows from each property. The calculation is based on budgeted net earnings for the next year that has been adjusted to normal earnings, and using a required yield rate that
reflects
current market yield rates for similar properties. The value is adjusted for factors not reflected in
normal
earnings, for example, actual vacancy rate, major refurbishments etc.The financial year's adjustments of the properties’ fair value are recognised in the income statement.Investments in group enterprisesInvestments in group enterprises are recognised and measured in the parent financial statements according to the equity
method.
This means that investments are measured at the pro rata share of the enterprises’ equity value plus
unamortised goodwill and plus or minus unrealised intra-group profits or losses.Reference is made to the above
section on
business combinations for more details about the accounting policies applied to acquisitions of
investments in
group enterprises.
Group enterprises with negative equity value are measured at DKK 0. Any receivables from these enterprises
are written down to net realisable value based on a specific assessment. If the Parent has a legal
or constructive
obligation to cover the liabilities of the relevant enterprise, and it is probable that such
obligation will involve a
loss, a provision is recognised that is measured at present value of the costs
necessary to settle the obligations at
the balance sheet date.
Upon distribution of profit or loss, net revaluation of investments in group enterprises is transferred to
reserve
for net revaluation according to the equity method in equity.
Goodwill is the difference between cost of investments and fair value of the pro rata share of assets and liabilities arising
from
acquisitions. Goodwill is amortised straight-line over its estimated useful life, which is fixed based on the
experience gained by Management for each business area.
For one amount of goodwill, it has not been
possible to estimate useful life reliably, for which reason such useful life has been set at 10 years. For other
amounts of goodwill, useful life has been determined based on an assessment of whether the enterprises
are
strategically acquired enterprises with a strong market position and a long-term earnings profile and whether
the amount of goodwill includes intangible resources of a temporary nature that cannot be
separated and
recognised as separate assets. Useful lives are reassessed annually. The amortisation periods
used are 5-20 years.
Investments in group enterprises are written down to the lower of recoverable amount and carrying amount.
Investments in associatesInvestments in associates are recognised and measured according to the equity method. This
means that investments are measured at the pro rata share of the associates’ equity value plus unamortised
goodwill and plus or minus unrealised pro rata intra-group profits and losses. Reference is made to the above section on
business combinations for more details about the accounting policies applied to acquisitions of investments in
associates.
Associates with negative equity value are measured at DKK 0. Any receivables from these associates are
written down to net realisable value based on a specific assessment. If the Parent has a legal or constructive
obligation to cover the liabilities of the relevant associate, and it is probable that such obligation will involve
a loss, a provision is recognised that is measured at present value of the costs necessary to settle the
obligations at the balance sheet date.
Upon distribution of profit or loss, net revaluation of investments in associates is transferred to reserve for
net revaluation according to the equity method in equity.
Investments in associates are written down to the lower of recoverable amount and carrying amount.
Investments in associates fall within the definitions of both participating interests and associates, yet in these consolidated financial statements they have been presented as investments in associates because this designation reflects more accurately the Group’s involvement in the relevant entities.
ReceivablesReceivables are measured at amortised cost, usually equalling nominal value, less writedowns for bad and
doubtful debts.Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount and the tax-based
value of
assets and liabilities, for which the tax-based value is calculated based on the planned use of each
asset.
Deferred tax assets, including the tax base of tax loss carryforwards, are recognised in the balance sheet at
their
estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets.InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value.
Cost consists of purchase price plus delivery costs. Cost of manufactured goods and work in progress consists
of costs of raw materials, consumables, direct labour costs and indirect production costs.
Indirect production costs comprise indirect materials and labour costs, costs of maintenance of, depreciation
on and impairment losses relating to machinery, factory buildings and equipment used in the manufacturing
process, and costs of factory administration and management. Finance costs are not included in cost.
The net realisable value of inventories is calculated as the estimated selling price less completion costs and
costs incurred to execute sale.Tax payable or receivableCurrent tax payable or receivable is recognised in the balance sheet, stated as tax computed on this year's
taxable income, adjusted for prepaid tax.PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured at
cost.CashCash comprises cash in hand and bank deposits.DividendDividend is recognised as a liability at the time of adoption at the general meeting. Proposed dividend for
the financial year is disclosed as a separate item in equity.Other provisionsOther provisions comprise anticipated costs of non-recourse guarantee commitments, returns, loss on
contract work in progress, decided and published restructuring, etc.
Other provisions are recognised and measured as the best estimate of the expenses required to settle the
liabilities at the balance sheet date. Provisions that are estimated to mature more than one year after the
balance sheet date are measured at their discounted value.
Non-recourse guarantee commitments comprise commitments to remedy defects and deficiencies within
the guarantee period.
Mortgage debtAt the time of borrowing, mortgage debt to mortgage credit institutions is measured at cost which corresponds
to the proceeds received less transaction costs incurred. Mortgage debt is subsequently measured at
amortised
cost. This means that the difference between the proceeds at the time of borrowing and the nominal
repayable
amount of the loan is recognised in the income statement as a financial expense over the term
of the loan
applying the effective interest method.<br />Other financial liabilitiesOther financial liabilities are measured at amortised cost, which usually corresponds to nominal value.Lease liabilitiesLease liabilities relating to assets held under finance leases are recognised in the balance sheet as
liabilities
other than provisions, and, at the time of inception of the lease, measured at the present value of
future lease
payments. Subsequent to initial recognition, lease liabilities are measured at amortised
cost. The difference
between present value and nominal amount of the lease payments is recognised in the
income statement as a
financial expense over the term of the leases.Cash flow statementThe cash flow statement shows cash flows from operating, investing and financing activities, and cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes and taxes paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments, and purchase, development, improvement and sale,
etc. of intangible assets and property, plant and equipment, including acquisition of assets held under finance
leases.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs, and the raising of loans, inception of finance leases, repayments of interest-bearing
debt, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less
short-
term bank loans.
The cash flow statement shows cash flows from operating, investing and financing activities, and cash
and cash equivalents at the beginning and the end of the financial year.
Cash flows from operating activities are presented using the indirect method and calculated as the operating
profit/loss adjusted for non-cash operating items, working capital changes and taxes paid.
Cash flows from investing activities comprise payments in connection with acquisition and divestment of
enterprises, activities and fixed asset investments, and purchase, development, improvement and sale,
etc. of intangible assets and property, plant and equipment, including acquisition of assets held under finance
leases.
Cash flows from financing activities comprise changes in the size or composition of the contributed capital
and related costs, and the raising of loans, inception of finance leases, repayments of interest-bearing
debt, purchase of treasury shares and payment of dividend.
Cash and cash equivalents comprise cash and short-term securities with an insignificant price risk less
short-
term bank loans.
2023-06-27Niels Thorborg