BDO Statsautoriseret revisionsaktieselskabVestre Ringgade 28DK-8000 Aarhus C20222670Årsrapport2024-06-03Edoardo Marco SirtoriSTMicroelectronics A/SPaludan Müllersvej 40B8200 Aarhus NRevisionspåtegningwww.st.com360904992014-09-09Aarhus2023-01-012023-12-312022-01-012022-12-31BDO Statsautoriseret revisionsaktieselskabVestre Ringgade288000Aarhus CJyske BankVestergade8-108600SilkeborgAarhus2024-06-03Ricardo Antonio De Sa EarpEdoardo Marco SirtoriChairmanRicardo Antonio De Sa EarpAndreas BrennerKonklusionGrundlag for konklusionAarhus2024-06-03BDO Statsautoriseret revisionsaktieselskab20222670Jonas Lund JacobsenRevisionspåtegningState Authorised Public Accountantmne46611210990131787525019257330161250583473503009932809812058591213352124334039512020775770375635676190471610943362045042407337002128536037002128536037002128536034275484748124204984810698480469558818480469558816349702834753502101877531314044816365613209772886718641098195167918156699240350104567671008839611412648500000500000-4141248-4841460-3641248-4341460240402404094389409514779943894095147791861157997824428136566671950252446844288300623932913727240157541081008839611412648500000-4841460700212500000-41412482119166094311382257324389002169329196113128244128864912192573301612505819257037586320775739512020775741004812678029370822998170375635676118108224468423422-395111350847632861921264739092432012347788106766602722822189243202393901079608072303901784275484204980Regnskabsklasse BtruetrueToday the Board of Directors and Executive Board have discussed and approved the Annual Report of STMicroelectronics A/S for the financial year 1 January - 31 December 2023. The Annual Report is presented in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2023 and of the results of the Company's operations for the financial year 1 January - 31 December 2023. The Management Commentary includes in our opinion a fair presentation of the matters dealt with in the Commentary. We recommend the Annual Report be approved at the Annual General Meeting. To the Shareholder of STMicroelectronics A/S We have audited the Financial Statements of STMicroelectronics A/S for the financial year 1 January - 31 December 2023, which comprise income statement, Balance Sheet, statement of changes in equity, notes and a summary of significant accounting policies. The Financial Statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the Financial Statements give a true and fair view of the assets, liabilities and financial position of the Company at 31 December 2023 and of the results of the Company's operations for the financial year 1 January - 31 December 2023 in accordance with the Danish Financial Statements Act. Basis for Opinion Grundlag for konklusion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), together with the ethical requirements that are relevant to our audit of the financial statements in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Management's Responsibilities for the Financial Statements Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such Internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Statement on Management Commentary Management is responsible for Management Commentary. Our opinion on the Financial Statements does not cover Management Commentary, and we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our responsibility is to read Management Commentary and, in doing so, consider whether Management Commentary is materially inconsistent with the Financial Statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether Management Commentary provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that Management Commentary is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of Management Commentary. Principal activities The company's activities are designing and development of software services to affiliated companies’ semiconductor products. Development in activities and financial and economic position The company is a research and development unit under the ST Microelectronics Cooperation. The company's has lost more than half of its share capital and is subject to the rules on capital losses in the Danish Companies Act. The annual report has been prepared as a going concern. See note "Going concern assumptions" for further information. The management are pleased with development of company and the current strategy. The result for the year was anticipated by management. Significant events after the end of the financial year No events have occurred after the end of the financial year of material importance for the Company's financial position. DKK Share Capital Retained earnings Total Equity at 1 January 2023 500.000 -4.841.460 -4.341.460 Proposed profit allocation 700.212 700.212 Equity at 31 December 2023 500.000 -4.141.248 -3.641.248 Staff costs 1 Average number of full time employees 21 19 Wages and salaries 16.609.431 13.822.573 Pensions 2.438.900 2.169.329 Social security costs 196.113 128.244 Other staff costs 12.886 4.912 19.257.330 16.125.058 Other financial income 2 Interest income from group enterprises 19.257 0 172.110 Other interest income 375.863 207.757 395.120 207.757 Other financial expenses 3 Interest expenses to group enterprises 410.048 126.780 173.107 Other interest expenses 293.708 229.981 703.756 356.761 Property, plant and equipment 5 DKK Other plant, fixtures and equipment Leasehold improvements Cost at 1 January 2023 1.135.084 763.286 Additions 192.126 47.390 Disposals -92.432 0 Cost at 31 December 2023 1.234.778 810.676 Depreciation and impairment losses at 1 January 2023 660.272 282.218 Reversal of depreciation of assets disposed of -92.432 0 Depreciation for the year 239.390 107.960 Depreciation and impairment losses at 31 December 2023 807.230 390.178 Carrying amount at 31 December 2023 427.548 420.498 Long-term liabilities 6 31/12 2023 Repayment Debt outstanding 31/12 2022 total liabilities next year after 5 years total liabilities Payables to group enterprises 9.438.940 0 0 9.514.779 535.400 535.400.01 9.438.940 0 0 9.514.779 Contingent liabilities The company has signed a rental contract with a monthly rent for 44 t.kr. The contract has a notice period of 6 months. The rent in the notice period amounts to 267 t.kr. Going concern assumptions 8 The company's equity is negative by 3.641.248 DKK as of December 31, 2023, of which the share capital amounts to 500,000 DKK. Therefore, the company has lost more than half of its share capital and is subject to the rules on capital losses in the Danish Companies Act. The Company's current assets are adequate to meet its current liabilities, indicating the availability of sufficient liquidity to support its ongoing operations. Management expects the share capital to be restored through operating earnings. Based on this, the annual report for 2023 has been prepared on a going concern basis. The Annual Report of STMicroelectronics A/S for 2023 has been presented in accordance with the provisions of the Danish Financial Statements Act for enterprises in reporting class B and certain provisions applying to reporting class C. Regnskabsklasse B1 true true The Annual Report is prepared consistently with the accounting principles applied last year. Net revenue Sale of services is generally recognised on the basis of a measurable degree of completion, using straight-line recognition of services delivered over time in a regular pattern. Where the degree of completion is not measurable or the sales value or the total costs of completion are uncertain, revenue is recognised by the amount that the enterprise as a maximum believes to have a right to claim and is expected to be received for services delivered at the Balance Sheet date. Net revenue is recognised exclusive of VAT and less duties and discounts related to the sale. Other operating income Other operating income includes items of a secondary nature in relation to the enterprises' principal activities, including profit from sale of intangible and tangible assets, operating loss and conflict compensations, as well as salary refunds. Compensations are recognised when the income is estimated to be realisable. Other external expenses Other external expenses include other production, sales, delivery and administrative costs, including costs of energy, marketing, premises, loss on bad debts, lease expenses, etc Staff costs Staff costs comprise wages and salaries, including holiday pay and pensions, and other costs of social security etc., for the Company's employees. Other operating expenses Other operating expenses include items of a secondary nature in relation to the Group’s and the Company’s activities. Losses from sale of intangible and tangible fixed assets are also included. Financial income and expenses Financial income and expenses include interest income and expenses, financial expenses of finance leases, realised and unrealised gains and losses arising from securities, debt and transactions in foreign currencies, as well as charges and allowances under the tax-on-account scheme, etc. Financial income and expenses are recognised by the amounts that relate to the financial year. Interest income and expenses are calculated on amortised cost prices. Tax The tax for the year, which consists of the current tax for the year and changes in deferred tax, is recognised in the Income Statement by the share that may be attributed to the profit for the year, and is recognised directly in equity by the share that may be attributed to entries directly to equity. Tangible fixed assets Land and buildings, production plant and machinery, other plant, fixtures and equipment are measured at cost less accumulated depreciation and impairment losses. The depreciation base is cost less estimated residual value after end of useful life. The cost includes the acquisition price and costs incurred directly in connection with the acquisition until the time when the asset is ready to be used. Straight-line depreciation is provided on the basis of an assessment of the expected useful lives of the assets and their residual value: Useful life Other plant, fixtures and equipment 2-5 years Leasehold improvements 3-10 years Profit or loss on sale of tangible fixed assets is stated as the difference between the sales price less selling costs and the carrying amount at the date of sale. Profit or loss is recognised in the Income Statement as other operating income or other operating expenses. Impairment of fixed assets The carrying amount of tangible assets, are assessed annually for indications of impairment other than that reflected by amortisation and depreciation. In the event of impairment indications, an impairment test is made for each asset or group of assets, respectively. If the recoverable amount is lower than the carrying amount, the asset is written down to the recoverable amount. The recoverable amount is calculated at the higher of the capital value and the sales value less expected costs of a sale. The capital value is determined as the Company's share in the current value of the net cash flows which the subsidiary is expected to generate through its activities and from sale of assets after the end of their useful lives. A discount rate is used which reflects the risk-free market rate and the owners' minimum return on interest requirements for similar assets. The growth rate in the terminal period is determined in accordance with the standards within the industry. Receivables Receivables are measured at amortised cost which usually corresponds to nominal value. The value is written down to meet expected losses. Write-off is performed to provide for losses when an objective indication has been assessed to have incurred that a receivable or a portfolio of receivables are impaired. If there is an objective indication that an individual receivable is impaired, the write-off is performed at individual level. Receivables for which there are no objective indication of impairment at individual level are assessed at portfolio level for objective indication of impairment. The portfolios are primarily based on the debtors’ registered office and credit rating in accordance with the Company’s policy for credit risk management. The objective indicators, which are applied for portfolios, are determined based on the historical loss experiences. Write-off is determined as the difference between the carrying amount of receivables and the present value of the expected cash flows, including realisable value of any received collaterals. The effective interest rate is used as discount rate for the single receivable or portfolio. Accruals, assets Accruals recognised as assets include costs incurred relating to the subsequent financial year. Tax payable and deferred tax Current tax liabilities and receivable current tax are recognised in the Balance Sheet as the calculated tax on the taxable income for the year, adjusted for tax on the taxable income for previous years and taxes paid on account. Deferred tax is measured on the temporary differences between the carrying amount and the tax value of assets and liabilities. Deferred tax assets, including the tax value of tax loss carryforwards, are measured at the amount at which the asset is expected to be used within a reasonable number of years, either by setoff against tax on future earnings or by setoff against deferred tax liabilities within the same legal tax entity. Deferred tax is measured on the basis of the tax rules and tax rates that under the legislation in force on the Balance Sheet date will be applicable when the deferred tax is expected to crystallise as current tax. Any changes in the deferred tax resulting from changes in tax rates, are recognised in the income statement, except from items recognised directly in equity. Liabilities Financial liabilities are recognised at the time of borrowing by the amount of proceeds received less transaction costs. In subsequent periods, the financial liabilities are measured at amortised cost equal to the capitalised value when using the effective interest, the difference between the proceeds and the nominal value being recognised in the Income Statement over the loan period. The amortised cost of current liabilities corresponds usually to the nominal value. 360904992023-01-012023-12-31360904992023-12-31360904992022-12-31360904992022-01-012022-12-31360904992023-01-01g:ContributedCapitalMember360904992023-12-31g:ContributedCapitalMember360904992023-01-012023-12-31g:RetainedEarningsMember360904992023-01-01g:RetainedEarningsMember360904992023-12-31g:RetainedEarningsMember360904992023-01-012023-12-311360904992023-01-012023-12-31g:FixturesFittingsToolsAndEquipmentMember360904992023-01-01g:FixturesFittingsToolsAndEquipmentMember360904992023-12-31g:FixturesFittingsToolsAndEquipmentMember360904992023-01-012023-12-31g:LeaseholdImprovementsMember360904992023-01-01g:LeaseholdImprovementsMember360904992023-12-31g:LeaseholdImprovementsMember360904992023-01-012023-12-311360904992023-01-012023-12-312360904992023-01-012023-12-313360904992023-01-012023-12-311xbrli:pureiso4217:DKK