Årsrapport33771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 Hellerup2022-01-012021-01-012022-12-312021-12-3136058714Croda Denmark A/SElsenbakken233600FrederikssundFrederikssundPricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab33771231Strandvejen442900HellerupDanmark2023-07-03Peter Holm TygesenRegnskabsklasse C, mellemstor virksomhedRevisionspåtegningThe Executive Board and Board of Directors have today considered and adopted the Annual Report of Croda Denmark A/S for the financial year 1 January - 31 December 2022.The Annual Report is prepared in accordance with the Danish Financial Statements Act.In our opinion the Financial Statements give a true and fair view of the financial position at 31 December 2022 of the Company and of the results of the Company operations for 2022.In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review.We recommend that the Annual Report be adopted at the Annual General Meeting.Frederikssund2023-07-03Peter Holm TygesenCEODaniele PiergentiliChairmanJørgen Peter BrodersenPeter Holm TygesenTo the Shareholder of Croda Denmark A/SOpinionIn our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company’s operations for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We have audited the Financial Statements of Croda Denmark A/S for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies (”the Financial Statements”). Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the ”Auditor’s responsibilities for the audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management is responsible for Management’s Review. Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financials Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. 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 judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the Financial Statements, including the 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. 11Hellerup2023-07-03Hellerup2023-07-03PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabUlrik RæbildState Authorised Public Accountantmne33262Nikolaj Erik JohnsenState Authorised Public Accountantmne35806Seen over a five-year period, the development of the Company is described by the following financial highlights: 81110000477970008264800014572000-167990001842900031500002220000-1049000-358000-64900010941000-137740001131200041045600036541900034877700024798700020996900018674300000-16199000008586851312.23.5-4.54.465.960.560.457.553.517.717.24.8-6.96.6Key activities The Company's activity consists of the production and sale of adjuvants. Sales are mainly effected to countries outside the EU. Development in the year The income statement of the Company for 2022 shows a profit of DKK 53.0 million, and at 31 December 2022 the balance sheet of the Company shows equity of DKK 325.9 million. 2022 has been another milestone year for Croda Denmark A/S. Following the record-breaking year of 2021 where we benefited from the strong demand for COVID vaccines, we have further increased our gross profit by nearly DKK 30 million. Overall sales growth over 2022 was 15% compared to LY while the same profit percentage has been successfully maintained. Expectations for 2023 The outlook for 2023 remains robust. Although we do not expect the same sales growth compared to the previous years due to the gradual fading out of COVID demand from our total turnover during 2023, the company is confident in rapidly reallocating capacity to meet the demand from our non-COVID related customers. Operating profits would be lower due to adverse mix effect as we would be selling less to human vaccine customers which command a price premium. For the first 5 months of the year we also faced some exchange headwinds in terms of depreciating USD versus DKK and we also faced higher costs due to lower amount of stock overhead movement as production level are lower than previous year. Operating risks The Company produces and sells goods, and the risk is related to Company's production capacity. Market risks The Company is currently subject to the competition and market situation - including customer expectations to the future and thus the demand for products offered by the Company. Credit risks The Company's credit risks relate exclusively to our customers. Internal control systems in the form of tight credit control and application of external credit information imply that the Company is not subject to any material risks posed by individual customers or business partners, and historically the Company has not realized any major bad debts. Strategy and objectives Strategy The Company's strategy is to develop our core business, i.e. aluminum-based adjuvants, through an everstronger connection with our customer base in terms of delivering products and expertise to the customers. In addition, we will continuosly expand our current production capacity to reflect the growth in the adjuvant market. Lastly, it is a strategic decision to work purposefully to expand our product portfolio through the development, and launch, of new and innovative adjuvants. External environment Croda is continuously working on limiting our impact on the external environment surrounding our warehouses and factories in accordance with the current rules. The Croda Group furthermore places a numbers of requirements on the Company´s management of the external environment. Uncertainty relating to recognition and measurement Recognition and measurement in the Annual Report have not been subject to any uncertainty.1654050001368550008984300072791000110950009133000644670005493100010202000308600070520008660006761700057151000145650001228900053052000448620006069000689700007000606900069040006062700056690000925200008231400021300024100000171710002792800017053100016717300015165700015165700073500031900015239200015197600032899200032605300054264000327690005731000313410001143700017527000042710001037000016430003550000278930005478200083675000375750001658320001251260004948240004511790005000005000005000005000003254010002723490003259010002728490001756700010873000175670001087300012656000012656000012656000012656000091600001668900023160004911000133200001408200005215000247960004089700015135600016745700049482400045117900050000027234900053052000500000325401000827410006679900071460005732000-44000260000898430007279100011498 In accordance with section 98(b)(3) of Danish Financial Statements Act, remuneration to the Executive Board i not disclosed.78710001035700066940001917000015000145650001228900082770002000000827700020000001380000199300082800070002208000200000060690000Amortised over 3-10 years 75159000138580000730000262600028851000567800070900000771900001799400000-17994000808370001572830007300002626000185760001846900056266000489000262600092300000004820001741000849700028000002021000064763000517000262600014050006062700092520000213000017171000Depreciated over 30-40 years 4-20 years 4-6 years 3-8 years 151657000151657000Adjuvac International ABUppsala1007350007350001049900082100002880000330004088500024526000Prepayments consist of prepaid expenses concerning rent and insurance premiums.0200000005305200024862000Provision for deferred tax at 1 January 10,873 8,956 Amounts recognised in the income statement for the year 6,694 1,917 Provision for deferred tax at 31 December 17,567 10,873 17,567 10,873126560000126560000126560000126560000Rental and lease obligations Lease obligations under operating leases. Total future lease payments: Within 1 year 110 171 Between 1 and 5 years 28 169 138 340 Rental obligations 5,806 4,304Basis Controlling interest Croda Europe Limited Majority shareholder Transactions The Company has chosen only to disclose transactions which have not been made on an arm’s length basis in accordance with section 98(c)(7) of the Danish Financial Statements Act. The Company is included in the consolidated financial statements of Croda International Plc. Name Place of registered office Croda International Plc (største koncern udelad hvis samme som mindste) East Yorkshire, England (mindste koncern) The Group Annual Report of Croda International Plc may be obtained at the following address: Croda International Plc Cowick Hall Snaith Goole East Yorkshire DN14 9AA England The Annual Report of Croda Denmark A/S for 2022 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to medium-sized enterprises of reporting class C. The Financial Statements for 2022 are presented in TDKK.With reference to section 112 of the Danish Financial Statements Act and to the consolidated financial statements of Croda International Plc, the Company has not prepared consolidated financial statements.With reference to section 86(4) of the Danish Financial Statements Act and to the cash flow statement included in the consolidated financial statements of Croda International Plc, the Company has not prepared a cash flow statement.Revenues are recognised in the income statement as earned. Furthermore, value adjustments of financial assets and liabilities measured at fair value or amortised cost are recognised. Moreover, all expenses incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changed accounting estimates of amounts that have previously been recognised in the income statement. Assets are recognised in the balance sheet when it is probable that future economic benefits attributable to the asset will flow to the Company, and the value of the asset can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow out of the Company, and the value of the liability can be measured reliably. Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below.Leases in terms of which the Company assumes substantially all the risks and rewards of ownership (finance leases) are recognised in the balance sheet at the lower of the fair value of the leased asset and the net present value of the lease payments computed by applying the interest rate implicit in the lease or an alternative borrowing rate as the discount rate. Assets acquired under finance leases are depreciated and written down for impairment under the same policy as determined for the other fixed assets of the Company. The remaining lease obligation is capitalised and recognised in the balance sheet under debt, and the interest element on the lease payments is charged over the lease term to the income statement. All other leases are considered operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the lease term.Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of future cash flows, the value adjustments are recognised directly in equity. Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the rates at the time when the receivable or the debt arose are recognised in financial income and expenses in the income statement. Fixed assets acquired in foreign currencies are measured at the transaction date rates.Expenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve revenue for the year.Other external expenses comprise indirect production costs and expenses for premises, sales and distribution as well as office expenses, etc.With reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a summary of revenue, other operating income, expenses for raw materials and consumables and other external expenses.Staff expenses comprise wages and salaries as well as payroll expenses.Amortisation, depreciation and impairment losses comprise amortisation, depreciation and impairment of intangible assets and property, plant and equipment.Other operating income and other operating expenses comprise items of a secondary nature to the main activities of the Company, including gains and losses on the sale of intangible assets and property, plant and equipment.Financial income and expenses are recognised in the income statement at the amounts relating to the financial year.Tax for the year consists of current tax for the year and changes in deferred tax for the year. The tax attributable to the profit for the year is recognised in the income statement, whereas the tax attributable to equity transactions is recognised directly in equity.Software is measured at cost with deduction of accumulated amortisation. Software are amortised on a straight line basis over an evaluation of the expected useful life. Usually, the amortisation period is 3-8 years.Property, plant and equipment are measured at cost less accumulated depreciation and less any accumulated impairment losses. Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the asset is ready for use. Interest expenses on loans raised directly for financing the construction of property, plant and equipment are recognised in cost over the period of construction. Depreciation based on cost reduced by any residual value is calculated on a straight-line basis over the expected useful lives of the assets, which are: Production buildings 30-40 years Plant and machinery 4-20 years Other fixtures and fittings, tools and equipment 4-6 years Leasehold improvements 3-8 years The fixed assets’ residual values are determined at nil. Depreciation period and residual value are reassessed annually.The carrying amounts of intangible assets and property, plant and equipment are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation. If so, the asset is written down to its lower recoverable amount.Investments in subsidiaries are measured at cost. Where cost exceeds the recoverable amount, write-down is made to this lower value.Other fixed asset investments consist of deposits.Inventories are measured at the lower of cost based on weighted average prices and net realisable value. The net realisable value of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal operations with deduction of selling expenses. The net realisable value is determined allowing for marketability, obsolescence and development in expected selling price. The cost of goods for resale, raw materials and consumables equals landed cost. The cost of finished goods and work in progress comprises the cost of raw materials, consumables and direct labour with addition of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour as well as maintenance and depreciation of the machinery, factory buildings and equipment used in the manufacturing process as well as costs of factory administration and management.Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which corresponds to nominal value less provisions for bad debts.Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and interest.Dividend distribution proposed by Management for the year is disclosed as a separate equity item.Deferred income tax is measured using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes on the basis of the intended use of the asset and settlement of the liability, respectively. Deferred tax assets are measured at the value at which the asset is expected to be realised, either by elimination in tax on future earnings or by set-off 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 will be effective under the legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. Any changes in deferred tax due to changes to tax rates are recognised in the income statement or in equity if the deferred tax relates to items recognised in equity.Current tax liabilities and receivables are recognised in the balance sheet as the expected taxable income for the year adjusted for tax on taxable incomes for prior years and tax paid on account. Extra payments and repayment under the on-account taxation scheme are recognised in the income statement in financial income and expenses.Debts are measured at amortised cost, substantially corresponding to nominal value.Deferred income comprises payments received in respect of income in subsequent years.The share capital consists of 500,000 shares of a nominal value of TDKK 1. 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