ANNUAL
REPORT
2021
CVR no. 30 82 6 7 52
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CONTENTS
Management review
Letter from the Chairman
Group financial review
Five-year summary
Financial outlook
Sustainable performance
Risk management
Consolidated financial statements
of the Topsøe Holding Group
Income statement
Statement of comprehensive income
Balance sheet
Statement of cash flows
Statement of changes in equity
Notes
Financial statements of Topsøe Holding A/S
Income statement
Balance sheet
Statement of changes in equity
Notes
Management’s statement
and auditor’s report
Statement by the Executive Board
and the Board of Directors
Independent auditor’s report
TOPSØE HOLDING A/S ANNUAL REPORT 2021 CONTENTS
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THE CLIMATE CHALLENGE
IS AS REAL AS EVER
LETTER FROM THE CHAIRMAN
Topsøe Holding and the family owners are dedicated to being active
in areas and activities that help solve global challenges – especially
within climate change and treatment of diseases. In 2021, we saw
significant action and progress in keeping with this ambition, both in
Topsoe A/S as well as IGM Biosciences Inc. In addition, we made
minority investments within cleantech and life sciences.
TOPSOE A/S
In 2020, Topsoe set a vision of being
recognized as the global leader in carbon
emission reduction technologies by 2024.
This vision is driven by the urgent need for
solutions to combat the biggest global
threat - climate change - and Topsoe being
uniquely positioned to deliver these
solutions.
In 2021, decisive steps were taken to further
this vision and Topsoe developed new green
solutions and entered into a number of
industrial partnerships to facilitate the
future production of green hydrogen, green
ammonia, eMethanol, and efuels.
Furthermore, a new strategy and
organizational structure have been
implemented to even better position Topsoe
to lead the development of Power-to-X
solutions and drive the energy transition.
Topsoe has always been committed to
developing technologies that solve pressing
global challenges and the traditional
business provides a very strong platform of
offerings that help our customers lower
their carbon emissions, and set up Topsoe
to take a leading role in enabling the energy
transition.
With Topsoe´s unique competencies from
decades of developing technologies and
catalysts, I am truly excited to see our
long-standing ambition to lead the energy
transition taking shape and being put into
action to combat climate change.
I am also very impressed that in spite of
considerable challenges posed by the
COVID-19 pandemic, Topsoe managed to
deliver a strong performance across the
company in 2021 with an increase in earnings
(EBIT before special items) of 6% and revenue
being in line with our guidance for 2021 and at
a record level.
I want to extend a very warm thank you to
our fellow owners at Temasek for a truly
great partnership, to all board members for
their valuable contributions and great
co-operation, to the Senior Leadership
Team for executing on the new strategy and
to all the hardworking, brilliant and
dedicated employees who went above and
beyond to deliver incredible results on all
parameters.
IGM BIOSCIENCES, INC.
IGM Biosciences continued to grow the
organization and further expanded its
pipeline. IGM also broadened the scope of
its technology platform beyond oncology by
establishing separate business units
focused on the development of IgM based
treatments for patients with autoimmune
and infectious diseases.
In addition to the two oncology programs in
clinical trials – IGM-2323 and IGM-8444,
IGM-6268 against COVID-19 is now also
being tested in the clinic. We are looking
forward to following the progress of these
clinical trials based on IGM Biosciences´
unique antibody technology.
It has been truly impressive to experience the
dedication from the board, management and
all employees in times that have been
particularly challenging for the biotech sector.
FRYDENLUND EJENDOMSSELSKAB APS
The renovation projects at Frydenlund are
still proceeding according to plan. The
operation of the orchard has, once again,
been challenged by a poor harvest which
reflects the general situation for this year’s
fruit growing in Denmark. Furthermore,
COVID-19 has had a negative impact on
sales. Making the orchard profitable and
preserving the historic apple varieties will
continue in the coming years.
A warm thank you to all the people that work
hard to maintain Frydenlund as a beautiful oasis.
I want to thank the family, my fellow board
members and the small - but great - team in
Topsøe Holding for their support and
constructive co-operation. We are fortunate
to be involved in companies that are uniquely
positioned to address the biggest challenges
facing our planet and stay dedicated to
vigorously supporting them as owners.
JAKOB HALDOR TOPSØE
Chairman
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 OVERVIEW
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FINANCIAL HIGHLIGHTS 2021
Profit before tax amounted to DKK 772
million in 2021 (2020: DKK 767 million).
For the core business, total revenue increased
by 1% to DKK 6,225 milion in 2021 (2020: DKK
6,179 milion). COVID-19 had a negative impact
on Topsøe Holding Group’s (The Topsøe
Group) business during 2021, as many refinery
and technology projects were delayed due to
low demand and market uncertainty. This was
especially the case in the first half of 2021,
where our revenue declined by 9%. However,
due to general improvements in the market
environment combined with strong demand
for The Topsøe Group's renewable fuel
offerings, we were able to deliver 11% revenue
growth in the second half of 2021.
In 2021, IGM Biosciences Inc. impacted the
income statement with a total loss of DKK
354 million. This was expected for the year
and in the range for the forecast.
Topsøe Holding A/S has in 2021 reduced the
ownership in IGM Biosciences, Inc. from
39.60% to 39.0% as of 31 December 2021
due to dilution. The loss from the dilution
amounts to DKK 11 million.
EBIT before special items
EBIT before special items for 2021 increased
by 6% to DKK 890 million (2020: DKK 841
million), while the EBIT margin before special
items for 2021 was 14.3% (2020: 13.6%).
Total special items of DKK -26 million for
2021 reflect restructuring cost. In 2020,
special items amounted to DKK -275 million,
mainly driven by restructuring and legal fees.
Consequently, EBIT after special items
increased by 52% to DKK 864 million in 2021
(2020: DKK 566 million).
Net profit
Net profit decreased by 13% to DKK 601
million (2020: DKK 691 million).
The decrease in the net profit is mainly
explained by:
→ The net profit in Haldor Topsøe A/S
increased to DKK 890 million (2020: DKK
480 million). The high increase was driven
by organic growth of the business
combined with the successful divestment
of the shares in the UK-based battery
technology company Faradion.
→ The result of investments in associated
companies amounted to DKK -222 million
compared to DKK 174 million in 2020, due
to the companies IGM Biosciences, Inc.
(DKK -354 million) and Faradion (DKK 132
million). The gain from Faradion is
GROUP FINANCIAL REVIEW
included in the net profit from Haldor
Topsøe A/S mentioned above.
→ Total special items decreased to DKK -26
million compared to DKK -275 in 2020, due
to one-off costs in 2020. The effect from
special items is included in the net profit
from Haldor Topsøe A/S mentioned above.
→ Financial income increased to DKK 260
million compared to DKK 164 million in
2020, due to higher profit related to
investments in Securities and Bonds.
CASH FLOW AND BALANCE SHEET
Cash flow from operating activities
Cash flow from operating activities
amounted to DKK 464 million (2020: DKK
1,104 million). This decrease was mainly due
to higher net working capital. Net working
capital increased by DKK 707 million in 2021
(compared to a decrease of DKK 176 million
in 2020) and made up 18.2% of revenue
(2020: 6.9%). The higher net working capital
was mainly due to higher raw material
pricing, increased net contract assets, high
sales in December and a receivable from the
sale of Faradion.
CAPEX
CAPEX decreased by 8% to DKK 464 million
(2020: DKK 502 million). This includes
investments in intangible assets (patents,
software), property, and plants and
equipment.
In 2021, Topsøe Holding A/S made a further
equity investment in the Danish water-tech
company Aquaporin A/S (DKK 50 million)
and a new equity investment in the Danish
MedTech (medical technology) company
Centaflow A/S (DKK 35 million).
Return on invested capital (ROIC)
ROIC amounted to 13.2% (2020: 8.8%) driven
by the 6% increase in EBIT before special
items offset by the development in net
working capital.
Financial covenants
Financial covenants as of December 31,
2021, were all met.
Order backlog
The order backlog amounted to DKK 3,634
million at the end of 2021, a decrease of
DKK 628 million, or 15%, compared to 2020.
The reduction in order backlog is primarily a
result of delays in new catalyst orders
caused by COVID-19 and shorter lead times
in the market. The order backlog by the end
of 2021 is still healthy despite the reductions
seen during the COVID-19 pandemic. In
2022, we expect to see the order backlog
returning to a growth trajectory.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 FINANCIAL RESULTS & OUTLOOK
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FIVE-YEAR SUMMARY
Income statement
DKK million 2021 2020 2019 2018
1)
2017
1)
Revenue , , , , ,
Gross profit , , , , ,
EBITDA , ,
Depreciation and amortization - - - - -
EBIT before special items
Special items - - -
EBIT after special items
Net financial income, etc. - - -
Profit from continuing operations ,
Profit/loss from discontinuing operations - -
Net profit , -
Balance sheet
Balance sheet total , , , , ,
Equity, shareholders in Topsøe Holding A/S , , , , ,
Net working capital ,
Net interest-bearing debt
Cash flow
Cash flows from operating activities ,
- of which continuing operations ,
Cash flows from investing activities - - -, -
- of which investment in Property, plant
and equipment
- - - - -
Cash flows from financing activities - - , - -
Employees
Numbers
2021 2020 2019 2018 2017
Average number of employees , , , , ,
Ratios
%
Gross margin . . . . .
EBITDA margin . . . . .
EBIT before special items margin . . . . .
EBIT after special items margin . . , . .
Return on invested capital (ROIC) . . . . .
Equity ratio . . . . .
Return on equity . . . -. -.
Leverage ratio . . . . .
The ratios have been prepared in accordance with the Recommendations & Financial Ratios produced by the Danish Finance Society
and CFA Society Denmark.
1. IFRS 16 was implemented in 2019 using the modified retrospective approach, and comparative figures for 2017-2018 have not been
restated.
TOPSØE HOLDING A/S ANNUAL REPORT 2021
5
FINANCIAL RESULTS & OUTLOOK
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OUTLOOK 2022
Revenue
Topsøe Holding Group enters into 2022 with a
healthy order book allowing for solid financial
performance in 2022 with positive single digit
revenue growth. The global energy transition
will remain the key driver of growth.
Russia's invasion of Ukraine has taken place
after the end of the reporting period. This
war is expected to have a negative impact
on the financial performance of Topsøe
Holding Group. Currently, a reliable estimate
of the financial effect on the consolidated
financial statements cannot be made and is
not reflected in the outlook above.
Funding
Topsøe Holding Group’s current funding
position is strong, based on access to green
funding, the corporate bond market,
institutional banks as well as commercial
banks. Committed revolving credit facilities
are also available.
Topsøe Holding Group intends to maintain a
credit profile that will ensure compliance
with all bank covenants at any time.
FORWARD-LOOKING STATEMENTS
Topsøe Holding Group’s financial reports,
whether in the form of annual reports or
interim reports, as well as any presentations
based on such financial reports, and any
other written information released, or oral
statements made, to the public based on
this annual report or in the future on behalf
of Topsøe Holding Group, may contain
forward-looking statements.
These forward-looking statements are
based on current plans, estimates and
projections. By their very nature, forward-
looking statements involve inherent risks
and uncertainties, both general and specific,
which may be outside Topsøe Holding
Group’s influence, and which could
materially affect such forward-looking
statements.
Topsøe Holding Group cautions that a
number of factors, including those
described in the risk management part of
this report, could cause actual results to
differ materially from those contemplated in
any forward-looking statements.
FINANCIAL
OUTLOOK 2022
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 FINANCIAL RESULTS & OUTLOOK
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SUSTAINABILITY
PERFORMANCE
ABOUT THIS
REPORT
This report complies with the statutory
disclosure requirements on corporate
social responsibility as set out in sections
99a, 99b and 99d of the Danish Financial
Statements Act. It outlines Topsøe’s CSR
activities, business strategies and
activities with regard to human rights,
labor rights, anti-corruption, the
environment, and the climate (99a) as well
as underrepresented gender (99b) and
data ethics (99d). Unless otherwise stated,
sustainability data include consolidated
data from Haldor Topsøe A/S and
subsidiaries controlled by Topsøe.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 SUSTAINABILITY
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 SUSTAINABILITY
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GOVERNANCE
Data ethics
WANT TO
KNOW MORE?
Read our Sustainability Report for a deep
dive on material environmental, social and
governance topics to Topsøe. This report
also constitutes our UN Communication
on Progress.
→ Topsøe’s
Sustainability
Report
Topsøe Compliance
Hotline
→ Read more
Gender in management
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 SUSTAINABILITY
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RISK MANAGEMENT
Scenario and risk thinking exercises are part of
our strategic planning process. They include
analysis of market dynamics as well as of
economic and political developments that
present opportunities or risks to our business.
Topsøe Holding Group (The Group) is
exposed to a variety of risks in connection
with its business operations. In addition to
strategic and operational risks, The Group is
exposed to financial risks such as interest
rates, exchange rates, commodity prices,
credit risk and insurance risk.
The Group operates an Enterprise Risk
Management set-up for the purpose of
identifying, quantifying and mitigating risks that
could have an adverse impact on operations.
Each year, risks are identified and assessed
and mitigating actions are agreed upon
after thorough dialogue with management
teams across the organization.
MAIN FOCUS AREAS IN 2021
The main focus in 2021 has been on the
transition risks of moving towards a
low-carbon (or zero-carbon) economy and
the inherent impact on Topsoe's traditional
core business.
GEOPOLITICAL RISK
The Group operates globally including
regions where we are exposed to
geopolitical instability and risks that may
impact demand for our solutions and our
ability to deliver. As part of our risk
management processes, we are assessing
and screening our customers and business
partners to secure compliance with all
regulation and sanctions.
In addition, the geopolitical risks may also
impact The Group's ability to source raw
material, energy and other components
used in our supply chain.
As reported under subsequent events,
Russia´s invation of Ukraine has taken place
after the end of the reporting period.
This war is expected to have a negative
impact on the financial performance of
The Group. The Group monitors the
situation closely to assess the implications
and impact, both near-term and long-term.
TRANSITIONAL CLIMATE RISK
The global energy consumption is expected
to grow considerably over the coming
decades. Our traditional core business plays
a key role in ensuring energy-efficient
production of the world’s chemicals and
fuels. Already today, we provide chemical
and fuel producers with solutions for
energy-efficient production. At the same
time, we see a push for accelerating the
transition to renewable energy sources and
new technologies.
While a significant part of our technical and
catalytic solutions is based on fossil fuel
feedstock (notably natural gas), we also
work intensively with an increasingly wide
range of non-fossil-based technologies
within green hydrogen, green ammonia,
eMethanol, and eFuels.
CYBER SECURITY
In recent years, several major cyber-attacks
have been launched against companies
around the world, and we see growth in
serious cyber operations in closer proximity
to our business.
Being a knowledge-based and increasingly
digitalized company, the group is exposed
to information security risks. The threat of
cyber-attacks is increasing, and a major
malware attack could lead to severe
business disruption. The group is
continuously monitoring the efforts within
this area to ensure stable and secure digital
environments.
COVID-19
The COVID-19 pandemic continues to
impact the global economy and the world’s
supply chains.
While COVID-19 has naturally challenged
our supply chain at times, we have not
experienced major disruptions such as
supply failures, and we have been able to
continue our production and R&D more or
less as usual.
During 2021, we have focused on
safeguarding the health, safety and
well-being of our employees.
Managing risks thoroughly and systematically
is key to us to create and protect value in the
short, medium, and long term.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 RISK MANAGEMENT
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Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
CONSOLIDATED
FINANCIAL
STATEMENTS
OF TOPSØE
HOLDING GROUP
TOPSØE HOLDING A/S ANNUAL REPORT 2021
12
CONSOLIDATED FINANCIAL STATEMENTS
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DKK million Note
Revenue . 6,225 6,179
Other operating income . 72 81
Purchased equipment for contract work -539 -570
Raw materials and consumables used -1,782 -1,842
Other external expenses -1,095 -1,064
Gross profit 2,881 2,784
Staff costs . -1,661 -1,618
EBITDA 1,220 1,166
Depreciation, amortization and impairment losses -330 -325
EBIT before special items 890 841
Special items . -26 -275
EBIT after special items 864 566
Result of investment in joint ventures and associated companies . -222 174
Financial income . 260 164
Financial expenses . -130 -137
Profit before tax 772 767
Ta x . -181 -121
Profit from continuing operations 591 646
Profit from discontinuing operations . 10 45
Net profit 601 691
Attributable to:
Owners of the parent company 326 545
Non-controlling interests 275 146
Net profit 601 691
CONSOLIDATED INCOME
STATEMENT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
DKK million Note
Net profit 601 691
Foreign currency translation adjustment 210 -212
Fair value adjustment of financial assets 0 -38
Other 1 1
Items that will be reclassified to the income statement 211 -249
Fair value adjustment of investments in other enterprises -8 0
Actuarial adjustments on pension obligations 47 -2
Tax on this . -11 1
Items that will not be reclassified to the income statement 28 -1
Other comprehensive income 239 -250
Total comprehensive income 840 441
Continuing operations 830 396
Discontinuing operations 10 45
Total comprehensive income 840 441
Attributable to:
Owners of the parent company 525 295
Non-controlling interests 315 146
Total comprehensive income 840 441
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
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Assets
DKK million Note
Intangible assets . 3,469 3,447
Property, plant and equipment . 2,059 1,916
Right-of-use assets . 477 531
Deferred tax asset . 11 0
Other non-current assets . 1,542 1,737
Non-current assets 7,558 7,631
Inventories . 1,649 1,494
Trade receivables . 1,232 1,079
Contract assets . 270 188
Tax receivable 68 58
Other receivables and prepayments . 307 81
Securities . 1,711 1,697
Cash 886 1,188
Current assets 6,123 5,785
Assets 13,681 13,416
CONSOLIDATED BALANCE SHEET
Equity and liabilities
DKK million Note
Share capital . 2,200 2,200
Reserves 137 -37
Retained earnings 6,136 5,886
Equity attributed to the owners of the parent company 8,473 8,049
Non-controlling interest 957 710
Total equity 9,430 8,759
Pension obligations . 37 42
Deferred tax . 522 454
Provisions . 175 290
Borrowings . 452 560
Lease liabilities . 445 485
Other payables . 105 101
Non-current liabilities 1,736 1,932
Borrowings . 134 238
Lease liabilities . 68 77
Contract liabilities . 1,179 1,378
Trade payables 568 419
Other payables . 530 567
Deferred income 36 46
Current liabilities 2,515 2,725
Liabilities 4,251 4,657
Equity and liabilities 13,681 13,416
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
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DKK million Note
EBITDA 1,220 1,166
Special items . -26 -275
Adjustments for non-cash items . 85 210
Change in working capital . -707 176
Interest received, etc. 117 68
Interest paid, etc. -99 -114
Corporate income tax paid -126 -127
Cash flows from operating activities 464 1,104
- of which continuing operations 464 1,104
Purchase of intangible assets -65 -66
Purchase of property, plant and equipment -334 -329
Sale of property, plant and equipment 1 1
Purchase of non-current financial assets -65 -107
Sale of non-current financial assets 0 2
Purchase of current financial assets -50 -295
Sales of current financial assets 150 0
Dividend received 33 40
Cash flows from investing activities -330 -754
CONSOLIDATED CASH FLOW
STATEMENT
DKK million Note
Raising of borrowings 0 362
Repayment of borrowings -213 -611
Installments on lease liabilities -75 -75
Received share capital 3 71
Dividend distributed -174 0
Cash flows from financing activities -459 -253
Cash flows for the year -325 97
Cash and cash equivalents at January 1,188 1,106
Foreign currency translation adjustments 23 -15
Cash and cash equivalents at December 886 1,188
Cash 886 1,188
Cash and cash equivalents at December 886 1,188
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Total
reserves
Retained
earnings Total
Non-
controlling
interest
Total
equity
Equity at January , 2,200 -37 0 -37 5,886 8,049 710 8,759
Net profit 0 0 0 0 326 326 275 601
Foreign currency translation adjustment 0 179 0 179 0 179 31 210
Fair value adjustment of investments in other enterprises 0 0 -6 -6 0 -6 -2 -8
Other 0 1 0 1 25 26 11 37
Other comprehensive income 0 180 -6 174 25 199 40 239
Comprehensive income 0 180 -6 174 351 525 315 840
Increase in non-controlling interest 0 0 0 0 -3 -3 3 0
Dividend distributed to owners 0 0 0 0 -102 -102 0 -102
Dividend distributed to non-controlling interest 0 0 0 0 0 0 -72 -72
Share-based payments 0 0 0 0 4 4 1 5
Transactions with owners 0 0 0 0 -101 -101 -68 -169
Equity at December , 2,200 143 -6 137 6,136 8,473 957 9,430
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CONSOLIDATED FINANCIAL STATEMENTSTOPSOE HOLDING A/S ANNUAL REPORT 2021
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Foreign
currency
translation
reserve
Reserve for
financial
assets
measured
at fair value
Total
reserves
Retained
earnings Total
Non-
controlling
interest
Total
equity
Equity at January , 2,200 -116 0 -116 5,579 7,663 582 8,245
Net profit 0 0 0 0 545 545 146 691
Transfer during the year 0 273 0 273 -273 0 0 0
Other 0 -194 0 -194 -1 -195 -55 -250
Other comprehensive income 0 79 0 79 -274 -195 -55 -250
Comprehensive income 0 79 0 79 271 350 91 441
Increase non-controlling interest 0 0 0 0 0 0 71 71
Reatribution 0 0 0 0 34 34 -34 0
Other adjustments 0 0 0 0 2 2 0 2
Transactions with owners
Equity at December , 2,200 -37 0 -37 5,886 8,049 710 8,759
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 CONSOLIDATED FINANCIAL STATEMENTS
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NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Basis of reporting
. Basis of preparation
. Changes in accounting policies
. Key accounting estimates
and judgements
Income statement
. Revenue
. Other operating income
. Staff costs
. Special items
. Income tax and deferred tax
Operating assets and liabilities
. Intangible assets
. Property, plant and equipment
. Right-of-use assets
. Other non-current assets
. Inventories
. Trade receivables
. Contract assets and liabilities
. Other receivables and prepayments
. Securities
. Pension obligations
. Provisions and contingent
liabilities
. Other payables
Capital structure
and financial items
. Equity, dividend and earnings
per share
. Borrowings and lease liabilities
. Financial assets and liabilities
. Financial income and expenses
Other notes
. Share-based payment
. Fee to auditors appointed
at the general meeting
. Related parties
. Cash flow specifications
. Commitments
. Events after the balance sheet date
. Group enterprises
. Discontinuing operations
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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1 BASIS OF REPORTING
1.1 Basis of preparation
INTRODUCTION
The financial statements for comprise the con-
solidated financial statements of Topsøe Holding A/S
and its subsidiaries.
The consolidated financial statements have been
prepared in accordance with the International Financial
Reporting Standards (IFRS), as adopted by the EU, and
further requirements in the Danish Financial State-
ments Act for class C large companies.
The financial statements are presented in Danish Kro-
ner (DKK) and rounded to the nearest million, unless
otherwise stated.
The Board of Directors considered and approved the
Annual Report of Topsøe Holding A/S on March
. The Annual Report will be submitted to the
shareholders of Topsøe Holding A/S for approval at the
Annual General Meeting on April , .
BASIS OF MEASUREMENT
The consolidated financial statements have been
prepared on the historical cost basis, except for deriv-
atives and investments in other enterprises, which are
measured at fair value.
The accounting policies has been applied consistently
for the financial year and for the comparative figures.
BASIS OF CONSOLIDATION
The consolidated financial statements comprise the
parent company, T opsøe Holding A/S , and all subsidi-
aries controlled by Topsøe Holding A/S.
The consolidated financial statements have been
prepared by summarizing the financial statements of
the parent company and the subsidiaries, which have
been prepared in according with the Group’s account-
ing policies. Inter-group balances, income, expenses,
shareholdings, and dividends as well as realized and
unrealized gains and losses have been eliminated.
The non-controlling interest's share of profit for the
year and of equity in subsidiaries, which not are fully
owned, is included as part of the Group's profit and
equity, but shown as separate items.
FOREIGN CURRENCY
Functional currency
For each Group enterprise a functional currency is
determined. The functional currency is the currency
used in the primary economic environment in which
the enterprise operates.
Foreign currency translation
On initial recognition, foreign currency transactions are
translated into the functional currency at the exchange
rate at the transaction dates. Exchange difference
between the exchange rates at the transaction date
and the date of payment are recognized in the income
statement under financial income or expenses.
Monetary items in foreign currency are translated at
the exchange rates at the balance sheet date. The
difference between the exchange rates at the balance
sheet date and the transaction date is recognized
in the income statement under financial income or
financial expenses.
Foreign currency translation differences arising on
the translation of non-monetary items, such as
investments in associated companies, are recognized
directly in other comprehensive income.
Recognition in the consolidated financial statements
On preparation of the consolidated financial state-
ments, the income statements of Group enterprises
with a functional currency other than Danish Kroner,
are translated at the exchange rate at the transaction
dates and balance sheet items are translated at the
exchange rate at the balance sheet date.
Foreign exchange difference arising on translation
of the opening equity at the exchange rate at the
balance sheet date and on translation of non-current
intercompany balances considered part of the net
investment are recognized in other comprehensive
income under foreign currency translation reserve.
Foreign exchange difference arising from the trans-
lation of income statement from the exchange rate
at the transaction dates to the exchange rate at the
balance sheet date are also recognized in other com-
prehensive income.
OTHER ACCOUNTING POLICIES
Purchased equipment for contract work
Purchased equipment for contract work comprise
hardware etc. related to engineering projects.
Raw materials and consumables used
Raw material and consumables used comprise raw
materials and consumables consumed to achieve
revenue for the year.
Other external expenses
Other external expenses comprise expenses to exter-
nal assistance, premises and office expenses, sales and
distribution expenses, etc.
Deferred income
Deferred income comprises payments received in
respect of income in subsequent years related to
government grants.
PRESENTATION
Cash flow statement
The cash flow statement is presented in accordance
with the indirect method.
Cash flows from operating activities are stated as
EBITDA adjusted for non-cash items, such as gain and
loss from disposal of assets, change in working capital,
interest received and paid and paid corporate income
tax. Cash flows from investing activities comprise cash
flows from purchase and sale of non-current assets
and received dividend. Cash flows from financing ac-
tivities comprise cash flows from raising and repaying
borrowings, installments on lease liabilities as well as
payments to and from shareholders.
Cash and cash equivalents comprises cash at hand
and deposits with financial institutions.
Materiality in financial reporting
In preparing the Annual Report, Management has
sought to improve the information value of the con-
solidated financial statements, the notes to the state-
ments and other measures disclosed by presenting the
information in a way that supports the understanding
of the Group’s performance in the reporting period
which has resulted in immaterial classifications and
changes.
This objective is achieved by presenting fair trans-
actional aggregation levels on line items and other
financial information, emphasizing information that
is considered of material importance to the user and
making relevant rather than generic descriptions
throughout the Annual Report. All disclosures are
made in compliance with the International Financial
Reporting Standards, the Danish Financial Statements
Act and other relevant regulations, ensuring a true and
fair view throughout the Annual Report.
19
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
Gross margin =
Gross profit ×
Revenue
EBITDA margin =
EBITDA ×
Revenue
EBIT before special
items margin
=
EBIT before special items ×
Revenue
EBIT after special items
margin
=
EBIT after special items ×
Revenue
Return on invested
capital
=
EBIT before special items ×
Average invested capital
Equity ratio =
Equity at year-end ×
Balance sheet total
Return on equity =
Net profit ×
Average equity
Leverage =
Net interest-bearing debt
EBITDA
Earnings per share =
Profit from continuing operations
Average number of shares
When preparing the consolidated financial statements
Management is required to make several estimates and
judgements. The estimates and judgements are based on
professional experience, historical data and other factors
available to Management. Actual results may differ from the
amounts estimated and judgements made, as more detailed
information becomes available. Accounting estimates and
judgements are continuously evaluated, and the effect r
ecognized in the financial statements.
The primary financial statement items for which more signifi-
cant accounting estimates and judgements are applied are:
Presentation of items and subtotals
The presentation of items and subtotals is based on
separate classification of material groups of similar
items. In the income statement, income and expense
items are classified based on the ‘nature of expense’
method in accordance with IAS . Furthermore, the
use of special items is applied to improve the trans-
parency and understanding of the Group’s financial
statements by separating the ordinary activities of the
Group from exceptional items. Please refer to note .
Special items for further information.
Five-year summary
The key figures and financial ratios have been calculat-
ed as follows:
The accounting policies are unchanged from last year.
Leased assets have been reclassified from property,
plant and equipment to a separate balance sheet
item called Right-of-use assets to improve the users
possibility to assess the impact of these assets. The
impact is a decrease in property, plant and equipment
amounting to DKK million as per December ,
and an increase in right-of-use asset by same
amount.
New standards and amenments not yet implemented
IASB has issued a number of amended standards and
interpretations which are not yet in effect or endorsed
by the EU, and which consequently not have been
incorporated in the consolidated financial statement
for . None of the amendments are currently
expected to have any significant impact on the Groups
financial statements.
- IAS Accounting policies, changes in accounting
estimates and errors: This amendment introduces a
new definition of accounting estimates: "Accounting
estimates are monetary amounts in financial state-
ments that are subject to measurement uncertainty".
The new definition emphasizes that accounting esti-
mates involves utilization of measurement techniques
and assumptions. This is made to assist companies
when determining whether a change is due to change
in an accounting estimate or a change of accounting
policies
- IAS Income Taxes: The amendment requires
recognition of deferred tax on transactions, that on
initial recognition, give rise to equal amounts of taxable
and deductible temporary diffenrences. Deferred tax
assets and tax liabilities are to be presented net within
the same tax juristriction.
The mendments wil be effective for financial years
beginning on or after January , and will be im-
plemented when they take effect. None of the amend-
ments are currently expected to have any significant
impact on the Group's financial statements.
Note
Significant
accounting
estimates and
judgements
Nature of
accounting
impact
Impact of
estimate
and
judgement
Determine
performance
obligation
Judgement
. Revenue
Determine
recognition
method
Judgement
Estimate of
total cost
to complete
Estimate
. Goodwill
Estimate
valuation
of Group
enterprises
Estimate
. Other
investments
Estimate
valuation
of Other
investments
Estimate
. Inven-
tories
Estimate
valuation
of inventory
Estimate
. Provisions
and contingent
liabilities
Estimate
warranty
provisions
Estimate
Additional information of accounting estimates and
judgements are included in the relevant notes.
1.1 Basis of preparation (continued) 1.2 Changes in accounting
policies and new standards
1.3 Key accounting
estimates and judgements
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
2 INCOME STATEMENT
DKK million
Revenue split on categories and recognition method
Revenue recognized at a point in time , ,
Catalyst revenue , ,
Revenue recognized at a point in time
Revenue recognized over time , ,
Technology revenue , ,
Total revenue , ,
Backlog and previously recognized contract liabilities
Backlog, of which the majority is expected to be recognized in , ,
Revenue recognized that was included in contract liability balance at the
beginning of the year
The Group's revenue can be divided into two main categories: catalyst sales and technology sales. Catalyst sales
primary comprise the sale of catalysts. Technology sales primary comprise basic engineering design, license fee and
hardware.
The majority of catalyst sales are paid after delivery with typically - days of credit, but in certain situations the
Group receives prepayments.
Technology sales are paid in installments during the contract’s lifetime. The Group strives to be cash flow positive on
all technology contracts at any time during project execution.
2.1 Revenue
ACCOUNTING POLICIES
Revenue from contracts with customers is recognized
in the income statement when control of the goods or
service has been transferred to the customer, i.e. when
goods are delivered. Revenue is recognized exclusive of
VAT and net of discounts relating to sales.
Revenue from catalyst sales is recognized at a point of
time when control has been transferred, which typical-
ly takes place based on Incoterms.
Revenue from technology sales is recognized over
time using the percentage-of-completion method
based on incurred versus forecasted contract costs,
which means that revenue equals the selling price
of the work completed for the year. This method is
applied when total revenue and cost in respect of the
contract and the percentage-of-completion at the
balance sheet date can be measured reliably, and it is
probable that economic benefits, including payments,
will flow to the Group.
The transaction price of a contract is allocated to
performance obligations, e.g. delivered catalyst and
delivered technology. Technology is considered to be
one performance obligation, since the deliveries are
interlinked and work together as a whole and not as
distinct elements.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Judgement is performed when determining if a
contract for sale of technology or catalysts or a
combination hereof, involves one or more performance
obligations.
Judgements are made by Management when determin-
ing if a performance obligation is recognized as revenue
over time or at a point in time. The judgements relate
to if there is an alternative use of the assets sold and if
there is an enforceable right to payment throughout the
contractual term.
The percentage-of-completion is determined on
the basis of the share of contract costs incurred
compared to forecasted contract costs. Forecasted
costs are partly based on an estimate which to a high
degree is based on historical experience. Expected
income and costs of technology projects may be
adjusted gradually as projects are progressing and any
uncertainties are clarified.
21
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million
Other operating income
Government grants
Other services
Other operating income
Total other operating income
2.3 Staff costs
DKK million
Staff costs
Wages, salary and other remuneration , ,
Share-based payment
Pension costs - defined contribution plans
Pension costs - defined benefit plans
Social security cost and other staff costs
Total , ,
Transferred to assets - -
Total staff costs , ,
Average number of employees 2,142 2,278
Remuneration to Senior Leadership Team and Board of Directors
Salary
Share-based payment
Pension
Severance pay
Total remuneration to Senior Leadership Team
Fee to Board of Directors
Total remuneration to Senior Leadership Team and Board of Directors
2.2 Other operating income
ACCOUNTING POLICIES
Staff costs are recognized in the financial year in which
the employees renders the related service. Costs re-
lated to long-term employee benefit, e.g. share-based
payments, are recognized in the periods in which they
are earned.
ACCOUNTING POLICIES
Other operating income comprise income of second-
ary nature to the Group’s main activities, including
government grants provided for research projects and
other services, which comprise service for assisting in
discontinuing operations.
Grants
Government grants are recognized when there is
reasonable assurance that the grants will be received.
Government grants received for research and develop-
ment projects are recognized as deferred income and
systematically recognized in other operating income in
line with the cost. Grants for the purchase of property,
plant and equipment are set off against the related
property, plant and equipment.
22
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million
Special items
Restructuring cost - -
Legal costs regarding two special cases -
Adjustment of scrap values on buildings -
Total special items - -
Line items impacted, if special items had been recognized in EBIT before special items
Other external expenses -
Staff costs - -
Total special items - -
2.5 Income tax and deferred tax2.4 Special items
ACCOUNTING POLICIES
Special items comprise exceptional income and costs
which by their nature are not related to the Group’s
ordinary operating activities. These are irregular and
non-recurring in nature. This includes costs related to
significant organizational restructuring, etc.
ACCOUNTING ESTIMATES AND JUDGEMENTS
In the classification of special items, judgement is applied
in ensuring that only exceptional items not associated with
the ordinary operations of the Group are included.
ACCOUNTING POLICIES
Tax for the year
Income tax comprise current tax for the year, changes
in deferred tax for the year as well as any adjustments to
prior years. Tax attributable to the profit for the year is
recognized in the income statement, whereas tax attrib-
utable to other comprehensive income transactions is
recognized through other comprehensive income.
Current tax
Tax receivable and tax payable is recognized in the
balance sheet as tax calculated on the taxable income
for the year adjusted for tax on taxable income for
previous years and for prepaid tax.
Deferred tax
Deferred tax is measured using the balance sheet liability
method in respect of temporary differences between the
carrying amount and the tax value of assets and liabilities.
Deferred tax is not recognized in respect of goodwill,
unless it is deductible for tax purposes.
Deferred tax is measured on the basis of the tax rules
and tax rates of the relevant countries that will be
effective under current legislation at the balance sheet
date on which the deferred tax is expected to materi-
alize as current tax.
Deferred tax assets, including the tax base of tax loss
carryforwards, are recognized as non-current assets at
the expected value of their utilisation.
Deferred tax assets and tax liabilities are offset if the enter-
prise has a legally enforceable right to set off current tax
liabilities and tax assets or intends either to settle current
tax liabilities and tax assets on a net basis or to realize the
assets and liabilities simultaneously.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management applies judgements when recognizing
and measuring deferred tax assets. Deferred tax
assets, including the tax base of tax loss carryfor-
wards, are recognized if it is assessed that they can be
utilized. This assessment is based on business plans
and knowledge of the business.
The Group is from time to time part of tax disputes.
Management assess the likely outcome based on
knowledge available of the substance of the disputes,
including opinions be external tax experts.
23
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million
Income tax
Current tax for the year
Change in deferred tax for the year
Adjustments to prior years
Total income tax recognized in income statement
Income tax recognized in other comprehensive income -
Total income tax recognized in comprehensive income
Tax on continuing operations
Tax on discontinuing operations - -
Total income tax
Effective tax rate, %
Danish corporate tax rate . .
Non-deductible expenses -. -.
Income not subject to tax -. -.
Differences in foreign tax rates -. .
Adjustments relating to prior years . .
Other adjustments -. -.
Effective tax rate . .
The major impact of the change in effective tax rate from to is related to increased deduction on R&D
activities implented by the Danish Government and non-taxable divestment of investment in associated companies.
2.5 Income tax and deferred tax (continued)
DKK million .
Foreign
currency
translation
adjustments
Tax for
the year
Tax for
previous
years
Tax on
equity .
Deferred tax,
Intangible assets and property, plant and
equipment
Inventories -
Contract assets -
Provisions - - - -
Other - -
Deferred tax at December , -
Recognized as deferred tax asset -
Recognized as deferred tax liability
Deferred tax at December ,
Of this, due after more than year
Not recognized deferred tax assets regarding unused tax losses
Deferred tax,
Intangible assets and property, plant and
equipment - -
Inventories
Contract assets -
Provisions - - -
Other -
Deferred tax at December , - -
Recognized as deferred tax asset
Recognized as deferred tax liability
Deferred tax at December ,
Of this, due after more than year
Not recognized deferred tax assets regarding unused tax losses
24
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3 OPERATING ASSETS AND LIABILITIES
3.1 Intangible assets
ACCOUNTING POLICIES
Goodwill
Goodwill is the positive difference between the cost of
an acquisition and fair value of identifiable net assets in
the acquired enterprise. Goodwill is measured at cost
less accumulated impairment losses.
Goodwill is tested for impairment annually and when
there is an indication of impairment. Goodwill is written
down to the recoverable amount through the income
statement. The recoverable amount is determined
as the present value of expected cash flows of the
cash-generating unit to which goodwill has been
allocated. Impairment indicators comprise e.g. reduced
earnings compared to expected future results or ma-
terial negative development trends in the sector or the
economy in the markets of the enterprise.
Impairment loss relating to goodwill is not reversed.
Other intangible assets
Rights and patents are measured at cost less accu-
mulated amortization and impairment losses. Rights as
well as patents are amortized on a straight-line basis
over the remaining patent term, but not exceeding
years, due to the notoriously fast development in
applied technologies.
Acquired or internally developed software is measured
at cost less accumulated amortization and impairment
losses. Software is amortized on a straight-line basis
over years or over the contract period.
Other intangible assets are tested for impairment
when there is an indication of impairment. Impairment
indicators are similar to those stated in the section on
goodwill. Intangible assets are written down to recov-
erable amount, through the income statement, if lower
than the carrying amount. The recoverable amounts
is the higher of the fair value of the asset less the
expected cost to sell and its value in use. Impairment
losses relating to other intangible assets are reversed if
the recoverable amount subsequently increases.
25
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.1 Intangible assets (continued)
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Total
Intangible asset,
Cost at January , , ,
Foreign currency translation
adjustment - -
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December , , ,
Amortization and impairment
losses at January ,
Foreign currency translation
adjustment - -
Amortization for the year
Disposals during the year - -
Amortization and impairment
losses at December ,
Carrying amount
at December , , ,
Research and development costs expensed in
DKK million Goodwill Rights Patents Software
Intangible
assets under
construction Total
Intangible asset,
Cost at January , , ,
Foreign currency translation
adjustment
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December , , ,
Amortization and impairment losses
at January ,
Foreign currency translation
adjustment
Amortization for the year
Disposals during the year - - -
Amortization and impairment
losses at December ,
Carrying amount
at December , , ,
Research and development costs expensed in
26
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million Land and buildings Plant and machinery Other fixtures and equipment
Property, plant and equipment
under construction Total
Property, plant and equipment,
Cost at January , , ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - - -
Transfers during the year -
Cost at December , , ,
Depreciation and impairment losses at January , , ,
Foreign currency translation adjustment
Depreciation for the year
Disposals during the year - - -
Depreciation and impairment losses at December , , ,
Carrying amount at December , ,
Carrying amount of assets used for operational lease
3.2 Property, plant and equipment
ACCOUNTING POLICIES
Property, plant and equipment are measured at cost
less accumulated depreciation and impairment losses.
Property, plant and equipment under construction are
measured at cost less impairment loss.
The cost comprises the acquisition price and other
directly attributable expenses of preparing the asset
for its intended use. The present value of estimated
expenses for dismantling and disposing of the asset as
well as restoration expenses are added to the cost if
such expenses are recognized as a provision. Material
borrowing costs directly attributable to the construc-
tion of the individual asset are also added to cost.
Cost of self-constructed assets are recognized as
property, plant and equipment in progress on an
ongoing basis until the assets are ready for use and
comprises direct and indirect expenses for labor,
materials, components and sub-suppliers.
Property, plant and equipment are accounted for as
separate items, if the useful life of the individual assets
is different.
27
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.2 Property, plant and equipment (continued)
DKK million Land and buildings Plant and machinery Other fixtures and equipment
Property, plant and equipment
under construction Total
Property, plant and equipment,
Cost at January , , , ,
Transfer to right-of-use assets at January , - - - -
Restated cost at January , , ,
Foreign currency translation adjustment - - - - -
Additions during the year
Disposals during the year - - - -
Transfers during the year -
Cost at December , , ,
Depreciation and impairment losses at January , , ,
Transfer to right-of-use assets at January , - - - -
Restated depreciation and impairment
losses at January , , ,
Foreign currency translation adjustment - - - -
Depreciation for the year
Disposals during the year - - - -
Depreciation and impairment losses at December , , ,
Carrying amount at December , ,
Carrying amount of assets used for operational lease
Depreciation based on cost reduced by impairment
loss and residual value is calculated on a straight-line
basis over the expected useful lives of the assets,
which are:
Buildings – years
Plant and machinery – years
Other fixtures and equipment – years
Land is not depreciated.
The residual value and useful lives of the assets are
reassessed annually and adjusted if necessary.
Property, plant and equipment are tested for impair-
ment when there is an indication of impairment. Impair-
ment indicators are similar to those stated in the section
on intangible assets. Additionally, indicators comprise
damage to the asset or changed use of the asset. Prop-
erty, plant and equipment are written down to recovering
amount, through the income statement, if lower than the
carrying amount. The recoverable amount is the higher
of the fair value of the asset less the expected cost to sell
and its value in use. Impairment losses are reversed if the
recoverable amount subsequently increases.
Lessor
When The Group is the lessor in a lease agreement clas-
sified as operational lease, the lease asset is recognized
as property, plant and equipment and depreciated over
the useful life. Lease income is recognized in revenue.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Judgement is applied in determining the depreciation
period and future residual value and is generally based
on historical experience. Reassessment is done annually.
Furthermore, judgement is applied in determining
whether impairment indicators are present.
28
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Whether a contract contains a lease or a service
arrangement is assessed at contract inception. For
contracts which contain a lease, the Group recognizes
a right-of-use asset and a lease liability. The right-of-
use asset is initially measured at cost, being the initial
amount of the lease liability. The right-of-use asset
is subsequently depreciated using the straight-line
method over the lease term. The right-of-use asset
is periodically adjusted for certain remeasurements
of the lease liability and reduced by any impairment
losses.
The lease term determined by the Group is the
non-cancellable period of a lease, together with
extension/termination option if these are reasonably
certain to be exercised.
The lease liability is initially measured at the present
value of the lease payments outstanding at the com-
mencement date, discounted using the incremental
borrowing rate. The lease liability is measured using the
effective interest method.
The lease liability is remeasured when there is a change
in future lease payments, typically due to a change in
index on property leases, or if there is a reassessment
of whether an extension or termination option will be
exercised. A corresponding adjustment is made to the
right-of-use asset, or in the income statement when
the right-of-use asset has been fully depreciated.
Short-term leases (less than months) and leases
relating to low-value assets are not recognized in the
balance sheet.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management has evaluated extension options primarily
related to office rentals. In most cases, extension op-
tions are not included, as the Group could replace the
assets without significant costs or business disruption.
DKK million
Lease information
Interest expense (included in financial expenses)
Expense relating to short-term leases (included in other external expenses)
Expense relating to leases of low-value assets that are not shown
above as short-term leases (included in other external expenses)
Revenue from sub-lease
Total cash outflow for leases
DKK million
Land and
buildings
Other fixtures
and equipment Total
Right-of-use assets,
Carrying amount at January ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - -
Depreciation for the year - - -
Carrying amount at December ,
Right-of-use assets,
Carrying amount at January ,
Transferred to right-of-use assets at January
Foreign currency translation adjustment - -
Additions during the year
Depreciation for the year - - -
Carrying amount at December ,
3.3 Right-of-use assets
The majority of lease contracts relate to lease of office
buildings. Please see note . Borrowing and lease
liabilities for information about the lease liabilities.
The Group has entered into a lease contract under
which the Group is obligated to purchase the property
at a price of DKK million after termination of the
lease contract in . The purchase obligation is
included in the lease liability.
29
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Investments in joint ventures
and associated companies
Entities in which the Group directly or indirectly con-
trols at least %, but not more than %, of the vot-
ing power are accounted for as associated companies.
Investments in joint ventures and associated compa-
nies are recognized and measured under the equity
method. The proportional share of the result after tax
of investments in joint ventures and associated com-
panies are included under financial income or financial
expense.
Investments with negative net asset values are recog-
nized at DKK million.
Other securities and investments
Investments in other enterprises are measured at fair
value at the balance sheet date. Fair value adjustments
are recognized through other comprehensive income
under the reserve for financial assets measured at fair
value.
Securities, e.g. issued loans, are measured at amortized
cost less expected credit loss.
Receivables
Receivables are measured at amortized cost less
expected credit loss.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Investments in other enterprises are measured at fair
value at the balance sheet date. In case, that fair value
cannot be derived from an active market, it is required
that Management assesses and selects an appropriate
method for determination of the fair value. In this case,
the fair value is measured at the discounted value of
expected future cash flows. Material assumptions
comprise expected future cash flows, discount rates
and growth rates for the period.
3.4 Other non-current assets
30
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.4 Other non-current assets (continued)
DKK million
Invest-
ments in
associated
compa-
nies
Invest-
ments in
joint
venture
Pension
asset
Other
securi-
ties and
invest-
ments
Other
receiva-
bles Total
Non-current assets,
Cost at January , ,
Foreign currency translation adjustment
Additions during the year
Disposals during the year - - -
Transfers during the year (to Securities) - -
Cost at December , ,
Value adjustment at January , - -
Profit/loss for the year - -
Dilution/loss for the year - -
Disposals during the year
Value adjustments for the year - -
Value adjustment at December , - -
Carrying amount at December , , ,
DKK million
Profit from divestment of shares in associated companies
Share of result of associated companies, net of tax - -
Gain / loss in connection to dilution -
Total result of investments in joint ventures and associated companies -
DKK million
Invest-
ments in
associated
compa-
nies
Other
securi-
ties and
invest-
ments
Other
receiva-
bles Total
Non-current assets,
Cost at January , ,
Transferred to current assets
Additions during the year
Disposals during the year - -
Cost at December , ,
Value adjustment at January , - -
Profit/loss for the year - -
Dilution gain
Value adjustments for the year - - - -
Value adjustment at December , - -
Carrying amount at December , , ,
31
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
Ramagundam Fertilizers and Chemicals Limited,
New Delhi, India
The Group has increased the investment in Ramagun-
dam Fertilizers and Chemicals Limited, still corre-
sponding to % of the share capital. The company is
constructing a fertilizer plant in India. The fair value
is of the investment is DKK million (: DKK
million).
GTLA Holdings LP, Delaware, US
The Group has invested in GTLA Holdings LP, cor-
responding to % of the share capital. The purpose
of the company is to develop a project regarding
construction of a gas-to-liquid plant. The fair value of
the investment is DKK million due to a license having
been suspended.
Centaflow ApS
The Group has during invested DKK million
in the Danish MedTech (medical technology) company
Centaflow A/S, corresponding to % of the share
capital.
INVESTMENTS IN ASSOCIATED COMPANIES:
Faradion Ltd., Sheffield, United Kingdom
The Group has converted it's loans and divested it's
shares in Faradion Ltd., at a price of DKK million
resulting in a gain amounting to DKK million.
IGM Biosciences Inc. Mountain Veiw, US
The Group has in reduced the ownership in
IGM biosciences inc. from .% to .% as at
December due to dilution. The loss from the
dilution amounts to DKK million.
INVESTMENTS IN JOINT VENTURES:
Shaanxi Yanchang Topsoe Catalytic Technologies Co,
Ltd., Weinan, China
The Group has during invested DKK million in
Shaanxi Yanchang Topsoe Catalytic Technologies Co,
Ltd., corresponding to % of the share capital. The
joint venture is a limited liability company. The com-
pany will establish a minor production line. The Group
is obligated to invest an additional amount of CNY
million (equal to DKK million).
OTHER SECURITIES AND INVESTMENTS:
Karnaphuli Fertilizer Limited, Dhaka, Bangladesh
(KAFCO)
The Group holds shares in KAFCO of nominally BDT
million, which equals % of the shares in KAFCO.
The shares are measured at fair value based on a
discounted cash flow calculation using the present
budgets and forecasts of KAFCO.
Based on these criteria, the KAFCO shares have been
written down by DKK million (: DKK million).
The fair value of the investment is DKK million.
3.4 Other non-current assets (continued)
32
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Inventories are measured at the lower of cost or net
realizable value. Cost is determined using the first-in,
first-out method. Cost comprises direct production
costs such as raw materials, consumables and labor as
well as indirect production costs. Production costs for
work in progress and finished goods include indirect
production costs such as staff costs, depreciation,
maintenance, etc.
ACCOUNTING ESTIMATES AND JUDGEMENTS
The calculation of indirect production cost is reviewed
on a regular basis to ensure that all relevant assumptions
such as prices, production yield and capacity utilisation
are incorporated correctly. Changes in the assumptions
could have a significant impact on the gross margin and
the overall measurement of inventories.
Inventories are written down to net realizable value
if this is lower than cost. A potential impairment
requirement is primarily assessed based on production
quality and the development in sales market. The net
realizable value is calculated as the revenue expected
to be generated less selling expenses.
DKK million
Inventories
Raw materials and consumables
Work in progress
Finished goods
Inventories at December , ,
Cost of sales for the year , ,
Write down of inventories
Impairment at January,
Foreign currency translation adjustment
Additions during the year
Reversals during the year - -
Realized during the year - -
Write down at December
Reversal of impairment losses is attributable to disposal or reuse of impaired goods in the production.
ACCOUNTING POLICIES
Trade receivables are measured in the balance sheet at
amortized cost less expected credit loss.
DKK million
Gross trade
receivables
Expected
loss rate (%)
Loss
allowance
Trade
receivables
Aging of trade receivables and expected credit loss,
Not due
- days
- days
- days -
+ days -
At December , , - ,
Aging of trade receivables and expected credit loss,
Not due
- days -
- days -
- days -
+ days -
At December , , - ,
ACCOUNTING ESTIMATES AND JUDGEMENTS
The expected credit loss is based on historical credit
loss experience combined with forward-looking
information.
3.5 Inventories 3.6 Trade receivables
DKK million
Loss allowance
Loss allowance at January
Foreign currency translation adjustment
Additions during the year
Reversals during the year - -
Realized during the year - -
Loss allowance at December
Trade rceivables due after more than year
33
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Contract work in progress
Contract work in progress is measured at the selling
price of the work completed calculated on the basis of
the percentage-of-completion. The percentage-
of-completion is determined on the basis of the share
of contract costs incurred compared to the forecasted
contract costs. This method is found to be the best
and most prudent method to reflect the progress.
Prepayments are set off against contract work in pro-
gress. Received payments on account exceeding the
selling price of the work completed are recognized in
contract work in progress under current liabilities.
DKK million
Contract assets and liabilities
Contract work in progress
Contract assets at December
Contract work in progress
Prepayments from customers related to catalysts, etc.
Contract liabilities at December , ,
Net contract work in progress has increased due to revenue recognition exceeding
actual invoicing during the year, mainly impacting contract liabilities.
Contract work in progress
Selling price of work completed at the balance sheet date , ,
Payments received on account -, -,
Contract work in progress at December - -
Contract work in progress recognized in contract assets
Contract work in progress recognized in contract liabilities - -
Contract work in progress at December - -
Where it is probable that total contract cost will ex-
ceed the total revenue from a contract, the expected
loss is recognized as a cost in the income statement.
Where the selling price cannot be measured reliably,
the selling price is measured at the lower of costs
incurred and net realizable value.
Please refer to accounting estimates and judgements
in note . Revenue.
3.7 Contract assets and liabilities
34
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.8 Other receivables and prepayments
DKK million
Other receivables and prepayments
Indirect taxes receivables
Derivatives
Proceeds from divestment of associated companies
Other receivables
Prepayments
Other receivables and prepayments at December
Agent commission for obtaining contracts
Agent commission recognized as prepayments
Agent commission recognized in the income statement during the year.
ACCOUNTING POLICES
Other receivables are measured at amortized cost.
Expenses relating to sales work and the winning of
contracts are recognized in the income statement as
incurred except agent commisions which is recognized
when the relevant performance obligations have been
delivered-either at a point-in-time or over time.
3.9 Securities
DKK million
Equities funds
Bonds funds
Total , ,
ACCOUNTING POLICES
Securities are measured at fair value at the balance
sheet date.
Gains and losses from securities are recognized in
the income statements under "Financial income" and
Financial expenses" respectively.
35
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million
Net pension obligation
Present value of pension obligations at January
Foreign currency translation adjustment -
Pension costs
Calculated interest on obligation
Actuarial gains and losses, demographic assumption - -
Actuarial gains and losses, financial assumption -
Pension paid - -
Pension paid for settlements - -
Present value of pension obligations at December
Fair value of pension plan assets at January
Foreign currency translation adjustment -
Calculated interest on pension assets
Return on plan assets excl. interest on pension assets
Paid by the company
Pension paid - -
Pension paid for settlements - -
Fair value of pension plan assets at December
Net pension obligation/asset at December -
Pension costs
Pension costs
Interest expenses
Interest income on plan assets - -
Total pension related to defined benefit recognized in staff costs
The weighted average duration of the defined benefit obligation in years .-. .-.
Expected defined benefit pension payments by the Group in amount to DKK million.
ACCOUNTING POLICIES
For defined benefit plans, the costs and obligation for
the year are determined using the projected unit credit
method. This reflects services rendered by employees
up to the valuation dates and is based on actuarial
assumptions primarily regarding discount rates used in
determining the present value of benefits and project-
ed increase in wages.
Differences between the calculated development in
pension obligations and plan assets and the realized
values are recognized in other comprehensive income
as actuarial gains or losses.
Changes in pension obligation for employees’ past
services result in an adjustment of the actuarial
calculation of the present value, which is classified as
past service costs. Past service costs are charged to
the income statement immediately if the employees
have already earned the right to the adjusted benefits.
Otherwise, they will be recognized in the income
statement over the period in which the employees
earn the right to the adjusted benefits.
Pension plan assets are only recognized to the extent
that the Group is able to derive future economic
benefits such as refunds from the plan or reductions
of future contributions.
Actuarial valuations of the present value of pension
obligation are performed annually.
3.10 Pension obligations
36
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.10 Pension obligations (continued)
Percentage
Composition of plan assets, %
Shares
Bonds
Real estate
Commodities
Other
Composition of plan asset at December
Applied actuarial assumptions, %
Discount rate .-. .-.
Future wage increases .-. .-.
DKK million
Sensivity analysis of impact on pension obligation
.%-point increase on discount rate - -
.%-point decrease on discount rate
.%-point increase on future wage increase
.%-point decrease on future wage increase -
The Group has entered into pension plans with a considerable number of its employees. Most of the plans are defined
contribution plans and only a small part is defined benefit plans.
Defined contribution plans
The Group finances the plans by currently paying a premium to independent insurance companies that are responsi-
ble for the pension obligations. Once the pension contributions to the defined contribution plans have been paid, the
Group has no further pension obligations to current or terminated employees.
Defined benefit plans
The Group has made agreements with specific groups of employees regarding payment of certain benefits, including
pension. These pensions mainly relate to certain employees in Topsoe A/S's US subsidiary where the plan partly con-
sists of a basic pension and partly of an additional pension for selected members of US management. The pension
obligations are partly hedged through an independent fund. Actuarial valuation is performed annually. In addition,
employees in India and Germany are covered by defined benefit plans.
37
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Provisions are recognized when, due to an earlier
event, the Group has a legal or constructive obligation
and it is expected that the settlement of the obligation
will require an outflow of resources.
Provisions are measured on the basis of Management’s
best estimate of the amount at which the obligation
is expected to be met and are discounted if deemed
material.
Contingent liabilities comprise possible obligations
which have not yet been confirmed or cannot be
measured reliably, but which result in outflow of
resources, if realized.
ACCOUNTING ESTIMATES AND JUDGEMENTS
The warranty provisions are based on historical levels
as well as estimated amounts required for settling
specific warranty cases. Furthermore, the warranty
provision for engineering projects reflects the expect-
ed risk associated with the various technologies. War-
ranty provision can be impacted by unexpected quality
issues on our catalyst or technology solutions.
Management continuously assesses provisions,
including contingencies and the likely outcome of
pending and potential legal proceedings. The outcome
of these depends on future events which are uncertain
by nature.
The assessments may involve advice from external
experts and legal advisors.
DKK million
Warranty
provision for
engineering
projects
Warranty
provision for
catalysts Other Total
Provisions,
Provisions at January ,
Provisions during the year
Reversals during the year - - -
Realized provision during the year - - -
Provisions at December ,
The majority of the warrenty provisions is expected to be recognized after year.
Provisions,
Provisions at January ,
Foreign currency translation adjustment - -
Provisions during the year
Reversals during the year - -
Realized provision during the year - - -
Provisions at December ,
Approx. / of the provisions are potentially to be recognized within year.
3.11 Provisions and contingent liabilities
38
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
3.11 Provisions and contingent liabilities (continued)
DKK million
Aging of guarantees issued on the Group's behalf for project-related risk
Less than year
Between and years
After years
Guarantees issued at December
Garantees have been issued by banks and credit insurance institutions to customers on the Groups behalf to cover
project related risk, such as received prepayments and performance. In the event a guarantee materialize, banks and
credit insurance institutions have recourse against the Group. In the event a guarantee is expected to materialize, a
provision is recognized.
DKK million
Guarantees issued by the Group
Guarantee issued by the Group in relation to Employee Share Program,
expires
Guarantees issued by the Group at December
Contingent liabilities
The Group's property in Frederikssund, Denmark, has been found to be contaminated. Management assesses that
the remediation costs will not be significant.
The Group is a party to a number of court cases and legal disputes. Management assesses that none of these will
significantly impact the Group's financial position.
Through participation in joint taxation scheme with Danish group enterprises, the company is jointly and severally
liable for taxes, etc. payable in Denmark.
3.12 Other payables
DKK million
Other payables
Staff-related items
Other payables
Other payables at December
Classification of other payables
Non-current liabilities
Currency liabilities
Other payables at December
Staff-related items primary comprise employee holiday provision, provision for Group bonus and payroll taxes due.
ACCOUNTING POLICIES
Other payables are measured at amortized cost, mainly corresponding to nominal value.
39
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Reserves
The foreign currency translation reserve comprises all
translation adjustments arising from the translation
of financial statements of Group enterprises with a
functional currency other than Danish kroner as well
as translation adjustments concerning non-current
intercompany balances that are considered a part of
the net investment in such enterprises.
Reserve for financial assets measured at fair value
comprises the accumulated net change in the fair
value of investments in other enterprises classified
as financial assets measured at fair value through
other comprehensive income.
4 CAPITAL STRUCTURE AND FINANCIAL ITEMS
Dividend
Proposed dividend for the financial year is recognized
in retained earnings.
According to Danish corporate law, reserves available
for distribution as dividends are based on the financial
statements of the parent company, Topsøe Holding
A/S. Dividends are paid from distributable reserves.
Share premium is a distributable reserve.
Number
Shares
A Shares ,, ,,
B Shares ,,,
Total shares ,,, ,,,
The share capital is nominally DKK , million divided into shares of DKK , or multiples thereof.
All issued shares have been paid. The shares are divided into classes. A shares are entitled to votes per share amount
of DKK ,. B shares are entitled to one vote for each share of DKK ,.
4.1 Equity and dividend
40
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
ACCOUNTING POLICIES
Borrowings are initially recognized at the proceeds
received net of transaction costs incurred. Subse-
quently, the loans are measured at amortized cost,
DKK million
Other
payables Borrowings
Lease
liabilities Total
Interest-bearing debt,
Interest-bearing debt at January , ,
Foreign currency translation adjustment
Loans raised
Installments - - - -
Interest-bearing debt at December , ,
Interest-bearing debt,
Interest-bearing debt at January , , .
Foreign currency translation adjustment
Loans raised
Installments - - -
Interest-bearing debt at December , ,
Borrowings comprise loans from credit institutions.
Please refer to note . Right-of-use assets for further information.
corresponding to capitalized value, using the effective
interest rate, so that the difference between the
proceeds and the nominal value is recognized in the
income statement over the term of the loan.
4.2 Borrowings and lease liabilities
41
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
4.3 Financial assets and liabilities
ACCOUNTING POLICIES
Fair value measurements are categorised into Level ,
or based on the degree to which the inputs to the
fair value measurements are observable and on the
significance of the inputs to the fair value measure-
ment as a whole. The inputs are described as follows:
• Level inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the entity can access at the measurement date.
• Level inputs are inputs, other than quoted prices
included within Level that are observable for the
asset or liability, either directly or indirectly.
• Level inputs are fair value measures derived from
valuation techniques that include inputs for the
asset or liability that are not based on observable
market data (unobservable inputs).
DKK million
Classification of financial assets
Other securities and investments
Financial assets designated as assets measured at fair value through
other comprehensive income
Trade receivables , ,
Other receivables
Cash ,
Financial assets measured at amortized cost , ,
Derivatives
Financial assets measured at fair value through other comprehensive income
Financial assets at December , ,
DKK million < year - years > years
Total
payments
Future
interests
Carrying
amount
Maturity and classification
of financial liabilities,
Borrowings -
Lease liabilities -
Trade payables
Other financial liabilities
Financial liabilities measured
at amotized cost , , - ,
Financial liabilities
at December , , , - ,
Maturity and classification
of financial liabilities,
Borrowings -
Lease liabilities -
Trade payables
Other financial liabilities
Financial liabilities measured
at amortizad cost , , - ,
Financial liabilities at
December , , , - ,
42
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
4.3 Financial assets and liabilities (continued)
DKK million Level Level Level
Fair value assets,
Other securities and investments
Derivative
Assets stated at fair value at December ,
Please refer to note . Other non-current assets for information on input to the fair value measurement of invest-
ments in other enterprises stated in level .
There have been no transfers between levels , and during the year.
DKK million
Fair value of level
Fair value of level assets at January
Addition
Write-down recognized in other comprehensive income - -
Fair value of level assets at December
Available credit facility
Undrawn credit facility
Undrawn revolving credit facility , ,
Available credit facility at December , ,
FINANCIAL RISK
Currencies
As The group operates globally, the income statement, balance sheet, and cash flows are subject to the risk of
currency fluctuations, mainly in relation to The Group’s flows of USD.
Part of this risk is mitigated through natural hedges arising from activities where The Group has both income and
expenses in the same currency. However, the risk is not fully covered by natural hedges, and consequently The Group
hedges certain future cash flows. A % change in the DKK/USD exchange rate is assessed to have an EBIT effect of
DKK - million.
Interest rates
The Groups’s general interest rate policy is to maintain a loan portfolio where the fixed interest rate portion is kept
within a range of -%, while the floating interest rate portion is kept within a range of -%. By the end of
, the fixed rate portion stood at %, while the floating rate portion stood at %. For the floating rate portion
of our interest-bearing debt at end of , an increase in the interest rate level of percentage point will increase
interest expenses by DKK . million p.a.
Credit
The credit risk of The Group is primarily related to trade receivables from state, public and privately-owned corpo-
rations. Where feasible, we seek to mitigate credit risk by applying instruments such as letters of credit and bank
guarantees as well as selective structuring of payment terms, etc. On a quarterly basis, we assess whether the Group
should make accruals for bad debt which is considered unlikely to be collected.
Futhermore, credit risk arises from cash and derivatives. In order to reduce this risk, The Group only deals with finan-
cial counterparties who, in the opinion of Management, have satisfactory financial strength (based on credit rating
from a recognized international credit rating agency where feasible).
At December , , The Group considers its maximum credit risk to be DKK , million (:DKK ,
million) equal to the total of the Group's financial assets.
Liquidity
The Group must maintain sufficient liquidity to fund daily operations, debt service, and expansion. Topsøe’s access to
liquidity consists of cash and cash equivalents, including access to committed revolving credit facilities. The target is
to maintain a minimum of DKK million in unused committed revolving credit facilities at any time.
43
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
4.4 Financial income and expenses
DKK million
Financial income
Dividend from other investments
Interest income
Foreign currency translation adjustment
Other financial income
Total financial income
Financial expenses
Interest expenses
Value adjustment of other receivables
Foreign currency translation adjustment
Total financial expenses
Interest expenses include interest on financial liabilities measured at amortized cost of DKK million
(: DKK million.)
44
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
5.1 Share-based payment
ACCOUNTING POLICIES
Performance shares
The Group’s performance shares scheme is equity-set-
tled, measured at the grant date and the recognized in
the income statement as staff costs over the vesting
period. The offsetting item is recognized directly in
equity.
The fair value of the performance shares granted is
determined based on the external valuations of the
Group and comparable peers.
On initial recognition, an estimate is made of the
number of share units that the employees are expect-
ed to earn. The estimated number of shares units is
adjusted subsequently to reflect the actual number of
share units earned.
The estimated voliatility is based on historical data over
the precending years adjusted for any unusual circum-
stances during the period.
Employee Share Program (ESP)
The Employee Share Program is considered an equi-
ty-settled program. The discount element, which is
the deviation between the employees’ share purchase
price and the market value, is expensed as a cost in
Staff costs during the duration of the program. The
counter entry is included directly in the Retained earn-
ings as a transaction with owners.
The Phantom Program is considered a cash-settled
program. The invested amount is considered as a
non-current liability. The annual fair value adjustment is
expensed as cost in Staff costs.
5 OTHER NOTES
No. of shares
Performance shares
Granted during the year ,
Cancelled during the year ,
No. of shares at December ,
Share-based incentive schemes
In , the Group launched incentive share-based
payment schemes for the purpose of motivating and
retaining selected employees, senior leaders and
members of the Executive Management.
Retention is motivated by requiring continued service
for a period covering the vesting period as a minimum.
The schemes are also intended to align the interests of
employees and shareholders.
A total of employees held performance shares at
December , .
Total costs recognized in amounted to DKK
million.
The fair value of the performance share scheme at
December , , is estimated to DKK million.
Employee Share Program
The Group launched an Employee Share Program
(ESP) with enrollment in February . Employees
at all levels have been offered the opportunity to
acquire shares in Haldor Topsoe A/S at market value
by investing an amount equal to ½, or months'
salary. For every four shares purchased at market
value, employees purchased a fifth share at a price of
DKK . An annual investment window will be open to
new employees. The program will expire either in case
of an IPO or by December , , at the latest. If
the program expires without an IPO, the shares will be
purchased by a purchaser designated by the Group at
market price. The shares cannot be sold or pledged.
In further employees (: employees)
enrolled in the program and , new shares
(: ,, shares) were issued. The shares
issued in were issued at an average price of
DKK . (: DKK .) per share resulting in a
discount element of DKK . (: DKK .). Staff
costs have been impacted by DKK million (:
DKK million) due to the accrued part of the discount
element and the fair value adjustment.
Good leavers (mainly employees who retire or are
dismissed) can choose to keep the shares until the
program expires or sell the shares to a purchaser
designated by the Group in the next annual window at
the fair market price. Resigning participants must sell
the shares to a purchaser designated by the Group in
the next annual window at the lower of the invested
amount plus an amount for the fifth share that in-
creases to the price paid for the four shares during the
period or the fair market price.
In some countries, participation in the ESP is not
possible due to local legislation. Instead, employees in
these countries have been offered to participate in a
Phantom program. The participating employees have
invested an amount equal to ½, or months' salary
and are granted phantom shares in Haldor Topsoe A/S
at principles equal to the ESP. At the time of expiry of
the program, employees will be refunded based on the
fair value of the phantom shares.
employees (: employees) are enrolled
in the Phantom program. Staff costs have not been
impacted in nor in .
45
TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
5.2 Fee to auditors appointed at the general meeting
DKK million
Fee to auditors appointed at the general meeting
Statutory audit fee
Other assurance statements
Tax assistance
Other assistance
Total fee to auditors appointed at the general meeting
5.3 Related parties
For remuneration to Senior Leadership Team and Board of
Directors, please refer to note . Staff costs.
Intercompany transactions have been eliminated in
the consolidated financial statements.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
5.4 Cash flow specifications
DKK million
Adjustments for non-cash items
Gain and losses from disposal of assets
Cash flow from discontinuing operations -
Gain from divestment of associated companies
Change in provisions -
Employee Share Program
Other adjustments
Total adjustments for non-cash items
Change in working capital
Increase (-) / decrease in inventories - -
Increase (-) / decrease in trade receivables -
Increase / decrease (-) in contract assets and liabilities -
Increase / decrease (-) in trade payables, etc. -
Total change in working capital -
5.5 Commitments
DKK million
Contractual obligations
Purchase obligations relating to property, plant and equipment
and intangible assets
Lease obligations related to software, IT service and maintainance agreements, running
up to years
Investment obligations related to investing in companies included under
non-current assets
Contractual obligations at December
Aging of contractual obligations
Less than year
Between and years
After years
Contractual obligations at December
Payments for the year recognized as operating lease expenses
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
Russia’s invasion of Ukraine has taken place after the end of the reporting period. This war is expected to have a
negative impact on the financial performance of Topsøe Holding Gruop. Currently, a reliable estimate of the financial
effect on the consolidated financial statements cannot be made and is not reflected in the outlook.
No events materially affecting the Group's financial position at December , have occured after the balance
sheet date.
Company Country Ownership share Activity
Haldor Topsøe A/S * Denmark .% P, S, R, O
Haldor Topsoe America Latina S.A. Argentina % S
Haldor Topsoe Australia Pty. Ltd. Australia % S
Haldor Topsoe do Brasil Tecnologia e Servicos
em Catalisadores Eireli Brazil % S
Haldor Topsoe Canada Limited Canada % S
Haldor Topsøe (Beijing) Co., Ltd China % P, S
Jiangsu JITRI-Topsoe Joint R&D Center Co, Ltd. China % R
Haldor Topsøe International A/S Denmark % S
Subcontinent Ammonia Investment Company ApS Denmark % O
Haldor Topsøe Project Investment A/S Denmark % O
HT Ramagundam A/S Denmark % O
Haldor Topsøe Sustainables A/S Denmark % O
Haldor Topsoe Germany GmbH Germany % S
Haldor Topsoe India Pvt. Ltd. India % S, O
Haldor Topsoe Sdn. Bhd. Malaysia % S
Haldor Topsoe De Mexico, S. A. de C. V. Mexico % S
OOO Haldor Topsøe Russia % S
Haldor Topsoe, Inc. US % P, S
Haldor Topsoe Project Development U.S., Inc. US % O
Pacific Coast Fertilizer LLC US % O
Saturn Ferrostaal Gas Chemicals LLC, US % O
Haldor Topsoe eCOs Inc. US % O
Haldor Topsoe LFG Solutions Inc. US % O
Frydenlund Ejendomsselskab ApS*. Denmark % P, S
HT ESP ApS* Denmark % O
* Directly held entities by Topsøe Holding A/S
P: Production S: Sales R: R&D O: Other
5.7 Group enterprises5.6 Events after the balance sheet date
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
5.8 Discontinuing operations
ACCOUNTING POLICIES
A discontinuing operation is a component of an entity
that has been disposed of or is classified as held for
sale and which represents a separate major line of
business or geographical area of operations or is
part of a single coordinated plan to dispose of such a
line of business or area of operations. The results of
discontinuing operations are presented separately in
the income statement.
DKK million
Profit from discontinuing operations
Transaction related costs -
Value adjustment of net assets sold
Profit on sale before income tax -
Income tax
Profit from discontinuing operations
On June , , Topsøe announced that it had sold
its emissions control business areas. The divestment
was finalized on November , . The divestment
comprised the subsidiaries Haldor Topsøe Catalyst
(Tianjin) Co., Ltd., Haldor Topsøe Automotive Catalyst
Trading (Tianjin) Co., Ltd. and Haldor Topsoe Catalisa-
dores e Technologias do Brasil Ltda. as well as business
assets and liabilities in Denmark, the US, and China.
Finalization of the divestment of the emissions control
business areas impacted with a net profit of DKK
million after reversal of provisions made in previous
years. has mainly been impacted by reopened
tax assessments.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
Income statement
Balance sheet
Statement of changes in equity
Notes
FINANCIAL
STATEMENTS
OF TOPSØE
HOLDING A/S
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million Note
Other external expenses - -
Staff costs - -
EBIT - -
Dividend from Group enterprises
Financial income
Financial expenses - -
Profit before tax
Ta x - -
Net profit
INCOME STATEMENT OF
TOPSØE HOLDING A/S
51
FINANCIAL STATEMENTS OF TOPSØE HOLDING A/STOPSØE HOLDING A/S ANNUAL REPORT 2021
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Equity and liabilities
DKK million Note
Share capital , ,
Retained earnings , ,
Proposed dividend
Equity , ,
Credit institutions
Payables to Group enterprises
Corporate income tax
Other payables
Current liabilities
Liabilities
Equity and liabilities , ,
BALANCE SHEET OF
TOPSØE HOLDING A/S
Assets
DKK million Note
Investments in Group enterprises , ,
Investments in associated companies
Other receivables
Investments , ,
Non-current assets , ,
Receivables from Group enterprises
Other receivables
Tax receivable
Receivables
Securities , ,
Cash
Current assets , ,
Assets , ,
52
FINANCIAL STATEMENTS OF TOPSØE HOLDING A/STOPSØE HOLDING A/S ANNUAL REPORT 2021
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STATEMENT OF CHANGES IN EQUITY
OF TOPSØE HOLDING A/S
DKK million
Share
capital
Retained
earnings
Proposed
dividend Total
Equity at January , , , ,
Net profit
Net profit and income
and expenses recognized under equity
Dividend paid - -
Transactions with owners - -
Equity at December , , , ,
DKK million
Share
capital
Retained
earnings
Proposed
dividend Total
Equity at January , , , ,
Net profit -
Net profit and income
and expenses recognized under equity -
Dividend paid
Transactions with owners
Equity at December , , , ,
53
FINANCIAL STATEMENTS OF TOPSØE HOLDING A/STOPSØE HOLDING A/S ANNUAL REPORT 2021
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
1 Accounting policies
Staff costs
Financial income
Financial expenses
Proposed distribution of profit
Investments
Securities
Share capital
Fee to auditors appointed
at the general meeting
Contingent liabilities
Related parties
Subsequent events
NOTES TO THE
FINANCIAL
STATEMENTS
OF TOPSØE
HOLDING A/S
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
1 ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial statements for of Topsøe Holding
A/S have been prepared in accordance with the
requirements in Danish Financial Statements Act for
class C large companies.
The accounting policies are unchanged from last year.
The applied accounting policies are similar to those of
the Group except for the following matters:
Dividend from group enterprises
The dividend proposed and declared in the financial
year is recognized in the parent company’s income
statement.
Investments in group enterprises
Investments in group enterprises and associated
companies are recognized and measured at cost in the
parent company’s financial statements.
Cash flow statement
No separate cash flow statement has been prepared
for the parent company, as the parent company’s cash
flow statement is included in the consolidated cash
flow statement.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
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2 STAFF COSTS
DKK million
Wages, salary and other remuneration
Total
Total remuneration to Executive Management and Board of Directors
Average number of employees
3 FINANCIAL INCOME
DKK million
Other financial income
Total financial income
4 FINANCIAL EXPENSES
DKK million
Other financial expenses
Total financial expenses
5 PROPOSED DISTRIBUTION OF PROFIT
DKK million
Proposed dividend
Retained earnings -
Total proposed distribution of profit
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
DKK million
Investments
in Group enterprises
Investments in
associated companies
Other
investments
Cost at January , ,
Additions during the year
Transfers during the year (to Securities) -
Cost at December , ,
Carrying amount at December , ,
6 INVESTMENTS
Company Registered office
Voting and
ownership share
Haldor Topsoe A/S*
Lyngby, Denmark .%
Haldor Topsoe America Latina S.A. Buenos Aires, Argentina %
Haldor Topsoe Australia Pty Ltd. Perth, Australia %
Haldor Topsoe do Brasil Tecnologia e Servicos
em Catalisadores Eireli Rio de Janeiro, Brazil %
Haldor Topsoe Canada Limited Vancouver, Canada %
Haldor Topsøe (Beijing) Co., Ltd Beijing, China %
Jiangsu JITRI-Topsoe Joint R&D Center Co. Ltd. Suzhou, China %
Haldor Topsøe International A/S Lyngby, Denmark %
Subcontinent Ammonia Investment Company ApS Lyngby, Denmark %
Haldor Topsøe Project Investment A/S Lyngby, Denmark %
HT Ramagundam A/S Lyngby, Denmark %
Haldor Topsøe Sustainables A/S Lyngby, Denmark %
Haldor Topsoe Germany GmbH Essen, Germany %
Haldor Topsoe India Pvt. Ltd. New Delhi, India %
Haldor Topsoe Sdn. Bhd. Kuala Lumpur, Malaysia %
Haldor Topsoe De Mexico, S. A. de C. V. Mexico City, Mexico %
OOO Haldor Topsøe Moscow, Russia %
Haldor Topsoe, Inc. Houston, US %
Haldor Topsoe Project Development U.S. Inc. Houston, US %
Haldor Topsoe LFG Solutions Inc. Houston, US %
Pacific Coast Fertilizer LLC Seattle, US %
Saturn Ferrostaal Gas Chemicals LLC Wilmington, US %
Haldor Topsoe eCOs Inc. Wilmington, US %
Frydenlund Ejendomsselskab ApS* Lyngby, Denmark %
HT ESP ApS* Lyngby, Denmark %
* Directly held entities by Topsøe Holding A/S
Investments in Group enterprises:
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
7 SECURITIES
DKK million
Equities funds
Bonds fund
Total , ,
9 FEE TO AUDITORS APPOINTED
AT THE GENERAL MEETING
Please refer to the note in the consolidated financial
statements.
10 CONTINGENT LIABILITIES
Through participation in joint taxation scheme with
Danish Group enterprises, the Company is jointly and
severally liable for taxes, etc. payable in Denmark.
Number of shares of DKK , A shares B shares Total
Total share capital , ,, ,,
The share capital constitutes nominally DKK ,, distributed on shares of DKK , or multiple of this.
8 SHARE CAPITAL
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
12 SUBSEQUENT EVENTS
Russia’s invasion of Ukraine has taken place after the
end of the reporting period. This war is expected to
have a negative impact on the financial performance
of Topsøe Holding Group. Currently, a reliable estimate
of the financial effect on the consolidated financial
11 RELATED PARTIES
No transactions have been carried out with the
Board of Directors, Senior Leadership Team,
key management staff, shareholders, Group
enterprises or other related parties which
have not been under normal market condi-
tions.
statements cannot be made and is not reflected in the
outlook.
No events materially affecting the Group's financial
position at December , have occured after
the balance sheet date.
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TOPSØE HOLDING A/S ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OF TOPSØE HOLDING A/S
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
60
STATEMENTSTOPSØE HOLDING A/S ANNUAL REPORT 2021
STATEMENT BY THE EXECUTIVE MANGEMENT AND
BOARD OF DIRECTORS ON THE ANNUAL REPORT
Registered Executive Management
Henrik Gaarn Bak
Chief Executive Officer
Board of Directors
Jakob Haldor Topsøe
Chairman
Christina Teng Topsøe
Vice Chairman
Emil Øigaard
Member
Birgitte Nielsen
Member
Thomas Schleicher
Member
Anne Haugwitz-Hardenberg-
Reventlow
Member
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
61
STATEMENTSTOPSØE HOLDING A/S ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
Opinion
Basis for opinion
Statement on Management’s review
Management’s responsibilities for the
Financial Statements
Auditor’s responsibilities for the audit of
the Financial Statements
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
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STATEMENTSTOPSØE HOLDING A/S ANNUAL REPORT 2021
• Evaluate the overall presentation,
CVR No 33 77 12 3 1
Michael Groth Hansen
State Authorised Public Accountant
mne33228
Rikke Lund-Kühl
State Authorised Public Accountant
mne33507
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3
Topsøe Holding A/S
Tel. +45 45 2 7 20 00
CVR no. 30 82 67 52
DocuSign Envelope ID: 364B5AB4-B033-43E4-97F4-C687718500B3