Solae Denmark ApS CVR-nr. 16 31 67 92 Annual Report for the period 1 January 2014-31 December 2014 The Annual Report has been presented and adopted at the Annual General Meeting of the Company ont May 2015 Chairman HENRIK FASTHOLM ADVOKAT! LEGAL COUNSEL Langebrogade 1 DK-1411 Copenhagen K
Contents Page Managements Statement on the Annual Report 1 Independent Practitioner's Statement 2 Company Information 4 Review 5 Accounting Policies 6 Income Statement 11 Balance Sheet at 31 December 12 Statement of Changes in Equity 14 Notes to the Annual Report 15
Management's Statement on the Annual Report The Executive and Supervisory Boards have today considered and adopted the Annual Report of Solae Denmark ApS for the financial year 1 January 31 December 2014. The Annual Report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the Financial Statements give a true and fair view of the financial position at 31 December 2014 of the Company and of the results of the Company operations for 2014. In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review. We propose that the Annual Report for 2015 will not be audited, and recommend that the proposal is adopted at the general meeting. The executive and supervisory boards consider the requirements to omit audit fulfilled. We recommend that the Annual Report be adopted at the Annual General Meeting. Aarhus, 8 May 2015 Executive Board ivfl orge7mti'kkund Nielse Chief Ex'ecutive Officer Supervisory Board Etienne Laurent Andrew Baker Jørgeiosen1uiid Nielsen Chairman
Independent Auditor's Statement To the Shareholder of Solae Denmark ApS Statement on Extended Review of the Financial Statements We have performed an extended review of the Financial Statements of Solae Denmark ApS for the financial year 1 January 31 December 2014, which comprise income statement, balance sheet, statement of changes in equity, notes and summary of significant accounting policies. The Financial Statements are prepared in accordance with the Danish Financial Statements Act. Management's Responsibility for the Financial Statements Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express a conclusion on the Financial Statements. We conducted our extended review in accordance with the Danish Business Authority's assurance standard for small enterprises and FSR Danish Auditors' standard on extended review of financial statements prepared under the Danish Financial Statements Act. This requires that we comply with the Danish Act on Approved Auditors and Audit Firms and FSR Danish Auditors' Code of Ethics and that we plan and perform procedures to obtain limited assurance in respect of our conclusion on the Financial Statements and, moreover, that we perform supplementary procedures specifically required to obtain additional assurance in respect of our conclusion. An extended review consists of making inquiries, primarily of Management and others within the enterprise, as appropriate, and applying analytical procedures and the supplementary procedures specifically required as well as assessing the evidence obtained. An extended review is less in scope than an audit and, consequently, we do not express an audit opinion on the Financial Statements. The extended review has not resulted in any qualification. Conclusion Based on the extended review, in our opinion the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2014 and of the results of the Company operations for the financial year 1 January - 31 December 2014 in accordance with the Danish Financial Statements Act. 2
Indep endent Auditor's Statement Statement on Management's Review We have read Management's Review in accordance with the Danish Financial Statements Act. We have not performed any procedures additional to the extended review of the Financial Statements. On this basis, in our opinion, the information provided in Management's Review is consistent with the Financial Statements. Aarhus, 8 May 2015 PricewaterhouseCoopers Statsautorjrt Revisionspartnerselskab nsen homas P. Blohm ate u horised Public Accountant State Authorised Public Accountant 3
Company Information The Company Solae Denmark ApS Edwin Rahrs Vej 38 DK-8220 Brabrand Telephone: +45 89 31 21 11 Telephone: +45 89 31 21 12 CVR no: 16 31 67 92 Financial year: 1 January - 31 December Municipality of reg. office: Aarhus Supervisory Board Etienne Laurent (Ch airman) Andrew Baker Jørgen Rosenlund Nielsen Executive Board Jørgen Rosenlund Nielsen Auditors PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Bankers Danske Bank Åboulevarden 69 DK-8000 Aarhus C
Review Primary activity The activity of the Company comprises the production of soy protein based ingredients and derivatives on behalf of Solae Europe S.A. The activity of the Company is under closure, and the company will continue as a dormant entity. Development in activities and finances The operating result for 2014 showed a loss before tax of DKK 4,491k. Management finds the result satisfactory, and in accordance with expectations. Outlook The company's production was closed in 2012, but there is still ongoing settlement of activities. After this the company is expected to continue as a dormant company. Events after the balance sheet date Since the closing of the accounts, the last building owned by the Company has been sold, and all reestablishment obligations have been transfered to the buyer. Apart from this, no other major events have occurred that could considerably influence the economic position of the Company at 31 December 2014. 5
Accounting Policies Basis of Preparation The Annual Report of Solae Denmark ApS for 2014 has been prepared in accordance with the provisions of the Danish Financial Statements Act applying to middle-sized enterprises of reporting class B. The given accounting policies are unchanged compared to last year. The Annual Report for 2014 is reported in DKK 1.000. Recognition and measurement All revenues are recognised in the income statement as earned based on the following criteria: delivery has been made before year-end; a binding sales agreement has been made; the sales price has been determined; and payment has been received at the time of sale or may with reasonable certainty be expected to be received. Based on the above, revenues are recognised in the income statement as earned, which includes recognition of value adjustments of financial assets and liabilities measured at fair value or amortised cost. Furthermore, all expenses incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changed accounting estimates of amounts that have previously been recognised in the income statement. Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Translation policies Transactions in foreign currencies are translated during the year at the exchange rates at the dates of transaction. Gains and losses arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in financial income and expenses in the income statement. Receivables, pay-ables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the balance sheet date and the transaction date rates are recognised in financial income and expenses in the income statement. 6
Accounting Policies Corporation tax and deferred tax Tax for the year consists of current tax for the year and deferred tax for the year. The tax attributable to the profit for the year is recognised in the income statement, whereas the tax attributable to equity entries is recognised directly in equity. Any share of the tax reported in the income statement arising from profit/loss on extraordinary activities for the year is attributed to such activities, whereas the remaining share is attributed to profit/loss on ordinary activities for the year. Current tax liabilities and current tax receivable are recognised in the balance sheet. Deferred tax is measured under the balance sheet liability method in respect of all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised in respect of temporary differences concerning goodwill not deductible for tax purposes or other items - apart from business acquisitions - where temporary differences have arisen at the time of acquisition without affecting the profit for the year or the taxable income. In cases where the computation of the tax base may be made according to alternative tax rules, deferred tax is measured on the basis of the intended use of the asset or settlement of the liability, respectively. Deferred tax assets, are measured at the value at which the asset is expected to be realised. Deferred tax is measured on the basis of the tax rutes and tax rates that will be effective under the legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. Any changes in deferred tax due to changes to tax rates are recognised in the income statement. The Company is jointly taxed with Danish Group Companies. The tax effect of the joint taxation is allocated to Danish enterprises showing profits or losses in proportion to their taxable income. 7
Accounting Policies Income Statement Administrative expenses Administrative expenses comprise expenses for Management, administrative staff, office expenses, depreciation, etc. Other income Other income include items of secondary character compared to the company's core business, among these projectgrant from EU. Financial income and expenses Financial income and expenses comprise interest, financial expenses in respect of finance leases, realised and unrealised exchange adjustments, price adjustment of securities, as well as extra payments and repayment under the on-account taxation scheme. Extraordinary income and expenses Extraordinary income and expenses includes items which are not related to the ordinary activity of the company, and are of a non recurring nature. This includes income and expenses for closing the activity of the company and related cost. 8
Accounting Policies Balance Sheet Property Property is measured at cost less accumulated depreciation and less any accumulated impairment losses. Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the asset is ready for use. In the case of assets of own construction, cost comprises direct and indirect expenses for labour, materials, components and sub-suppliers. Depreciation based on cost reduced by any residual value is calculated on a straight-line basis over the expected useful lives of the assets, which are: Production buildings Other buildings 20-30 years 40 years Gains and losses on current replacement of property are recognised as other income. Impairment of fixed assets The carrying amounts of property are reviewed on an annual basis to determine whether there is any indication of impairment other than that expressed by amortisation and depreciation. If so, the asset is written down to its lower recoverable amount. The recoverable amount of the asset is calculated as the higher of net selling price and value in use. Where a recoverable amount cannot be determined for the individual asset, the assets should be assessed in the smallest group of assets for which a reliable recoverable amount can be determined based on a total assessment. Buildings for which a value in use cannot be determined as the asset does not on an individual basis generate future cash flows are reviewed for impairment together with the group of assets to which they are attributable. Receivables Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which corresponds to nominal value less provisions for bad debts. Provisions for bad debts are determined on the basis of an individual assessment of each receivable, and in respect of trade receivables, a general provision is also made based on the Company's experience from previous years. Prepayments Prepayments, listed as asset, include defrayed payment in advance such as rent, incurance etc. 9
Accounting Policies Equity Provisions Provisions are recognised when - in consequence of an event occurred before or on the balance sheet date - the Company has a legal or constructive obligation and it is probable that economic benefits must be given up to settle the obligation. Provisions are measured at amortized cost, substantially corresponding to nominal value. Other payables Other payables is measured to amortized costprice, which practically is the same as nominal value. 10
Income Statement 1 January - 31 December Note 2014 2013 DKK '000 DKK '000 Administrative expenses Operating profit/loss -3987-18250 -3987-18250 Other income 79 3 806 Profit/loss before financial costs - net -3 908-14 444 Financial income 1 1 464 1 270 Financial expenses 2-2 047-2 658 Profit/loss before extraordinary items -4 491-15 832 Extraordinary income 3 0 28 899 Profit/loss before tax -4 491 13 067 Tax on profit/loss for the year 4 1 020-961 Net profit/loss for the year -3 471 12 106 Distribution of profit Proposed distribution of profit Retained earnings -3 471 12 106-3 471 12 106 11
Balance Sheet 31 December Assets Note 2014 2013 DIU( '000 DIU( '000 Receivables from group enterprises 4 4 102 Other receivables 484 2 166 Corporation tax 1 778 0 Deferred tax asset 7 0 8 407 Prepayments 5 36 91 Receivables 2 302 14 766 Cash at bank and in hand 178 812 188 327 Current assets 181 114 203 093 Assets 181 114 203 093 12
Balance Sheet 31 December Liabilities and equity Note 2014 2013 DKK '000 DKK '000 Share capital 6 31 000 31 000 Retained earnings 148 660 152 131 Equity 179 660 183 131 Other provisions 0 1 010 Provisions 0 1 010 Trade payables 528 923 Payables to group enterprises 0 1 277 Corporation tax 0 11 118 Other payables 926 5 634 Short-term debt 1 454 18 952 Debt 1 454 18 952 Liabilities and equity 181 114 203 093 Contractual obligations 8 Contingent liabilities 9 Staff 10 Related parties and ownership 11 13
Statement of Changes in Equity Retained Share capital earnings Total DICK '000 DICK '000 DICK '000 Equity at! January 2014 31 000 152 131 183 131 Net profit/loss for the year 0-3 471-3 471 Equity at 31 December 2014 31 000 148 660 179 660 Retained Share capital earnings Total DKK '000 DKK '000 DICK '000 Equity at 1 January 2013 31 000 140 025 171 025 Net profit/loss for the year 0 12 106 12 106 Equity at 31 December 2013 31 000 152 131 183 131 Movement in share capital There has been no changes in the Company's share capital in the past 5 years. 14
Notes to the Annual Report 2014 2013 DKK '000 DICK '000 1 Financial income Exchange adjustments 1 377 1 228 Other financial income 87 42 1 464 1 270 2 Financial expenses Exchange adjustments 34 1 941 Other financial expenses 2 013 717 2 047 2 658 3 Extraordinary items Reversal of provision from previous years 0 28 899 Extraordinary income 0 28 899 4 Tax on profit/loss for the year Current tax for the year, ordinary result -1 574-11 019 Change in deferred tax, ordinary result 8 407 547 Change in deferred tax, extraordinary income and expenses 0 7 225 Adjustment of previous years -7 853 4 208 Total tax for the year -1 020 961 15
Notes to the Annual Report 5 Prepayments Prepayments comprise prepaid expenses for lease of land 6 Share capital The share capital consists of 31,000 shares of a nominal value of DKK 1,000. No shares carry any special rights. 2014 2013 7 Provision for deferred tax Property, plant and equipment Accruals DICK '000 DICK '000 0-7545 0-862 0-8407 Deferred tax has been provided at 23.5% (24.5%) corresponding to the current tax rate. Deferred tax as at 1 January -8 407-16 179 Changes charged to P&L 8 407 7 772 Deferred tax as at 31 December 0-8 407 8 Contractual obligations The company has entered into a contract concerning lease of land, where the building of the company is located. The agreement is irrevocable from Solae Denmark ApS in 9 months amounting to DIU( 246k. The Landlord is not able to cancel the leasing contract before 2029. The company's building is on leased land, and the company is obligated to return the land without any building etc. at the time of teimination of the lease. The last building owned by the Company has been sold in 2015, and the obligation to return the land has been transfered to the buyer. After this no contractual obligations remain for Solae Denmark ApS. 16
Notes to the Annual Report 9 Contingent liabilities The Danish companies in the DuPont Group are jointly taxed and jointly liable for the total tax of the Group. The net payable tax is included in the annual report of Dupont Denmark Holding ApS, which is the administration company for the group taxation. Any later corrections of the taxable income may increase the total liable amount. The Danish tax authorities have raised an assessment in 2009 that significantly increased the Company's taxable income for 2003. The Company challenged the assessment and it has subsequently been appealed to the Danish National Income Tax Tribunal. Due to the nature of the situation it is not possible to assess the monetary implication or the time of completion. An employee related claim has been raised against Solae Denmark ApS. The claim is not material for the financial position of the Company, and management is expecting, that it will be dismissed by the court. 2014 2013 10 Staff DKK '000 DKK '000 Wages and salaries 4 214 26 892 Pensions 170 1 432 Other social security expenses 228 467 Reversed accrual for restructuring -3 518-21 477 1 094 7 315 Wages and salaries, pensions and other social security expenses are recognised in the following items: Administrative expenses 1 094 7 315 1 094 7 315 Average number of employees 3 36 17
Notes to the Annual Report 11 Related parties and ownership Controlling interest Solae Holding LLC Basis Controlling shareholder Ownership Solae Denmark ApS is owned 100 % by Solae Holdings, LLC, Corporation Trust Center, 1209 Orange Street, Newcastle County, Wilmington, DE 19801,USA. Solae Holdings, LLC prepares consolidated accounts for the smallest group. Solae Holding LLC is part of the total group of E. I. DU PONT DE NEMOURS AND COMPANY, Delaware, USA. E. I. DU PONT DE NEMOURS AND COMPANY prepares consolidated accounts for the largest group. The Group Annual Report may be obtained at vvww.dupont.com. 18