Darling Ingredients Germany Holding GmbH

Belm-Icker

Befreiender Konzernabschluss gem. §291/292 HGB zum Geschäftsjahr vom 01.01.2019 bis zum 31.12.2019

Annual Report Darling International NL Holdings B.V. 2019

Contents

Annual Report

Management report

Financial statements

Consolidated balance sheet as at 31 December 2019

Consolidated profit and loss account for the year ended 31 December 2019

Consolidated statement of comprehensive income for the year ended 31 December 2019

Notes to the 2019 consolidated financial statements

Company balance sheet as at 31 December 2019

Company profit and loss account for the year ended 31 December 2019

Notes to the 2019 company financial statements

List of consolidated shareholdings

Other information

Independent auditor's report

Provisions in the Articles of Association governing the appropriation of result

Management report

In accordance with Part 9 of Book 2 of the Netherlands Civil Code under article 394, the Management Report is, upon request, available for inspection at the office of Darling International NL Holdings B.V.

Financial Statements Darling International NL Holdings B.V. 2019

Consolidated balance sheet as at 31 December 2019

In thousands of euros

(before result appropriation)

		2019		2018
		EUR	EUR	EUR	EUR
Fixed assets
Intangible fixed assets	1	167,917		193,499
Tangible fixed assets	2	627,877		606,270
Financial fixed assets	3	90,151		48,938
			885,945		848,707
Current assets
Inventories	4	220,743		198,666
Trade and other receivables	5	272,737		247,559
Cash and cash equivalents	6	63,001		90,354
			556,481		536,579
			1,442,426		1,385,286
Group equity	7
Shareholders' equity		455,408		404,990
Minority interests		46,683		46,693
			502,091		451,683
Provisions	8		109,963		125,272
Long-term liabilities	9		510,562		539,433
Current liabilities	10		319,810		268,898
			1,442,426		1,385,286

Consolidated profit and loss account for the year ended 31 December 2019

In thousands of euros

		2019		2018
		EUR	EUR	EUR	EUR
Net turnover	13	1,457,924		1,430,756
Changes in inventories of finished products and work in progress		10,612		(17,499)
Other operating income	14	24,430		31,486
Total operating income			1,492,966		1,444,743
Costs of raw materials and consumables		450,685		480,253
Costs of outsourced work and other external costs	15	557,826		549,724
Wages and salaries	16	214,205		203,220
Social security and pension charges	17	43,764		41,488
Amortization and depreciation on intangible and tangible fixed assets	18	122,244		119,354
Other value changes in intangible and tangible fixed assets		-		2,135
Total operating expenses			1,388,724		1,396,174
Operating result			104,242		48,569
Interest income and similar income	20	5,933		16,837
Interest charges and similar charges	21	(25,715)		(62,064)
			(19,782)		(45,227)
Result before tax			84,460		3,342
Tax on result from ordinary activities	22	(23,265)		3,067
Share of result from participating interests		2,553		1,741
			(20,712)		4,808
Result after tax			63,748		8,150
Minority interests			(7,842)		(3,988)
Net result			55,906		4,162

Consolidated statement of comprehensive income for the year ended 31 December 2019

In thousands of euros

		2019		2018
		EUR		EUR
Consolidated net result after tax attributable to the company		55,906		4,162
Unrecognized actuarial gains / (losses)	(1,595)		1,380
Foreign currency impact of cashflow hedges	(4,384)		1,293
Unrealized foreign exchange gain / (loss) directly in shareholders' equity	491		(8,054)
Total of items recognized directly in shareholders' equity of the company as part of the group entity		(5,488)		(5,381)
Total result of the legal entity		50,418		(1,219)

Notes to the 2019 consolidated financial statements

General

Reporting entity and relationship with parent company

Darling International NL Holdings B.V., having its statutory seat in Eindhoven, the Netherlands and its office address at N.C.B.-weg 10, 5681 RH Best is a private limited liability company under Dutch law and its consolidated subsidiaries and joint venture entities (together hereafter, "the company"), constitutes a component division owned by Darling International Netherlands B.V., a private company, having its statutory seat in Amsterdam and its office address in Best, The Netherlands. The financial information of the company is included in the consolidated financial statements of Darling Ingredients Inc., a United States listed firm seated in Iving, Texas. The 2019 consolidated financial statements of Darling Ingredients Inc. can be obtained from www.darlingii.com.

The company is registered with the chamber of commerce under registration number 59238666. The component entities are mainly located in the Netherlands, Germany, France, Belgium, China and Brazil. The ultimate parent of the company is Darling Ingredients Inc., located in Irving, Texas, United States.

The company holds worldwide positions in the slaughter by-product markets. The company's core activity is adding value to slaughter by-products. These products are used as high quality ingredients in highly diverse markets as pharmaceutics, cosmetics, food, feed, energy and technology. The company invests in innovative sustainable processes such as the production of biofuel and biophosphates.

The consolidated financial statements are presented in thousands of euros and rounded as such.

Financial reporting period

These financial statements cover the year 2019, which ended at the balance sheet date of 31 December 2019.

Basis of preparation

The consolidated financial statements of the Company are part of the statutory financial statements of the Company and have been prepared in accordance with Title 9, Book 2 of the Dutch Civil Code.

The accounting policies applied for measurement of assets and liabilities and determination of results are based on the historical cost convention, unless otherwise stated in the further accounting principles.

Application of Section 402, Book 2 of the Netherlands Civil Code

The financial information of the Company is included in the consolidated financial statements. For this reason, in accordance with Section 402, Book 2 of the Dutch Civil Code, the separate profit and loss account of the Company exclusively states the share of the result of participating interests after tax and the other income and expenses after tax.

Going concern

These financial statements have been prepared on the basis of the going concern assumption.

Accounting policies for the measurement of assets and liabilities and the determination of the result

General

Assets and liabilities are measured at historical cost, unless stated otherwise in the further principles.

An asset is recognised in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the asset has a cost price or value of which the amount can be measured reliably. Assets that are not recognised in the balance sheet are considered as off-balance sheet assets.

A liability is recognised in the balance sheet when it is expected that the settlement of an existing obligation will result in an outflow of resources embodying economic benefits and the amount necessary to settle this obligation can be measured reliably. Provisions are included in the liabilities of the Company. Liabilities that are not recognised in the balance sheet are considered as off-balance sheet liabilities.

An asset or liability that is recognised in the balance sheet, remains recognised on the balance sheet if a transaction (with respect to the asset or liability) does not lead to a major change in the economic reality with respect to the asset or liability. Such transactions will not result in the recognition of results. When assessing whether there is a significant change in the economic circumstances, the economic benefits and risks that are likely to occur in practice are taken into account. The benefits and risks that are not reasonably expected to occur, are not taken in to account in this assessment.

An asset or liability is no longer recognised in the balance sheet, and thus derecognised, when a transaction results in all or substantially all rights to economic benefits and all or substantially all of the risks related to the asset or liability are transferred to a third party. In such cases, the results of the transaction are directly recognised in the profit and loss account, taking into account any provisions related to the transaction.

If assets are recognised of which the Company does not have the legal ownership, this fact is being disclosed.

Income is recognised in the profit and loss account when an increase in future economic potential related to an increase in an asset or a decrease of a liability arises of which the size can be measured reliably. Expenses are recognised when a decrease in the economic potential related to a decrease in an asset or an increase of a liability arises of which the size can be measured with sufficient reliability.

Revenues and expenses are allocated to the respective period to which they relate. Revenues are recognised when the Company has transferred the significant risks and rewards of ownership of the goods to the buyer.

Some figures in the notes for 2018 have been reclassified for comparison purposes.

Functional and presentation currency

The financial statements are presented in euros (`EUR´) unless stated otherwise, which is the Company's functional currency. All amounts have been rounded to the nearest thousand.

Use of estimates

The preparation of the financial statements requires the management to form opinions and to make estimates and assumptions that influence the application of principles and the reported values of assets and liabilities and of income and expenditure. Actual results may differ from these estimates. The estimates and the underlying assumptions are constantly assessed. Revisions of estimates are recognized in the period in which the estimate is revised and in future periods for which the revision has consequences.

The following accounting policies are in the opinion of management the most critical for the purpose of presenting the financial position and require estimates and assumptions.

•	Recognition and subsequent measurement of fixed assets, and
•	Recognition and subsequent measurement of provisions
•	Recognition and subsequent measurement of deferred tax assets

Consolidation principles

Consolidation scope

The consolidated financial statements include the financial information of the Company, its subsidiaries in the group, other group companies and other companies over which the Company can exercise control or of which it conducts the central management. Subsidiaries are participating interests in which the Company (and/or one or more of its subsidiaries) can exercise more than half of the voting rights in the general meeting, or can appoint or dismiss more than half of the managing directors or supervisory directors.

Group companies are participating interests in which the Company has a majority interest, or in which it can exercise decisive influence (control) by other means. In assessing whether the Company has control, potential voting rights are taken into account that can be exercised in such a way that they will provide the Company with more or less influence.

Interests exclusively held with the view to resale are exempted from consolidation if the intention to resale was already present at the acquisition date, resale within one year is probable and at the acquisition date (or shortly thereafter) other indicators are being met. These interests are presented as securities, under current assets ('exclusively held for sale').

Newly acquired participating interests are consolidated as from the date that decisive influence (control) can be exercised. Participating interests disposed of remain included in the consolidation until the date of loss of this influence.

For a list of the consolidated group companies reference is made to note 37 of the financial statements.

Business combinations

A business combination is a transaction whereby the group obtains control over the assets and liabilities and the activities of the acquired party.

Business combinations are accounted for using the 'purchase accounting' method on the date that control is transferred to the group (the acquisition date). The transaction price is the cash consideration or equivalent agreed as part of the acquisition, or the fair value of the consideration transferred at the acquisition date. Transaction costs that are directly attributable to the business combination are allocated to the transaction price. In case of deferred payment of the consideration, the transaction price is the discounted value of the consideration.

The group recognises the identifiable assets and liabilities of the acquiree at the acquisition-date. These assets and liabilities are recognised individually at their fair values, provided that it is probable that future economic benefits will flow to the group (assets) or settlement will result in an outflow of resources embodying economic benefits (liabilities), and the cost or fair value of it can be measured with reliability.

Refer to the accounting policy under the heading `Intangible fixed assets´ for the recognition of positive or negative goodwill resulting from a business combination.

An agreed possible adjustment to the purchase price that is contingent on future events is included in the purchase price if the adjustment is probable and the amount can be measured reliably. It is also possible that a previous estimate of the adjustment to the purchase price must be revised.

Such adjustments to the purchase price, that are recorded as changes in estimates, will also result in an adjustment to (positive or negative) goodwill. The adjusted goodwill is amortised prospectively from the date of the adjustment of the purchase price. Comparative figures are not adjusted.

Consolidation method

The consolidated financial statements are prepared by using uniform accounting policies for measurement and determination of result of the group.

In the consolidated financial statements, intragroup shareholdings, liabilities, receivables and transactions are eliminated. Also, the results on transactions between group companies are eliminated to the extent that the results are not realised through transactions with third parties outside the group and no impairment loss is applicable. For a transaction whereby the Company has a less than a 100% interest in the selling group company, the elimination from the group result is allocated pro rata to the minority interest based on the interest of the minority in the selling group company.

Subsidiaries are consolidated in full, whereby minority interest is presented separately within group equity. If losses to be allocated to the minority interest exceed the minority interest within equity of the consolidated entity, the difference, including any further losses, is fully charged to the majority shareholder, except to the extent that the minority shareholder has the obligation to, and is able to, compensate for the losses. The minority interest in the result is deducted from group result on a separate line item in the consolidated profit and loss account.

Principles for the translation of foreign currency

Transactions in foreign currencies

Transactions denominated in foreign currency are translated into the relevant functional currency of the group companies at the exchange rate applying on the transaction date.

Monetary assets and liabilities denominated in foreign currency are translated at the balance sheet date into to the functional currency at the exchange rate applying on that date. Translation gains and losses are taken to the profit and loss account in the period in which they arise. Exempted from this are exchange differences on monetary items that are part of a net investment in a foreign operation (see below).

Non-monetary assets and liabilities denominated in foreign currency that are measured based on historical cost, are translated into the functional currency at the exchange rates at the date of the transactions. Non-monetary assets and liabilities denominated in foreign currencies that are measured at current value, are translated into the functional currency at the exchange rates when the current value is determined. Exchange rate differences that arise from this translation are directly recognised in equity as part of the revaluation reserve.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into euros at exchange rates applying on the balance sheet date. Income and expenses of foreign operations are translated into euros at the exchange rate applying on the transaction date.

Translation gains and losses are taken to reserve for translation difference within equity. If a foreign operation is fully or partially sold, the respective amount is transferred from the reserve for translation difference to the profit and loss account.

Financial instruments

Financial instruments include investments in shares and bonds, trade and other receivables, cash items, loans and other financing commitments, derivative financial instruments, trade payables and other amounts payable. These financial statements contain the following financial instruments: loans and receivables (both purchased and issued), equity instruments, other financial liabilities and derivatives. The company did not identify embedded derivatives in its financial and non-financial contracts.

Financial instruments are initially stated at fair value, including discount or premium and directly attributable transaction costs. However, if financial instruments are subsequently measured at fair value through profit and loss, then directly attributable transaction costs are directly recognized in the profit and loss account at initial recognition.

After initial recognition, financial instruments are valued in the manner described below.

Loans granted and other receivables

Loans granted and other receivables are carried at amortised cost on the basis of the effective interest method, less impairment losses. The effective interest and impairment losses, if any, are directly recognised in the profit and loss account. Purchases and sales of financial assets that belong to the category loans granted and other receivables are accounted for at the transaction date.

Non current and current liabilities and other financial commitments

Non-current and current liabilities and other financial commitments are measured after their initial recognition at amortised cost on the basis of the effective interest rate method. The effective interest is directly recorded in the profit and loss account.

Redemption payments regarding non-current liabilities that are due next year, are presented under current liabilities.

Derivatives

Derivatives are used to hedge currency risks of transactions, loans on foreign currencies and future interests on long term loans. Derivatives are measured at fair value with recognition of all changes in value in the profit and loss account, except where hedge accounting is used to hedge the variability of future cash flows that affect the profit and loss account (cash flow hedge accounting).

Cash flow hedge

If cash flow hedge accounting is used, the effective portion of the fair value changes of the derivatives is initially recognised in the revaluation reserve. As soon as the expected future transactions lead to the recognition of gains or losses in the profit and loss account, the respective amounts are transferred from the revaluation reserve to the profit and loss account. If a hedged position in respect of an expected future transaction leads to the recognition in the balance sheet of a non-financial asset or a non-financial liability, the Company adjusts the cost of this asset by the hedging results. This is done through a transfer from the revaluation reserve of the results that have been deferred in this reserve until such time.

If a derivative no longer meets the conditions for hedge accounting, expires or is sold, or if the Company has decided to no longer apply hedge accounting, the hedging relationship is terminated.

The deferred gains or losses recognised at the time of the termination of the hedging relationship remain in equity until the expected future transaction takes place. If the transaction is no longer expected to take place, the deferred gain or loss on the hedge recognised in equity is transferred to the profit and loss account.

Impairment of financial assets

A financial asset that is not measured at (1) fair value with value changes reflected in the profit and loss account, or at (2) amortised cost or lower market value, is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, with negative impact on the estimated future cash flows of that asset, which can be estimated reliably. Objective evidence that financial assets are impaired includes significant financial difficulty of the issuer or obligor, breach of contract such as default or delinquency in interest or principal payments, granting to the borrower a concession that the Company would not otherwise consider, indications that a debtor or issuer will enter bankruptcy or other financial restructuring, the disappearance of an active market for that financial asset because of financial difficulties or observable data indicating that there is a measurable decrease in the estimated future cash flow, including adverse changes in the payment status of borrowers or issuers, indications that a debtor or issuer is approaching bankruptcy, and the disappearance of an active market for a security. Indicators for subjective evidence are also considered together with objective evidence of impairments, such as the disappearance of an active market because an entity's financial instruments are no longer publicly traded, a downgrade of an entity's credit rating or a decline in the fair value of a financial asset below its cost or amortised cost.

The entity considers evidence of impairment for financial assets measured at amortised cost (loans and receivables and financial assets that are held to maturity) both individually and on a portfolio basis. All individually significant assets are assessed individually for impairment. The individually significant assets that are not found to be individually impaired and assets that are not individually significant are then collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Company uses historical trends of the probability of default, the timing of collections and the amount of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate.

Impairment losses are recognised in the profit and loss account and reflected in an allowance account against loans and receivables or investment securities held to maturity. Interest on the impaired asset continues to be recognised by using the asset's original effective interest rate.

Impairment losses below (amortised) cost of investments in equity instruments that are measured at fair value through profit or loss, are recognised directly in the profit and loss account.

When, in a subsequent period, the amount of an impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in impairment loss is reversed through profit or loss (up to the amount of the original cost).

Offsetting financial instruments

A financial asset and a financial liability are offset when the entity has a legally enforceable right to set off the financial asset and financial liability and the company has the firm intention to settle the balance on a net basis, or to settle the asset and the liability simultaneously.

If there is a transfer of a financial asset that does not qualify for derecognition in the balance sheet, the transferred asset and the associated liability are not offset.

Intangible fixed assets

Intangible fixed assets are only recognised in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the cost of that asset can be measured reliably.

Intangible fixed assets acquired from third parties are valued at acquisition price less accumulated amortisation and, if applicable impairments. The accounting principles for the determination and recognition of impairments are included under the section impairments of fixed assets.

Intangible fixed assets are amortised following the straight-line method which is in accordance with the estimated useful life. The following amortization percentages are applied:

• Goodwill :	10 %
• Permits :	6.67 %
• Supplier relations:	8-14%
• Customer relationships	10%
• Land user rights :	2%-2.5%
• Patents :	12.5 %
• Trade names :	6.67 %
• Software :	20% - 33,3%

Goodwill

Goodwill represents the excess of the cost of the acquisition of the participating interest over the company's interest in the net realisable value of the assets acquired and the liabilities assumed of the acquired entity, less cumulative amortisation and impairment losses. Internally generated goodwill is not capitalised.

Goodwill paid upon the acquisition of foreign group companies and subsidiaries is translated at the exchange rates at the date of acquisition. The capitalised goodwill is amortised on a straight-line basis over an estimated useful life. In case the useful life cannot be estimated, goodwill is amortized in 10 years in accordance with article 386-3 Book 2 title 9 of the Dutch civil code.

Negative goodwill (interest in fair values of the identifiable assets and liabilities at the acquisition date is less than the cost of acquisition) is recognised as a separate accrual.

To the extent that negative goodwill relates to expected future losses and expenses that are identified in the acquisition plan and that can be determined reliably, that portion of the negative goodwill is credited to the profit and loss account when those future losses and expenses occur.

To the extent that negative goodwill relates to expected future losses and expenses that are identified in the acquisition plan and that can be determined reliably, and the expected losses and expenses are not recognised in the period in which they were expected, the portion of the negative goodwill that does not exceed the fair values of the identifiable non-monetary assets is systematically credited to the profit and loss account in proportion to the weighted average of the remaining useful life of the acquired depreciable fixed assets, and the portion that exceeds the fair values of the identifiable nonmonetary assets is immediately credited to the profit and loss account.

To the extent that negative goodwill does not relate to expected future losses and expenses that can be determined reliably at the acquisition date, the portion of the negative goodwill not exceeding the fair values of the identifiable non-monetary assets is systematically credited to the profit and loss account over the weighted average useful life of the acquired amortisable assets, and the portion that exceeds the fair values of the identifiable non-monetary assets is immediately credited to the profit and loss account.

In case of a full or partial sale of a participating interest, the positive goodwill that can be allocated to the sold part is written off proportionally (in case of capitalized goodwill) or reversed proportionally (in case of goodwill charged directly against shareholder equity) and is charged to the book result. In the latter case, a useful life of 10 years is assumed in determining the amount to be reversed.

Permits

The permits include agriculture, building and construction, declaration, certificate, license, emissions, environmental, feed handle materials and animal by-products, production and plant site, storage and treatment sites and water permits. Permits are stated at costs less accumulated amortization. The costs concern acquisition price. The permits are amortised on a straight-line basis over an estimated useful life of fifteen years. The estimated useful life is based on the lifetime of the specific permit.

Supplier relations

The category supplier relations consists of long-term relationships with raw material suppliers. Supplier relations are stated at costs less accumulated amortization. The costs concern acquisition price. The estimated useful life of these relations is based on the specific segment between 7 and 12 years.

Customer relationships

The category customer relationships consists of long-term relationships with customers. Customer relations are stated at costs less accumulated amortization. The costs concern acquisition price. The estimated useful life of these relationships is 10 years.

Land user rights

The land user rights are leaseholds in different countries where the company is located. Land user rights are stated at costs less accumulated amortization. The costs concern acquisition price. In accordance with the underlying contracts of these rights the useful life is determined between 40 and 50 years.

Patents

Patents are stated at costs less accumulated amortization. The costs concern acquisition price. The estimated useful life of the patents is determined on 8 years.

Trade names

The following trade names are recognized: Ecoson, Rendac, Sonac C3, Sonac Bone, Sonac Fat, Sonac Blood, Sonac Heparin, Rousselot and CTH. Tradenames are stated at costs less accumulated amortization. The costs concern acquisition price. The estimated useful life of these trade names is determined at 15 years.

Other intangible fixed assets

Other intangible fixed assets are stated at cost less accumulated amortisation and impairment losses. They relate to purchased software.

The capitalised amount is amortised on a straight-line basis. The estimated useful life of the this software is determined at 3-5 years.

Tangible fixed assets

Tangible fixed assets are recognised in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the cost of that asset can be measured reliably.

Land and buildings, Machinery and equipment, Other fixed operating assets, Fixed assets under construction are stated at cost, less accumulated depreciation and impairment losses.

The cost consists of the price of acquisition or manufacture, plus other costs that are necessary to get the assets to their location and condition for their intended use. The cost of self-constructed assets includes the cost of materials and consumables and other costs that can be directly allocated to the construction. The cost of construction furthermore includes a reasonable portion of the indirect costs and the interest on debts during the period of construction of the assets.

Government grants are deducted from the cost price of the assets to which the grants relate.

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each item of the tangible fixed assets. Land and Fixed assets under construction are not depreciated. Depreciation starts as soon as the asset is in use, and ends at decommissioning or divestment. The following depreciation percentages are applied:

• Buildings :	3.33-10%
• Machinery and equipment :	10-33.3%
• Other fixed operating assets :	6.67-33.3%

Maintenance expenditures are only capitalised when the maintenance leads to extension of the useful life of the asset. Costs of major maintenance and repairs are included in the book value of the tangible fixed assets (the so-called 'component approach')

Tangible fixed assets, for which the company and its group companies possess the economic ownership under a financial lease, are capitalised. The obligation arising from the financial lease contract is recognized as a liability. The interest included in the future lease instalments is charged to the profit and loss account during the term of the finance lease contract.

Assets that are taken out of service are stated at the lower of book value or net realisable value.

Financial fixed assets

Participating interest with significant influence

Participating interests where significant influence is exercised over the business and financial policy are valued according to the equity method on the basis of net asset value. If measurement at net asset value is not possible because the information required for this cannot be obtained, the participating interest is measured according to the visible equity.

The net asset value is calculated on the basis of the company's accounting policies.

If the company transfers an asset or a liability to a participating interest that is measured according to the equity method, the gain or loss resulting from this transfer is recognised to the extent of the relative interests of third parties in the participating interest (proportionate determination of result). Any loss that results from the transfer of current assets or an impairment of fixed assets is fully recognised. Results on transactions involving transfer of assets and liabilities between the company and its participating interests and mutually between participating interests are eliminated to the extent that these cannot be regarded as having been realized.

Participating interests with a negative net asset value are valued at nil. This measurement also covers any long-term receivables on the participating interests that are, in substance, an extension of the net investment. In particular, this relates to loans for which settlement is neither planned nor likely to occur in the foreseeable future. A share in the profits of the participating interest in subsequent years will only be recognised if and to the extent that the cumulative unrecognised share of loss has been absorbed. If the company fully or partially guarantees the debts of the relevant participating interest, or if has the constructive obligation to enable the participating interest to pay its debts (for its share therein), then a provision is recognized accordingly to the amount of the estimated payments by the company on behalf of the participating interest. This provision is recognized primarily to the debit of the receivables on the respective participating interest and for the remainder is presented under provisions.

Joint arrangements

Participating interests where the company exercises control along with other participants, such as in joint ventures, are valued according to the equity method on the basis of net asset value.

In case of contribution in or sale of assets by the company to a joint venture, the company recognizes the part of the result in the profit and loss account that corresponds to the relative share of the other participants in the joint venture. No result is recognised if the non-monetary assets contributed by the participants approximately equal each other in terms of type, use (same business activity) and fair value. Any unrecognised results are charged to the net asset value of the joint venture. Any losses on current assets or impairments of fixed assets are recognised immediately and in full.

In case of sale of assets by the joint venture to the company, the company recognizes its share in the profit or loss of the joint venture on that sale in its profit and loss account only when the asset is (re)sold to a third party. However, the company immediately recognises its share in losses on current assets or impairments of fixed assets.

Other financial fixed assets

Receivables from non-consolidated participating interests are initially measured at fair value plus directly attributable transaction costs. Subsequently these receivables are measured at amortised cost using the effective interest method, less impairment losses.

The accounting policies for other financial fixed assets are included under the heading 'Financial instruments'.

Dividends are accounted for in the period in which they are declared. Dividends from participating interests that are carried at cost, are recognised as income from participating interests (under financial income) in the period in which the dividends become payable.

Impairment of fixed assets

For tangible and intangible fixed assets an assessment is made as of each balance sheet date as to whether there are indications that these assets are subject to impairment. If there are such indications, then the recoverable value of the asset is estimated. The recoverable value is the higher of the value in use and the net realisable value. If it is not possible to determine the recoverable value of an individual asset, then the recoverable value of the cash flow generating unit to which the asset belongs is estimated.

If the carrying value of an asset is higher than the recoverable value, an impairment loss is recorded for the difference between the carrying value and the recoverable value. In case of an impairment loss of a cash flow generating unit, the loss is first allocated to goodwill that has been allocated to the cash flow generating unit. Any remaining loss is allocated to the other assets of the unit in proportion to their carrying values.

In addition an assessment is made on each balance sheet date whether there is any indication that an impairment loss that was recorded in previous years has decreased. If there is such indication, then the recoverable value of the related asset is estimated.

Reversal of an impairment loss that was recorded in the past only takes place in case of a change in the estimates used to determine the recoverable value since the recording of the last impairment loss. In such case, the carrying value of the asset is increased up to the amount of the estimated recoverable value, but not higher than the carrying value that would have applied if no impairment loss had been recorded in prior years for the asset.

An impairment loss of goodwill is not reversed in a subsequent period.

Disposal of fixed assets

Fixed assets available for sale are stated at the lower of their carrying amount and net realisable value.

Inventories

Raw materials and consumables are carried at the lower of cost, determined in accordance with the first-in, first-out (FIFO) principle, and market value.

(Semi-) finished products are stated at the lower of cost, on the basis of weighted average prices comprising cost of used raw materials and consumables and the other costs directly attributable to manufacture, and market value. In addition, part of the indirect costs and the interest on debts over the period of manufacture are attributed to the cost of manufacture. Trade discounts, rebates and similar indemnities received or to be received in connection with purchasing are deducted from the sales price.

Goods available for sale are stated at the lower of cost and market value. Cost includes the purchase price and expenditures incurred in acquiring the inventories and bringing them to their existing location and condition.

The valuation of inventories includes possible impairments that arise on the balance sheet date.

Trade and other receivables

The accounting policies applied for the valuation of trade and other receivables are described under the heading 'Financial instruments'.

Cash and cash equivalents

Cash and cash equivalents are stated at nominal value. If cash and cash equivalents are not readily available, this fact is taken into account in the measurement.

Cash and cash equivalents denominated in foreign currencies are translated at the balance sheet date in the functional currency at the exchange rate ruling at that date. Reference is made to the accounting policies for foreign currencies.

Shareholders' equity

Financial instruments that are designated as equity instruments by virtue of the economic reality are presented under shareholders´ equity. Payments to holders of these instruments are deducted from the shareholders' equity as part of the profit distribution.

Financial instruments that are designated as a financial liability by virtue of the economic reality are presented under liabilities. Interest, dividends, income and expenditure with respect to these financial instruments are recognized in the profit and loss as financial income or expense.

Minority interests

Minority interests are measured at net fair value of the acquirer´s share in identifiable assets, liabilities and contingent liabilities according to the company´s valuation principles.

Provisions

General

A provision is recognised if the following applies:

•	the Company has a legal or constructive obligation, arising from a past event; and
•	the amount can be estimated reliably;
•	it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Rights and obligations resulting from contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent, are not recognised. Recognition occurs when the consideration to be received is not (or no longer) in balance with the performance obligation of the Company and this imbalance has adverse effects for the Company.

If all or part of the payments that are necessary to settle a provision are likely to be fully or partially compensated by a third party upon settlement of the provision, then the compensation amount is presented separately as an asset.

Provisions are measured at the nominal value of the best estimate of the expenditures that are expected to be required to settle the liabilities and losses.

Provision for restructuring costs

A provision for restructuring costs is established if a detailed restructuring plan has been formalised at the balance sheet date and, no later than on the preparation date of the financial statements, a valid expectation of implementation of the plan has been raised for those persons that will be affected by the restructuring. A valid expectation applies when implementation of the restructuring has started, or when the main elements of the plan have been announced to persons that will be affected by the restructuring. The provision for restructuring costs includes the costs that are directly associated with the restructuring, which are not associated with the ongoing activities of the company.

Provision for other risks and costs

The provision for other risks and costs relates to provisions for claims, legal costs and possible settlements, mostly towards purchasers of goods and services. A provision for claims, disputes and lawsuits is established when it is expected that the company will be sentenced in legal proceedings. The provision represents the best estimate of the amount for which the claim can be settled, including the costs of litigation.

Non Current liabilities

The valuation of long-term liabilities is explained under the heading 'Financial instruments'.

Current liabilities

The valuation of current liabilities is explained under the heading `Financial instruments´.

Revenue recognition

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, the amount of the revenue can be determined reliably, recovery of consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing involvement with the goods. The transfer of risks and benefits varies according to the conditions of the relevant sales contract. The respective costs of these goods are recognized in the same period. The most common terms under which goods and services are delivered concern Delivered Duty Paid (DDP) and Insurance, Cost, Freight (CIF).

Government grants

Government grants are initially recognized in the balance sheet as deferred income in the category other receivables when there is reasonable assurance that they will be received and the company will comply with the conditions associated with the grant. Grants that compensate the company for expenses incurred are recognized in the profit and loss on a systematic basis in the same period in which the expenses are recognized. Grants that compensate the company for the cost of an asset are recognized in the profit and loss account on a systematic basis over the useful life of the asset.

Costs of outsourced work and other external costs

This concerns costs that are directly attributable to net turnover and consists of direct selling and freight expenses, direct production expenses, energy and water expenses attributable to the production of finished goods, repair and maintenance expenses related to the production equipment and other expenses directly attributable to net turnover.

Share in result of participating interests

The share in the result of participating interests consists of the share of the group in the results of these participating interests, determined on the basis of the accounting principles of the group. Results on transactions, where the transfer of assets and liabilities between the group and the nonconsolidated participating interests and mutually between non-consolidated participating interests themselves, are not recognized as they can be deemed as not realized.

The results of participating interests acquired or sold during the financial year are stated in the group result from the date of acquisition or until the date of sale respectively.

Employee benefits/pensions

Employee benefits are charged to the profit and loss account in the period in which the employee services are rendered and, to the extent not already paid, as a liability on the balance sheet. If the amount already paid exceeds the benefits owed, the excess is recognised as a current asset to the extent that there will be a reimbursement by the employees or a reduction in future payments by the company.

The company recorded EUR 22,720 of unfunded pension, jubilee and postretirement benefit plan obligations (2018: EUR 20,643).

The company has retirement, jubilee and pension plans covering a substantial number of its domestic and foreign employees. Most retirement benefits are provided by the company under separate finalpay non-contributory and contributory defined benefit and defined contribution plans for all salaried and hourly employees who meet service and age requirements. Although various defined benefit formulas exist for employees, generally these are based on length of service and earnings patterns during employment.

The company recognizes the over-funded or under-funded status of the company's defined benefit plans as an asset or liability in the company's balance sheet, with changes in the funded status recognized through comprehensive income in the year in which they occur. This liability or asset is measured on the basis of actuarial measurement principles generally accepted under US GAAP. The measurement of the defined benefit plans in these financial statements are in accordance with ASC 715. This is one of the possibilities for the measurement in accordance with the RJ 271 guidelines. ASC 715 embodies the US GAAP guidance on Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans.

Leasing

The company may enter into financial and operating leases. A lease contract where the risks and rewards associated with ownership of the leased property are transferred substantially all to the lessee, is referred to as a financial lease. All other leases are classified as operating leases. In classifying leases, the economic reality of the transaction is decisive rather than its legal form.

Financial leases

If the company acts as lessee in a financial lease, the leased asset (and the related liability) is recognized in the balance sheet at the start of the lease period at its fair value or, if lower, at the present value of the minimum lease payments. Both amounts are determined at the start of the lease. The interest rate applied for the calculation of present value is the implicit interest rate. If it is not practically possible to determine this interest rate, then the marginal interest rate is used. The initial direct costs are included in the initial measurement of the leased property.

The accounting principles for the subsequent measurement of the leased asset are described under the heading "Tangible fixed assets". If there is no reasonable certainty that the company will become the owner of a leased asset at the end of the lease period, the asset is depreciated over the shorter of the lease period or the useful life of the asset.

The minimum lease payments are split into interest expense and redemption of the lease liability. The interest charges are allocated during the lease term to each period in such a way that this results in a constant periodic interest rate over the remaining net liability with regard to the financial lease. Conditional lease payments are recorded as an expense in the period in which the conditions for payment are being met.

Operating leases

If the company acts as lessee in an operating lease, then the leased asset is not capitalised. Lease payments regarding operating leases are charged to the profit and loss account on a straight-line basis over the lease period.

Interest

Interest income is recognized in the profit and loss account on an accrual basis, using the effective interest rate method. Interest expenses and similar charges are recognised in the period to which they belong.

Corporate income tax

Corporate income tax comprises the current and deferred corporate income tax payable and receivable for the reporting period. Corporate income tax is recognized in the profit and loss account except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the financial year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to the tax payable in respect of previous years.

If the carrying values of assets and liabilities for financial reporting purposes differ from their values for tax purposes (tax base), this results in temporary differences. A provision for deferred tax liabilities is recognized for taxable temporary differences. For deductible temporary differences, unused loss carry forwards and unused tax credits, a deferred tax asset is recognized, but only in so far as it is probable that taxable profits will be available in the future for offset or compensation.

Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.

For taxable temporary differences related to group companies, foreign branches, associates and interests in joint ventures, a deferred tax liability is recognized unless the company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

For deductible temporary differences regarding group companies, foreign branches, associates and interests in joint ventures, a deferred tax asset is only recognized in so far as it is probable that the temporary difference will reverse in the foreseeable future and that taxable profit will be available to offset the temporary difference. Deferred tax assets and liabilities are stated at nominal value.

Cash flow statement

The cash flow statement is not a part of these financial statements in accordance with RJ 360.104.

Please refer to the financial statements of Darling Ingredients Inc. for the consolidated cash flow statement. The financial statements of Darling Ingredients Inc. are available on the internet site of Darling Ingredients Inc.

Determination of fair value

The fair value of a financial instrument is the amount for which an asset can be sold or a liability settled, involving parties who are well informed regarding the matter, willing to enter into a transaction and are independent from each other.

•	The fair value of listed financial instruments is determined on the basis of the exit price.
•	The fair value of non-listed financial instruments is determined by discounting the expected cash flows to their present value, applying a discount rate that is equal to the current risk-free market interest rate for the remaining term, plus credit and liquidity surcharges.
•	The fair value of derivatives that do not involve exchange of collateral is determined by discounting the cash flows to present value, applying the relevant swap curve plus credit and liquidity surcharges.

Related parties

Transactions with related parties (refer to note 23) are disclosed if they have not been entered into at arm's length. Disclosed are the nature and amounts involved with such transactions, and other information that is deemed necessary for an insight into the transactions.

Subsequent events

Events that provide further information on the actual situation at the balance sheet date and that appear before the financial statements are being prepared, are recognised in the financial statements. Events that provide no information on the actual situation at the balance sheet date are not recognised in the financial statements. When those events are relevant for the economic decisions of users of the financial statements, the nature and the estimated financial effects of the events are disclosed in the financial statements.

1 Intangible fixed assets

Movements in intangible fixed assets were as follows:

	Goodwill	Permits	Supplier relations	Customer relationships	Land user rights	Patents	Trade names	Other intangible fixed assets	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January 2019:
• Purchase price	2,165	139,983	123,850	4,100	11,215	3,200	23,200	21,872	329,585
• Accumulated amortisation and impairment	(207)	(46,795)	(63,217)	(2,049)	(1,496)	(1,999)	(7,898)	(12,425)	(136,086)
• Carrying amount	1,958	93,188	60,633	2,051	9,719	1,201	15,302	9,447	193,499
Changes in carrying amount:
• Investments	81	-	643	-	2,293	-	-	1.260	4,277
• Acquisition	-	-	-	-	-	-	-	-	-
• Impairments	-	-	-	-	-	-	-	-	-
• Disposals	-	-	-	-	-	-	-	-	-
• Discontinued consolidations	-	-	-	-	-	-	-	-	-
• Exchange rate differences	12	119	109	-	76	-	-	52	368
• Amortisation	(224)	(9,306)	(13,483)	(407)	(416)	(397)	(1,671)	(4,323)	(30,227)
• Balance	1,827	84,001	47,902	1,644	11,672	804	13,631	6,436	167,917
Balance as at 31 December 2019:
• Purchase price	2,246	139,983	124,493	4,100	13,508	3,200	23,200	23,132	333,862
• Accumulated amortisation and impairment	(419)	(55,982)	(76,591)	(2,456)	(1,836)	(2,396)	(9,569)	(16,696)	(165,945)
• Carrying amount	1,827	84,001	47,902	1,644	11,672	804	13,631	6,436	167,917

2 Tangible fixed assets

Movements in tangible fixed assets were as follows:

	Land and Buildings	Machinery and equipment	Other fixed operating assets	Fixed assets under construction	Idle assets	Total
	EUR	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January 2019:
• Purchase price	308,346	540,734	61,248	62,268	198	972,794
• Accumulated amortisation and impairment	(55,558)	(274,405)	(36,561)	-	-	(366,524)
• Carrying amount	252,788	266,329	24,687	62,268	198	606,270
Changes in carrying amount:
• Investments	19,058	58,683	7,577	31,364	-	116,682
• Acquisitions	-	-	-	-	-	-
• Impairments	-	-	-	-	-	-
• Disposals	(405)	(3,593)	(409)	(106)	(198)	(4,711)
• Discontinued consolidations	(8)	(32)	(123)	-	-	(163)
• Reclass from other categories	(523)	9,318	1,376	(10,827)	656	-
• Capitalized interest	-	-	-	1,567	-	1,567
• Investment grants	-	-	-	-	-	-
• Exchange rate differences	137	18	5	89	-	249
• Depreciation	(12,940)	(70,848)	(8,229)	-	-	(92,017)
• Balance	258,107	259,875	24,884	84,355	656	627,877
Balance as at 31 December 2019:
• Purchase price	326,021	592,834	66,761	84,355	656	1,070,627
• Accumulated depreciation and impairment	(67,914)	(332,959)	(41,877)	-	-	(442,750)
• Carrying amount	258,107	259,875	24,884	84,355	656	627,877

Fixed assets under construction includes interest of EUR 1,567 (2018: EUR 567) capitalised during the construction period using interest rates between 2.8% and 3.5%. Refer to Note 9 for a disclosure on pledges. Guarantors have not pledged individual tangible fixed assets. Machinery and equipment include EUR 106 (2018: EUR 289) of assets under capital leases agreements. The company has committed itself for various capital expenditure commitments. Reference is made to note 12.

3 Financial fixed assets

Movements in financial fixed assets were as follows:

	Nonconsolidated shareholdings	Loans to participants	Other receivables	Deferred tax assets	Total
	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January 2019:
• Cost price	23,986	-	11,886	13,066	48,938
• Accumulated depreciation and impairment	-	-	-	-	-
• Carrying amount	23,986	-	11,886	13,066	48,938
Changes in carrying amount:
• Loans granted	-	45,000	2,465	-	47,465
• Loans repaid	-	-	(298)	-	(298)
• Share in result of shareholdings	2,553	-	-	-	2,553
• Dividend received	(1,516)	-	-	-	(1,516)
• Exchange rate differences	-	-	(30)	(14)	(44)
• Recognition deferred tax assets	-	-	-	2,098	2,098
• Utilization of deferred tax assets	-	-	-	(5,420)	(5,420)
• Reclass to short-term	-	-	(3,625)	-	(3,625)
Balance at 31 December 2019	25,023	45,000	10,398	9,730	90,151
Balance as at 31 December 2019:
• Cost price	25,023	45,000	10,398	9,730	90,151
• Accumulated depreciation and impairment	-	-	-	-	-
• Carrying amount	25,023	45,000	10,398	9,730	90,151

The breakdown of the non-consolidated shareholdings is noted below:

Name	Country	Share in issued capital
ASAP s.r.o.	Prague, Czech Republic	40%
ASAVET a.s.	Prague, Czech Republic	40%
Best Hides GmbH	Eching-Weixerau, Germany	40%
Berndt GmbH	Oberding, Germany	21.5%
Berndt Besitz GmbH & Co KG	Oberding, Germany	21.5%
Berndt Verwaltungs GmbH	Vellmar, Germany	21.5%

Loans to participants refers to a loan to Darling US Inc. The average interest rate the company charged on the loan amounts to 1.348%.

Other receivables mainly relate to a receivable from the Dutch government amounting to EUR 5,214 (2018: EUR 3,228) and the long term part of Brazilian tax receivables of EUR 2,242 (2018: EUR 3,235). The residual terms of the other receivables are all longer than 1 year and no interest is charged to the borrower.

The deferred tax assets relate to the recognized unused tax loss carry-forwards and deductible temporary differences. It is expected that EUR 5,689 (2018: EUR 6,858) of the deferred tax assets will be used within one year. EUR 41,919 of net operating losses across various tax jurisdictions have not been recognized (2018: EUR 47,542).

4 Inventories

	2019	2018
	EUR	EUR
Raw materials and consumables	29,003	19,673
Semi-finished products	62,414	56,662
Finished products	114,072	117,910
Other inventories	41,861	38,012
Provision for obsolete	(26,607)	(33,591)
	220,743	198,666

Refer to Note 9 for a disclosure on pledges. The valuation of inventories on the basis of the market value does not materially differ from the valuation above. Other inventories reported mainly relate to inventories of spare parts and chemicals held.

Of the provision, EUR 15,651 (2018: EUR 14,145) relates to spare parts, included in Other inventories, whereas EUR 1,471 (2018: EUR 653) relates to (semi-) finished products. The movements in the provision for obsolete are as follows:

	2019	2018
	EUR	EUR
Balance at 1 January	33,591	28,518
Additions, charged to the profit and loss account	8,011	16,620
Exchange rate differences	(562)	(754)
Write-offs, charged against the provision	(14,433)	(10,793)
Balance at 31 December	26,607	33,591

The cost of inventories recognised as an expense in the profit and loss account, amounts to EUR 1,268 (2018: EUR 1,293). The cost of sales can be specified as follows:

	2019	2018
	EUR	EUR
Raw materials and consumables	450,685	480,253
Wages and social security charges	204,544	189,195
Other attributable operating expenses	623,439	606,402
Net change in inventories	(10,612)	17,498
Cost of sales	1,268,056	1,293,348

5 Trade and other receivables

	2019	2018
	EUR	EUR
Trade receivables	173,687	163,192
Taxes receivable	25,585	24,109
Other receivables	36,657	36,497
Intercompany financing account and other receivables affiliated companies	36,808	23,761
	272,737	247,559

The trade and other receivables are due within one year. The average interest rate the company charged on the intercompany financing amounts to 1.14% (2018: 1.08%).

Trade receivables

	2019	2018
	EUR	EUR
Amortised cost of outstanding receivables	178,446	167,690
Less: Provision for bad debts	(4,759)	(4,498)
	173,687	163,192

Refer to Note 9 for a disclosure on pledges.

Taxes receivable

	2019	2018
	EUR	EUR
Income tax receivable	3,788	5,108
VAT receivable	21,333	17,185
Other taxes receivable	464	1,816
	25,585	24,109

Other receivables

	2019	2018
	EUR	EUR
Prepayments and accrued income	28,027	21,903
Other receivables third parties	6,830	10,896
Derivatives	1,799	3,662
Interest receivable third parties	1	36
	36,657	36,497

Prepayments and accrued income

	2019	2018
	EUR	EUR
Prepaid invoices	17,768	13,952
Sales to be invoiced	10,259	7,951
	28,027	21,903

6 Cash and cash equivalents

	2019	2018
	EUR	EUR
Funds at hand	61	65
Bank accounts	39,737	61,231
Deposits	23,203	29,058
	63,001	90,354

Cash and cash equivalents are available on demand.

7 Group equity

Minority interests

	2019	2018
	EUR	EUR
Minority interests:
• Rousselot (Da'an) Gelatin Co. Ltd	757	702
• Haripro SpA	8,327	8,733
• Rousselot (Zheijang) Gelatin Co. Ltd	2,458	(669)
• Rousselot (Whenzou) Gelatin Co. Ltd	16,286	16,206
• Rousselot (Guangdong) Gelatin Co. Ltd	15,827	17,172
• Hide Service GmbH	-	1,533
• Darling Ingredients Germany Holding GmbH (10%)	3,028	3,016
	46,683	46,693

The remaining 10% of the shares of Darling Ingredients Germany Holding GmbH is owned by the parent company of the company, Darling International Netherlands B.V.

For a detailed explanation of the share of the company in group equity, reference is made to note 28 Shareholders' equity in the separate financial statements.

The movements in minority interests are as follows:

	2019	2018
	EUR	EUR
Balance as at 1 January	46,693	64,019
Discontinued consolidations	(1,512)	(11,849)
Third-party share in result	7,821	3,988
Dividend distributions	(6,632)	(8,374)
Translation differences	313	(1,091)
Balance as at 31 December	46,683	46,693

8 Provisions

Movements in provisions can be specified as follows:

	Deferred tax liabilities	Pension Provision *Note A	Other benefit plans	Restructuring provision	Other risk and costs	Total
	EUR	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January 2019 Changes:	97,793	20,643	64	2,166	4,606	125,272
• Provisions formed during the year	703	2,070	11	-	436	3,220
• Provisions used during the year	(16,339)	-	-	(222)	(1,843)	(18,404)
• Provisions released during the year	-	-	-	-	-	-
• Exchange rate differences	58	7	-	(190)	-	(125)
Balance as at 31 December 2019	82,215	22,720	75	1,754	3,199	109,963

Note A: Refer to the note on pension provisions below for an overview of the movements in the pension provision.

Provision for deferred tax liabilities

The provision for deferred tax liabilities comprises the tax effect of the taxable temporary differences between the profit determination for financial reporting purposes and for tax purposes. Deferred taxes with a residual term of one year or less amount to EUR 17,802 (2018: EUR 12,267).

Pension provision/Employee benefits

The company has retirement and pension plans covering a substantial number of its domestic and foreign employees. Most retirement benefits are provided by the company under separate final-pay non-contributory and contributory defined benefit and defined contribution plans for all salaried and hourly employees (excluding those covered by union-sponsored plans) who meet service and age requirements. Although various defined benefit formulas exist for employees, generally these are based on length of service and earnings patterns during employment.

The company maintains defined contribution plans both domestically and at its foreign operations. The company recognizes the over-funded or under-funded status of the company's defined benefit postretirement plans as an asset or liability in the company's balance sheet, with changes in the funded status recognized through comprehensive income in the year in which they occur. The following table sets forth the plans' funded status for the company's domestic and foreign defined benefit plans and amounts recognized in the company's consolidated balance sheets based on the measurement date 31 December 2019 and 31 December 2018.

1. Change in projected benefit obligations

	2019	2018
	EUR	EUR
As at January 1	(31,649)	(33,190)
Service costs	(1,140)	(1,204)
Interest costs	(629)	(626)
Employee contributions	(59)	(61)
Plan amendments	-	-
Plan curtailments	39	398
Plan settlements	807	280
Actuarial gains/losses	(2,996)	1,337
Benefits paid	1,153	1,204
Other	(155)	-
Exchange rate changes	(231)	213
	(34,860)	(31,649)

2. Change in plan assets

	2019	2018
	EUR	EUR
As at January 1	11,008	10,836
Plan settlements	(807)	(280)
Actual return on plan assets	937	(145)
Employer contributions	1,875	1,848
Employee contributions	59	61
Benefits paid	(1,153)	(1,247)
Other	-	-
Exchange rate changes	221	(65)
	12,140	11,008

3. Funded status

	2019	2018
	EUR	EUR
Funded status	(22,720)	(20,643)
	(22,720)	(20,643)

Amounts recognized in the consolidated balance consists of:

	2019	2018
	EUR	EUR
Non current liability	(21,772)	(19,636)
Current liability	(948)	(1,007)
	(22,720)	(20,643)

4. Amounts recognized in the Other actuarial gains and losses consists of:

	2019	2018
	EUR	EUR
Net actuarial loss	(4,733)	(2,576)
Prior service costs	(254)	(282)
Exchange rate changes	3	(26)
Gross amount recognized	(4,984)	(2,884)

	2019	2018
	EUR	EUR
Projected benefit obligation	(34,860)	(31,649)
Accumulated benefit obligation	(31,818)	(28,436)
Fair value of the plan assets	12,140	11,008

5. Net pension costs includes the following components

	2019	2018
	EUR	EUR
Service costs	1,140	1,204
Interest costs	629	626
Expected return on plan assets	(366)	(358)
Curtailment and settlement gain	21	(181)
Net amortization and deferral	289	308
	1,713	1,599

6. Amounts recognized in Other actuarial gains and losses for the year ended

	2019	2018
	EUR	EUR
Actuarial loss / (gain) recognized during the period	1,913	(799)
Exchange rate changes	1	(8)
Prior service costs arising during the period	-	-
Amortization of curtailment	(23)	(23)
Amortization of settlement	(252)	(218)
Exchange rate changes	(44)	(332)
Net amount recognized	(1,595)	(1,380)

The company made required and tax deductible discretionary contributions to its foreign pension plans in 2019 of approximately EUR 628 (2018: EUR 628).

The estimated amount that will be amortized from Other actuarial gains and losses into net periodic pension cost in 2019 is as follows:

	2019	2018
	EUR	EUR
Net actuarial loss	(367)	(258)
Prior service costs	(29)	(29)
	(396)	(287)

7. Weighted average assumptions used to determine benefit obligation

	2019	2018
	EUR	EUR
Discount rate	1.11%	2.02%
Rate of compensation increase	2.52%	2.72%

8. Weighted average assumptions used to determine net periodic benefit costs for the employee benefit pension plans

	2019	2018
	EUR	EUR
Discount rate	2.02%	1.98%
Rate of increase in future compensation levels	2.72%	2.85%
Expected long-term rate return on assets	3.24%	3.23%

The plans' assets are principally invested under insurance contracts arrangements which have an expected long-term rate of returns of approximately 2.4%.

The investments objectives have been established in conjunction with a comprehensive review of the current and projected financial requirements. The primary investment objectives are: 1) to have the ability to pay all benefit and expense obligations when due; 2) to maximize investment returns within reasonable and prudent levels of risk in order to minimize contributions; and 3) to maintain flexibility in determining the future level of contributions. Investments results are the most critical element in achieving funding objectives; however, contributions are used as a supplemental source of funding as deemed appropriate.

The following table presents fair value measurements for the company's defined benefit plans' assets are categorized using the fair value hierarchy under FASB authoritative guidance.

	Total fair value	Quoted prices in Active markets for identical assets Level 1	Significant Other observable inputs Level 2	Significant Unobservable Inputs Level 3
	EUR	EUR	EUR	EUR
Balance as at 31 December 2019
Fixed income
• Long term	1,119	1,119	-	-
• Short term	604	604	-	-
Equity securities
• International equities	1,207	1,207	-	-
• Insurance contracts	9,210	-	5,197	4,013
Total	12,140	2,930	5,197	4,013

The majority of the foreign pension assets are held under insurance contracts where the investment risk for the accumulated benefit obligation rests with the insurer, which the company has no specific detailed asset information.

The fair value measurement of plan assets using significant unobservable inputs (level 3) changed due to the following:

	2019	2018
	EUR	EUR
Balance as at 1 January	2,911	2,815
Unrealized gains relating to instruments still held in the reporting period	1,102	96
Balance as at 31 December	4,013	2,911

9. Estimated future contributions and benefit payments

The company's funding policy for employee benefit pension plans is to contribute annually not less than the minimum amount required nor more than the maximum amount that can be deducted for income tax purposes. Contributions are intended to provide not only for benefits attributed to service to date but also for those expected to be earned in the future. Based on current actuarial estimates, the company expects to make payments of approximately EUR 1,185 for 2020.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid.

Year ending	Pension benefits
2020	1,185
2021	1,884
2022	1,491
2023	1,480
2024	2,292
Next 5 years	11,943

Provision for restructuring

The provision for restructuring of EUR 1,754 (2018: EUR 2,166) relates to a restructuring plan in Argentina and Germany. The provision covers the estimated costs for outplacement and redundancy. The total restructuring provision is due within one year as at December 31, 2019 (2018: EUR 975).

Provision for other risks and costs

The provision for other risks and costs pertains provisions for various purposes by the different group entities such as provision for legal costs, claims etc. In the fiscal year an amount of EUR 436 has been expensed related to legal costs and claims. The part of the provision, which is due within one year, amounts to EUR 235 as at December 31, 2019 (2018: EUR 2,084).

The provision in respect of claims, disputes and lawsuits relates to disputes involving the company and/or its group companies. Although the outcome of these disputes cannot be predicted with certainty, and these are also contested by the company and/or its subsidiaries, it is expected, partly based on legal advice, that the disputes will probably have a negative effect on the consolidated financial position.

9 Long-term liabilities

	2019	2018
	EUR	EUR
Debt to credit institution (Revolver Loan)	0	28,000
EURO bond loan	508,737	507,883
Debts to other credit institutions	264	952
Capital lease obligations	0	17
Derivatives	0	446
Other long term debts	1,561	2,135
	510,562	539,433

Movements in long-term liabilities can be specified as follows:

	Debt to credit institution	EURO bond loan	Debt to other credit	Capital lease obligation	Derivative	Other long term debt	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January 2019	28,000	507,883	952	17	446	2,135	539,433
Changes:
• Issuance of loans	165,000	-	-	-	-	1,399	166,399
• Repayments	(193,000)	-	(688)	-	-	(12)	(193,700)
• Capitalized deferred loan costs	-	-	-	-	-	-	-
• Amortized deferred loan costs	-	854	-	-	-	-	854
• Exchange rate differences	-	-	-	-	-	-	-
• Reclass to short-term	-	-	-	(17)	(446)	(1,961)	(2,424)
Balance as at 31 December 2019	0	508,737	264	0	0	1,561	510,562

Debt to credit institution

For purposes of financing the VION Ingredients acquisition and the future working capital of Darling Ingredients Inc (including Darling International NL Holdings B.V. and its subsidiaries) a Credit Agreement, dated as of 6 January 2014 was entered into and was amended and extended on 18 December 2017. Darling International NL Holdings B.V. is a borrower under the Credit Agreement. The JP Morgan Chase Bank serves as the "Administrative Agent" under the Credit Agreement.

Under the Credit Agreement a Revolving Credit Facility of USD 1 billion is available to Darling Ingredients Inc including Darling International NL Holdings B.V. as a borrower. As per 31 December 2019 Darling International NL Holdings has no outstanding debt under this Revolving Credit Facility (2018: EUR 28 million). The average interest rate on the loan amounts to 2%. The expected duration of the revolver credit facility is longer than one year.

The company and all material subsidiaries in the Netherlands, Belgium, Germany and Brazil are guarantors under Darling Ingredients Inc.´s second and amended credit agreement dated 6 January 2014 (and amended and extended on 18 December 2017) and granted a security interest in certain of its assets as described below:

•

Belgium

―	Pledge on Business Mandate provided by each Belgian guarantor
―	Pledge of receivables owned by each Belgian guarantor

―	Share pledge over shares of the Belgian guarantors otherwise owned by a Loan Party

•

Brazil

―	Share pledge over the shares of the Brazilian guarantors otherwise owned by a Loan Party
―	Pledge of receivables owned by the Brazilian guarantors

•

Germany

―	Share pledge over the shares of the Germany guarantors otherwise owned by a Loan Party
―	Assignment of receivables owned by the German guarantors

•	Netherlands

―	Share pledge over the shares of the Dutch guarantors otherwise owned by a Loan Party
―	Pledge of trade receivables (undisclosed), insurance receivables and intercompany receivables owned by the Dutch guarantors
―	Pledge of movable assets owned by the Dutch guarantors in the Netherlands
―	Pledge of Intellectual Property rights owned by the Dutch guarantors

Of the debts mentioned above, an amount of EUR 0 has a remaining term of more than five years (2018: EUR 0).

Covenants

The Amended Credit Agreement as well the 3.625% Indenture contains financial covenants as well as other covenants. These covenants are monitored on consolidated Darling Ingredients Inc level. As per end December 2019 the company believes it is in compliance with all financial covenants under the Amended Credit Agreement, as well as all of the other covenants contained in the Amended Credit Agreement, the 5.25% Indenture and the 3.625% Indenture.

EURO bond loan

Effective 3 May 2018 (€ 264,5 million) and 8 June 2018 (€ 250,5 million) Darling Global Finance B.V. repaid a bond loan and replaced this by a new € 515 million bond with a 3.625% coupon, due 2026. The fair value of the bond loan amounts to € 543 million as at December 31, 2019.

Debts to other credit institutions

Debts to other credit institutions relate to local (bilateral) credit facilities for two German companies.

Other long term debts

Other long term debt relate to long term tax liabilities for a Brazilian and a Chinese company.

10 Current liabilities

	2019	2018
	EUR	EUR
Trade payables third parties	153,513	130,484
Other interest bearing short-term debts	29,289	4,135
Derivatives	1,310	1,335
Other taxes and social security payables	21,525	21,382
Other payables affiliate companies	7,356	3,559
Other payables third parties	106,817	108,003
	319,810	268,898

Interest bearing short-term debts relate to bank accounts and local (bilateral) credit facilities / debt and for certain debts guarantees and/or collateral has been provided.

Other taxes and social security payables

	2019	2018
	EUR	EUR
Income tax payables	7,522	5,128
Social security payables	4,601	5,637
VAT payable	3,484	4,705
Wage tax payable	2,168	2,905
Other tax payables	3,750	3,007
	21,525	21,382

Other payables affiliated companies

The average interest rate the company charged on the other payables to affiliated companies amounts to 1.84% (2018: 1,76%).

Other payables third parties

	2019	2018
	EUR	EUR
Personnel	36,167	30,573
Production	8,242	4,280
Sales	4,883	4,041
Utilities	6,910	8,064
Office costs	2,319	2,643
Repair and maintenance	5,105	3,710
Interest	2,319	2,358
Purchases	17,589	15,109
Accrued capital expenditures	4,509	4,203
Payables to minority shareholder	1,485	605
Freight costs	7,321	6,628
Sales bonuses	446	375
Audit fee and advisory	885	723
Insurance	1,771	1,532
Government grants	0	3,500
Customer advance payments	3,637	14,383
Other	3,229	5,276
	106,817	108,003

The accruals include an amount of EUR 0 (2018: EUR 0) with a residual term of more than one year.

11 Financial instruments

General

During the normal course of business, the companies use various financial instruments that expose it to currency, credit and interest rate risks. To control these risks, the companies have instituted a policy including a code of conduct, procedures and policies that are intended to limit the risks of unpredictable adverse developments in the financial markets and thus for the financial performance of the companies.

Regarding the currency, interest rate and credit risk, a separate central Treasury respectively Credit Risk department is established.

The company applies derivatives, including interest rate swaps , forward exchange- and option contracts to control its risks. The company does not trade in financial derivatives.

Credit risk

Credit risk arises principally from the company loans and receivables presented under financial fixed assets, trade and other receivables. The maximum amount of credit risk that the company incurs is EUR 328,135 (2018: 259,446), consisting of

	2019	2018
Loans and receivables presented as financial fixed assets	55,398	11,887
Trade and other receivables	272,737	247,559
Total	328,135	259,446

The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. There is no material concentration of credit risk on customer nor geographical level.

Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. The company's analysis includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the management; these limits are reviewed quarterly. Customers that fail to meet the company's benchmark creditworthiness may transact with the company only on a prepayment basis.

Interest rate risk

The current finance structure is driven by the US ultimate parent shareholder. Approximately 99% of the gross debt of the company has a fixed interest rate. There is no active interest rate hedging at the level of the company.

In case interest rates as of 31 December 2019 would increase with 1%, leaving all other assumptions constant, the impact on total interest expenses would be almost zero.

Currency risk

The company is exposed to currency risk in the following areas:

a) transactional exposures, such as forecasted sales and purchases, and on-balance-sheet receivables or payables resulting from such transactions,

b) translation exposure of foreign currency of the company for the debts and deposits and

c) translation exposure of equity invested in consolidated foreign entities of the company.

The company applies foreign exchange forward contracts and foreign exchange options to control its risks at fluctuations, against the functional currency of the relevant subsidiary, in the US Dollar, Australian Dollar, Chinese Yuan Renminbi, British Pound Sterling, Japanese Yen Argentine Pesos, Brazilian Real and Polish Zloty. For material currency exposures, the treasury policies instruct operating companies to hedge 100% of committed exposure and a layer hedging program for forecasted exposure where underlying commercial contracts are in place (mainly for collagen sales).

At year-end 2019, the notional value and fair value of foreign exchange currency contracts are noted below. The fair value of these foreign exchange currency contracts are accounted for as derivative assets or derivative liabilities. The fair value of these derivatives are included in the balance sheet and listed below.

Derivative assets

	Notional Value	Fair value
Brazilian Real (BRL)	972,328	1,905
Australian Dollar (AUD)	104	0
Euro (EUR)	392	319
Japanese Yen (JPY)	(204,824)	28
Polish Zloty (PLN)	26,647	10
Total		2,262

Derivative liabilities

	Notional Value	Fair value
Brazilian Real (BRL)	139,858	(741)
Euro (EUR)	20,950	(565)
Australian Dollar (AUD)	-328	(2)
British Pounds (GBP)	94	(2)
Total		(1,310)

Liquidity risk

The company monitors its cash position by using successive annual budgets, quarterly forecasts and daily/weekly cash reports. The management ensures that the cash position is sufficient to meet the company's financial obligations towards creditors and to stay within the limits of its loan covenants. The company applies foreign currency forward contracts to control its risk.

Fair value

Aside from the derivatives and the EUR Bond Loan, the fair value of the financial instruments stated on the balance sheet, including receivables, securities, cash and cash equivalents, current liabilities, long term liabilities and long term receivables is approximately equal to their carrying amount.

12 Off-balance sheet assets and liabilities

Claims

Several claims have been lodged against the company and/or group companies. For those claims of which the outcome can be predicted with certainty, a provision has been recognized on the balance sheet. For claims filed of which the outcome cannot be predicted with any certainty, it is assumed - partly on the basis of legal advice - that these will not have any material unfavourable impact on the consolidated financial position.

Liability

Pursuant to Section 2:403 of the Dutch Civil Code and article 264 (3) No.2 and 264b of the German Commercial Code, the company has issued a liability declaration for all the Dutch consolidated and almost all German participating interests. These amount to:

	2019	2018
	EUR	EUR
Provisions	73,876	44,428
Long term liabilities to external companies	510,701	511,053
Short term liabilities to external companies	155,533	87,023
Short term liabilities to affiliate companies	21,004	12,326
Total	761,114	654,830

Guarantees and securities

The total amount of bank guarantees at year-end 2019 is EUR 10,253 (2018: EUR 15,504). No securities at year-end 2019 (2018: EUR 37).

Long-term financial commitments

Long-term unconditional commitments have been entered into in property lease, vehicle operational lease, other operational lease. The operating leasing costs are recognized on a straight-line basis in the profit and loss account over the lease period. The remaining term can be specified as follows:

	2019	2018
	EUR	EUR
No more than 1 year	5,348	6,841
Between 1 and 5 years	9,061	7,213
Longer than 5 years	684	987
Net turnover	15,093	15,041

The future minimum sublease payments expected to be received under non-cancellable subleases at the balance sheet date amounted to nil.

The minimum lease payments and their present value resulting from finance lease contracts are as follows:

	Lease payments	Present value
	EUR	EUR
No more than 1 year	17	17
Between 1 and 5 years	-	-
Longer than 5 years	-	-
	17	17

Purchase commitments

At 31 December 2019, The company has purchase commitments for EUR 448 (2018: EUR 11,043). EUR 424 of the total commitments has a term within one year (2018: EUR 10,923). There are no commitments with a term longer than 5 years. The company has committed itself to invest EUR 45,854 (2018: EUR 31,623) for various investments.

13 Net turnover

The breakdown of net turnover by operating segments is as follows:

	2019	2018
	EUR	EUR
Food Ingredients	885,188	868,752
Feed Ingredients	336,347	334,191
Fuel Ingredients	236,389	227,813
Net turnover	1,457,924	1,430,756

The breakdown of net turnover by geographical region is as follows:

	2019	2018
	EUR	EUR
Netherlands	190,224	197,655
Belgium	81,418	77,111
Germany	161,331	161,732
Italy	30,088	34,093
Great Britain	26,473	27,903
Other EU member countries	313,836	318,697
Other European countries	41,856	43,361
United States	99,129	65,907
Mexico	986	677
Canada	1,248	779
China	191,864	192,488
Other Asia	137,990	124,652
Poland	42,671	45,702
Czech Republic	8,360	11,180
Russia	24,916	23,978
Brazil	47,248	37,892
Other countries global	58,286	66,949
Net turnover	1,457,924	1,430,756

14 Other operating income

Other operating income concerns income the company generated from activities that are not part of the regular production and trading activities. Income from these activities mainly relate to grants received, services rendered, income generated from disposals of fixed assets and other operating income.

15 Cost of outsourced work and other external costs

	2019	2018
	EUR	EUR
Selling costs	72,302	70,582
Production costs	118,690	117,266
Energy and water	108,217	107,550
Repair and maintenance	75,560	76,021
Freight	120,980	117,346
General costs	62,077	60,960
	557,826	549,724

16 Wages and salaries

Staffing level

During the 2019 financial year, the average number of staff employed in the group, converted into full-time equivalents, amounted to 4,570 people (2018: 4,570 people), of which 3,722 (2018: 3,746) were employed outside the Netherlands. This staffing level (average number of staff) can be divided into the following staff categories:

	2019	2018
Production Personnel	2,580	2,603
General and administrative	531	517
Purchasing and collection	538	567
Marketing & Sales	194	190
Quality	86	94
Environment	99	94
Maintenance	488	460
R&D	54	45
	4,570	4,570

17 Social security and pension charges

	2019	2018
	EUR	EUR
Social security charges	37,255	35,589
Pension costs	6,509	5,899
	43,764	41,488

Of the pension costs of EUR 6,509 (2018: EUR 5,899), EUR 5,373 (2018: EUR 4,695) relates to defined contribution plans which is not included in the note of the defined benefit pension provision.

18 Amortisation and depreciation on intangible and tangible fixed assets

	2019	2018
	EUR	EUR
Depreciation of tangible fixed assets
Land and buildings	12,940	13,505
Machinery and equipment	70,848	67,009
Other fixed operating assets	8,229	9,523
	92,017	90,037
Amortization of intangible fixed assets
Goodwill	224	75
Permits	9,306	9,340
Supplier relations	13,483	13,023
Customer relations	407	408
Land user rights	416	305
Patents	397	398
Trade names	1,671	1,632
Software	4,323	4,136
	30,227	29,137
	122,244	119,354

19 Extraordinary expenses

Extraordinary expenses amount to EUR 0 (2018 EUR 10,330). In 2018 these expenses related to the to the production stop of the Argentina plant for an amount of EUR 10,330. These costs were recognized in the wages and salaries (EUR 7,192) and Cost of outsourced work and other external expenses (EUR 3,138).

20 Interest income and similar income

	2019	2018
	EUR	EUR
Banks	1,301	1,962
Interest on loans to shareholders and group companies	165	10,301
Other financial income	4,467	4,574
	5,933	16,837

21 Interest charges and similar charges

	2019	2018
	EUR	EUR
Banks	2,779	9,295
Interest on loans to shareholders and group companies	-	2,154
Interest on non-current loans to external parties	17,123	21,328
Other financial expense	5,813	29,287
	25,715	62,064

The other financial expenses mainly relate to currency exchange losses and losses on foreign exchange contracts. In 2018 other financial expenses included also a loss on the derivative related to the termination of the interest agreement with the US ultimate parent shareholders.

22 Tax on result from ordinary activities

The company is a subsidiary within a fiscal unity for Dutch corporate income tax purposes. The parent company of the fiscal unity is Darling International Netherlands B.V. Each of the companies recognises the portion of corporate income tax that the relevant company would owe as an independent taxpayer, taking into account the tax facilities applicable to the company.

The following companies were included in the Dutch Fiscal Unity during the year 2019: Darling International Netherlands B.V., Darling International NL Holdings B.V., Rendac B.V., Rendac Son B.V., Sonac Son B.V., IT Services B.V., Darling Ingredients Nederland B.V., Rousselot B.V., Ecoson B.V., HR Service Nederland B.V., Harimex B.V., Hepac B.V., Ligital B.V., Darling 5Q B.V., Sonac B.V., Sonac Harlingen B.V., Darling Ingredients International Holding B.V., Darling Ingredients International Rendering and Specialties B.V. (former name: ERS Holding B.V.), Sonac Functional Products B.V., Sonac Burgum B.V., Sonac Eindhoven B.V., Sonac Loenen B.V., Sonac Vuren B.V., Darling Ingredients Nederland Holding B.V., Best Commodity Trade B.V., BV CTH Groep, CTH B.V., Nederlandse Darmenhandel Nevada B.V., Darling Global Finance B.V. and Sonac Almere B.V. In December 2019 the following entities were merged within the fiscal unity and thus are excluded from the year end list: Rendac B.V., Harimex B.V., Ligital B.V., Darling 5Q B.V., Sonac B.V. and Nederlandse Darmenhandel Nevada B.V.

The applicable weighted average tax rate is 29.9% (2018: 41.4%), whereby the weighted average has been calculated based on the results before taxes and the nominal tax rates in the various tax jurisdictions. The tax expense recognized in the profit and loss account for 2019 amounts to EUR 23,265 or 27.6% of the result before tax (2018: EUR -3,067 or -91.8% of the result before tax). The numerical reconciliation between the applicable and the effective tax rate is as follows:

	2019	%
	EUR
Nominal tax rate in the Netherlands	21,115	25.0
Effect of different foreign tax rates	4,113	4.9
	25,228	29.9
Non-deductible expenses	1,148	1.4
Non-recognizable income	-1,128	-1.3
Non-deductible interest	166	0.2
Tax credits and incentives	-3,849	-4.6
Withholding taxes	2,303	2.7
Change in valuation of deferred tax assets	-142	-0.2
Other tax effects	-1,628	-1.9
Tax rate changes	1,167	1.4
Tax on result / Effective tax rate	23,265	27.6

23 Transactions with related parties

Transactions with related parties occur when a relationship exists between the company, its participating interests and their directors and key management personnel. Transactions are transfers of resources, services or obligations, regardless whether anything has been charged. There were no transactions with related parties that were not on a commercial basis. The company has a loan from the shareholders. Please refer to Note 9 for further information.

As part of its ordinary activities, the company buys and sells goods and services from and to various related parties in which the company has an interest of 50% or less. Generally, these transactions are conducted on a commercial basis under comparable conditions that apply to transactions with third parties. The remuneration of the managing directors is included in Note 35.

24 Auditor's fees

The following fees were charged by KPMG to the company, its subsidiaries and other consolidated companies, as referred to in Section 2:382a (1) and (2) of the Netherlands Civil Code.

	KPMG Accountants N.V. 2019	Other KPMG network 2019	Total KPMG 2019
	EUR	EUR	EUR
Audit of the financial statements	95	263	358
Other audit engagements	-	53	53
Tax-related advisory services	-	-	-
Other non-audit services	-	-	-
	95	316	411
	2018	2018	2018
	EUR	EUR	EUR
Audit of the financial statements	108	265	372
Other audit engagements	-	48	48
Tax-related advisory services	-	-	-
Other non-audit services	-	-	-
	108	313	421

The fees mentioned in the table for the audit of the financial statements 2019 relate to the total fees for the audit of the financial statements 2019, irrespective of whether the activities have been performed during the financial year 2019.

25 Subsequent events

In December 2019, a novel coronavirus disease ("COVID-19") was reported and in January 2020, the World Health Organization ("WHO") declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

Many of the initial economic effects of the early stages of the global COVID-19 outbreak and the government imposed movement and work restrictions designed to slow the pace of the outbreak occurred in the last month. To date, these restrictions have not had a material impact on the Company's operations, as the Company operates in industries that are deemed "critical" and "essential" under the rules imposing these restrictions. In addition, the Company has implemented operational guidelines throughout the Company's organization consistent with the applicable governmental and regulatory policies in the geographies the Company operates intended to protect the Company's employees and prevent the spread of the virus in the Company's workplace, and to date, all of the Company's facilities are operational.

The Company believes the severity and duration of the COVID-19 pandemic is uncertain and such uncertainty will likely continue throughout the remainder of the Company's current fiscal year. Among the items that could have a significant impact on the Company's future results is a reduction in the Company's raw material supply due to disruptions in the operations of the Company's third- party suppliers. Accordingly, while to date the Company has experienced no material negative effects on the Company's business and results of operations as a result of the current COVID-19 outbreak, the situation remains dynamic and subject to rapid and possibly material change, including but not limited to changes that may materially affect the operations of the Company's supply chain partners and finished product customers, which ultimately could result in material negative effects on the Company's business and results of operations.

Company balance sheet as at 31 December 2019

In thousands of euros

(before result appropriation)

		2019		2018
		EUR	EUR	EUR	EUR
Fixed assets
Financial fixed assets	26	1,188,210		1,125,359
			1,188,210		1,125,359
Current assets
Trade and other receivables	27	19,626		17,371
			19,626		17,371
			1,207,836		1,142,730
Shareholders' equity	28
Issued capital		-		-
Share premium reserve		729,481		729,481
Other comprehensive income		(6,800)		(821)
Foreign currency translation reserve		(20,152)		(20,643)
Other Legal reserves		21,079		19,286
Other reserves		(324,106)		(326,475)
Unappropriated result		55,906		4,162
			455,408		404,990
Long-term liabilities	29		515,000		543,000
Current liabilities	30		237,428		194,740
			1,207,836		1,142,730

Company profit and loss account for the year ended 31 December 2019

In thousands of euros

		2019	2018
		EUR	EUR
Share of result of participating interests after tax	33	68,434	33,781
Other result after tax		(12,528)	(29,619)
Net result		55,906	4,162

Notes to the 2019 company financial statements

General

The company financial statements are part of the 2019 financial statements of the Darling International NL Holdings B.V. group. For the company profit and loss account, use has been made of the exemption pursuant to Section 2:402 of the Dutch Civil Code.

If no further explanation is provided of items in the company balance sheet and the company profit and loss account, please refer to the notes to the consolidated balance sheet and profit and loss account.

The company financial statements are presented in thousands of euros and rounded as such.

Reporting period

These financial statements have been prepared for a reporting period of one year.

Accounting policies

The principles for the valuation of assets and liabilities and the determination of the result are the same as those applied to the consolidated profit and loss account, with the exception of the following principles.

Financial instruments

In the company financial statements, financial instruments are presented on the basis of their legal form. Refer to the notes of the consolidated financial statements.

Participating interests in group companies

Participating interests in group companies are accounted for in the company financial statements according to the equity accounting method on the basis of net asset value. For details we refer to the accounting policy for financial fixed assets in the consolidated financial statements.

Share of result of participating interests

This item concerns the company´s share of the profit or loss of these participating interests. In so far as gains or losses on transactions involving the transfer of assets and liabilities between the company and its participating interests or between participating interests themselves can be considered unrealized, they have not been recognized.

26 Financial fixed assets

	2019	2018
	EUR	EUR
Participating interests in group companies	1,187,377	1,124,431
Deferred tax assets	833	928
	1,188,210	1,125,359

Movements in financial fixed assets were as follows:

	Participating interests in group companies	Deferred tax assets	Total
	EUR	EUR	EUR
Balance as at 1 January 2019:
• Cost of acquisition	1,124,431	928	1,125,359
• Accumulated depreciation and impairment	-	-	-
• Carrying amount	1,124,431	928	1,125,359
Changes during the financial year:
• Share in result of participations	68,434	-	68,434
• Dividends received from participations	-	-	-
• Actuarial gains and losses	(1,595)	-	(1,595)
• Foreign currency impact of cashflow hedges	(4,384)	-	(4,384)
• Exchange rate differences	491	-	491
• Utilization of deferred tax assets	-	(95)	(95)
Changes	62,946	(95)	62,851
• Balance as at 31 December 2019 / costs of acquisition	1,187,377	833	1,188,210

Participating interests in group companies

As at 31 December 2019 no shareholdings had a negative equity value and as a result no provision for negative participation values has been formed per 31 December 2019.

Deferred tax assets

The deferred tax assets relate to the recognised unused tax loss carry-forwards and deductible temporary differences. It is expected that EUR 150 (2018: EUR 147) of the deferred tax assets will be offset within one year.

27 Trade and other receivables

	2019	2018
	EUR	EUR
Taxes receivable	5,579	6,216
Intercompany financing account and other receivables affiliated companies	14,047	11,155
	19,626	17,371

The trade and other receivables are due within one year. The average interest rate the company charged on the Intercompany financing amounts to 1.14% (2018: 1.08%).

28 Shareholders' equity

	Issued capital	Share premium	Other comprehensive income	Foreign currency translation reserve	Other legal Reserves	Other reserves	Unappropriated result	Total 2019	Total 2018
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance as at 1 January	-	729,481	(821)	(20,643)	19,286	(326,475)	4,162	404,990	312,209
Changes in financial year:
• Capital contribution	-	-	-	-	-	-	-	-	94,000
• Direct equity movements	-	-	-	-	-	-	-	-	-
• Appropriation of result	-	-	-	-	-	4,162	(4,162)	-	-
• Result of the year	-	-	-	-	-	-	55,906	55,906	4,162
• Additions to legal reserves	-	-	-	-	1,793	(1,793)	-	-	-
• Dividend paid	-	-	-	-	-	-	-	-	-
• Translation differences	-	-	-	491	-	-	-	491	(8,054)
• Changes in OCI	-	-	(5,979)	-	-	-	-	(5,979)	2,673
Balance as at 31 December	-	729,481	(6,800)	(20,152)	21,079	(324,106)	55,906	455,408	404,990

Issued capital

The company's authorised capital amounts to EUR 100. Of the issued capital an amount of EUR 100 is not recognized as paid up.

Share premium

The share premium concerns the income from the issuing of shares in so far as this exceeds the nominal value of the shares (above par income). On 31 December 2016, the parent company Darling International Netherlands B.V. contributed an amount of EUR 125,000 to Darling International NL Holdings B.V. as a share premium contribution. On 18 December 2018 Darling International Netherlands B.V. contributed an additional amount of EUR 94,000 to Darling International NL Holdings B.V. as a share premium contribution.

The amount of EUR 729,481 (year-end 2018: EUR 729,481) of the share premium reserve can be considered as freely distributable share premium as referred to Section 2 of the Dutch Civil Code.

Other comprehensive income

The other comprehensive income is related to changes in the pension provision and the changes in cashflow hedges.

Foreign currency translation reserve

Exchange gains and losses arising from the translation of foreign operations from functional to reporting currency are accounted for in this statutory reserve. In the case of the sale of a participating interest, the associated accumulated exchange differences are taken to other reserves.

Legal reserves

Other legal reserves consist of a statutory reserve for participating interests.

The legal reserve for participating interests, which amounts to EUR 21,079 (2018: EUR 19,286), pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference between the participating interests' retained profit and direct changes in equity, as determined on the basis of the parent company's accounting policies, and the share thereof that the parent company may distribute. As to the latter share, this takes into account any profits that may not be distributable by participating interests that are Dutch limited companies based on the distribution tests to be performed by the management of those companies. The statutory reserve is determined on an individual basis.

Appropriation of result prior year

The General Meeting of Shareholders, held on 24 June 2019, has approved to add the result of 2018, amounting to EUR 4,162 to the other reserves.

Unappropriated result

The General Meeting of Shareholders will be asked to approve the following appropriation of the 2019 result after taxation: an amount of EUR 55,906 to be added to the Other reserves. The result after tax for 2019 is included under unappropriated result in shareholders' equity.

29 Long-term liabilities

	2019	2018
	EUR	EUR
Debt to credit institution (revolver loan)	0	28,000
Debt to group and affiliate companies	515,000	515,000
	515,000	543,000

Debt to credit institution

Movements were as follows:

	2019	2018
	EUR	EUR
Balance as at 1 January	28,000	-
Borrowings during the year	165,000	28,000
Repayments during the year	(193,000)	-
Long term portion as at 31 December	0	28,000

As per 31 December 2019 Darling International NL Holdings no outstanding debt under this Revolving Credit Facility (2018: EUR 28,000). The average interest rate on the loan amounts to 2%.

Covenants

The Amended Credit Agreement as well the 3.625% Indenture contains financial covenants as well as other covenants. These covenants are monitored on consolidated Darling Ingredients Inc level. As per end December 2019 the company believes it is in compliance with all financial covenants under the Amended Credit Agreement, as well as all of the other covenants contained in the Amended Credit Agreement, the 5.25% Indenture and the 3.625% Indenture.

Debt to group and affiliate companies

Debt to group and affiliate companies relates to loans received from group companies for the financing of the working capital of Darling Ingredients Inc (including Darling International NL Holdings B.V. and its subsidiaries). Movements were as follows:

	2019	2018
	EUR	EUR
Balance as at 1 January	515,000	515,000
Repayments during the year	-	(515,000)
Loans received during the year	-	515,000
	515,000	515,000

On 3 May 2018 a new intercompany loan between Darling International NL Holdings BV and Darling Global Finance BV is issued. The proceeds from this loan are used to refinance the existing loan. The residual time is more than 5 years with an ultimate repayment date of 15 May 2026. The average interest rate is amounted to 3.625%.

30 Current liabilities

	2019	2018
	EUR	EUR
Debt to group and affiliate companies	234,421	191,694
Accruals related to interest, tax and other accruals	3,007	3,046
	237,428	194,740

31 Financial instruments

General

During the normal course of business, the company uses various financial instruments that expose it to currency, credit and interest rate risks. To control these risks, the company has instituted a policy including a code of conduct, procedures and policies that are intended to limit the risks of unpredictable adverse developments in the financial markets and thus for the financial performance of the companies.

Regarding the currency, interest rate and credit risk, a separate central Treasury respectively Credit Risk department is established.

The company applies derivatives, including interest rate swaps and forward exchange contracts to control its risks. The company does not trade in financial derivatives.

Credit risk

Credit risk arises principally from the company loans and receivables presented under financial fixed assets, trade and other receivables. The maximum amount of credit risk that the company incurs is EUR 19,626 (2018: EUR 17,370), which solely consists of trade and other receivables.

The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. There is no material concentration of credit risk on customer nor geographical level.

Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. The company's analysis includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the management; these limits are reviewed quarterly. Customers that fail to meet the company's benchmark creditworthiness may transact with the company only on a prepayment basis.

Interest rate risk

The current finance structure is driven by the US ultimate parent shareholder. Approximately 99% of the gross debt of the company has a fixed interest rate. There is no active interest rate hedging at the level of the company.

In case interest rates as of 31 December 2019 would increase with 1%, leaving all other assumptions constant, the impact on total interest expenses would be near to zero.

Currency risk

The company is exposed to currency risk in the following areas:

a) translation exposure of foreign currency of the company for the debts and deposits and

b) translation exposure of equity invested in consolidated foreign entities of the company.

The company applies forward exchange contracts to control its risks at fluctuations, against the functional currency of the relevant subsidiary, in the US Dollar, Australian Dollar, Chinese Yuan Renminbi, British Pound Sterling, Japanese Yen, Argentine Pesos, Brazilian Real and Polish Zloty. For material currency exposures, the treasury policies instruct operating companies to hedge 100% of committed exposure and a portion of forecasted exposure and a layer hedging program for forecasted exposure where underlying commercial contracts are in place (mainly for collagen sales).

Liquidity risk

The company monitors its cash position by using successive annual budgets, quarterly forecasts and daily/weekly cash reports. The management ensures that the cash position is sufficient to meet the company's financial obligations towards creditors and to stay within the limits of its loan covenants. The company applies foreign currency forward contracts to control its risk.

Fair value

Aside from the derivatives, the fair value of the financial instruments stated on the balance sheet, including receivables, securities, cash and cash equivalents, current liabilities, long term liabilities and long term receivables is approximately equal to their carrying amount.

32 Off-balance sheet assets and liabilities

Tax entity

The company is a subsidiary within a fiscal unity for Dutch corporate income tax purposes. The parent company of the fiscal unity is Darling International Netherlands B.V. Each of the companies recognises the portion of corporate income tax that the relevant company would owe as an independent taxpayer, taking into account the tax facilities applicable to the company. The company is jointly and separate liable to tax liabilities of the Dutch fiscal unity.

Liability

Pursuant to Section 2:403 of the Dutch Civil Code and article 264 (3) No.2 and 264b of the German Commercial Code, the company has issued a liability declaration regarding the consolidated participating interests. Reference is made to note 12 of the financial statements.

33 Share of result of participating interest after tax

This concerns the share of the company in the result of its participating interests. The total amount of EUR 68,434 (2018: EUR 33,781) relates to group companies.

34 Number of employees

During the 2019 financial year, the average number of staff employed in Darling International NL Holdings B.V., converted into full-time equivalents, amounted to zero (2018: zero).

35 Remuneration of managing directors

The emoluments, including pension costs as referred to in Section 2:383(1) of the Netherlands Civil Code, charged in the financial year to the company and group companies amounted to EUR 1,863 (2018: EUR 1,719) for managing directors.

36 Subsequent events

In December 2019, a novel coronavirus disease ("COVID-19") was reported and in January 2020, the World Health Organization ("WHO") declared it a Public Health Emergency of International Concern. On 28 February, 2020, the WHO raised its assessment of the COVID- 19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on 11 March, 2020, the WHO characterized COVID-19 as a pandemic.

Many of the initial economic effects of the early stages of the global COVID-19 outbreak and the government imposed movement and work restrictions designed to slow the pace of the outbreak occurred in the last month. To date, these restrictions have not had a material impact on the Company's operations, as the Company operates in industries that are deemed "critical" and "essential" under the rules imposing these restrictions. In addition, the Company has implemented operational guidelines throughout the Company's organization consistent with the applicable governmental and regulatory policies in the geographies the Company operates intended to protect the Company's employees and prevent the spread of the virus in the Company's workplace, and to date, all of the Company's facilities are operational. The Company believes the severity and duration of the COVID-19 pandemic is uncertain and such uncertainty will likely continue throughout the remainder of the Company's current fiscal year. Among the items that could have a significant impact on the Company's future results is a reduction in the Company's raw material supply due to disruptions in the operations of the Company's third-party suppliers. Accordingly, while to date the Company has experienced no material negative effects on the Company's business and results of operations as a result of the current COVID-19 outbreak, the situation remains dynamic and subject to rapid and possibly material change, including but not limited to changes that may materially affect the operations of the Company's supply chain partners and finished product customers, which ultimately could result in material negative effects on the Company's business and results of operations.

37 List of consolidated shareholdings

Ownership percentage (direct and indirect combined) is 100% unless stated otherwise.

•	Darling Ingredients Germany Holding GmbH (90%), Belm-Icker, Germany () / (**)
•	Darling Global Finance B.V., Best, the Netherlands
•	Darling Ingredients International Holding B.V., Best, the Netherlands
•	Sonac Loenen B.V., Loenen, the Netherlands
•	Hepac B.V., Loenen, the Netherlands
•	Haripro SpA (50%), Spilamberto, Italy
•	Harimex do Brazil Ltda, Brazil
•	Darling Ingredients Nederland B.V. , Son, the Netherlands
•	Best Commodity Trade B.V., Son, the Netherlands
•	Rousselot B.V., Son, the Netherlands
•	Sonac Eindhoven B.V., Eindhoven, the Netherlands
•	Sonac Harlingen B.V., Harlingen, the Netherlands
•	Sonac Vuren B.V., Vuren, the Netherlands
•	Global Ceramic Materials Ltd, Stoke-on-Trent, United Kingdom
•	China Millers Ltd, Stoke-on-Trent, United Kingdom
•	IT Services B.V., Son, the Netherlands
•	Sonac Son B.V., Son, the Netherlands
•	HR-Service Nederland B.V., Son, the Netherlands
•	Sonac Burgum B.V., Sumar, the Netherlands
•	Ecoson B.V., Son, the Netherlands
•	Darling Ingredients International Rendering and Specialties B.V., Son, the Netherlands
•	Rendac Son B.V., Son, the Netherlands
•	Sonac Functional Products B.V., Vuren, the Netherlands
•	Sonac do Brasil Indústria e Comércio de subproduto animal Ltda, Brazil
•	Schmalzbaron Handels GmbH, Austria (in liquidation)
•	Sonac Australia PTY, Ltd, Nundah, Australia
•	Darling (Shanghai) Management Co., Ltd, Shanghai, China
•	Darling Ingredients Belgium Holding BVBA, Denderleeuw, Belgium
•	Sonac België BVBA, Denderleeuw, Belgium
•	Sonac Gent BVBA, Gent, Belgium
•	Sonac Transport BVBA, Gent, Belgium
•	Sobel Luxembourg Sarl, Hunsdorf, Luxembourg
•	Rousselot SAS, Courbevoie, France
•	Rousselot (Wenzhou) Gelatin Co. Ltd (70%), Qiancang, China
•	Rousselot Angoulême SAS, Angoulême, France
•	Rousselot Isle Sur La Sorgue SAS, Isle Sur La Sorgue, France
•	Rousselot Japan KK, Tokyo, Japan
•	Rousselot GmbH (D), Düsseldorf, Germany
•	Rousselot (M) Sdn Bhd, Kuala Lumpur, Malaysia
•	Rousselot Gelatin SL, Cervia de Ter (Girona), Spain
•	Rousselot Argentina SA, Hurlingham, Argentina
•	Rousselot (Guangdong) Gelatin Co. Ltd (75%), Guangdong, China
•	Rendac BVBA, Denderleeuw, Belgium

•	Rendac Transport BVBA, Denderleeuw, Belgium
•	Rendac C.E.S. s.a., Hunsdorf, Luxembourg
•	Rendac UDES SPRL, Ciney, Belgium
•	DenTrans BVBA, Belgium
•	Rendac UDES Transport SPRL, Ciney, Belgium
•	Rousselot (Da'an) Gelatin Co. Ltd (75%), Da'an, China
•	Rousselot (Zhejiang) Gelatin Co. Ltd (70%), Qiancang, China
•	Rousselot Gelatinas do Brasil Ltda, Amparo, Brasil
•	Rousselot BVBA, Gent, Belgium
•	Sonac (China) Biology Co. Ltd, Wuhan, China
•	Zhejiang Sonac Biotechnology Co. Ltd, Zhejiang, China
•	Qionglai Sonac Biotechnology Co. Ltd, Qionglai, China
•	Sonac (Luohe) Biotechnology Co. Ltd, Luohe, China
•	Changchun Sonac Biotechnology Co. Ltd, Changchun, China
•	Siping Sonac Biotechnology Co. Ltd, Siping, China
•	Sonac (Guangdong) Biotechnology Co. Ltd, Guangdong, China
•	B.V. CTH Groep, Almere, the Netherlands
•	CTH B.V., Almere, the Netherlands
•	Nevada Darmen- und Schlachtnebenprodukte Handels GmbH, Bad Bentheim, Germany
•	Triperia CTH Espana SL, Burgos, Spain
•	CTH US Inc., Mukwonago, United Stated
•	Hunan Teijsen Casings & Food Co. Ltd, Changsha, China
•	CTH België BVBA, Kalmthout, Belgium
•	CTH GmbH, Holdorf, Germany () / (**)
•	CTH Porto - Industria Alimentar, Unipessoal Lda, Vila do Conde, Portugal
•	Sonac Bad Bramstedt GmbH, Bad Bramstedt, Germany (*)
•	Sobel GmbH, Belm-Icker, Germany () / (**)
•	LARU GmbH, Bottrop, Germany (*)
•	SNP Handels- und Beteiligungsgesellschaft mbH, Belm-Icker, Germany () / (**)
•	Treuhand SNP Icker GmbH, Germany
•	Sonac Lingen GmbH, Lingen, Germany (*)
•	Rendac Lingen GmbH, Lingen, Germany (*)
•	Sonac Kiel GmbH, Kiel, Germany (*)
•	Sonac Mering GmbH, Mering, Germany (*)
•	Kanzler GmbH, Grossalmerode, Germany (*)
•	Rendac Jagel GmbH, Jagel, Germany (*)
•	Rendac Rotenburg GmbH, Rotenburg, Germany (*)
•	Rendac Icker GmbH & Co KG, Belm-Icker, Germany (**)
•	Sonac Gelsenkirchen GmbH, Gelsenkirchen, Germany () / (**)
•	Sonac Elsholz GmbH, Elsholz, Germany (*)
•	Sonac Erolzheim GmbH, Erolzheim, Germany (*)
•	Sonac Versmold GmbH, Belm-Icker, Germany (*)
•	MD Entsorgungsgesellschaft für Schlachtnebenprodukte mbH, Belm-Icker, Germany (*)
•	Sonac Bergheim GmbH, Frohnleiten, Austria (in liquidation)
•	Sonac Briinen GmbH, Hamminkeln, Germany () / (**)
•	Sonac Osetnica Sp. z o.o, Chojnow, Poland

•	Sanrec GmbH, Belm-Icker, Germany (***)
•	Sonac Usnice Sp. z o.o, Sztum, Poland
•	Sonac Lubien Kujawski Sp. z o.o, Kujawski, Poland
•	Darling Ingredients Nederland Holding B.V., Best, the Netherlands
•	Sonac Almere B.V., the Netherlands

^(*) using exemption regulation according to article 264 Abs. 3 German Commercial Code (HGB)
^(**) using exemption regulation according to article 264b German Commercial Code (HGB)
^(***) using exemption rule for the preparation of a consolidated financial statement in accordance with article 291 Germany Commercial Code (HGB)

29 May 2020

N.C.B.-weg 10, 5681 RH Best,

The Board of Directors:

R.C. Stuewe

J. B. Phillips

J. M.I.M. van der Velden

J.A.C.M. Roijmans

M.A.D.M. Beerendonk

Adopted by the general meeting date 23 June 2020

Other information

Independent auditor's report

To: the General Meeting of Darling International NL Holdings B.V.

Report on the accompanying financial statements

Our opinion

We have audited the financial statements 2019 of Darling International NL Holdings B.V., based in Best.

In our opinion the accompanying financial statements give a true and fair view of the financial position of Darling International NL Holdings B.V. as at 31 December 2019 and of its result for 2019 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

The financial statements comprise:

1.	the consolidated and company balance sheet as at 31 December 2019;
2.	the consolidated and company profit and loss account for the year ended 31 December 2019;
3.	the consolidated statement of comprehensive income for the year ended 31 December 2019; and
4.	the notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the 'Our responsibilities for the audit of the financial statements' section of our report.

We are independent of Darling International NL Holdings B.V. in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the 'Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten' (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the 'Verordening gedrags- en beroepsregels accountants' (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Report on the other information included in the annual report

In addition to the financial statements and our auditor's report thereon, the annual report contains other information that consists of:

―	Management report;
―	other information pursuant to Part 9 of Book 2 of the Dutch Civil Code;

Based on the following procedures performed, we conclude that the other information:

―	is consistent with the financial statements and does not contain material misstatements;
―	contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.

The Board of directors is responsible for the preparation of the other information, including the director's report in accordance with Part 9 of Book 2 of the Dutch Civil Code, and other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.

Description of the responsibilities for the financial statements

Responsibilities of the Board of Directors for the financial statements

The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Directors is responsible for such internal control as the Board of Directors determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to errors or fraud.

As part of the preparation of the financial statements, the Board of Directors is responsible for assessing the company's ability to continue as a going concern. Based on the financial reporting framework mentioned, the Board of Directors should prepare the financial statements using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose events and circumstances that may cast significant doubt on the company's ability to continue as a going concern in the financial statements.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud during our audit.

Misstatements can arise from fraud or errors and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

A further description of our responsibilities for the audit of the financial statements is located at the website of de 'Koninklijke Nederlandse Beroepsorganisatie van Accountants' (NBA, Royal Netherlands Institute of Chartered Accountants) at: http://www.nba.nl/ENG algemeen 01

This description forms part of our independent auditor's report.

Eindhoven, 29 May 2020

KPMG Accountants N.V.

M.J.A. Verhoeven RA

Provisions in the Articles of Association governing the appropriation of result

Under Article 21 of the company's Articles of Association, the result is at the disposal of the General Meeting of Shareholders, which can allocate the result either wholly or partly to the formation of - or addition to - one or more general or special equity components.

Sonac Gelsenkirchen GmbH