Heidelberg Materials : Group Report on Payments for the financial year 2023

Group Report on Payments for the financial year 2023

Introduction

The Group Report on Payments of Heidelberg Materials AG for the reporting period (financial year from 1 January to 31 December 2023) has been prepared in accordance with the provisions of §§ 341q to 341y of the German Commercial Code (HGB) and includes all subsidiaries that are obliged under the provisions of the German Commercial Code or in accordance with other national provisions through the implementation of EU Directive 2013/34/EU to create a report on payments, as well as the parent company. The Group Report on Payments was approved and released by the Managing Board on 21 May 2024.

The Group Report on Payments was drawn up in German and denominated in euro.

The Group Report on Payments is published in the Federal Gazette. It can also be downloaded in German and English from the Heidelberg Materials Group's website at www.heidelbergmaterials.com.

Fundamentals of the Group Report on Payments for 2023

Legal regulations

In accordance with § 341r of the HGB, activities in the mineral extraction industry are activities involving the exploration, prospection, discovery, development, and extraction of minerals, crude petroleum and natural gas deposits, or other materials, within the economic activities listed in section B, divisions 05-08 of Annex I to Council Regulation (EC) no. 1893/2006 of 20 December 2006 establishing the statistical classification of the economic activities in NACE Revision 2 and amending the Council Regulation (EEC) no. 3037/90, as well as some regulations of the EU on specific statistical domains (OJ L393 dated 30 December 2006, page 1).

In accordance with § 341v, section 1 of the HGB, Heidelberg Materials AG, as a parent company within the meaning of § 290 of the HGB in conjunction with § 341q of the HGB, is required to create and publish a Group Report on Payments on an annual basis because it belongs to the relevant group of (large) corporations active in the raw material extraction industry in accordance with § 341q of the HGB and NACE Code Revision 2 ("Nomenclature statistique des activités économiques dans la Communauté européenne"). Since a Group Report on Payments has been published, the parent company is exempt from drawing up and publishing this information itself. This applies independently of its activity classified in division 23 of Council Regulation (EC) no. 1893/2006 of 20 December 2006.

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Scope of consolidation

In accordance with § 341v, section 3 of the HGB, the scope of consolidation of the companies included in the Group Report on Payments covers the parent company and all subsidiaries within the meaning of § 290 of the HGB and IFRS 10.

Joint operations that are recorded proportionately in the consolidated financial statements in accordance with § 315a of the HGB in conjunction with IFRS 11, as well as joint ventures and associates that are accounted for using the equity method in the consolidated financial statements of Heidelberg Materials AG in accordance with § 315a in conjunction with IFRS 11 and IAS 28, do not form part of the Group Report on Payments, as there is no obligation to report their payments.

The inclusion of subsidiaries and their payments in the Group Report on Payments begins on the date of the first‐time consolidation and ends at the point of retirement from the scope of consolidation.

With regard to the scope of consolidation, we refer to the 2023 Annual Report of Heidelberg Materials.

Activities

• 341r of the HGB does not define the term "activities", but refers to the NACE classification, which provides the identification of an activity. In accordance with §§ 341q ff. of the HGB, the following activities fall under the reportable NACE codes 05-08:
• • Division 05 Mining of coal
  • Division 06 Extraction of crude petroleum and natural gas
  • Division 07 Mining of metal ores
  • Division 08 Other mining and quarrying

The activities of the Heidelberg Materials Group companies essentially concern the activities in division 08, group 08.1: extraction of natural stone, gravel, sand, clay, and kaolin, including the extraction of lime and gypsum, as well as sand and gravel. These are primarily the activities of the aggregates business line of the Heidelberg Materials Group.

If a company has a variety of different activities, the NACE classification in accordance with NACE Revision 2 provides for the assignment to the NACE code that is identified as the main activity of the company. The main activity is the activity that makes the greatest contribution to the added value of a company and must not account for more than 50% of its total activity. Added value is calculated as the difference between production value and intermediate consumption (gross added value). If an activity accounts for more than 50% of the total activity, this activity must be considered a main activity.

Heidelberg Materials uses the result from current operations to determine the greatest contribution to added value.

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This is also called the "top‐down method". In contrast, the so‐called "infection theory" - another permitted approach - does not distinguish between main and sideline activities and only uses engagement in the abovementioned activities of NACE codes 05-08 as a trigger for reporting.

Subject to legal clarification or supreme court jurisdiction, the Heidelberg Materials Group will continue to use the top‐down method in the Group Report on Payments. The approach of Heidelberg Materials is in line with the pronouncements of the Institute of Public Auditors in Germany (IDW) - Practice Statement 1/2017: creation of (group) reports on payments.

Payments

Payments are all amounts paid in cash or in kind in connection with activities in the mineral extraction industry, if they are due to the following reasons in accordance with § 341r, no. 3 of the HGB:

1. Production payment entitlements
2. Taxes levied on the income, production, or profits of corporations, excluding taxes on consumption, sales taxes, value added taxes, taxes on the wages of employees of corporations, and similar taxes
3. Royalties
4. Dividends and other profit distributions from company shareholdings
5. Signature, discovery, and production bonuses
6. Rental and entry fees, other considerations for licences or concessions
7. Payments for infrastructure improvements

In the 2023 financial year, no payments were made by the subsidiaries of the Heidelberg Materials Group in accordance with § 341r, no. 3 (a) (Production payment entitlements), (d) (Dividends and other profit distributions from company shareholdings), (e) (Signature, discovery, and production bonuses) and (g) (Payments for infrastructure improvements) of the HGB. A tabular presentation in the Group overview and country reports section is therefore not required for these payment reasons.

Payments to governments, whether made as a single payment or a series of related payments and with a total amount not exceeding €100,000 during the reporting period, have not been considered in the Group Report on Payments in accordance with § 341t, section 4 of the HGB.

Payments in foreign currency have been converted into euro at the average annual exchange rate.

Payments made to governments have been recorded in the Group Report on Payments.

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The payments listed in this report on payments relate to cash payments. In the 2023 financial year, no reportable payments in kind corresponded to or exceeded individually or in total the amount of €100,000.

Governments

Governments within the meaning of § 341r, no. 4 of the HGB are national, regional, or local authorities of a Member State of the European Union, of another State which is a party to the Agreement on the European Economic Area, or of a third country, including departments or agencies that are controlled by an authority, as well as companies on which an authority can exercise a dominant influence within the meaning of § 290 of the HGB.

Projects

A project stands for the combination of operational activities that form the basis for payment obligations with a government, from which companies have usually received a quarrying license or concession. These mainly concern quarries or gravel and sand pits.

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Group overview

The following country overview shows the total amount in euro of all payments made by subsidiaries of Heidelberg Materials to governments in accordance with § 341r, no. 3 of the HGB, broken down by country and payment reason:

	Payment reason (amount in EUR)
	Taxes on income,	License fees,
Country	production or	Royalties rental fees, entry
	profits	fees, etc.

Total

Australia		2,310,419	7,380,069	9,690,489
Benin	72,072	102,350		174,422
Germany		921,257	327,334	1,248,591
France	8,146,685	2,199,020	551,961	10,897,666
Ghana	258,673	287,113		545,786
United Kingdom	74,939,803	2,484,276	15,943,626	93,367,705
Indonesia	373,996			373,996
Israel		47,877,189		47,877,189
Canada	217,917			217,917
Kazakhstan		131,541		131,541
Malaysia	297,091	3,413,404	100,021	3,810,515
Norway			117,982	117,982
Poland		723,245	1,095,326	1,818,571
Russia	160,265	236,811	239	397,315
Sweden	1,028,428			1,028,428
Slovakia	277,208			277,208
Spain			294,967	294,967
Czechia	3,742,414		1,651,147	5,393,561
United States	33,466	4,661,945	3,294,359	7,989,769
Total	89,548,017	65,348,570	30,757,030	185,653,617

Due to rounding, numbers presented in this Group Report on Payments may not add up precisely to the totals provided.

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Country details

The following tables show payments made to governments in accordance with § 341r, no. 3 of the HGB, broken down by country and payment reason:

Australia (1 of 4)

Government entity to which payment was made (official name, place, region)

CENTRAL COAST COUNCIL‐GOSFORD‐ NSW

COMMISSIONER OF STATE REVENUE‐ BRISBANE‐QLD

DEPARTMENT OF ENVIRONMENT AND SCIENCE‐BRISBANE‐QLD

DEPARTMENT OF INDUSTRY CROWN LANDS‐DANGAR‐NSW

Subtotal 1

Project

(Aggregates quarry site)

3497 ‐ CALGA SAND QUARRY

3503 ‐ CENTRAL COAST SAND QUARRY

3575 ‐ KULNURA QUARRY

3517 ‐ FERNY GROVE QUARRY

3520 ‐ RAVENSBOURNE SAND QUARRY

3522 ‐ WOLFFDENE QUARRY

3559 ‐ GLASSHOUSE QUARRY

3566 ‐ FARLEIGH QUARRY

3577 ‐ NERANG QUARRY

3499 ‐ ISAAC RIVER SANDS QUARRY

3517 ‐ FERNY GROVE QUARRY

3518 ‐ LYTTON SAND QUARRY

3520 ‐ RAVENSBOURNE SAND QUARRY

3522 ‐ WOLFFDENE QUARRY

3559 ‐ GLASSHOUSE QUARRY

3564 ‐ CUNGULLA SAND QUARRY

3577 ‐ NERANG QUARRY

3589 ‐ YALKARA QUARRY

3592 ‐ EDMONTON QUARRY

3593 ‐ BARRON SAND QUARRY

3503 ‐ CENTRAL COAST SAND QUARRY

3505 ‐ CLARENCE SANDS QUARRY

3507 ‐ SANCROX QUARRY

Taxes on income, production or profits

Royalties

430,060

430,060

477,346

477,346

907,406

License fees, rental fees, entry fees etc.

109,002

14,786

20,195

74,021

1,947,348

99,727

85,829

1,414,770

63,601

22,992

260,430

70,683

8,209

4,365

8,209

4,365

6,170

12,990

4,104

6,170

4,365

4,365

7,369

2,586

1,409

964

212

2,129,619

Total

109,002

14,786

20,195

74,021

1,947,348

99,727

85,829

1,414,770

63,601

22,992

260,430

500,743

8,209

4,365

438,269

4,365

6,170

12,990

4,104

6,170

4,365

4,365

7,369

479,931

1,409

478,309

212

3,037,024

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Australia (2 of 4)

Government entity to which		Taxes on		License fees,
Project	income,
payment was made	Royalties	rental fees,	Total
(Aggregates quarry site)	production or
(official name, place, region)		entry fees etc.
	profits
Subtotal 1			907,406	2,129,619	3,037,024
DEPT MINES, INDUSTRY REGULATION
& SAFETY‐WEST PERTH‐WA				112,410	112,410

DEPT OF ENVIRONMENT LAND WATER & PLANNIN‐EAST MELBOURNE‐VIC

3478	‐ RUSSELL ROAD SAND QUARRY	2,011	2,011
3480	‐ OLDBURY SAND QUARRY	29	29
3484	‐ GASKELL DRY SAND AND BAG PLANT	4,680	4,680
3485	‐ GASKELL SAND QUARRY	28,927	28,927
3492	‐ JANDABUP SAND QUARRY
3498	‐ PARABURDOO CREEK SAND QUARRY	808	808
3537	‐ CANE RIVER QUARRY	643	643
3538	‐ BYFORD QUARRY	3,125	3,125
3540	‐ RED HILL QUARRY	9,089	9,089
3550	‐ KARRATHA QUARRY	31,823	31,823
3551	‐ EXMOUTH QUARRY	3,851	3,851
3554	‐ TURNER RIVER QUARRY	22,710	22,710
3557	‐ HEYWOOD QUARRY	604	604
3560	‐ BUNBURY QUARRY	4,109	4,109
		471,756	471,756

3529	‐ KILMORE QUARRY	36	36
3532	‐ AXEDALE SAND & GRAVEL QUARRY	469,984	469,984
3533	‐ TARRAWINGEE SAND QUARRY	1,671	1,671
3578	‐ AXEDALE QUARRY	64	64
DEPT OF MINES INDUSTRY REGULATN
& SAFETY‐EAST PERTH‐WA		1,228,165	1,228,165
3485	‐ GASKELL SAND QUARRY	986,412	986,412
3498	‐ PARABURDOO CREEK SAND QUARRY	230	230
3537	‐ CANE RIVER QUARRY	4,178	4,178
3550	‐ KARRATHA QUARRY	173,429	173,429
3551	‐ EXMOUTH QUARRY	1,204	1,204
3554	‐ TURNER RIVER QUARRY	62,712	62,712

Subtotal 2

1,228,165

584,166

1,812,331

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Australia (3 of 4)

Government entity to which			Taxes on		License fees,
Project	income,
payment was made	Royalties	rental fees,	Total
(Aggregates quarry site)	production or
(official name, place, region)		entry fees etc.
		profits
Subtotal 2				1,228,165	584,166	1,812,331
ENVIRONMENTAL REGULATI‐PERTH‐
WA					118,719	118,719
	3479	‐ HOPELAND SAND QUARRY			5,335	5,335
	3485	‐ GASKELL SAND QUARRY			8,269	8,269
	3491	‐ GINGIN SAND QUARRY			5,335	5,335
	3493	‐ PRESTON BEACH SAND QUARRY			5,335	5,335
	3537	‐ CANE RIVER QUARRY			1,334	1,334
	3538	‐ BYFORD QUARRY			7,883	7,883
	3539	‐ GELORUP QUARRY
	3540	‐ RED HILL QUARRY			61,550	61,550
	3550	‐ KARRATHA QUARRY			5,335	5,335
	3554	‐ TURNER RIVER QUARRY			5,172	5,172
	3558	‐ MT BARKER QUARRY			5,335	5,335
ENVIRONMENT PROTECTION	3560	‐ BUNBURY QUARRY			7,839	7,839
AUTHORITY‐SYDNEY SOUTH‐NSW					256,929	256,929
	3497	‐ CALGA SAND QUARRY			11,809	11,809
	3501	‐ BASS POINT QUARRY			56,464	56,464
	3503	‐ CENTRAL COAST SAND QUARRY			12,069	12,069
	3505	‐ CLARENCE SANDS QUARRY			12,069	12,069
	3507	‐ SANCROX QUARRY			11,495	11,495
	3508	‐ TAMWORTH SAND QUARRY			1,277	1,277
	3509	‐ WAGGA SAND QUARRY			11,495	11,495
	3555	‐ EAST GUYONG QUARRY			28,524	28,524
	3556	‐ CANBERRA QUARRY			28,524	28,524
	3574	‐ BRANDY HILL QUARRY			29,950	29,950
	3575	‐ KULNURA QUARRY			29,950	29,950
	3582	‐ MOLONG QUARRY			11,495	11,495
	3587	‐ TWEED SAND QUARRY			11,809	11,809

Subtotal 3

375,648

375,648

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Australia (4 of 4)

Government entity to which			Taxes on		License fees,
Project	income,
payment was made	Royalties	rental fees,	Total
(Aggregates quarry site)	production or
(official name, place, region)		entry fees etc.
		profits
Subtotal 3					375,648	375,648
GOLD COAST CITY COUNCIL‐GOLD
COAST MC‐QLD					633,010	633,010
	3522	‐ WOLFFDENE QUARRY			380,537	380,537
	3577	‐ NERANG QUARRY			252,473	252,473
REVENUE NSW‐PARRAMATTA‐NSW					2,273,731	2,273,731
	3497	‐ CALGA SAND QUARRY			215,746	215,746
	3501	‐ BASS POINT QUARRY			445,995	445,995
	3503	‐ CENTRAL COAST SAND QUARRY			70,886	70,886
	3505	‐ CLARENCE SANDS QUARRY			64,673	64,673
	3507	‐ SANCROX QUARRY			60,543	60,543
	3509	‐ WAGGA SAND QUARRY			80,445	80,445
	3510	‐ WALLGROVE QUARRY			432,001	432,001
	3512	‐ MOAMA SAND QUARRY			12,826	12,826
	3555	‐ EAST GUYONG QUARRY			105,893	105,893
	3574	‐ BRANDY HILL QUARRY			197,256	197,256
	3575	‐ KULNURA QUARRY			533,029	533,029
	3587	‐ TWEED SAND QUARRY			54,438	54,438
REVENUE SA‐ADELAIDE‐SA					179,549	179,549
	3486	‐ KANMANTOO QUARRY			67	67
	3487	‐ GOLDEN GROVE SAND QUARRY			57,505	57,505
	3488	‐ MASLIN BEACH SAND QUARRY			53,993	53,993
	3489	‐ ROWLAND FLAT SAND QUARRY			3,412	3,412
	3500	‐ WHITE ROCK QUARRY			54,486	54,486
SHELLHARBOUR CITY COUNCIL‐	3572	‐ CURRAMULKA QUARRY			10,087	10,087
SHELLHARBOUR SQUARE‐NSW				30,452	101,982	132,434
STATE REVENUE OFFICE VICTORIA‐	3501	‐ BASS POINT QUARRY		30,452	101,982	132,434
MELBOURNE‐VIC					1,085,777	1,085,777
	3495	‐ LANG LANG SAND QUARRY			135,998	135,998
	3496	‐ LANGWARRIN DRY SAND QUARRY			36,219	36,219
	3529	‐ KILMORE QUARRY			14,640	14,640
	3530	‐ LYSTERFIELD QUARRY			134,854	134,854
	3531	‐ MILDURA QUARRY			3,240	3,240
	3533	‐ TARRAWINGEE SAND QUARRY			13,882	13,882
	3534	‐ WOLLERT QUARRY			421,817	421,817
	3543	‐ BACCHUS MARSH SAND QUARRY			120,532	120,532
	3557	‐ HEYWOOD QUARRY			560	560
	3562	‐ DIGGERS REST QUARRY			71,137	71,137
	3565	‐ YANNATHAN SANDS QUARRY			15,482	15,482
	3579	‐ CARISBROOK QUARRY			31,427	31,427
SUNSHINE COAST REGIONAL COUNCIL‐	3590	‐ WERRIBEE QUARRY			85,988	85,988
SUNSHINE COAST‐QLD				144,397	16,587	160,984
	3559	‐ GLASSHOUSE QUARRY		144,397	16,587	160,984
Subtotal 4				174,848	4,290,636	4,465,485
Total				2,310,419	7,380,069	9,690,489

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