8.10
Notes to the company financial statements

A. General

The company financial statements are part of the 2018 financial statements of Accell Group N.V.

B. Basis of preparation

The company financial statements have been prepared in accordance with Title 9, Book 2 of the Netherlands Civil Code. For setting the principles for the recognition and measurement of assets and liabilities and determination of the result for its company financial statements, Accell Group makes use of the option provided in section 2:362(8) of the Netherlands Civil Code. This means that the principles for the recognition and measurement of assets and liabilities and determination of the result (hereinafter referred to as principles for recognition and measurement) of the company financial statements of Accell Group are the same as those applied for the consolidated EU-IFRS financial statements. A reference is made to paragraph 6.6 Notes to the consolidated financial statements for a description of these principles.

i. Result of participating interests

Participating interests in group companies are accounted for in the company financial statements according to the net equity value, with separate presentation of the goodwill component under intangible fixed assets.

Participations with a negative net asset value are valued at nil. If Accell Group N.V. guarantees the debts of the relevant participations, a provision is formed.

ii. Result of participating interests

The share in the result of participating interests consists of the share of Accell Group in the result of these participating interests. Results on transactions involving the transfer of assets and liabilities between Accell Group and its participating interests and mutually between participating interests themselves, are eliminated to the extent that they can be considered as not realized.

32. Goodwill

Changes in goodwill are as follows:

  2018 2017
  € x 1,000 € x 1,000
Cost
Balance at 1 January 9,996 10,939
Investments as a result of business combinations - -
Legal restructuring - -
Currency translation differences 334 943-
Balance at 31 December 10,330 9,996
Accumulated impairments
Balance at 1 January - -
Impairments - -
Balance at 31 December - -
Carrying amount
Balance at 1 January 9,996 10,939
Balance at 31 December 10,330 9,996

33. Financial fixed assets

Changes in financial fixed assets are as follows:

  Notes 2018 2017
    € x 1,000 € x 1,000
Subsidiaries
Balance at 1 January   385,036 374,695
Initial application IFRS 9   1,810 -
Revised balance at 1 January   386,846 374,695
Profit of participating interests   22,451 22,038
Investments (divestments)   1,503 1,150
Received dividend participating interests   - -
Translation differences   -2,135 -12,707
Actuarial gains and losses   3,752 197
Changes in hedging and fair value adjustments   7,761 -16,020
Legal restructuring   2,381 -
Reclassification subsidiary to provision 35 9,351 -
Other movements   -14,710 15,683
Balance as at 31 December   417,200 385,036
Loans to group companies
Balance at 1 January   18,665 37,696
Loans provided   25,662 -
Loans repaid   -1,200 -19,031
Translation differences   - -
Balance at 31 December   43,127 18,665
Total financial fixed assets   460,327 403,701

 

The long-term loans to group companies are provided as long-term financing and are interest-bearing (2.4%).

34. Shareholders' equity

The movement schedule of shareholders’ equity 2017 is as follows:

  Share capital Share premium Hedging reserve Translation reserve Other legal reserve Other reserve Unappropriated result Total equity
  € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000
Balance at 1 January 2017 258 43,734 3,215 -8,832 6,980 241,733 32,292 319,380
Net profit - - - - - - 10,501 10,501
Other comprehensive income - - -10,289 -13,651 - 197 - -23,743
Total comprehensive income - - -10,289 -13,651 - 197 10,501 -13,242
 
Transfer to other reserve - - - - - 32,292 -32,292 -
Dividends paid - - - - - -18,616 - -18,616
Stock dividends 5 -5 - - - 11,876 - 11,876
Share-based payments - -510 - - - 439 - -71
Other changes - - - - -4,276 4,270 - -6
Balance at 31 December 2017 263 43,219 -7,074 -22,483 2,704 272,191 10,501 299,321

The movement schedule of shareholders’ equity 2018 is as follows:

  Share capital Share premium Hedging reserve Translation reserve Other legal reserve Other reserve Unappropriated result Total equity
  € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000 € x 1,000
Balance at 1 January 2018 263 43,219 -7,074 -22,483 2,704 272,191 10,501 299,321
Initial application IFRS 9 - - 2,615 - - -805 - 1,810
Revised balance as at 1 January 2018 263 43,219 -4,459 -22,483 2,704.00 271,386 10,501 301,130
Net profit - - - - - - 20,271 20,271
Other comprehensive income - - 7,103 -1,921 - 3,752 - 8,934
Total comprehensive income - - 7,103 -1,921 - 3,752 20,271 29,205
 
Transfer to other reserve - - - - - 10,501 -10,501 -
Dividends paid - - - - - -13,141 - -13,141
Stock dividends 3 -3 - - - 5,770 - 5,770
Share-based payments - -748 - - - 182 - -566
Other changes - - - 2,220 569 -2,797 - -8
Balance at 31 December 2018 266 42,468 2,644 -22,184 3,273 275,653 20,271 322,391

 

Accell Group has issued share options (Note 19 Share-based payments of the consolidated financial statements).

Ordinary shares

On 31 December 2018 the authorized capital consists of 55,000,000 ordinary shares, 5,000,000 cumulative preference shares F and 60,000,000 cumulative preference shares B, each with a nominal value of € 0.01. Of these, 26,597,354 (2017: 26,255,179) ordinary shares have been issued and duly paid at 31 December 2018, as a result the issued and paid-up share capital amounts to € 265,974.

Share premium reserve

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).

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Translation reserve

The legal translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Other legal reserves

Other legal reserves consist of a legal reserve for participating interests and a legal reserve for capitalized development costs.

The legal reserve for participating interests, which amounts to € 1.4 million (2017: € 2.3 million), 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 Accell Group’s accounting policies, and the share thereof that Accell Group may distribute. The legal reserve is determined on an individual basis.

In accordance with applicable legal provisions, a legal reserve for the carrying amount of € 1.9 million thousand (2017: € 0.4 million) has been recognized for capitalized development.

Proposal for profit appropriation (Unappropriated result)

The Board of Directors proposes to the General Meeting that the result after tax in 2018 should be allocated as follows: to pay out an amount of € 13.3 million as an optional dividend, equivalent to € 0.50 per share (2017: € 0.50) and to add the remaining amount of € 7.0 million to the other reserves. The 2018 result after tax is presented as unappropriated profit in shareholders' equity.

Dividend

The Board of Director proposes to make available to the shareholders a dividend with stock option of € 0.50 per share with respect to the current year. The dividend proposal of € 13.3 million is subject to approval by the General Meeting of Shareholders on 24 April 2019 and is not reflected as a liability in these financial statements. The dividends have not been provided for and there are no income taxes consequences.

The dividend in respect of financial year 2017 was determined at € 0.50 per share or as stock dividend during the General Meeting of Shareholders of 25 April 2018. After the period in which shareholders could report their preference, 44% of the shareholders opted for the stock dividend. On 18 May 2018 € 7.4 million was distributed as cash dividend and 314,480 shares were issued as stock dividend and added to issued share capital.

35. Provisions

The negative net asset value of Accell North America Inc. is included under the provisions.

36. Loans to and from group companies

The short-term loans to and from group companies relate to current accounts arising from cash management within Accell Group N.V. The loans are interest-bearing (3 months Euribor plus margin).

37. Receivables from and liabilities to group companies

The receivables from and liabilities to group companies are current receivables and current liabilities (no interest).

38. Other financial instruments

A reference is made to note 24 Financial instruments – fair values and risk management of the consolidated financial statements for the note on other financial instruments; other financial instruments consist of forward exchange contracts (net financial asset) of € 8.5 million (2017: € 9.3 million of financial liabilities) and interest rate swaps (financial liabilities) of € 1.0 million (2017: € 0.2 million), both used for hedging purposes.

39. Interest-bearing loans and revolving credit facility

A reference is made to notes 17 Interest-bearing loans and 24 Financial instruments – fair values and risk management of the consolidated financial statements for the note on interest-bearing loans of € 98.6 million (2017: € 98.5 million) and the revolving credit facility of € 40.0 million (2017: € 40.0 million). For the note on Accell Group’s policies in respect of liquidity risk and market risk, consisting of currency risk and interest risk, a reference is made to note 24 Financial instruments – fair values and risk management of the consolidated financial statements.

40. Loans from group companies

The long-term loans of group companies have a financing character. By means of (legal) restructuring, Accell Group N.V. intends to terminate these loans and simplify its financing structure. As a result, the loan of € 1.1 million has been repaid in August 2018; in 2018 the interest on this loan is 5%. At the end of 2018, a loan of € 2.2 million was taken over as a result of the liquidation of a group company. 0% interest is owed on this loan. In 2019 Accell Group N.V. intends to settle this loan.

41. Net turnover

Net turnover comprises charges to group companies with regard to management fees.

42. Personnel expenses

As of 1 January 2018, the employees of Accell Group N.V. are transferred to Accell Services B.V. and Accell Operations B.V., after which only the board of directors remains in Accell Group N.V. The remuneration of the Board of Directors, including pension charges as referred to in Section 2: 383, subsection 1 of the Dutch Civil Code, charged in the financial year to Accell Group N.V. amounted to € 3.5 million (2017: € 3.6 million) and to € 0.2 million (2017: € 0.2 million) for the members of the Supervisory Board. For details on the remuneration of the Board of Directors and the Supervisory Board a reference is made to note 29 Remuneration of the Board of Directors and the Supervisory Board of the consolidated financial statements.

Personnel costs also include an amount of € 38 thousand (2017: € 448 thousand) for social security costs and € 92 thousand (2017: € 122 thousand) for conditional shares for directors of group companies. For details on this conditional share plan, reference is made to Note 19 Share-based payments of the consolidated financial statements.

43. Other expenses

The other expenses include implementation costs of the strategy, IT costs, consultancy costs, audit costs and travel expenses.

44. Net finance cost

Financial income amounts to € 9.9 million (2017: € 10.3 million) and mainly comprises results from treasury activities for group companies and interest income related to loans to group companies. The financial expenses amount to € 2.8 million in 2018 (2017: € 5.5 million) and include interest expenses, bank fees and currency results on bank balances and overdrafts.

45. Off-balance sheet assets and liabilities

Operational lease commitments

Accell Group N.V. has financial commitments of € 0.1 million arising from operational lease agreements cars for use in the ordinary course of business.

Several liability and guarantees

The legal entity Accell Group N.V. has issued declarations of joint and several liabilities for debts arising from the actions of Dutch consolidated participating interests. Notices to that effect have been filed with the chamber of commerce where the legal entity on whose behalf the notice of liability has been given is registered.

At 31 December 2018, Accell Group N.V. holds a group guarantee to the trustees of the English defined benefit plan, whereby in the event of a bankruptcy of the English subsidiary, Accell Group N.V. guarantees any deficits in the UK pension scheme up to a maximum of £ 8.7 million. In addition, Accell Group has provided a rental guarantee, whereby in the event of a bankruptcy of the Dutch subsidiary, Accell Group guarantees any rental income up to a maximum of € 1.3 million. The other contingent liabilities consist of a number of smaller customs guarantees, bank guarantees and rental guarantees totaling € 1.5 million.

In addition, declarations of joint and several liability have been issued for debts to suppliers arising from the purchase transactions of consolidated participating interests.

Fiscal unity

The Company constitutes the fiscal unity ‘Accell Group N.V.’ with its subsidiaries for corporate income tax purposes and value added tax; the standard conditions prescribe that each of the companies is liable for the corporate income tax payable by all companies belonging to the fiscal unity.

 

Supervisory Board
A.J. Pasman, chairman
G. van de Weerdhof, vice-chairman
P.B. Ernsting
D. Jansen Heijtmajer

Board of Directors
A.H. Anbeek, CEO
R.S. Baldew, CFO
J.J. Both, CSCO

Heerenveen, 11 March 2019