Background
Financial statement

Notes to the consolidated balance sheet

1. Intangible fixed assets (in EUR x 1,000)


The composition and movement of intangible fixed assets in the financial year 2016/2017 were as follows:

  Cost of
research and
development
Goodwill Concessions, 
permits and
interlectual 
properties
Total
         
Purchase value 803 5,002 4,267 10,072
Cumulative depreciation -268 -2,542 - -2,810
         
Book value as per July 1st 535 2,460 4,267 7,262
         
Investments 146 - - 146
Disposals - - -450 -450
Depreciation -291 -992 -545 -1,828
         
Balance -145 -992 -995 -2,132
         
Purchase value 949 5,002 3,817 9,768
Cumulative depreciation -559 -3,534 -545 -4,638
         
Book value as per 30 June 390 1,468 3,272 5,130
         

The divestments relate to the sale of part of the variety package.

2. Tangible fixed assets (in EUR x 1,000)

The movement per category for tangible fixed assets for the year 2016/2017 is as follows:

  Company buildings
and land
Machines and
equipment
Other fixed
assets
Totaal
2016/2017
Totaal
2015/2016
           
Purchase value 32,482 21,639 2,703 56,824 53,257
Cumulative depreciation -21,306 -15,593 -2,184 -39,083 -36,195
           
Book value as per July 1st 11,176 6,046 519 17,741 17,062
           
Investments 6,677 1,753 213 8,643 3,050
Other value adjustments - - - - 541
Disposals -540 -68 - -608 -
Depreciation -1,140 -1,751 -173 -3,064 -2,912
           
Balance 16,173 5,980 559 22,712 17,741
           
Purchase value as of 1 July

38,619 23,324 2,916 64,859 56,824
Cumulative depreciations -22,446 -17,344 -2,357 -42,147 -39,083
           
Book value as per 30 June 16,173 5,980 559 22,712 17,741
           

Investments in buildings and land mainly concern the purchase of land in Metslawier.

3. Financial fixed assets (in EUR x 1,000)

The movement per category of financial fixed assets is as follows:

  Participations Receivables
from association
HZPC
Other
securities
Deferred
tax
receivables
Other
receivables

 
Total
 
             
Book value as per July 1st 2,061 349 25 1,488 40 3,963
             
Investments/increase 624 -46 - 439 -1 936
Dividend -80 - - - - -
Result of participating interests -278 - - - - -278
             
Movements 2016/2017 266 -46 - 439 -1 658
             
Book value as per 30 June 2,327 303 25 1,927 39 4,621
             


Participations
These are participating interests that are not consolidated due to minority interests. For an overview of the capital interests, see page 39.

Receivables from Vereniging HZPC (HZPC Association)
These receivables are fully related to Vereniging HZPC regarding loans to growers for purchasing certificates of Vereniging HZPC. The agreed interest rate varies from 0.0% to 2.0%. 
The term of the loan is 5 years.

Other securities
The item other securities refers to securities that are intended to be held long-term. The market value of the different classes other securities approximates to the carrying value EUR 25,000.

Deferred taxes
The item deferred taxes relates to deductible temporary differences including tangible fixed assets. Of these assets, a limited amount is expected to be realised within one year.
The loss carry forward and deductible temporary differences not brought for valuation are nil.

Other receivables
The other receivables relates to loans granted to personnel in the amount of EUR 37,000 (2015/2016: EUR 40,000) with an average maturity of 5 years and an interest rate of 4%

4. Inventories (in EUR x 1,000)

  30-06-2017 30-06-2016
     
Packaging 1,124 1,098
Finished product 337 352
     
  1,461 1,450

Finished product stock refers to self-developed mini-tubers in particular. On the balance sheet date, no provision for obsolescence is needed for supplies.

Receivables

5. Trade receivables (in EUR x 1,000)

  30-06-2017 30-06-2016
     
Amortised cost of outstanding receivables 53,519 57,399
Minus: provision due to bad debts -12,630 -15,441
     
  40,889 41,958

In the amount of the trade receivables there are no amounts with a term longer than one year that are not anticipated.

6. Accounts receivable from participating interests

The amounts refer to participating interests with significant influence.
The remaining term is shorter than one year and free from interest.

7. Taxes, contributions and social security (in EUR x 1,000)

 

  30-06-2017 30-06-2016
     
Sales tax 4,673 4,556
Contributions and social insurances 61 160
     
  4,734 4,716

 

8. Other receivables and accrued income (in EUR x 1,000)

  30-06-2017 30-06-2016
     
Pension contributions 165 926
Licences to be claimed 3,662 2,523
Prepaid expenses 4,355 4,942
Health insurance premium 222 209
Government grants 688 648
Other amounts 2,623 2,164
     
  11,715 11,412


The other receivables and accrued income contain an amount of EUR 450,000 with a term longer than one year.

9. Cash and cash equivalents (in EUR x 1,000)

  30-06-2017 30-06-2016
     
Cash 10 20
Bank current account 28,451 19,675
Deposits - 25
     
  28,461 19,720

The cash and cash equivalents include deposits which are repayable on demand. The item bank current account is freely available like last year.

10. Group equity

For an explanation of the group equity, reference is made to the notes on equity in the company financial statement. The share of third parties in the group equity is zero.

11. Provisions


Pensions (in EUR x 1,000)

The entry for pensions includes the obligations based on pension regulations and comparable obligations.

The composition and the course of the pensions in the financial year 2016/2017 are shown in the following overview:

  Total
2016/2017
Total
2015/2016
Pension provision staff    
Status as of 1 July 291 317
Donation 53 96
Withdrawal -60 -122
     
Status as of 30 June 284 291
     

The full amount of the pension provision is long-term. The pension provision relates to employees abroad. They have plans that are not comparable to the way in which the Dutch pension system is organised and functions. For these foreign schemes a best estimate of the existing pension liability is made as of the balance sheet date. The best estimate of the pension obligation is determined using the actuarial method. The principal actuarial assumptions that have been used include:

• discount rates: 2.1% based on Bloomberg rate of June 30, 2017;
• chance of survival: Insee mortality table applied.


Other provisions
The following overview shows the movements in 2016/2017:

  Total
2016/2017
Total
2015/2016
     
Status as of 1 July 376 395
Donation 43 37
Withdrawal -11 -56
     
Status as of 30 June 408 376
     

The other provision relates to anniversary liabilities, calculated on the basis of a 4% discount rate and taking the expected turnover in personnel into account. Out of the total amount EUR 24,000 is short-term.

12. Current liabilities


Growers deposits

The grower deposit has a long-term character, but has been classified under current liabilities because it can immediately be withdrawn by the members. Interest is paid (monthly) on the grower deposits. The interest rate paid at the end of the financial year is 0.1%.

Taxes, contributions and social insurances

  2016/2017 2015/2016
Corporate income tax to be paid 2,106 653
Corporate sales tax to be paid 557 566
Payroll tax and social insurances 433 366
     
  3,096 1,585
     

Taxes, contributions and social securities contain no amounts with a term longer than one year.

Other debts and accrued liabilities

  2016/2017 2015/2016
     
Licences to be paid 1,366 3,142
Wages and salaries to be paid 1,262 723
Pension contributions 775 -
Holiday allowances 1,035 878
Product related costs 7,097 6,154
Pool operating result 654 3,346
Other amounts 5,547 3,898
     
  17,736 18,141

Other debts and accrued liabilities contain no amounts with a term longer than one year.

Financial instruments
In the normal course of business, the Company uses financial instruments that expose the Company to market, currency, interest rate, credit and liquidity risks. To manage these risks, the company has developed a policy, including the establishment of a system of credit limits and procedures to reduce the risks of unpredictable adverse developments in financial markets and thus the financial performance of the company.

Credit risk
The Company incurs credit risk on loans and receivables recorded under financial fixed assets, trade and other receivables and cash. The maximum credit risk facing the Company amounted to 71 million euros. Exposure to credit risk of the Company is primarily determined by the individual characteristics of each customer. In addition, management also considers the demographics of the customer base, including the default risk of the country in which customers operate, because these factors, particularly in the current deteriorating economic conditions, have an influence on the credit risk.

Due to the unrest in the Middle East, the credit risk in this region is high. The receivables from customers from this region are mostly covered. The Company has taken the following measures to limit credit risk:

  • Safeguard measures such as advance payments, letters of credit and bank guarantees are used regularly;
  • Credit limits are actively monitored throughout the season;
  • No new deliveries are allowed until debts from the previous season have been paid.

Currency risk
As a result of international activities the Company does by way of the receivables and debts recorded in the balance sheet, hold net investments in foreign companies and is exposed to a currency risk in relation to future foreign currency transactions in US Dollars / Pounds Sterling / Polish Zloty and Canadian Dollars in particular. On June 30 2017 the net exposure was converted into EUR at the spot rate on the balance sheet date as follows:


x 1000
ASSETS
EUR

local currency
LIABILITIES
EUR

local currency
         
USD 2,631 2,999 - -
GBP 6,036 5,312 919 809
PLN 4,211 17,666 928 3,895
CAD 4,193 5,840 2,103 2,930
         
Totaal 17,071   3,950  
         

Liquidity risk
The Company monitors its liquidity position through successive liquidity budgets. The management will ensure that sufficient liquidity is available to meet the obligations. The Company is partly funded by grower deposits which are repayable on demand by growers. If a large number of growers collect its credit claims this will have a negative impact on the liquidity of the Company. For this, the Company has an overdraft facility of EUR 20 million.

Interest risk
The Company is exposed to interest risk on the interest bearing assets and liabilities, including the grower deposits. Both of these receivables and payables have agreed variable interest rates, which means that the Company is exposed to future cash flows. The interest rate risk on interest-bearing receivables and payables is very limited and therefore the management has taken no additional mitigating measures.

Off-balance sheet assets and liabilities
These include:

  • Obligations under operating leases and rent for an amount of EUR 1.7 million. Of this amount, EUR 0.6 million has a term of less than one year. The remaining amount concerns an obligation for less than five years.
  • To hedge commercial transactions in ware potatoes for the coming harvest, HZPC Holland B.V. uses potato futures for the account and risk of the growers. These positions are valued daily at cost price or lower market value. Any results on the year end outstanding positions are recorded in the year to which the harvest relates. The unrealised exchange gain on the balance sheet date at the expense and risk of the growers amounted to EUR 1,750 positive.
  • Several claims have been filed against the company and/or group companies, including South Africa, which are contested by it/them. Although the outcome of these disputes can not be predicted with certainty, it is assumed - partly on the basis of legal advice received - that it will not adversely affect the consolidated position.