Notes to the 2022 consolidated financial statements
General
Numidia Holding B.V. (“the Company”, “Numidia” or “the Group”), having its corporate seat in Roermond, is located at Boven de Wolfskuil 6 in Herten. Numidia Holding B.V. is a private limited liability Company under Dutch law and is listed under number 54253594 in the Trade Register. These financial statements contain the financial information of both the Company and the consolidated companies of the Company ("the Group"). The Company is a holding company. The main activities of the group of which the Company is the parent consist of trades in dairy goods on the worldwide dairy goods market and operate worldwide. Dairy goods are purchased and sold both within Europe and outside Europe. Shipments can either be on order (back-to-back) or on stock (temporary storage in external warehouses).
Financial reporting period
These financial statements cover the year 2022, which ended at the balance sheet date of 31 December 2022.
Basis of preparation
The financial statements have been prepared in accordance with Title 9, Book 2 of the Netherlands Civil Code. The accounting policies applied for measuring assets and liabilities and the determination of result are based on the historical cost convention, unless otherwise stated in the further 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 Netherlands Civil Code, the Company profit and loss account of the Company exclusively stated the share of the result of participating interests after tax and the general result after tax.
Going concern
These financial statements have been prepared on the basis of the going concern assumption.
Accounting policies
general
Assets and liabilities are measured at nominal value, unless otherwise stated in the further principles.
An asset is recognized in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the costs of the asset can be measured reliably. Assets that are not recognized in the balance sheet are considered as off-balance sheet assets. A liability is recognized in the balance sheet when it is expected to result in an outflow of resources embodying economic benefits and the amount of the obligation can be measured reliably. Provisions are included in the liabilities of the Company. Liabilities that are not recognized in the balance sheet are considered as off-balance sheet liabilities.
An asset or liability that is recognized in the balance sheet, remains 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 into account in this assessment.
An asset or liability is no longer recognized in the balance sheet when a transaction results in all or substantially all rights to economic benefits and all or substantially all of the risks related to the assets or liability being transferred to a third party. In such cases, the results of the transaction are directly recognized in the profit and loss account, taking into account any provisions related to the transaction. If assets are recognized of which the Company does not have legal ownership, this fact will be disclosed.
Income is recognized 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 has arisen, providing the size can be measured reliably. Expenses are recognized when a decrease in the economic potential related to a decrease in an asset or an increase of a liability has arisen, providing the size can be measured with sufficient reliability
Revenues and expenses are allocated to the period to which they relate. Revenues are recognized when the Company has transferred the significant risks and rewards of ownership of the goods to the buyer.
functional and presentation currency
The financial statements are presented in euros (EUR), which is the Company’s functional currency. All amounts have been rounded up or down 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.
consolidation principles
The consolidated financial statements include the financial data 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 its controlling interest exists, 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.
Newly acquired participating interests are consolidated as from the date that decisive influence (control) can be exercised. Participating interest disposed of remain included in the consolidation until the date of loss of this influence.
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, debts, 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.
Subsidiaries are consolidated in full, whereby the 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, make good 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 functional currency of the Company at the exchange rate applicable on the transaction date.
Monetary assets and liabilities denominated in foreign currency are translated at the balance sheet date into the functional currency at the exchange rate applicable on that date. Exchange differences resulting from the settlement of monetary items, or resulting from the translation of monetary items denominated in foreign currency, are recognized in the profit and loss account in the period in which they arise.
Non-monetary assets and liabilities denominated in foreign currency that are stated at historical cost are translated into euros at the exchange rates applicable on the transaction date.
Foreign operations
The assets and liabilities that are part of the net investment in a foreign operation are translated into euros at the exchange rate prevailing at the balance sheet date. The revenues and expenses of such a foreign operation are translated into euros at the exchange rate on the transaction date. Currency translation differences are recognized in the translation reserve within equity. A group Company that has received a loan from the parent recognises any translation differences in the profit and loss account, even if the loan is regarded by the parent as part of a net investment in a foreign operation. When a foreign operation is fully or partially sold, the corresponding cumulative amount is transferred from the translation reserve 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: trade and other receivables, cash items, loans, trade and other amounts payables and derivative financial instruments.
Financial and non-financial contracts may contain terms and conditions that meet the definition of derivative financial instruments. An embedded derivative in these contracts is separated from the host contract if its economic characteristics and risks are not closely related to those of the host contract. A separate instrument with the same terms and conditions as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value with changes in fair value recognized in the profit and loss account.
Derivatives separated from the host contract are, in accordance with the measurement policy for derivatives for which no cost price hedge accounting is applied, measured at cost or lower fair value.
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 the initial recognition. After initial recognition, financial instruments are valued in the manner described below.
Financial assets and liabilities are recognized in the balance sheet at the moment that the contractual risks or rewards with respect to that financial instrument originate. Financial instruments are derecognized if a transaction results in a considerate part of the contractual risks or rewards with respect to that financial instrument being transferred to a third party. Financial instruments (and individual components of financial instruments) are presented in the consolidated financial statements in accordance with the economic substance of the contractual terms. Presentation of the financial instruments is based on the individual components of financial instruments as a financial asset, financial liability or equity instrument.
trade and other receivables
Trade and other receivables are carried at amortized cost on the basis of the effective interest method, less impairment losses.
non-current and current liabilities and other financial commitments
Non-current and current liabilities and other financial commitments are stated after their initial recognition at amortized cost on the basis of the effective interest rate method. Redemption payments regarding non-current liabilities that are due next year are presented under current liabilities.
derivatives
After their initial recognition, FX forward and swap contracts are carried at the lower of cost or market value, except if the cost price model for hedge accounting is applied.
Commodity future and option contracts are carried after their initial recognition at fair value.
Cost price hedge accounting
If the cost model for hedge accounting is applied, then no revaluation of the derivative instrument takes place, as long as the derivative hedges the specific risk of a future transaction (in the case the derivative transaction is being related to financial assets or liabilities) that is expected to take place. As soon as the expected future transaction leads to recognition in the profit and loss account, then the profit or loss that is associated with the derivative is also recognized in the profit and loss account.
If the hedged position of an expected future transaction results in the recognition in the balance sheet of a non-financial asset or a non-financial liability, then at initial recognition the cost of this asset or liability is adjusted for the hedge results that have not yet been recognized in the profit and loss account.
If the hedged position of an expected future transaction results in the recognition in the balance sheet of a financial asset or a financial liability, the hedging results not yet recognized in the profit and loss account are recognized in the profit and loss account in the period(s) that the acquired asset or liability incurred affected profit or loss.
If forward exchange contracts are concluded to hedge monetary assets and liabilities in foreign currencies, cost hedge accounting is applied. This is done to ensure that the gains or losses arising from the translation of the monetary items recognized in the profit and loss account are offset by the changes in the value of forward exchange contracts arising from the difference between the exchange spot rates as at inception of the contract and the exchange spot rates as at the reporting date. The difference between the exchange spot rate at the inception of the contract and the forward rate is amortized via the profit and loss account over the term of the contract.
When a derivative expires or is sold, the accumulated profit or loss that has not yet been recognized in the profit and loss account prior to that time is included as a deferral in the balance sheet until the hedged transactions take place, consistent with the accounting policy of the initial hedged transaction in the profit and loss. If the transactions are no longer expected to take place, then the accumulated profit or loss is transferred to the profit and loss account.
If a derivative no longer meets the conditions for hedge accounting, but the financial instrument is not sold, then the hedge accounting is also terminated. Subsequent measurement of the derivative instrument is then at the lower of cost or market value.
To hedge the foreign exchange risk resulting from transactions in foreign currencies, Numidia uses derivative financial instruments such as forward foreign-exchange (FX) contracts. In addition, Numidia uses commodity forward and future contracts to offset their risk from fluctuations in commodity prices.
Numidia applies cost price hedge accounting in order to prevent an accounting mismatch in the income statement. The hedge results for the foreign-exchange (FX) contracts are recognized in the income statement within the Cost of sales.
Cash flow hedge accounting
If cash flow hedge accounting is used, the effective portion of the fair value changes of the derivatives is initially recognized 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 or this non-financial liability 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 the hedged position of an expected future transaction results in the recognition in the balance sheet of a financial asset or a financial liability, the hedging results not yet recognized in the profit and loss account are recognized by a transfer from the revaluation reserve to the profit and loss account in the period(s) that the acquired asset or liability incurred affected profit or loss.
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 recognized at the time of the termination of the hedging relationship remain in equity until the expected future transaction takes place in the profit and loss statement. If the transaction is no longer expected to take place, the deferred gain or loss on the hedge recognized in equity is transferred to the profit and loss account.
The hedge results of the commodity forward and future contracts are recognized in the income statement within the Other operating income.
All transactions of hedged commodities contracts will be settled within a period of 1 to 12 months. There are no transactions for which previously hedge accounting was used, but will no longer be expected to occur.
Conditions for hedge accounting
The Company documents its hedging relationships in generic hedging documentation and regularly checks the effectiveness of the hedging relationships by establishing whether the hedge is effective or that there is no over-hedging.
At each balance sheet date, the Company assesses the degree of ineffectiveness of the combination of the hedge instrument and the hedged position (the hedging relationship). The degree of ineffectiveness of the hedging relationship is determined by comparing the critical features of the hedging instrument against the hedged position.
If the critical features, assessed in the context of the hedging relationship, match (or matched) each other, there is (or was) no ineffectiveness. If the critical features, assessed in the context of the hedging relationship, do not (or did not) match each other, there is (or was) ineffectiveness. In that case, the degree of ineffectiveness is determined by comparing the fair value change of the hedging instrument with the fair value change of the hedged position.
If there is a cumulative loss on the hedging relationship for FX Derivatives (cost price hedge accounting) over the period between initial recognition of the hedging instrument and the balance sheet date, the ineffectiveness (loss) is directly recognized in the profit and loss account.
Losses and gains on the hedging relationship for FX Derivatives (cash flow hedge accounting) over the period between initial recognition of the hedging instrument and the balance sheet date, the ineffectiveness (loss) is directly recognized in the profit and loss account.
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.
impairment of financial assets
A financial asset that is not stated (1) at fair value with value changes reflected in the profit and loss account, or (2) at amortized 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 default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, indications that a debtor or issuer is approaching bankruptcy.
The entity considers evidence of impairment for financial assets measured at amortized cost (loan and receivables) both individually and on a portfolio basis. All individually significant assets are assessed individually for impairment. Those individually significant assets found not 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 by the management’s judgement on 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 stated at amortized 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.
Losses are recognized in the profit and loss account and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognized by using the asset's original effective interest rate.
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 recognized, the decrease in impairment loss is reversed through profit or loss (up to the amount of the original cost).
tangible fixed assets
Office equipment and buildings are stated at cost, less accumulated depreciation and impairment losses. Land is stated at cost, less impairment losses.
The costs are comprised of the price of acquisition plus, if applicable, other costs that are necessary to get the assets to their location and the conditions for their intended use.
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. Depreciation starts as soon as the asset is available for its intended use and ends at decommissioning or divestment.
For all office equipment, a depreciation rate of 20% - 33% is applied;
For buildings, a depreciation rate of 3% is applied;
Land is not depreciated.
impairments of fixed assets
Tangible fixed assets are assessed at each reporting date to see whether there is any indication of an impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the higher of value in use and net realisable value. If it is not possible to assess the recoverable amount for an individual asset, the recoverable amount is assessed for the cash-generating unit to which the asset belongs.
When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, an impairment loss is recognized for the difference between the carrying amount and the recoverable amount. If there is an impairment loss for a cash-generating unit, the loss is first allocated to goodwill and then allocated to the cash-generating unit. Any residual loss is allocated to the other assets of the unit pro rata to their book values.
Subsequently, at each reporting date, the entity assesses whether there is any indication that an impairment loss that was recorded in previous years has decreased. If any such indication exists, then an estimate is made on the recoverable amount of the asset or cash-generating unit.
Reversal of a previously recognized impairment loss only takes place when there is a change in the assessment used to determine the recoverable amount since the recognition of the last impairment loss. In such a case, the carrying amount of the asset (or cash-generating unit) is increased to its recoverable amount, but not higher than the carrying amount that would have applied (net of depreciation) if no impairment loss had been recognized in previous years for the asset (or cash-generating unit).
financial fixed assets
Participating interests
Participating interests where significant influence can be 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 recognized 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 recognized. 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 realised.
Participating interests with a negative net asset value are valued at nil. This measurement also covers any non-current receivables on the participating interests that are, in substance, an extension of the net investment. This particularly 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 recognized if and to the extent that the cumulative unrecognized share of loss has been absorbed. If the Company fully or partially guarantees the debts of the relevant participating interest, or if it 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.
Joint ventures
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 recognized 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 unrecognized results are charged to the net asset value of the joint venture. Any losses on current assets or impairments of fixed assets are recognized 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 recognizes its share in losses on current assets or impairments of fixed assets.
inventories
Goods available for sale are carried at cost of purchase or lower net realisable value. The costs of purchase include the purchase price and additional expenditure, such as import duties, transportation, and other costs directly attributable to the acquisition of inventory.
Net realisable value is based on the most reliable estimate of the amount the inventories would generate at the most, less costs still to be made.
Trade discounts, rebates and indemnities (to be) received in connection with purchasing are deducted from the costs of purchase.
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 and includes bank balances. If cash is not freely disposable, this is taken into account in the valuation. Cash and cash equivalents denominated in foreign currencies are translated at the balance sheet date in the functional currency at the exchange rate applicable 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 shareholder’s equity. Payments to holders of these instruments are deducted from the shareholder’s 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.
non-current liabilities
The valuation of non-current liabilities is explained under the heading ‘Financial instruments’.
current liabilities
The valuation of current liabilities is explained under the heading ‘Financial instruments’.
leasing
The Company may enter into financial and operating leases. A lease agreement under which the risks and rewards of ownership of the leased object are carried entirely or almost entirely by the lessee are classified as finance leases. All other leases are classified as operating leases. For lease classification, the economic substance of the transaction is considered conclusive rather than the legal form. At the inception of an arrangement, the Company assesses whether a lease should be classified as a finance lease or operating lease.
Operating leases
If the Company acts as lessee in an operating lease, the leased property is not capitalised. Benefits received as an incentive to enter into an agreement are recognized as a reduction of rental expense over the lease term. Lease payments and benefits regarding operating leases are recognized on the profit and loss account on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern of the benefits from the use of the leased asset.
The Company did not enter into any financial lease agreements.
revenue recognition
The Company usually recognizes revenue at the level of separate contracts. If it is necessary to reflect economic reality, revenue is recognized at the level of a group of contracts, for example where the Company has entered into several separate contracts, which have been negotiated as a total, separating the individual contracts in terms of pricing and profit margin that are closely related and are performed simultaneously or immediately after each other. Amounts that the Company receives for its own account (as principal) are recognized as revenue. Amounts that the Company receives for third parties (as an agent) are not recognized as revenue. Revenues only include the gross increases in economic potential that the Company has received or has receivable for its own account.
The Company recognizes revenue for the amount to which the Company expects to be entitled in exchange for transferring promised goods or services, which is the transaction price. This amount excludes amounts received on behalf of third parties. The transaction price may consist of a fixed fee, a variable fee or a combination thereof. When determining the transaction price, the Company does not take credit risk into account. Any write-downs as a result of the credit risk are charged to the profit and loss account. In determining the transaction price, the Company assumes that the goods or services will be provided in accordance with the relevant agreement and that this agreement will not be cancelled, extended or otherwise modified. The Company measures a non-monetary consideration at fair value. When determining the transaction price, the Company takes into account, among other things, the effects of :
Variable fees, due to discounts, returns, refunds, price concessions, performance bonuses, penalties or other similar elements that may vary in size. The Company estimates the amount of variable compensation as part of the total compensation and applies the prudence principle in doing so;
Major financing components, where the Company adjusts the transaction price for the effects of the time value of money. In doing so, the Company applies an interest rate that is determined at the generally applicable interest rate for a comparable financing instrument of an issuer with a comparable credit rating or an interest rate that, when discounting the transaction price, results in the current spot selling price of the goods and services; and
Payments to buyers of goods and services, which are accounted for as a reduction in the transaction price and therefore as a reduction in revenue, unless the payment to the buyer is made in exchange for a distinct good or service.
No revenue is recognized for all amounts received – or receivable – to which the Company does not expect to be entitled. The Company treats these received – or receivable – amounts in these cases as a repayment obligation . For the goods that are expected to be returned, the Company recognises a return asset, which is presented as an accrual.
Sale of goods
Revenue from the sale of goods is accounted for in net turnover at the fair value of the consideration received or receivable, net of returns and allowances. Revenue from the sale of goods is recognized in the profit and loss account 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 rewards varies according to the conditions of the relevant sales contract. For the sale of dairy products, transfer of risk and rewards usually occurs upon shipment of the products to the customer’s warehouse. For certain international shipments transfer of risk and rewards occurs upon receipt by the customer. Cost price of the goods is allocated to the same period as the related turnover.
The Company does not recognise revenue from services rendered.
Commissions
Revenue from transactions is recognised for the amounts received by the Company on its own account. Amounts received by the Company on behalf of third parties are not recognised as revenue. When the group acts in a transaction in the capacity of an agent rather than of a principal, the revenue recognised in the profit and loss account is the net amount of commission received by the group in respect of the transaction.
cost of sales
Cost of sales consist of the purchase costs of goods available for sale, commission fees, transportation costs, storage and other costs. All these costs are directly attributable to the goods sold.
selling expenses, and general and administrative expenses
Selling expenses and general and administrative expenses comprise of costs incurred during the financial year and are not directly attributable to the cost of the goods sold.
employee benefits
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 recognized 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.
For benefits with accumulating rights, sabbatical leave, profit-sharing and bonuses, the projected costs are taken into account during the period of employment. An expected payment resulting from profit-sharing and bonus payments is recognized if the obligation for that payment has arisen on or before the balance sheet date and a reliable estimate of the liabilities can be made.
If a benefit is paid in the case of non-accumulating rights (e.g. continued payment in the case of sickness or disability), the projected costs are recognized in the period in which such benefit is payable.
Pension plan
The basic principle is that the pension charge to be recognized for the reporting period is equal to the pension contributions payable to the pension provider over the period. Insofar as the payable contributions have not yet been paid as at the balance sheet date, a liability is recognized. If the contributions already paid at the balance sheet date exceed the payable contributions, a receivable is recognized to account for any repayment by the fund or settlement with contributions payable in future.
If there are adjustments to rights accrued as at the balance sheet date arising from future salary increases that are already committed to at the balance sheet date and which shall be paid by the Company, a provision is recognized.
In addition, a provision is included as at the balance sheet date for existing additional commitments to the fund and the employees, provided that it is probable that there will be an outflow of funds for the settlement of the commitments and it is possible to reliably estimate the amount of said commitments. The existence or non-existence of additional commitments is assessed on the basis of the administration agreement concluded with the fund, the pension agreement with the employees and other (explicit or implicit) commitments to the employees. The provision is stated as a best estimate of the present value of the anticipated costs of settling the commitments as at the balance sheet date. The pre-tax discount rate reflects the market interest rate at the balance sheet date of high-quality corporate bonds/yield on government bonds. Risks that have already been taken into account in estimating future expenditure are not included in the discount rate. As at the balance sheet date, no such additional commitment exists.
For any surplus at the pension provider as at the balance sheet date, a receivable is recognized if the Company has the power to withdraw this surplus, if it is likely that the surplus will flow to the Company and if the receivable can be reliably determined.
interest receivable, similar income and interest payable, and similar charges
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 recognized in the period to which they belong.
Premium, discount and redemption premiums are recognized as interest expense in the period to which they belong. The allocation of these interest expenses and the interest income on the loan is the effective interest rate that is recognized in the profit and loss account. On the balance sheet, the amortized value of the debt(s) is recognized (on balance). The amounts of the premium that are not yet recognized in the profit and loss account and the redemption premiums already recognized in the profit and loss account are recognized as an increase in the debt(s) to which they relate. Amounts of the discount that are not yet recognized in the profit and loss account are recognized as a reduction of the debt(s) to which they relate.
Additional costs associated with the use of more than customary supplier credit are recognized as an interest expense.
taxation
Corporate income tax comprises the current and deferred corporate income tax payable and deductible 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 to equity, in which case it is recognized in equity, or to business combinations.
Current tax comprises the expected tax payable or recoverable on the taxable profit or loss for the financial year, calculated using tax rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable in respect of previous years. If the carrying amount of assets and liabilities for financial reporting purposes differ from their values for tax purposes (tax base), this results in temporary differences.
For taxable temporary differences, a provision for deferred tax liabilities is recognized.
For deductible temporary differences, available tax losses and unused tax credits, a deferred tax asset is recognized, but only to the extent that it is probable that future taxable profits will be available for set-off 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 realised.
The measurement of deferred tax liabilities and deferred tax assets is based on the tax consequences following from the manner in which the Company expects, at the balance sheet date, to realise or settle its assets, provisions, debts and accrued liabilities. Deferred tax assets and liabilities are measured at nominal value.
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 non-consolidated participating interests, and mutually between the non-consolidated participating interests themselves, are not recognized as they can be deemed as not realised.
cash flow statement
The cash flow statement is prepared using the indirect method. Cash flows in foreign currency are translated into euros using the weighted average exchange rates at the dates of the transactions.
Cash flows from derivative financial instruments that are accounted for as fair value hedges or cash flow hedges are classified in the same category as the cash flows from the hedged balance sheet items. Cash flows from derivative financial instruments from which hedge accounting is no longer applied are classified in accordance with the nature of the instrument, from the date at which the hedge accounting ended.
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 properly informed of the matter, willing to enter into a transaction and independent of 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 and 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 involving the exchange of collateral is determined by discounting the cash flows to present value. This is done using the (Eonia) swap curve, because the credit and liquidity risk is mitigated by the collateral exchange.
The fair value of derivatives that do not involve an exchange of collateral is determined by discounting the cash flows to present value, taking into account its own and counterparty spread.
related parties
Transactions with related parties (refer to note 18 for the identified related parties) are disclosed if they have not been entered into at arm’s length. To be disclosed are the nature and amounts involved with such transactions, and other information 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 prepared are recognized in the financial statements.
Events that provide no information on the actual situation at the balance sheet date are not recognized in the financial statements. When those events are relevant for the economic decisions of users of the financial statements, the nature and estimated financial effects of the events are disclosed in the financial statements.