Background
Financial report

Notes to the consolidated balance sheet

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


Movements in intangible fixed assets were as follows:

  Software Goodwill Total
       
Purchase value - 2,917 2,917
Cumulative depreciation - -1,370 -1,370
       
Book value as per 1 July 1st - 1,547 1,547
       
Investments 803 554 1,357
Disinvestments - -55 -55
Depreciation - -614 -614
       
Total 803 1,432 2,235
       
Purchase value 803 3,371 4,174
Cumulative depreciation - -1,939 -1,939
       
Book value as per June 30th 803 1,432 2,235
       

Investments in software regard the cost of third parties to upgrade the current ICT package. This upgrade was finished ultimate book year so no depreciation has taken place In 2014/2015. The increase of goodwill is regarded to the investment in the joint venture with Mahindra.

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


The movement per category for tangible fixed assets for the year 2014/2015 is as follows:

  Land and
buildings
Plant and
equipment
Other
fixed assets
Total
2014/2015
Total
2013/2014
           
Purchase value 29,508 18,051 2,322 49,881 47,119
Cumulative
depreciation
-19,312 -12,380 -1,808 -33,500 -30,947
           
Book value per
July 1st
10,196 5,671 514 16,381 16,172
           
Investments 1,507 1,764 119 3,390 2,784
Disinvestments - - -14 -14 -25
Depreciation -972 -1,533 -190 -2,695 -2,550
           
Total 10,731 5,902 429 17,062 16,381
           
Purchase value as
per July 1st
31,015 19,815 2,427 53,257 49,881
Cumulative
depreciation
-20,284 -13,913 -1,998 36,195 -33,500
           
Book value as per
June 30th
10,731 5,902 429 17,062 16,381
           

 

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

 

  Participating
interest
Receivables
from
Vereniging
HZPC
Other
invest-
ments
Deferred
tax
receivable
Other
receivables

Total
             
Book value as
per July 1st
2,103 202 34 1,668 65 4,072
             
Investment 607 266 - -188 7 692
Result group
companies
354 - - - - 354
Dividend/repayments - -102 - - -12 -114
             
Total mutations
2014/2015
961 164 - -188 -5 932
             
Book value as
per June 30th
3,064 366 34 1,480 60 5,004
             

Receivables from Vereniging HZPC
These receivables are fully related to Vereniging HZPC regarding loans to growers for purchasing certificates of Vereniging HZPC. The agreed interest rate varies from 0.5% to 2.5%. The term of the loan is 5 years.

Other investments
The item other effects of securities that are intended to be held long-term. The market value of the different classes other securities approximates the carrying value EUR 34,000.

Deferred taxes
The deferred tax assets relates to the valuation of available loss carry forwards and deductible temporary differences, including tangible assets. Of these assets, an amount of EUR 200,000 is expected to be realized within one year.

The loss carry forward and deductible temporary differences not recognized amounts net EUR 90,000 (2013/2014: nil).

Other receivables
The other receivables relates to loans granted to personnel in the amount of EUR 60,000 (2013/2014: EUR 65,000 ) with an average maturity of 5 years and an interest rate of 4%

4. Inventories (in EUR x 1,000)

  30-06-2015 30-06-2014
     
Packaging 1,036 1,144
Finished products 396 -
     
  1,432 1,144

Finished product regards self developed mini-tubers. On balance no provision for obsolescence is needed for mini-tubers.

Receivables

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

  30-06-2015 30-06-2014
     
Amortized cost of outstanding receivables 45,755 48,057
Less: provision for bad debts -14,960 -16,682
     
  30,795 31,375

In the amount of the trade receivables there are no amounts with a term longer then one year which are not unforeseen.

6. Accounts receivable from participating interests

The amounts are regarding to participating interest 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)

 

  30-06-2015 30-06-2014
     
Income tax 4,874 4,547
Contributions and social securities 41 21
     
  4,915 4,568

 

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

 

  30-06-2015 30-06-2014
     
Pension premiums 855 719
License receivables 410 255
Prepaid expenses 345 336
Premium health insurance 206 204
Other accrued income 2,930 2,871
     
  4,746 4,385

The other receivables and accrued income contain no amounts with a term longer then one year.

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

  30-06-2015 30-06-2014
     
Cash funds 13 18
Bank accounts 19,463 19,858
Deposits 8,100 13,000
     
  27,576 32,876

Under cash and cash equivalents EUR 8.1 million is repayable on demand. Bank accounts are available on demand. HZPC has complied the banking covenants which were stated end book year to the standby facility of 15 million euro. HZPC made no use of this facility ending book year.

10. Group equity

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

11. Provisions

Pensions (in EUR x 1,000)
The pension provision comprises the liabilities with respect to pension plans and comparable liabilities:

  Total 2014/2015 Total 2013/2014
Pension provision staff    
Opening balance July 1st 351 534
Additions 102 88
Withdrawals -136 -271
     
Closing balance June 30th 317 351
     

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 organized and functions. For these foreign schemes is a best estimate of the balance sheet date, existing pension liability. 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, 2015;
  • survival : Insee dies offset applied.

Other provisions
The following overview shows the movements in 2014/2015:

  Total 2014/2015 Total 2013/2014
     
Opening balance July 1st 343 331
Additions 81 24
Withdrawals -29 -12
     
Closing balance June 30th 395 343
     

The provision for anniversary liabilities is calculated on the basis of a 4% discount rate and taking the expected turnover in personnel into account. Of this amount EUR 35,000 is short-term.

12. Current liabilities

Growers deposits
The grower deposits 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. At the end of the financial year, the interest rate amounts at 1.1%.

Taxes, contributions and social insurances

  Total 2014/2015 Total 2013/2014
     
National insurance 372 639
Premies en sociale verzekeringen 624 700
     
Premium en social security 996 1,339
     

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

Other debts and accrued liabilities

  Totaal 2014/2015 Totaal 2013/2014
     
Licenses to be paid 1,164 1,698
Wages and salaries 634 900
Commissions 313 308
Customer settlements 1,268 803
Holiday allowances 789 549
To be settled pool result 815 533
Other debts 3,588 2,966
     
  8,571 7,757

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

Financial instruments
The company is in normal business use of financial instruments exposes the Company to market, currency, interest rate, credit and liquidity risks. To manage these risks, the company has a policy, including established 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 under financial fixed assets has been disclosed, trade and other receivables and cash. The maximum credit risk facing the company amounted to 68 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, as 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 view has taken the following measures to limit credit risk:

  • Regularly using safeguard measures such as advance payments, letters of credit and bank guarantees;
  • Credit limits are actively monitored throughout the season;
  • New supplies are not allowed until all debts have been paid from the previous season.

Currency risk
As a result of international activities the Company holds net investments in foreign companies and is engaged in foreign currency transactions in particular US Dollars / Pounds Sterling / Polish Zloty and Canadian Dollars.

On June 30 2015 the net exposure is converted into EUR at the spot rate at the balance sheet date as follows:

x 1000 ASSETS
EUR

local currency
LIABILITIES
EUR

local currency
         
USD 675 758 - -
GBP 4,329 3,091 4,084 2,916
PLN 2,617 10,978 2,614 10,966
CAD 3,906 5,441 3,906 5,441
         
Totaal 11,527   10,604  
         

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. In 2015, a centralized cash management system was introduced to manage cash flows within the European companies. 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 15 million.

Interest risk
The Company incurs interest risk on interest bearing assets and liabilities, including the grower deposits. Both of these receivables and payables have floating interest rate agreements and are therefore subject to future changes in interest rates. 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 1.3 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 lower of cost or market value. Any results on the year end outstanding positions are recognized in the year in which the harvest concerned. The unrealized exchange gain at the expense and risk of growers at the balance sheet amounted to EUR 181,475 positive.

     

 

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