Financial report

Other explanatory notes

Other explanatory notes

Financial instruments
The use of financial instruments in its normal business 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 32 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 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.

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

local currency

local currency
USD 675 758 - -
GBP 1.455 1.039 - -
PLN 372 1.559 - -
CAD 277 386 - -
Totaal 2.778   -  

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 has been 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 on interest bearing assets and liabilities, including the grower deposits. Both of these receivables and payables have agreed on a floating rate interest rate agreements, thereby running the risk of doing business in respect of 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.

9. Share in result in participating interests after tax

This relates to the share in result the company has in participating interests of which EUR 1,038,000 (2013/2014: 4,854,000) relates to group companies.

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 part 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 balance sheet date to the expense and risk of the growers amounted to  EUR 181,475 positive.

Tax entity
Together with its subsidiaries, the Company forms a tax entity for corporate income tax purposes and value-added tax. The standard conditions stipulate that each of the companies is liable for the tax payable by all companies belonging to the tax entity. The fiscal entity does not differ from the fiscal entity of the consolidated Company.

Remuneration of managing and supervisory directors
A statement of the remuneration of the management has been omitted, pursuant to the provisions of Section 383 of Book 2, Title 9 of the Dutch Civil Code. The remuneration of supervisory board members amounts EUR 71,000 (2013/2014: EUR 71,000).

Joure, October 8, 2015

The Executive Board:
G.F.J. Backx (CEO), Sole Legal Representative
H. Verveld (CCO)
H.D. Heijtmeijer (CFO a.i.)

The Supervisory Board:
B.T. Visser, Chairman
E. Kraaijenzank
A.T. Oosterhof
W. Sinnema
M.J. Ubbens

Other information

Result appropriation by virtue of the Articles of Association
On the basis of article 27 of the Articles of Association of HZPC Holland B.V. a portion of the company’s annual profits, to be determined by the Board of Directors with the approval of the Supervisory Board, can be added to the reserves. The remaining profit is available for disposal at the discretion of the General Meeting of Shareholders.

Proposal for result
The General Meeting of Shareholders will be asked to approve the following appropriation of the 2014/2015 result after taxation: an amount of EUR 1,554,820 to be added to the other reserves and the remaining amount of EUR 2,938,968 to be paid out as dividend. Per share certificate EUR 3.75 is available. This proposal has been included in the balance sheet. The company can only make payments to the shareholders and other parties entitled to the distributable profit in so far as (1) the company can continue to pay its outstanding debts after the distribution (the so-called distribution test), and (2) the shareholders’ equity exceeds the legal reserves and statutory reserves under the articles of association to be maintained (the so-called balance sheet test). If not, management of the company shall not approve the distribution. Preliminary tests carried out by management revealed no indications that the proposed distribution of dividend will not be possible.

Subsequent events
No post balance sheet events with significant consequence have occurred.

Independent auditor's repost

To: the Board of Directors, Supervisory Board and Shareholders of HZPC Holland B.V.

Report on the financial statements
We have audited the accompanying financial statements for the year 1 July 2014 up to and including 30 June 2015 of HZPC Holland B.V., Joure, as included in this report on page 40 to 74, which comprise the consolidated and seperate company balance sheet as at 30 June 2015, the consolidated and seperate company profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

The directors’ responsibility
The directors are responsible for the preparation and fair presentation of these financial statements and for the preparation of the directors’ report, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore, the directors are responsible for such internal control as they determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the financial statements give a true and fair view of the financial position of HZPC Holland B.V. as at 30 June 2015 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal and regulatory requirements
Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have no deficiencies to report as a result of our examination whether the directors’ report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b - h has been annexed. Further, we report that the directors’ report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Netherlands Civil Code.

Groningen, October 8, 2015

KPMG Accountants N.V.

R.W. van Dijk RA