1 - Intangible fixed assets

The composition and movement of intangible fixed assets in the financial year 2018/2019 is as follows:

  Research and
devellopment
costs
Goodwill Concessions,
permits and
intellectual
properties
Total
2018 / 2019
         
Purchase value 4,442 5,002 3,817 13,261
Cumulative depreciation -850 -4,019 -1,090 -5,959
         
Book value as per 1 July 3,592 983 2,272 7,302
         
Investments 3,983 - - 3,983
Depreciation -71 -485 -546 -1,102
         
Total 3,912 -485 -546 2,881
         
Purchase value 8,425 5,002 3,817 17,244
Cumulative depreciation -921 -4.504 -1.636 -7.061

 

 

       
Book value
per 30 June
7,504 498 2,181 10,183
         

The investments entail the development of a new ERP system.
 

2 - Tangible fixed assets

The changes per category for tangible fixed assets for the year 2018/2019 is as follows:

 

Company
buildings and land

Plant and
equipment

Other fixed
operating
assets

Operating
assets under
construction

Totaal
2018/2019

           
Purchase value 39,001 24,785 3,436 272 67,399
Cumulative depreciation -23,457 -19,330 -2,586 - -45,278
           
Book value as per 1 July 15,544 5,455 850 272 22,121
           
Investments 329 2,674 221 123 3,347
Disposals -67 -121 -185 - -373
Depreciation -982 -1,960 -243 - -3,185
           
Balance -720 593 -207 123 -211
           
Purchase value

39,263 27,338 3,472 395 70,468
Cumulative depreciation -24,439 -21,290 -2,829 - -48,558
           
Book value as per 30 June 14,824 6,048 643 395 21,910
           

 

3 - Financial fixed assets

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

  Participating
interests
Receivables
from Association
HZPC
Other
securities
Deferred
tax
assets
Other
receivables
Total
 
             
Book value as per 1 July 1,322 249 25 2,050 409 4,055
             
Investments/increase  791 - - - - 791
Result from participating interests -747 - - - - -747
Impairments/repayments - -112 - -78 -35 -225
Dividend received -123 - - - - -123
Exchange rate fluctuations -36 - - - - -36
             
Movements 2018/2019 -115 -112 - -78 -35 -340
             
Book value as per 30 June 1,207 137 25 1,972 374 3,715
             


Participating interests
These are participating interests that are not consolidated due to minority interests.  For a summary of the capital interests, you are referred to this table.

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 interest rate is 1%. The term of the loan is 5 years.

Other securities
The 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 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 EUR 620,000.

Other receivables
The other receivables relates to loans granted to staff for an amount of EUR 30,000 (2017/2018 EUR 24,000) with an average term of 5 years and an interest rate of 4%. This post also includes an interest cap to cover the interest risk on working capital financing up to EUR 15 million. The cap has a term of 10 years and an interest cap of 2%.
 

4 - Inventories

  30-06-2019 30-06-2018
     
Packaging 1,120 1,233
Finished products 892 930
     
  2,012 2,163

The changes in finished products are included under costs of raw materials and consumables.
 

Trade and other receivables

 

5 - Trade receivables

  30-06-2019 30-06-2018
     
Amortized cost of outstanding receivables    52,334 55,583
Less: Allowance for doubtful debts -11,241 -11,570
     
  41,093 44,013

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

 

6 - Accounts receivables 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 insurances

  30-06-2019 30-06-2018
     
Sales tax 6,674 5,173
Corporate income tax 96 714
Contributions and social securities 18 16
     
  6,788 5,903

 

8 - Other receivables and accrued assets

  30-06-2019 30-06-2018
     
Pension contributions 228 220
Licences to be claimed 4,683 5,711
Prepaid expenses 1,566 2,225
Health insurance premium 257 225
Government grants 2,053 1,398
Receivable on growers 3,100 2,118
Other amounts 1,195 2,341
     
  13,082 14,238

The other receivables contain no amounts with a term longer than one year.
 

9 - Cash and cash equivalents

  30-06-2019 30-06-2018
     
Cash    9 8
Bank account current 30,394 25,224
     
  30,403 25,232

The item bank current account is freely available like previous 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
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 2018/2019 are shown in the following overview:

  Total
2018 / 2019
Total
2017 / 2018
     
Status as of 1 July 149 284
Additions 25 14
Withdrawals -10 -149
     
Status as of 30 June  164 149
     

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.  

 

Other provisions
The following overview shows the changes in 2018/2019:

  Total
2018 / 2019
Total
2017 / 2018
     
Status as of 1 July 402 408
Additions 22 69
Withdrawals -1 -75
     
Status as of 30 June 423 402
     

he provision for long-service liabilities is calculated on the basis of a 4% discount rate and taking the expected turnover in personnel into account. Of this amount EUR 51,000 is short-term.

 

Current liabilities

12 - Debts to credit institutions

Current account overdraft facility
The business has an overdraft facility with ING Bank N.V. and Deutsche Bank A.G. ING Bank N.V. ING Bank N.V. has provided an overdraft facility on the current account. The current account overdraft facility with the ING Bank N.V. amounts to EUR 10 million as of 30 June 2019 and the Euribor interest plus 0.75%. Deutsche Bank A.G. has also provided an overdraft facility on the current account. The current account overdraft facility with the Deutsche Bank A.G. amounts to EUR 9.9 million as of 30 June 2019 and the Euribor interest plus 0.75%.

  • With respect to the current account overdraft facility with the ING B.V., the following collaterals have been provided in the form of:
  • Access to joint account and co-liability agreement, issued by: IPR B.V., HZPC Research B.V., HZPC Holding B.V.,
  • HZPC Holland B.V., STET Holland B.V., ZOS B.V., ZOS Wehe B.V., SBA Europe B.V., SBDA B.V., HZPC France S.A.S. and
  • HZPC Deutschland GmbH;
  • Pledge of accounts receivable (first right of distraint) from: IPR B.V., HZPC Research B.V., HZPC Holding B.V.,
  • HZPC Holland B.V., and STET Holland B.V.
     

With respect to the current account overdraft facility with the Deutsche Bank A.G., the following collaterals have been provided in the form of:

  • Mortgage collateral on real estate (of 20 million primary sum to be increased by 40% for interest and costs).

 

Covenants
The following covenants are linked to the credit facility:
•    Solvency ratio
•    Asset coverage ratio
•    Turnover coverage ratio
•    EBITDA coverage ratio
•    Cross default

The business has agreed the following covenants with its banks:

  Solvency
ratio ING
Solvency ratio
Deutsche Bank
Asset coverage
ratio ING
Turnover coverage
ratio ING

EBITDA Coverage
rate ING

EBITDA Coverage
ratio Deutsche Bank
             
For the duration > 35% > 35% > 75% > 75% > 75% > 70%
             
30 June 2019 > 35% > 35% > 75% > 75% > 75% > 70%
             

The solvency ratio is defined for both the ING Bank B.V. and Deutsche Bank A.G. as follows:  Corrected capital/corrected balance
sheet total.
The asset coverage ratio is defined as follows: Assets from selected businesses (from the joint account)/consolidated assets.
The turnover coverage ratio is defined as follows: Turnover from selected businesses (from the joint account)/consolidated assets
The EBITDA coverage ratio is defined for the ING Bank B.V. as follows: EBITDA from selected businesses (from the joint account)/
consolidated EBITDA.
The EBITDA coverage ratio is defined for the Deutsche Bank A.G. as follows: EBITDA from selected businesses (all Dutch co-debtors)/consolidated EBITDA.
At the end of the accounting period, the entity is in compliance with the covenants.


 

13 - Taxes, contributions and social insurances

 

  2018 / 2019 2017 / 2018
Corporate income tax to be paid 1,048 170
Corporate sales tax to be paid 580 442
Payroll tax and social insurances 610 1,099
     
  2,238 1,711
     

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

 

14 - Other debts and accrued liabilities

  2018 / 2019 2017 / 2018
     
Licenses to be paid 1,655 2,023
Wages and salaries to be paid 720 439
Pension contributions 354 356
Holiday allowances 1,406 1,292
Product related costs 5,136 5,566
Growers 882 4,854
Other amounts 4,810 4,259
     
  14,963 18,789

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 EUR 51 million. 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.
  • New deliveries for the new season are rarely permitted until debts from the previous season have been paid.

 

Currency risk
As a result of international activities the company, by way of the receivables and debts recorded in the balance sheet, holds 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 2019 the net exposure was converted into EUR at the spot rate as of the balance sheet date as follows:


x 1000
Rate
EUR
ASSETS
local currency
ASSETS
in EUR
LIABILITIES
local currency
LIABILITIES
in EUR
           
USD 1.140 2.613 2.292 0 0
GBP 0.900 4.909 5.454 3.043 3.381
PLN 4.240 18.611 4.389 4.244 1.001
CAD 1.490 5.331 3.578 4.005 2.688
           
Totaal     15.713   7.070
           

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 business runs liquidity risks with respect to the interest on the credit facility. An interest cap has been implemented to cover the interest risk on the credit facility. The conditions of hedge accounting are fulfilled, whereby the hedge relationship is processed in accordance with the rules of cost price hedge accounting. For the securities provided, we refer you to ‘Credit facilities’ on page 62.

Interest risk
The Company incurs interest on interest bearing assets and liabilities. 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. In order to limit the interest risk on the credit facility, a interest cap has been agreed as a mitigating measure.

Off-balance sheet assets and liabilities
These include:

  • Obligations under operating leases and rent for an amount of EUR 1.4 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. The remaining amount concerns an obligation for less than 5 years. The debt for rental and lease in accounting year 2018/2019 amounted to EUR 0.9 million.
  • 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 unrealized exchange gain on the balance sheet date at the expense and risk of the growers amounts to EUR 1,000.
  • Several claims have been filed against the company and/or group companies, including South Africa and against the Challenger variety, which are contested by it/them. Although the outcome of these disputes cannot be predicted with certainty, it is assumed - partly on the basis of legal advice received - that it will not adversely affect the consolidated position.