Notes to the company financial statements

1. Summary of significant accounting policies

1.1 Basis of preparation

The company financial statements of Royal BAM Group nv (‘the Company’ or ‘BAM’) have been prepared in accordance with Part 9, Book 2 of the Dutch Civil Code. In accordance with subsection 8 of section 362, Book 2 of the Dutch Civil Code, the recognition and measurement principles applied in these parent company financial statements are the same as those applied in the consolidated financial statements (see note 2 to the consolidated financial statements).

Regarding IFRS 9 combination 3, the Group has applied the Dutch ‘RJ 100.107a’ regarding expected credit losses. Therefore the expected credit losses on receivables from subsidiaries have not been included in the company financial statements, since these have been eliminated within the book value of the receivables.

1.2 Investments in subsidiaries

Investments in subsidiaries are measured at net asset value. The net asset value is calculated using the accounting policies, as described in note 2 to the consolidated financial statements. The net asset value of subsidiaries comprises the cost, excluding goodwill, of BAM’s share in the net assets of the subsidiary plus BAM’s share in income or losses since acquisition, less dividends received.

1.3 Income tax

Corporate income tax is allocated to the subsidiaries forming part of the fiscal unit, as if they were independent taxable entities.

2. Property, plant and equipment

 (x €1,000) Other assets
   
As at 1 January 2020  
Cost 36,193
Accumulated depreciation and impairments (23,873)
  12,320
   
Additions 8,785
Disposals (1)
Reclassifications -
Depreciation charges (5,260)
  3,524
   
As at 31 December 2020  
Cost 44,977
Accumulated depreciation and impairments (29,133)
  15,844
   
Additions 4,520
Disposals -
Reclassifications* (7,628)
Depreciation charges (4,641)
  8,095
   
As at 31 December 2021  
cost 41,868
Accumulated depreciation and impairments (33,773)
  8,095

* Relates to investments in Non-integrated software.

3. Right-of-use assets

 

Land and
buildings

Cars

Total

As at 1 January 2020 98 4,216 4,314
       
Additions 11 1,704 1,715
Remeasurement (44)  (186)  (230)
Depreciation charges (47) (1,841) (1,888)
Reclassifications - (15) (15)
  (80) (338) (418)
       
As at 31 December 2020 18 3,878 3,896
       
Additions   753 753
Disposals / retirements (2) - (2)
Remeasurement (8) (21) (29)
Depreciation charges (8) (1,672) (1,680)
Reclassifications - (417) (417)
  (18) (1,375) (1,375)
       
As at 31 December 2021 - 2,521 2,521

 

Additional information on right-of-use assets is disclosed in Note 8 to the consolidated financial statements.

 

4. Intangible assets

 

Goodwill

Non-integrated software

Other

Total

As at 1 January 2020        
Cost  519,915  7,946 883  528,744
Accumulated amortisation and impairments  (157,088)  (2,613)  (331)  (160,032)
   362,827  5,333  552  368,712
         
Additions -  1,705 -  1,705
Amortisation charges -  (1,816) (88)  (1,904)
Impairment charges*  (43,400) -  (43,400)
Exchange rate differences  (7,446) - - (7,446)
   (50,846)  (111)  (88)   (51,045)
As at 31 December 2020        
Cost  512,469  9,651 883  523,003
Accumulated amortisation and impairments (200,488)  (4,429)  (419)  (205,336)
   311,981  5,222  464  317,667
         
Additions -  651 -  651
Amortisation charges -  (2,596) (88)  (2,684)
Reclassifications** -  7,628  -  7,628
Impairment charges*** - (3,112) - (3,112)
Exchange rate differences 9,971 - - 9,971
  9,971 2,571 (88) 2,454
         
As at 31 December 2021        
Cost 522,440 17,930 883 541,253
Accumulated amortisation and impairments (200,488) (10,137) (507) (211,132)
  321,952 7,793 376 330,121

* Impairment charges relates to the goodwill of BAM International (€22 million), BAM Deutschland (€12 million) and Kairos nv (€9 million). See note 27 of the notes to the consolidated financial statements.

** Relates to investments in Non-integrated software and has been reclassed from Property Plant & Equipment.

*** Impairment charges relates to Non-integrated software and are related, due to the divestments the software is not put to use as such it was impaired in 2021.

 

5. Financial assets

 

Shares
insubsidiaries

Receivables
from
subsidiaries

Other
participating
interests

Total


As at 1 January 2020  726,955  306,192 648  1,033,795
Net result for the year  (137,342) - -  (137,342)
Dividends  (95,156) - -  (95,156)
Adjustments in group structure  (90,828)  68,174  116,776  94,122
Capital contributions  - - - -
Loans granted and repayments -  (9,516) -  (9,516)
Hedging reserve  62,793 - -  62,793
Remeasurements of post-employment benefit obligations  2,176 - -  2,176
Exchange rate differences  (7,811) - -  (7,811)
As at 31 December 2020  460,787  364,850  117,424  943,061
         
Net result for the year  9,173  -  13,698  22,871
Dividends  (15,000)  -   (6,100)  (21,100)
Reclassifications  (70,334)  19,254 -  (51,080)
Capital contributions   110,231  -  -   110,231
Loans granted and repayments  -  (30,945)  -  (30,945)
Hedging reserve  254  -  -  254
Remeasurements of post-employment benefit obligations  33,520  -  -  33,520
Exchange rate differences  10,518  -   1,501  12,019
As at 31 December 2021  539,150  353,159  126,523  1,018,832

In 2021 the impairment of the long term receivables of BAM International bv of €28.9 million, done in 2020, has been reversed because of a capital contribution in 2021. For the provision of BAM International as per year end 2022 refer to Note 10.

The reclassifications under the other participating interests concerns the fair value of the 50 per cent interest in BAM PPP which is qualified as discontinued operation in 2020.

A list of the principal subsidiaries is disclosed in section Other information, paragraph 8.5.

6. Deferred tax assets

  2021 2020
     
Deferred tax assets  64,903  79,494
   64,903  79,494

Deferred tax assets include the liquidation of old property development activities in Germany and the tax loss carry-forwards of the operations in the Netherlands to the extent that the realisation of the related tax benefit through future taxable profits is probable offset against deferred tax liabilities.

Additional information on deferred tax assets and liabilities is disclosed in Note 24 to the consolidated financial statements.

 

7. Receivables

  2021 2020
     
Amounts due from subsidiaries  15,632  22,513
Amounts due from joint ventures -  2,310
Prepayments and accrued income  21,044  21,764
   36,676  46,587

Receivables are due within one year.

 

8. Cash and cash equivalents

  2021 2020
     
Cash at bank and in hand  582,264  1,167,229
   582,264  1,167,229

Cash and cash equivalents are at the free disposal of the Company.

 

9. Equity attributable to shareholders of the Company

At year-end 2021, the authorised capital of the Group was 400 million ordinary shares (2020: 400 million) and 600 million preference shares (2020: 600 million), all with a nominal value of €0.10 per share (2020: €0.10 per share).

All issued shares have been paid in full.

Movements in the number of ordinary shares are as follows:

 

Number of ordinary
shares

Number of
treasury
shares

Number of ordinary 
shares
in issue

       
As at 1 January 2020  279,407,449  6,111,432 273,296,017
Repurchase of ordinary shares - - -
Awarded LTI shares - - -
Dividends  - - -
As at 31 December 2020  279,407,449  6,111,432 273,296,017
       
Repurchase of ordinary shares - - -
Awarded LTI shares - - -
Dividends - - -
As at 31 December 2021  279,407,449  6,111,432 273,296,017


Movements in shareholders’ equity are as follows: 

  Attributable to the shareholders of the Company
 

Issued and paid capital

Share premium

Reserves


Retained 
earnings

Net result


Total


             
As at 1 January 2020  27,941  811,370  (183,647)  (39,066)  11,846  628,444
             
Net result for the year - - - - - -
Appropriation of result       -  (101,445)  (101,445)
Dividends - - -  11,846 ( 11,846) -
Remeasurements of post-employment benefit obligations - - - - - -
Cash flow hedges - - -  (1,940) -  (1,940)
Repurchase of ordinary shares - -  94,579 - -  94,579
Share-based payments  -  -  - -  - -
Exchange rate differences  -  - -  -  - -
Development cost  -  -  (10,597) -  -  (10,597)
Other  -  -  83,406  (88,265)  -  (4,859)
As at 31 December 2020  27,941  811,370  (16,259)  (117,425)  (101,445)  604,182
             
Net result for the year  -  -  -  -  (2,614)  (2,614)
Appropriation of result        (101,445)  101,445  -
Dividends  -  -  -  -  -  -
             
Remeasurements of post-employmentbenefit obligations - - -  27,465 -  27,465
Cash flow hedges - -  255 - -  255
Repurchase of ordinary shares  -  -  -  -  -  -
Share-based payments  -  -  -   2,374  -  2,374
Exchange rate differences  -  -  21,927  -  21,927
Other  -  - - -  -  -
As at 31 December 2021  27,941 811,370   5,923  (189,031)  (2,614)  653,589

9.1 Reserves and retained earnings

Reserves comprise amounts for (cash flow) hedging, translation differences and legal reserve related to joint ventures. The legal reserves are required by Dutch law. Distributions to the shareholders of the Company are restricted to the extent of the balance.

The hedging reserve amounts to nil (2020: nil) and the translation reserve €77 million negative (2020: €99 million negative). The total reserves include the legal reserve of €86 million (2020: €83 million) consisting of AsfaltNu of €1 million (2020: €6 million) and in respect of the joint venture BAM PPP of €85 million (2020: €77 million).

For a further breakdown of the reserves see Note 16 and 17 of the Notes to the consolidated financial statements.

In 2020 the total equity attributable to the shareholders of the Company amounts to €604 million and differs from the consolidated equity attributable to the shareholders of the Company with €21 million. The difference relates to the negative equity value of a certain subsidiary which has been valued at nil. The Company does not foresee an outflow of cash and expects that the equity will be positive in near future.
As the equity value of the subsidiary has increased and became positive, the difference has been recognised in the net result for the year 2021.

In 2021 the result for the year of the Company accounts amounts to €2.6 million negative and differs from the consolidated result for the year with €20.7 million. The difference relates to the reversal in 2021 of the beforementioned negative equity value of a certain subsidiary which has been valued at nil in 2020.

9.2 Dividends per share

Over 2021, no dividend is proposed to be declared as the capital ratio is below strategic target.

10. Provisions

  2021 2020
     
Subsidiaries  2,756  62,371
Employee benefits  22,522  18,193
Other provisions  2,138  1,600
   27,416  82,164

 

The provision for subsidiaries relates to the negative equity value of BAM International bv which has been valued at nil. The decrease is mainly caused by a Capital contribution and reversal of write-off on receivables. The Company does foresee an outflow of cash for the amount of the negative equity value.

11. Borrowings

  2021 2020
     
Subordinated convertible bonds - -
Revolving credit facility -  400,000
  -  400,000

 

The facility was fully repaid within the first quarter of 2021. At year-end 2021, the facility was not used (year-end 2020: fully drawn). Additional information on borrowings is disclosed in Note 19 to the consolidated financial statements.

 

12. Lease liabilities

 

2021

2020

     
Lease liabilities  2,557  3,931
   2,557  3,931

Additional information on lease liabilities is disclosed in Note 20 to the consolidated financial statements.

 

13. Other liabilities

  2021 2020
     
Amounts due to subsidiaries  1,298,670  1,322,349
Subordinated convertible bonds -  118,670
Other liabilities  61,180  42,482
   1,359,850  1,483,501

 

In response to Covid-19, the Group made use of the temporary deferral of tax payments (value added tax and wage tax) granted by certain tax authorities for a total amount of €6 million (2020: €6 million). An amount of €6 million (2020: €5 million) has been reflected under the non-current liabilities.
The other liabilities mainly consist of trade and other payables.

14. Internal charges

The internal charges represent services that have been charged to the other Group companies.

 

 

15. Employee benefit expenses

  2021 2020
     
Wages and salaries  36,461  36,178
Social security costs  2,764  3,731
Pension costs - defined contribution plans  2,548  2,942
Pension costs - defined benefit plans  28  142
   41,801  42,993

 

At year-end 2021, the Company had 286 employees in FTE (2020: 339). The average number of employees in FTE amounted to 303 (2020: 323). There are no employees in other countries than the Netherlands.

16. Finance income and expense

  2021 2020
     
Finance income    
- Interest income - intercompany  6,477  6,819
- Interest income - cash at banks  377 -
- Interest income - other financial assets 4 -
- Other finance income 1  1,077
   6,859  7,896
     
Finance expense    
- Subordinated convertible bonds  3,313  7,365
- Committed syndicated credit facility  3,707  6,126
- Bank fees - committed syndicated credit facility -  1,411
- Interest expense - cash at banks  1,443  2,326
- Interest expense - intercompany  367  1,478
- Interest expense on lease liabilities  33 52
- Recourse property financing  79  93
- Other recourse financing  1,319  2,099
   10,261  20,950
     
Net finance result (3,402) (13,054)

Additional information on finance income and expense is disclosed in Note 30 to the consolidated financial statements.

17. Related parties

The Company has entered into arrangements with a number of its subsidiaries and affiliated companies in the course of its business. These arrangements relate to service transactions and financing agreements and were conducted at market prices.

Additional information on key management compensation is disclosed in note 38 to the consolidated financial statements.

18. Commitments and contingencies

18.1 Guarantees

The Company has issued parent company guarantees amounting to €169 million (2020: €186 million) at year-end.

18.2 Third-party liability

The Company is jointly and severally liable for the debts of the subsidiaries based in the Netherlands pursuant to section 403, Book 2 of the Dutch Civil Code.

The Company, together with other participants, has a joint and several liability for deficits in the Group’s cash pool as a whole.

The Company forms a fiscal unity with BAM’s major Dutch and certain other subsidiaries for income tax and VAT purposes and, for that reason, it is jointly and severally liable for the Dutch income tax and Dutch VAT liabilities of the whole fiscal unity.

Bunnik, the Netherlands, 23 February 2022

Supervisory Board: Executive Board:
H.Th.E.M. Rottinghuis R.J.M. Joosten
G. Boon L.F. den Houter
B. Elfring  
D. Koopmans  
N.M. Skorupska  
M.P. Sheffield  

 

 

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