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).

As a result of a change in section 402, Book 2 of the Dutch Civil Code, the income statement in the company financial statements is no longer condensed. BAM has included the full income statement and other additional notes resulting from this change, including the comparative figures.

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. 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

 

Land and

buildings

Other

assets

Total

 

 

 

 

As at 1 January 2016

 

 

 

Cost

 16,896 

 17,076 

 33,972 

Accumulated depreciation and impairments

 (4,884)

 (9,078)

 (13,962)

 

 12,012 

 7,998 

 20,010 

 

 

 

 

Additions

-

 3,497 

 3,497 

Disposals

 (11,468)

 (1,296)

 (12,764)

Depreciation charges

 (544)

 (3,172)

 (3,716)

 

 (12,012)

 (971)

 (12,983)

 

 

 

 

As at 31 December 2016

 

 

 

Cost

-

 18,109 

 18,109 

Accumulated depreciation and impairments

 - 

 (11,082)

 (11,082)

 

 - 

 7,027 

 7,027 

 

 

 

 

Additions

-

4,188

4,188

Disposals

-

(50)

(50)

Depreciation charges

-

(3,587)

(3,587)

 

-

551

551

 

 

 

 

As at 31 December 2017

 

 

 

Cost

-

22,224

22,224

Accumulated depreciation and impairments

-

(14,646)

(14,646)

 

-

7,578

7,578


3. Intangible assets 

 

Goodwill

Non-

integrated 

software

Other

Total

 

 

 

 

 

As at 1 January 2016

 

 

 

 

Cost

 541,844 

 2,099 

-

 543,943 

Accumulated amortisation and impairments

 (155,731)

 (1,514)

 - 

 (157,245)

 

 386,113 

 585 

 - 

 386,698 

 

 

 

 

 

Additions

-

-

 883 

 883 

Disposals

 (1,357)

-

-

 (1,357)

Amortisation charges

-

 (335)

 (66)

 (401)

Exchange rate differences

 (22,915)

 - 

 - 

 (22,915)

 

 (24,272)

 (335)

 817 

 (23,790)

 

 

 

 

 

As at 31 December 2016

 

 

 

 

Cost

 518,929 

 2,099 

 883 

 521,911 

Accumulated amortisation and impairments

 (157,088)

 (1,849)

 (66)

 (159,003)

 

 361,841 

 250 

 817 

 362,908 

 

 

 

 

 

Additions

-

2,346

-

2,346

Amortisation charges

-

(191)

(88)

(279)

Exchange rate differences

(4,383)

-

(1)

(4,384)

 

(4,383)

2,155

(89)

(2,317)

 

 

 

 

 

As at 31 December 2017

 

 

 

 

Cost

514,546

4,455

883

519,884

Accumulated amortisation and impairments

(157,088)

(2,050)

(155)

(159,293)

 

357,458

2,405

728

360,591


4. Financial assets

 

Shares in 

subsidiaries

Receivables 

from 

subsidiaries

Other 

participating 

interests

Total

 

 

 

 

 

As at 1 January 2016

 973,098 

 593,855 

 1,911 

 1,568,864 

Net result

 46,487 

-

 9,684 

 56,171 

Dividends

 (80,311)

-

-

 (80,311)

Additions

-

-

 180 

 180 

Disposals

 (510)

-

-

 (510)

Reclassifications

 33,372 

 (33,372)

 (9,684)

 (9,684)

Capital contributions

 55,266 

-

-

 55,266 

Loans granted and repayments

-

 136,446 

-

 136,446 

Cash flow hedge

 (2,130)

-

-

 (2,130)

Remeasurements of post-employment 

 

 

 

 

benefit obligations

 (54,299)

-

-

 (54,299)

Exchange rate differences

 (42,756)

 - 

 - 

 (42,756)

As at 31 December 2016

 928,217 

 696,929 

 2,091 

 1,627,237 

 

 

 

 

 

Net result

55,028

-

1,500

53,528

Dividends

(25,604)

-

-

(25,604)

Additions

-

-

57

57

Reclassifications

(196,859)

196,859

-

-

Adjustments in group structure

(44)

-

-

(44)

Loans granted and repayments

-

(326,973)

-

(326,973)

Cash flow hedge

16,765

-

-

16,765

Remeasurements of post-employment 

 

 

 

 

benefit obligations

13,747

-

-

13,747

Exchange rate differences

(12,792)

-

-

(12,792)

As at 31 December 2017

778,453

566,815

648

1,345,921

The reclassification relates to the restructured entities of the Dutch sector Construction and Property.

None of the financial assets were subject to impairment.

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

5. Deferred tax assets

 

2017

2016

 

 

 

Deferred tax assets

169,229

185,457

 

169,229

185,457

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 22 to the consolidated financial statements.

6. Receivables 

 

2017

2016

 

 

 

Amounts due from subsidiaries

19,600

22,495

Prepayments and accrued income

12,649

10,787

 

32,249

33,282

Receivables are due within one year.

7. Cash and cash equivalents

 

2017

2016

 

 

 

Cash at bank

43,516

53,025

 

43,516

53,025

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

8. Equity attributable to shareholders of the Company

At year-end 2017, the authorised capital of the Group was 400 million ordinary shares (2016: 400 million) and 600 million preference shares (2016: 600 million), all with a nominal value of €0.10 per share (2016: €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 2016

 270,998,957 

 604,975 

 270,393,982 

Repurchased shares

-

 588,170 

 (588,170)

Dividends

815,771

-

815,771

As at 31 December 2016

 271,814,728 

1,193,145 

 270,621,583 

 

 

 

 

Repurchase of shares

-

518,940

(518,940)

Dividends

3,110,691

-

3,110,691

As at 31 December 2017

274,925,419

1,712,085

273,213,334

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 2016

 27,099 

 812,212 

 (104,536)

 157,192 

 (10,180)

 902,147 

 

 

 

 

 

 

 

Net result for the year

-

-

-

-

 46,831 

 46,831 

Appropriation of result

-

-

-

 10,180 

 (10,180)

-

Issue of convertible bonds

-

-

-

 7,852 

-

 7,852 

Dividends

 82 

 (82)

-

 (1,978)

-

 (1,978)

Remeasurements of post-employment benefit obligations

-

-

-

 (53,226)

-

 (53,226)

Cash flow hedges

-

-

 (45)

-

-

 (45)

Repurchase of ordinary shares

-

-

-

 (2,529)

-

 (2,529)

Share-based payments

-

-

-

 606 

-

 606 

Rate differences

-

-

 (65,671)

-

-

 (65,671)

Other

-

-

-

 263 

-

 263 

As at 31 December 2016

 27,181 

 812,130 

 (170,252)

 118,360 

 46,831 

 834,250 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net result for the year

-

-

-

-

12,520

12,520

Appropriation of result

-

-

-

46,831

(46,831)

-

Issue of convertible bonds

-

-

-

-

-

-

Dividends

312

(312)

-

(7,466)

-

(7,466)

Remeasurements of post-employment benefit obligations

 

 

-

-

14,512

-

14,512

Cash flow hedges

-

-

17,505

-

-

17,505

Repurchase of ordinary shares

-

-

-

(2,696)

-

(2,696)

Share-based payments

-

-

-

818

-

818

Exchange rate differences

-

-

(17,176)

-

-

(17,176)

Devolopment cost

-

-

12,000

(12,000)

-

-

Other

-

-

-

(49)

-

(49)

As at 31 December 2017

27,493

811,818

(157,923)

158,310

12,520

852,218

8.1 Reserves

Reserves relate to the reserves for (cash flow) hedging, translation differences and legal reserve related to the capatalisation of development cost. The reserves for (cash flow) hedging and translation differences are legal reserves that 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 €60 million negative (2016: €77 million negative) and the translation reserve €110 million negative (2016: €93 million negative). The total reserves includes as legal reserve for the development cost of €12 million.

For a further breakdown of the reserves see note 16 in the Consolidated statements.

8.2 Dividends per share

The Company proposes to declare a dividend over the financial year 2017 of 10 eurocents in cash per ordinary share or in shares, at the option of the shareholders with repurchase and cancellation of shares to offset dilution. (2016: 9 eurocents). Based on the number of ordinary shares outstanding at year-end 2017, a maximum of €27.3 million will be distributed as dividend on the ordinary shares. As yet, the dividend proposal has not been deducted from retained earnings under equity.

9. Provisions 

 

2017

2016

 

 

 

Employee benefits

41,344

47,339

 

41,344

47,339 

The duration of the provisions is more than one year. Provisions with a duration less than one year are included in current liabilities.

10. Borrowings 

 

2017

2016

 

 

 

Subordinated convertible bonds

114,987

112,491

 

114,987

112,491

Additional information on borrowings is disclosed in note 18 to the consolidated financial statements. 

11. Current liabilities

 

2017

2016

 

 

 

Amounts due to subsidiaries

914,694

1,241,267

Provisions

-

82

Other liabilities

35,841

33,507

 

950,535

1,274,856

The other liabilities mainly consist of trade and other payables.

12. Internal charges

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

13. Employee benefit expenses 

 

2017

2016

 

 

 

Wages and salaries

24,695

 22,421 

Social security costs

2,312

 2,097 

Pension costs - defined contribution plans

1,529

 2,005 

Pension costs - defined benefit plans

230

 340 

 

28,766

 26,863 

At year-end 2017, the Company had 230 employees in FTE (2016: 225). The average number of employees in FTE amounted to 225 (2016: 221). There are no employees in other countries than the Netherlands.

14. Finance income and expense 

 

2017

2016

Finance income

 

 

- Interest income - intercompany

14,454

 16,115 

- Interest income - cash at banks

1,426

 817 

- Interest income - other financial assets

6

 40 

- Other finance income

1,923

 1,629 

 

17,809

 18,601 

 

 

 

Finance expense

 

 

- Subordinated convertible bonds

6,871

 3,599 

- Subordinated loan

-

 3,585 

- Bank fees - subordinated loan

-

 665 

- Committed syndicated credit facility

16

 109 

- Bank fees - committed syndicated credit facility

2,708

 3,324 

- Other non-recourse financing

-

 44 

- Interest expense - intercompany

2,999

 3,567 

- Interest expense - bank overdrafts

-

 4 

- Recourse property financing

199

 206 

- Other recourse financing

1,518

 986 

- Fair value result - interest rate swaps

561

 1,795 

 

14,872

 17,884 

 

 

 

Net finance result

2,937

 717 

Additional information on finance income and expense is disclosed in note 28 to the consolidated financial statements.

15. 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 36 to the consolidated financial statements.

16. Commitments and contingencies

16.1 Guarantees 

The Company has issued parent company guarantees amounting to €169 million (2016: €151 million) at year-end 2017.

16.2 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 Netherlands 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
20 February 2018

Supervisory Board: Executive Board:

H.L.J. Noy R.P. van Wingerden
K.S. Wester T. Menssen
G. Boon E.J. Bax
C.M.C. Mahieu 
M.P. Sheffield 
H. Valentin 

Name

Company