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 the implementation of IFRS 9 and applying combination 3, the Group has applied the Dutch ‘RJ-uiting 2018-1’ 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. 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

 

Other

assets

Total

 

 

 

As at 1 January 2017

 

 

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

 

     

Additions

5,594

5,594

Disposals

(23)

(23)

 

Depreciation charges

(4,389)

(4,389)

 

 

1,182

1,182

     

As at 31 December 2018

27,794

27,794

Cost

(19,034)

(19,034)

 

Accumulated depreciation and impairments

8,760

8,760

 

 

3. Intangible assets

 

Goodwill

Non-

integrated

software

Other

Total

 

 

 

 

 

As at 1 January 2017

 

 

 

 

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

 



Additions

-

4,128

-

4,128

Amortisation charges

-

(815)

(88)

(903)

Exchange rate differences

(1,861)

-

-

(1,861)

 



 

(1,861)

3,313

(88)

1,364

 



As at 31 December 2018

 

 

 

 

Cost

512,685

6,859

883

520,427

Accumulated amortisation and impairments

(157,088)

(1,141)

(243)

(158,472)

 



 

355,597

5,718

640

361,955

 



 

4. Financial assets

 

Shares in
subsidiaries

Receivables
from
subsidiaries

Other
participating
interests

Total

 

 

 

 

 

As at 1 January 2017 Restated*

818,457

696,929

2,091

1,517,477

Net result

28,719

-

(1,500)

27,219

Dividends

(25,604)

-

-

(25,604)

Additions

-

-

57

57

Reclassifications

(196,859)

196,859

-

-

Adjustments in group structure

(46)

 

-

(46)

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

(7,683)

-

-

(7,683)

 



As at 31 December 2017 Restated*

647,496

566,815

648

1,214,959

 



Net result for the year

96,218

-

-

96,218

Dividends

(17,255)

-

-

(17,255)

Reclassifications

(13,661)

13,661

-

-

Adjustments in group structure

(12)

-

-

(12)

Capital contributions

41,000

-

-

41,000

Loans granted and repayments

-

(200,469)

-

(200,469)

Hedging reserve

(4,532)

-

-

(4,532)

Remeasurements of post-employment benefit obligations

29,110

-

-

29,110

Exchange rate differences

(4,550)

-

-

(4,550)

 



As at 31 December 2018

773,814

380,007

648

1,154,469

 




The reclassification relates to the entities of the Dutch sector Construction and Property and BAM Services Nederland bv.
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

 

2018

2017

 

 

 

Deferred tax assets

124,005

169,229

 

 

124,005

169,229

 

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

 

2018

2017

 

 

 

Amounts due from subsidiaries

21,752

19,600

Prepayments and accrued income

13,586

12,649

 

 

35,338

32,249

 

Receivables are due within one year.

 

7. Cash and cash equivalents

 

2018

2017

 

 

 

Cash at bank and in hand

172,604

43,516

 

 

172,604

43,516

 

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

8. Equity attributable to shareholders of the Company

At year-end 2018, the authorised capital of the Group was 400 million ordinary shares (2017: 400 million) and 600 million preference shares (2017: 600 million), all with a nominal value of €0.10 per share (2017: €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 2017

271,814,728

1,193,145

270,621,583

Repurchase of ordinary 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

 


Repurchase of ordinary shares

-

3,940,956

(3,940,956)

Awarded LTI shares

-

(170,039)

170,039

Dividends

3,853,600

-

3,853,600

 


As at 31 December 2018

278,779,019

5,483,002

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

 

 

 

 

 

 

 

Restated as at 1 January 2017*

27,181

812,130

(170,252)

8,601

46,831

724,491

 

 

 

 

 

 

 

Net result for the year

-

-

-

-

(13,789)

(13,789)

Appropriation of result

-

-

-

46,831

(46,831)

-

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

-

-

(12,068)

-

-

(12,068)

Development cost

-

-

12,000

(12,000)

-

-

Other

-

-

-

(51)

-

(51)

 





Restated as at 31 December 2017

27,493

811,818

(152,815)

48,549

(13,789)

721,256

 





Net result for the year

-

-

-

-

23,773

23,773

Appropriation of result

-

-

-

(13,789)

13,789

-

Dividends

386

(386)

-

(11,429)

-

(11,429)

Remeasurements of post-employment
benefit obligations

-

-

-

21,973

-

21,973

Cash flow hedges

-

-

(4,541)

-

-

(4,541)

Repurchase of ordinary shares

-

-

-

(15,492)

-

(15,492)

Share-based payments

-

-

-

(95)

-

(95)

Exchange rate differences

-

-

(6,410)

-

-

(6,410)

Development cost

-

-

(1,200)

1,200

-

-

Other

-

-

-

(4)

-

(4)

 





As at 31 December 2018

27,879

811,432

(164,966)

30,913

23,773

729,031

 






8.1 Reserves

Reserves relate to the reserves for (cash flow) hedging, translation differences and legal reserve related to the capitalisation of development cost. All of these reserves 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 €64 million negative (2017: €60 million negative) and the translation reserve €112 million negative (2017: €105 million negative). The total reserves includes as legal reserve for the capitalised development cost of €10.8 million (2017: €12.0 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 2018 of 14 eurocents in cash per ordinary share or in shares, at the option of the shareholders with repurchase of shares to offset dilution (2017: 10 eurocents). Based on the number of ordinary shares outstanding at year-end 2018, a maximum of €38.3 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

 

2018

2017

     

Employee benefits

42,747

41,344

 

 

42,747

41,344

 

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

 

2018

2017

     

Subordinated convertible bonds

117,637

114,987

 

 

117,637

114,987

 

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

 

11. Current liabilities

 

2018

2017

 

 

 

Amounts due to subsidiaries

928,118

914,694

Other liabilities

39,598

35,841

 

 

967,716

950,535

 

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

 

2018

2017

 

 

 

Wages and salaries

26,994

24,695

Social security costs

2,570

2,312

Pension costs - defined contribution plans

1,909

1,529

Pension costs - defined benefit plans

174

230

 

 

31,647

28,766

 

At year-end 2018, the Company had 271 employees in FTE (2017: 230). The average number of employees in FTE amounted to 251  (2017: 225). There are no employees in other countries than the Netherlands.

 

14. Finance income and expense

 

2018

2017

Finance income

 

 

- Interest income - intercompany

12,534

14,454

- Interest income - cash at banks

78

1,426

- Interest income - other financial assets

11

6

- Other finance income

2,170

1,923

 

 

14,793

17,809

     

Finance expense

 

 

- Subordinated convertible bonds

7,025

6,871

- Committed syndicated credit facility

328

16

- Bank fees - committed syndicated credit facility

2,611

2,708

- Interest expense - intercompany

1,770

2,999

- Recourse property financing

-

199

- Other recourse financing

1,403

1,518

- Fair value result - interest rate swaps

-

561

 

 

13,137

14,872

 

Net finance result

1,656

2,937

 

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 €160 million (2017: €169 million) at year-end 2018.

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 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
19 February 2019

Supervisory Board: Executive Board:

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

Name

Company