Wavin N.V. Annual Report 2016

Transcription

1 Wavin N.V. Annual Report 2016

2 Contents Directors Report 2 Financial Statements 8 Consolidated balance sheet 9 Consolidated income statement 10 Consolidated statement of comprehensive income 11 Consolidated statement of changes in equity 11 Consolidated statement of cash flows 12 Notes to the Consolidated financial statements 13 Company balance sheet 45 Company income statement 45 Notes to the Company Financial Statements 46 Other information 51 Additional information 57 Wavin Annual Report

3 Directors report The Director s report is available at the reception of Wavin N.V. in Zwolle. Wavin Annual Report

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9 Financial statements Consolidated balance sheet 9 Consolidated income statement 10 Consolidated statement of comprehensive income 11 Consolidated statement of changes in equity 11 Consolidated statement of cash flows 12 Notes to the Consolidated financial statements 1. General information Basis of preparation Significant accounting policies Financial risk management Assets held-for-sale Discontinued operations Revenue Other operating income Other operating expenses Personnel expenses Personnel employed Finance income and expense Income tax expense Property, plant & equipment Intangible assets Investments in associates Other financial assets Deferred tax assets and liabilities Inventories Trade and other receivables Cash and cash equivalents Equity Interest-bearing loans and borrowings Employee benefits Provisions Other non-current liabilities Share based payments Trade and other payables Operating leases Capital commitments Contingent liabilities Related parties Transactions with key management and remuneration Group companies 44 Company balance sheet 45 Company income statement 45 Notes to the Company Financial Statements A. General 46 B. Intangible assets 46 C. Investments in subsidiaries 47 D. Cash and cash equivalents 47 E. Shareholders equity 47 F. Interest-bearing loans and borrowings 48 G. Net income from subsidiaries and associates 48 H. Contingent liabilities 48 I. Remuneration of the Management Board and Supervisory Board 48 J. Shares held by the Management Board and Supervisory Board 49 K. Auditors remuneration 49 L. Employees 49 Wavin Annual Report

10 Consolidated financial statements Consolidated balance sheet As at 31 December Note Assets Property, plant & equipment , ,250 Intangible assets , ,930 Investments in associates 16 20,303 20,402 Interest bearing loans to group companies , ,022 Other financial non-current assets ,497 Deferred tax assets 18 12,202 10,155 Total non-current assets 1,073,403 1,111,256 Inventories , ,128 Trade and other receivables , ,247 Income tax receivable 1,907 2,668 Cash and cash equivalents 21 90, ,048 Assets classified as held-for-sale Total current assets 452, ,091 Total assets 1,525,719 1,653,347 Equity Issued capital 206, ,868 Share premium 576, ,020 Reserves (17,128) (21,680) Retained earnings 138, ,484 Total equity attributable to equity holders of the Company , ,692 Non-controlling interest 22 11,757 10,535 Total equity , ,227 Liabilities Interest-bearing loans from group companies ,134 Employee benefits 24 82,122 57,391 Provisions 25 7,036 10,697 Deferred tax liabilities 18 60,641 63,088 Other non-current liabilities 26 4,183 1,733 Total non-current liabilities 154, ,043 Interest bearing loans and borrowings 23-38,566 Bank overdrafts 23 8,448 6,851 Employee benefits Provisions 25 7,325 14,626 Income tax payable 6,535 4,039 Trade and other payables , ,029 Liabilities classified as held-for-sale Total current liabilities 454, ,077 Total liabilities 608, ,120 Total equity and liabilities 1,525,719 1,653,347 The notes on page 13 to 44 are an integral part of these consolidated financial statements. Wavin Annual Report

11 Consolidated financial statements Consolidated income statement For the year ended 31 December Note Continuing operations Total revenue 7 1,141,437 1,176,595 Cost of Sales (832,704) (881,248) Gross profit 308, ,347 Other operating income 8 6,911 13,696 Selling and distribution expenses (137,971) (138,565) Administrative expenses (89,972) (90,977) Research and development expenses (7,980) (10,406) Other operating expenses 9 (11,497) (8,263) Result from operating activities 68,224 60,832 Finance income 13,650 5,202 Finance expense (13,394) (15,547) Net finance costs (10,345) Share in profit of associates 16 1,812 1,038 Profit before income tax 70,292 51,525 Income tax benefit (expense) 13 (13,761) (8,742) Profit from continuing operations 56,531 42,783 Discontinued operations Result from discontinued operations 6 (1,441) (1,008) Profit for the period 55,090 41,775 Attributable to: Equity holders of the Company 53,512 40,457 Non-controlling interest 1,578 1,318 Profit for the period 55,090 41,775 The notes on page 13 to 44 are an integral part of these consolidated financial statements. Wavin Annual Report

12 Consolidated financial statements Consolidated statement of comprehensive income For the year ended 31 December Note Profit for the period 55,090 41,775 Items that may be reclassified subsequently to profit or loss Exchange rate differences on translating foreign operations 4,309 8,172 Items that will not be be reclassified subsequently to profit or loss Remeasurements in defined benefit pension schemes 24 (34,374) 36,907 Income tax relating to components of other comprehensive income 5,806 (8,858) Other comprehensive income (expense) for the period, net of income tax (24,259) 36,221 Total comprehensive income (expense) for the period 30,831 77,996 Attributable to: Equity holders of the Company 29,609 76,841 Non-controlling interest 1,222 1,155 Total comprehensive income (expense) for the period 30,831 77,996 The notes on page 13 to 44 are an integral part of these consolidated financial statements. Consolidated statement of changes in equity As at 31 December Note Issued Capital Share premium Legal and statutory reserve Translation reserve Retained earnings Total Noncontrolling interest Total equity Revised balance at 1 January , ,847 8,725 (36,163) 50, ,313 13, ,618 Profit (loss) for the period - - 1,038-39,419 40,457 1,318 41,775 Other comprehensive income Exchange rate differences on translating foreign operations ,802-8, ,877 Remeasurements in defined benefit pension schemes, net of tax ,049 28,049-28,049 Reclassification (238) - Total comprehensive income (expense) for the period - - 1,038 8,802 67,706 77,546 1,155 78,701 Contributions by and distributions to owners Shares issued 186,555 87, , ,728 Dividends declared to non-controlling interest (3,749) (3,749) Dividends received from associates - - (4,062) - 4, Other movements - - (20) (176) (71) Transactions with owners, recorded directly in equity 186,555 87,173 (4,082) - 4, ,833 (3,925) 269,908 Balance at 31 December , ,020 5,681 (27,361) 122, ,692 10, ,227 Balance at 1 January , ,020 5,681 (27,361) 122, ,692 10, ,227 Profit (loss) for the period - - 1,812-51,700 53,512 1,578 55,090 Other comprehensive income Exchange rate differences on translating foreign operations ,665-4,665 (356) 4,309 Remeasurements in defined benefit pension schemes, net of tax (28,568) (28,568) - (28,568) Reclassification (146) Total comprehensive income (expense) for the period - - 1,958 4,665 22,986 29,609 1,222 30,831 Contributions by and distributions to owners Shares issued Dividends paid to shareholder - (13,152) - - (8,998) (22,150) - (22,150) Dividends declared to non-controlling interest Dividends received from associates - - (2,071) - 2, Other movements Transactions with owners, recorded directly in equity - (13,152) (2,071) - (6,927) (22,150) - (22,150) Balance at 31 December , ,868 5,568 (22,696) 138, ,151 11, ,908 The notes on page 13 to 44 are an integral part of these consolidated financial statements. Wavin Annual Report

13 Consolidated financial statements Consolidated statement of cash flows For the year ended 31 December Note Profit for the period 56,531 42,783 Income from discontinued operations 6 (1,441) (1,008) Adjustments to reconcile to cash flow from operating activities Depreciation, amortisation and impairment 14,15 59,684 58,847 Curtailment gains and other non cash movements in provisions 1,250 (6,009) Net finance costs 14 (256) 10,350 Result on sale of property, plant and equipment and intangible fixed assets (1,978) (459) Share in profit of associates 16 (1,812) (1,038) Income tax expense (benefit) 13 13,761 8,742 Operating profit before changes in working capital and provisions 125, ,208 Changes in other receivables and other payables 5,072 25,722 Changes in working capital 5,013 37,657 Changes in provisions and employee benefits (14,928) (9,165) Cash generated from operations 120, ,422 Interest paid 2,622 (9,624) Income taxes paid (5,365) (3,208) Net cash from operating activities 118, ,590 Investments in fixed assets paid/ received (45,002) (67,100) Proceeds from sold property, plant and equipment and intangible assets 2,365 8,581 Dividends received from associates 16 2,071 4,062 Loans to associates - - Net cash used in investing activities (40,566) (54,457) Dividends paid to Shareholder (22,150) - Repayment of interest-bearing loans and borrowings 23 (115,700) - Use / (repayment) of credit facility 4,159 (15,416) Dividends paid to shareholders of non-controlling interest - (3,749) Net cash from (used in) financing activities (133,691) (19,165) Net cash used for continuing operations (56,104) 79,968 Cash flows from discontinued operations 6 (37) 611 Net change in cash & cash cash equivalents of continued and discontinued operations (56,141) 80,579 Cash and cash equivalents at 1 January ,048 57,487 Effect of exchange rate fluctuations on cash held 13,231 (5,018) Cash and cash equivalents at 31 December 21 90, ,048 The notes on page 13 to 44 are an integral part of these consolidated financial statements. Wavin Annual Report

14 1. General information Wavin N.V. (the Company) is a company headquartered in the Netherlands. Wavin N.V. acts as the holding company of the Wavin Group (the Group). Mexichem Soluciones Integrales Holding S.A. de C.V. holds 100% of the issued shares of the Company. The address of our registered office is Stationsplein 3, Zwolle, the Netherlands. We have filed a list of subsidiaries and associated companies, drawn up in conformity with sections 379 and 414 of Book 2 of the Netherlands Civil Code, with the Trade Registry of Zwolle. Our registration number at the Chamber of Commerce is KVK The consolidated financial statements of the Company for the year ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as the Group) and the Group s interest in associates covering the period 1 January 2016 up to and including 31 December The consolidated financial statements will be included in the consolidated financial statements of Mexichem S.A.B. de CV whose main address is in Río San Javier No.10, Fraccionamiento Viveros de Río, Tlalnepantla, C.P Estado de Mexico. There have been no changes to the Group structure in 2016 compared to The Group is primarily involved in the production and sales of plastic pipe systems and solutions. 2. Basis of preparation (a) Statement of compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and also comply with the financial reporting requirements included in section 9 of Book 2 of the Dutch Civil Code, as far as applicable. The Company presents a condensed income statement in the Company Financial Statements, using the facility of Article 402, Book 2, of the Dutch Civil Code. The financial statements were authorised by the Management Board on 14 March 2017 and are subject to approval by the General Meeting on 14 March (b) Basis of measurement The consolidated financial statements are prepared on the basis of historical cost except for the following assets and liabilities that are stated at their fair value: Derivative financial instruments; Investments held for trading. The methods used to measure fair values are discussed in note 3. (c) Functional and presentation currency The consolidated and company financial statements are presented in Euro, which is the Company s functional currency. The amounts are rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect amounts reported in the financial statements. The estimates and associated assumptions are based on experience and various other factors that are believed to be reasonable under the circumstances and are used to judge the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements are described in the following notes and applicable accounting policies: Note 14 and 19 Note 16 Note 16 Note 25 Note 26 and 32 Utilisation of tax losses Key assumptions used in discounted cash flow projections Recoverability of capitalised development costs Measurement of defined benefit obligations Provisions and contingencies Wavin Annual Report

15 3. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been consistently applied by Group entities, except for the change in accounting policy as explained in note 3b. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Company. Control is achieved when the Company: Has power over the investee; Is exposed, or has rights, to variable returns from its involvement with the investee; and Has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. (ii) Loss of control On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the income statement. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for in accordance with the equity method or as an available-for-sale financial asset depending on the level of influence retained. The list of direct and indirect participations has been filled with the Trade Registry of Zwolle. (iii) Investments in associates Associates are those entities in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but there is no control or joint control over those policies. Investments in an associates are accounted for using the equity method and are recognised initially at cost. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group s share of the net fair value of the identifiable assets and liabilities of the investee is recognized as goodwill, which is included in the carrying amount of the investment. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the associate, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in the associate, the Group s carrying amount is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. (iv) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised net gains after tax arising from transactions with jointly controlled entities are eliminated to the extent of the Group s interest in the associate. Unrealised gains arising from transactions with associates are eliminated against the investment in the associate. (b) Changes in accounting policies, presentation and estimation (i) Changes in accounting policies The accounting policies, presentations and estimations applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ending 31 December 2015 except for a number of amendments to IFRS and a new interpretation issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January The amendments to standards and interpretations which are effective for the year 2016 have no material impact on the financial statements of Wavin. (c) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. The functional currency of foreign entities is the currency of the primary economic environment in which the entity operates, which is generally the local currency. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at Wavin Annual Report

16 the foreign exchange rate prevailing at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. (ii) Foreign operations The assets and liabilities of foreign operations are translated to Euro at foreign exchange rates prevailing at the balance sheet date. The differences due to the conversion at beginning and final rates as related to the equity of the foreign participations are recognized through other comprehensive income. The revenues and expenses of foreign operations are translated to Euro at established average exchange rates which approximate the rates at the date of the transactions. The difference between the conversion of proceeds and costs at the established average exchange rates and the exchange rates prevailing at the end of the year is recognized through other comprehensive income. Upon disposal of foreign operations these cumulative translation adjustments are recognised in the income statement. Foreign currency translation differences are recognised in other comprehensive income and presented in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to the income statement as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes only part of its investment in an associate that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to the income statement. The following exchange rates, for the significant countries in which the Group operates, were used in preparing these financial statements: Year-end Year-end Average Average Pound Sterling Polish Zloty Danish Krone Norwegian Krone Czech Koruna Turkish Lira Hungarian Forint US Dollar (d) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings as well as trade and other liabilities. Non-derivative financial instruments are recognised initially at fair value. Attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition non-derivative financial instruments are measured as described below. Cash and cash equivalents comprise cash in hand, cash in bank accounts as well as call deposits and cheques with original maturities of three months or less. Wavin is operating a notional cash pool system for cash management of group companies. The positive and negative positions under the cash pool system are netted. As a consequence the finance income and finance expense related to this system are also presented on a net basis. Accounting for financial income and expense is disclosed in accounting policy (z). Financial assets and liabilities at fair value through profit or loss Financial assets and liabilities are classified at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group s documented risk management or investment strategy. Upon initial recognition attributable transaction costs are recognised in the income statement when incurred. Wavin Annual Report

17 Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents and trade and other receivables. Other Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less impairment losses. (ii) Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. Generally the Group enters into hedge contracts in order to minimise the effects of foreign currency and interest rate fluctuations in the income statement (for further details reference is made to note 4). Derivatives that can be used are interest rate swaps, FX-forward contracts, FX-swaps and FX-options. Transactions are entered with a limited number of counterparties with sound credit ratings. Foreign currency and interest rate hedging operations are governed according to the treasury policy which is approved and monitored by the Management Board. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. Derivative financial instruments are recognised initially at fair value. Attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, derivative financial instruments are measured at fair value and changes therein are accounted as described below. The fair value of forward exchange contracts are, if available, their quoted market price at the balance sheet date. For the fair value calculation of interest rate swaps reference is made to note 3 (ad) (ii). Cash flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized through other comprehensive income to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the income statement. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. (iii) Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction of equity, net of tax. (e) Property, plant & equipment (i) Owned assets All items of property, plant & equipment are stated at cost less cost reducing subsidies received from the government (see note 3 (g)), accumulated depreciation (see section (iv) Depreciation) and impairment losses (see note 3 (k)). Costs include expenditures that are directly attributable to the acquisition of the asset, including capitalised borrowing costs for qualifying assets. Assets that are being constructed or developed for future use are classified under property, plant & equipment in progress and stated at cost until construction or development is completed. Assets which have been ordered but for which no invoices have been received yet, are disclosed under capital commitments. Where an item of property, plant & equipment comprises major components that have different useful lives, they are accounted for as separate items of property, plant & equipment. Gains and losses on the sale of property, plant & equipment are included in the income statement as other income. If there is an indication that an asset may be impaired, the recoverable amount of the asset is estimated. If the carrying value exceeds the recoverable amount, an impairment charge is recognised in the income statement. (ii) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. Other leases are operating leases which are not recognised in the balance sheet and are recognised in the income statement on a straight-line basis over the term of the lease. Wavin Annual Report

18 (iii) Subsequent expenditure The cost of replacing part of an item of property, plant & equipment is capitalised as a separate asset when it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. Day to day maintenance costs of property, plant & equipment are expensed in the period in which they occur. (iv) Depreciation Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of items of property, plant & equipment, and major components that are accounted for separately. Land is not depreciated as it is deemed to have an indefinite life. Assets under construction are not depreciated. The rates for depreciation are: Surfaces 10 % Buildings 2.5 % Installations and production machinery 5 to 15 % Heads, cones, moulds 10 to 12.5 % Transport equipment 20 % Computer hardware 20 to % Office equipment/furniture 10 % The residual value, useful lives and depreciation methods are reassessed annually. (f) Intangible assets (i) Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial recognition reference is made to note 3 (a). Goodwill is stated at cost less accumulated impairment charges (see note 3 (k)). Goodwill is not amortised but tested annually for impairment. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate. (ii) Brand names The Group carries assets in the balance sheet for the major brands such as Wavin, Hep 2O, Chemidro and Pilsa. Internally generated brands are not capitalised. The fair value of an acquired brand name is estimated using generally accepted valuation methods such as the relief from royalty method. Brand names have an indefinite live as there are no material legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of these intangibles. (iii) Customer relations Acquired customer relations and distribution networks are calculated based on the Group s valuation methodology, which is based on cash flow projections of value-added products taking into account an attrition rate for the acquired customers. Acquired customer relations and distribution networks are stated at fair value at acquisition date less accumulated amortisation (see below) and impairment losses (see note 3 (k)). (v) Research and development Development activities are capitalised only if development costs can be measured reliably and the product or process is technically and commercially feasible and the Group has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour, an appropriate part of overhead costs and capitalised borrowing costs for qualifying projects. Other development expenditure and expenditure on research activities are recognised in the income statement when incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see note 3 (k)). (vi) Other intangible assets Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (see note 3 (k)). Expenditure on internally generated goodwill, patents, brands, etc. is recognised in the income statement as an expense when incurred. Wavin Annual Report

19 (vii) Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful life of intangible assets. Intangible assets other than goodwill and brand names are amortised from the date they are available for use. The annual amortisation rates are: Customer relations and distribution networks 4 to 10% Other assets from business combinations 20 to 50% Licenses 20% Capitalised development costs 20% Software 20 to 33.33% Brand names are an indissoluble part of the Company on a going concern principle. The Company is continuously investing in its brand names to maintain its competitive position and therefore the value of the brand names. Due to this infinite character the brand names are not amortised but tested for impairment annually. (g) Other non-current investments The other non-current investments mainly comprise long term credit facilities extended to customers and associates, other investments and guarantees deposited, after providing for doubtful debts. (h) Deferred tax assets Long term tax assets resulting from temporary differences between financial statements and fiscal valuations are capitalised as deferred tax assets as long as it is probable they will result in a future cash inflow. Tax losses carried forward for compensation with future profits that will probably materialise in the foreseeable future are also included under deferred tax assets. Within the different fiscal unities deferred tax assets and deferred tax liabilities are netted. (i) Inventories Inventories are stated at the lower of cost (see note 3 (v)) and net realisable value. The cost of inventories is based on the first-in first-out principle and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing it to their existing location. Costs for self-manufactured inventories and work in progress include an appropriate share of overhead costs based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. (j) Trade and other receivables Trade receivables, receivables from associates, prepaid expenses and accrued income are recognised initially at fair value. Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method less impairment losses. An allowance for impairment of trade and other receivables is established if the collection of a receivable becomes doubtful (see note 3 (k(i))). Discounted drafts with recourse are accounted for as debtors with the corresponding liability in interest-bearing loans and borrowings. (k) Impairment (i) Financial assets (including receivables) A financial asset not carried at fair value through profit or loss is assessed at each balance sheet date to determine whether there is objective evidence that it should be impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset. All individual significant receivables are assessed for specific impairment. Receivables that are not individually significant are collectively assessed for impairment. If any such indication exists, the asset s recoverable amount is estimated. Losses are recognised in the income statement and reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment to decrease, the decrease in impairment loss is reversed through the income statement. (ii) Non-financial assets The carrying amounts of the Group s non-financial assets other than other current investments (see note 3 (g)), inventories (see note 3 (i)) and deferred tax assets (see note 3 (h)) are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. Wavin Annual Report

20 (iii) Calculation of recoverable amount The recoverable amount of other non-current investments is calculated as the net present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Assets with a short duration are not discounted. The recoverable amount of other assets is the greater of the fair value less cost to sell and value in use. In assessing the value in use, the estimated cash flows are discounted to their net present value using an average pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. (l) Assets classified as held-for-sale Non-current assets, or disposal groups comprising assets and/or liabilities, that are expected to be recovered primarily through sale rather than through continuing use are classified as held-for-sale. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on re-measurement are recognised in the income statement. Gains are only recognised in excess of any cumulative impairment loss. Intangible assets and property, plant & equipment once classified as held-for-sale are not amortised or depreciated. In addition, equity accounting of associates ceases once classified as held-for-sale. (m) Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash in bank accounts as well as call deposits. All amounts are readily available. (n) Equity Retained earnings / appropriation of profit The net profit for the year under review is added to the retained earnings taking into account the required movements in legal reserves. Dividends are discretionary at the option of the shareholder. Dividends are recognised as a liability in the period in which they are declared. The Group can only declare dividends in so far as the equity exceeds the amount of the paid-up capital increased by the reserves that must be legally maintained. (o) Interest-bearing loans and borrowings Interest-bearing loans and borrowings are recognised initially at fair value net of transaction costs incurred. Subsequent to initial recognition the interest-bearing loans and borrowings are measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan and are amortised using the effective interest method during the period of the borrowings. (p) Employee benefits (i) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an expense in the income statement when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available to the Group. (ii) Defined benefit plans The Group s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. The benefits are discounted to determine the present value after which the fair value of the plan assets is deducted. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability (asset). The discount rate is the yield at balance sheet date on high quality corporate bonds that have maturity dates approximating the terms of the obligations. The calculations are made by qualified actuaries using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Group recognises them immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses in profit or loss. Wavin Annual Report

21 When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit relating to the past service by employees or the gain or loss on curtailment, is recognised in the income statement immediately when the amendment or curtailment occurs. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on a settlement is the difference between the present value of the defined benefit obligation being settled as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in connection with the settlement. (iii) Other non-current employee benefits This relates to non-current legal or constructive obligations as incorporated in (collective) labour agreements, company regulations, etc. (such as jubilee allowances, long term incentives, allowances for non-current service, medical, sickness and disability). These obligations are provided for on an actuarial basis. (iv) Current employee benefits Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short term cash bonus or profit sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (q) Government grants An unconditional government grant is recognised in the income statement when receipt of the grant is virtually certain. Other government grants are recognised initially as deferred income when there is reasonable assurance that they will be received and that the Group will comply with conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in the income statement on a systematic basis in the same periods in which the expenses are recognised. For grants that compensate the Group for the costs of an asset reference is made to note 3(e). (r) Provisions A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a past event that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (i) Warranties For products or services sold, a provision is recognised based on actual claims received and on historical data regarding warranty costs, which were not provided for on an individual claims basis. The product liability insurance cover is taken into account when determining the provision. Claims honoured are charged against the provision. (ii) Restructuring A provision for restructuring is recognised when a formal restructuring plan is approved and the restructuring has been announced. (iii) Tax A tax provision is recognised when tax exposures are identified within the Group. (iv) Others The other provisions mainly consist of provisions for the obligation to take back returnable packaging, quarry restorations and for environmental commitments. A provision for site restoration is recognised when there is a legal or constructive obligation to reduce or solve pollution of land, air, water etc. All environmental provisions are based on expert reports. (s) Share-based payment transactions To senior management (including the Management Board of Wavin) a share based payment award is granted by the shareholder. This cash settled share plan is based on certain performance conditions. The cash settled plan of share appreciation rights granted to employees are recognized as employee expenses. The costs of the share based payment award is recognized evenly over the period in which the employees become unconditionally entitled to the compensation. At each balance sheet date the Group assesses its estimates of the number of appreciation rights that are expected to vest. The amount recognized as an expense is adjusted, when necessary, to reflect the fair value of the number of rights for which the performance and service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of rights that meet the related service and performance conditions at the vesting date. Wavin Annual Report

22 (t) Deferred tax liabilities Long term tax liabilities resulting from temporary differences between financial statements and fiscal valuations per fiscal entity are recognised as deferred tax liability as long as they are expected to result in a cash outflow. No deferred tax liabilities are taken into account when it is probable that no profit taxes will be paid due to available losses carried forward. (u) Trade and other payables Trade and other payables are recognised initially at fair value. Subsequent to initial recognition, trade and other payables are measured at amortised cost using the effective interest method. (v) Revenue Revenue is derived from the goods and services sold and delivered during the year net of rebates and discounts and net of sales tax. Revenue from the sales of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to a third party, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably and there is no continuing management involvement with the goods. The timing of the transfer of risks and rewards depends on the individual delivery conditions. For the revenue of sales of goods these conditions are generally met at the time the product is delivered to the customer. Revenue from services rendered is recognised in the income statement in proportion to the stage of completion. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue at the same time the sales are recognised. (w) Cost of sales Cost of sales comprises the manufacturing costs of the goods sold and delivered, and any inventory write downs to lower net realisable value. Manufacturing costs include items as: the costs of raw materials and supplies, energy, packaging and other materials; depreciation and the costs of maintenance of the assets used in production; salaries, wages and social charges for the personnel involved in manufacturing. (x) Research and development expenses Research and other not capitalised development expenses are charged to income as incurred. Amortisation of capitalised development costs is charged on a straight-line basis over the estimated useful life. (y) Expenses Operating expenses (sales, distribution and administrative) are charged to income as incurred. Payments made under operational lease contracts are recognised in the income statement on a straight-line basis over the term of the lease. (z) Finance income and expense Finance income comprises interest income on funds invested, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, foreign currency gains as well as gains on hedging instruments that are recognised in the income statement. Interest income is recognised as it accrues, using the effective interest method. Finance expense comprises interest expense on borrowings, amortisation of fees relating to the arrangement of borrowings, foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and losses on hedging instruments that are recognised in the income statement. Borrowing costs are recognised in the income statement using the effective interest method. As the actual positive and negative positions under the notional cash pool system are netted, the related finance income and expense are netted as well. Foreign currency gains and losses arising from a group of similar transactions are reported on a net basis. (aa) Income tax expense Income tax is accounted for in accordance with the tax regulations of the country of domicile concerned. Income tax on the result for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates valid at the balance sheet date and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax recognised is based on the expected realisation or settlement of the carrying amount of assets and liabilities using tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on the tax rates that have been enacted on the balance sheet date. The tax rates used are based on the laws that have been enacted or Wavin Annual Report

23 substantially enacted at the reporting date. No provision for deferred tax liabilities is made when it is not probable that profit taxes will be paid due to available losses carried forward. In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The accruals for tax liabilities are adequate for all open tax years based on the Group s assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised. (ab) Discontinued operations A discontinued operation is a clearly distinguishable component of the Group s business that is abandoned or terminated pursuant to a single plan, and which represents a separate major line of business or geographic area of operations. (ac) Cash flow statement The cash flow statement is prepared using the indirect method. Changes in the balance sheet items that have not resulted in cash flows such as translation differences, fair value changes and other non-cash items, have been eliminated for the purpose of preparing this statement. Assets and liabilities acquired as part of a business combination are included in investing activities (net of cash acquired). Dividends paid to ordinary shareholders are included in financing activities. Dividends received are classified as investing activities. Interest paid is included in operating activities. Drawings and repayments under the revolving credit facility in which the turnover is quick and the maturities are short, are included on a netted basis. (ad) Determination of fair values A number of the Group s accounting policies and disclosures require the determination of fair value, for both financial and nonfinancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods described below. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. (ii) Financial instruments The fair value of forward exchange contracts is based on their quoted market price, if available. The fair value of interest rate swaps is estimated by discounting the difference between cash flows resulting from the contractual interest rates of both legs of the transaction, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of non-derivative financial instruments, which is determined for disclosure purposes, is calculated based on the present value of future cash flows, discounted at the market rate of interest at the reporting date. (iv) Pensions and other post-retirement benefits Retirement benefits represent obligations that will be settled in the future and require assumptions to project benefit obligations and fair values of plan assets. Retirement benefit accounting is intended to reflect the recognition of future benefit costs over the employee s approximate service period, based on terms of the plans and the investment and funding decisions made by the Company. The accounting requires management to make assumptions regarding variables such as discount rate, rate of compensation increase, return on assets, mortality rates and future healthcare costs. Periodically, management consults with external actuaries regarding these assumptions. Changes in these key assumptions can have a significant impact on the projected benefit obligations, funding requirements and periodic costs incurred. For details on key assumptions and policies reference is made to note 25. (ae) New standards and interpretations not yet implemented A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2016, and have not been applied in preparing these consolidated financial statements. The most important upcoming changes are: IFRS 9 Financial Instruments, which is expected to become mandatory for the Group s 2018 consolidated financial statements and could change the classification and measurement of financial assets and liabilities. The Group does not Wavin Annual Report

24 plan to adopt this standard early and the extent of the impact has not been determined yet. In 2017 we will start with our impact assessment. IFRS 15 Revenue from contracts with customers, which is expected to become mandatory for the Group s 2018 consolidated financial statements and could change the moment that the revenue should be recognized. The Group does not plan to adopt this standard early and the extent of the impact has not been determined yet. An investigation is in progress and the extent of the impact has not been determined yet. Based on a high level assessment we do not expect that the impact will be material. IFRS 16 Leases, which is expected to become mandatory for the Group s 2019 consolidated financial statements and will result in bringing most leases on balance sheet in a single lease accounting model, recognizing a right-to-use asset and a lease liability. The Group does not plan to adopt this standard early and the extent of the impact has not been determined yet. An investigation is in progress and the extent of the impact has not been determined yet. 4. Financial risk management Overview Wavin is exposed to internal and external risks and uncertainties that may affect its business, financial results or operational performance. To mitigate these risks, the Company has defined policies and guidelines that are followed throughout the organisation. These policies and guidelines are translated into internal risk management and control systems aimed at the adequate and effective control of these identified exposures. The Company regularly reviews the control systems to assess their adequacy. We feel that these policies and systems contribute to a more effective and transparent organisation. The principle risks that have been identified are: Strategic risks Operational risks Financial risks Geographic exposure Information technology (incl. Credit risk Construction market exposure cyber risk) Liquidity risk Customer concentration Raw material price volatility Currency risk Product Liability Interest Rate risk Manufacturing and Operations Pension Funds This note covers the Group s policies and procedures for controlling credit risk, liquidity risk, currency risk and interest rate risks. Capital Structure The policy of Wavin is to deploy an efficient capital structure that maintains shareholder, creditor and market confidence and supports future development of the business. The Management Board monitors the debt to equity ratio and return on capital employed closely. Wavin has set clear targets for its level of borrowings in relation to results (leverage) and interest cost (interest coverage) Total net cash position increased from 10.5 million in 2015 to a net cash position of 81.6 million in 2016, mainly as a result of strong operating result and improved working capital in combination with extension of the factoring facilities and other working capital improvement measures next to the improved net profit in the year. In 2015 the Company was financed through a million intercompany loan provided by our ultimate parent maturing in April This loan was repaid in full at the end of As per 31 December the Company has a revolving facility of USD 50 million provided by our ultimate parent. Financial risks Credit risks Trade and other receivables The Group s exposure to credit risk is influenced by the individual characteristics of each customer. The demographics of the Group s customer base, including the default risk of the industry and the country in which customers operate, has an influence on credit risk. At balance sheet date there were no significant concentrations of credit risk on customer level nor geographically. The Company realises approximately 22% (2015: 25%) of its sales in emerging economies where payment terms are generally longer than in Western Europe and availability of information on the financial history of customers is often limited, which makes it more difficult for us to accurately assess the associated credit risk. Any credit losses we may suffer as a result of these risks or as a result of credit losses from any significant customer could adversely affect our business, results of operations and financial condition. Sales might be affected by fast changing economic, regulatory, social and political environments. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet. At year end, the maximum credit risk exposure amounted to million (2015: million). Wavin Annual Report

25 The Group has strict policies regarding credit and payment terms which are closely monitored at local and corporate level. Credit limits are established for most of the customers and periodically reviewed. Transactions with customers that fail to meet the Group s credit policy are intensively monitored. In the Netherlands, Belgium, the UK, France, Ireland, Poland and Italy the credit risk of customers is partly transferred to credit insurance companies. In the Netherlands, the UK, France, Poland, Italy and Belgium, Wavin is factoring a large part of the trade receivables under uncommitted non-recourse facilities of million (2015: million) which are derecognised in the Group balance sheet. Factoring fees incurred during the year are written off to the Group income statement within finance expense. Allowance for impairment The credit risk from trade receivables is measured and analysed on a local level, mainly by aging analyses. Credit insurance covers are taken into account when establishing the allowance for impairment. The aging of the trade receivables at the reporting period that were not impaired was as follows: Not past due 182, ,711 Past due < 3 Months 15,873 17,315 Past due > 3 Months 1,722 2,934 Total trade receivables 200, ,960 The share of overdue trade receivables ended in line with last year. At balance sheet date 9% of trade receivables was overdue. Impairment charges for doubtful debts amounted to 0.9 million, 0.7 million below last year. The decrease of the impairment charges was mainly the result of strict credit risk management. Accounts receivables are impaired and provided for on an individual basis. At balance sheet date, accounts receivables of 20.4 million were past due but not fully impaired. With respect to trade receivables that are neither impaired, nor past due, there are no indications as of reporting date that the debtors will not meet their payment obligation. The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 January 14,919 15,073 Charged to income statement 3,175 2,628 Released to income statement (2,255) (1,014) Utilisation (1,642) (1,405) Effect of movements in exchange rates (583) (363) Book value at 31 December 13,614 14,919 Investments The Group limits its exposure to credit risk by only investing in liquid securities. Transactions involving derivative financial instruments are with counterparties that have high credit ratings. Given their high credit ratings, management does not expect any counterparty to fail to meet its obligations. Liquidity risks Access to funding is secured to finance long term growth, capital expenditures, seasonal working capital requirements, expected operational expenses and to service financial obligations. The Company intercompany loan of million, maturing in April 2018, was cancelled in In 2015, Wavin NV acceded as a borrower to the USD 1.5 billion RCF of Mexichem SAB de CV. Under this revolving credit facility, Wavin NV may borrow, at any time, up to an aggregate amount of USD 50 million. In addition to this facility, the Group has access to million uncommitted letter of credit facilities and million uncommitted receivable finance facilities. These aforementioned facilities provide Wavin with sufficient headroom and flexibility to respond to uncertain market conditions and offers a solid base to execute the Wavin strategic program. Currency risks Wavin operates in different countries and uses the Euro as its reporting currency. Revenues and expenses are translated to Euro at the average exchange rate for the applicable period for inclusion in the consolidated financial statements. The business generates substantial revenues, expenses and liabilities in jurisdictions outside the Euro zone. In 2016, approximately 58% (2015: 60%) of revenue was denominated in currencies other than the Euro. Consequently the translation risk of non-euro results to the Euro is the most significant currency risk. Translation risks of non-euro equity positions in the Group are not hedged. The translation risk of strategically held minority participations is not hedged. Wavin companies are exposed to foreign currency transactional risks on revenues, expenses and borrowings that are denominated in a currency other than the respective functional currencies of Wavin entities. Wavin has defined clear treasury policies regarding foreign exchange exposures. It is policy that material imbalances are identified and may be hedged in order to Wavin Annual Report

26 minimize potential volatility in results which could arise as a result of currency fluctuations. Currency exposure as a result of increasing purchasing activities outside the Eurozone, like the purchasing of raw materials and IC sales, are not hedged. The Group can use forward exchange contracts and currency swaps to hedge forecast cash flow transactions. The appreciation of most currencies against the Euro resulted in a transactional foreign exchange loss of 1.5 million (2015: 0.7 million loss). The Company does not hedge the Euro exposure of non-euro countries. Sensitivity analysis A strengthening or weakening of the Euro against the principal currencies at 31 December 2016 would have had an impact on equity and the income statement. Based on the foreign currency exposure ultimo year the impact of 5% strengthening of the local functional currencies against Euro and the other principle currencies would result in the amounts shown below, independently defined for each currency. This analysis assumes that all other variables, in particular interest rates, remain unchanged. The analysis is performed on the same basis for Profit or loss/equity Profit or loss/equity Euro 12,689 15,841 Pound Sterling 4,161 (130) Polish Zloty 2, Danish Krone 2, Norwegian Krone (19) 476 Czech Koruna 1,378 (1) Turkish Lira 31 1,651 US Dollar (99) 338 Swiss Franc 1,015 1,024 A 5% weakening of the local functional currencies against Euro and the other principle currencies at 31 December 2016 would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables remain unchanged. The sensitivity analysis excludes loans in foreign currencies which are transferred in full to group companies for which the related foreign currency of the loan is the functional currency of the group company concerned. Interest rate risk The Group s Treasury Committee is responsible for managing interest rate risks within the framework specified by the corporate financing policy. The company does not have interest rate derivatives outstanding per year-end Debt profile At the reporting date the interest rate profile of the Group s interest-bearing financial instruments only includes variable rate instruments. Sensitivity analysis for variable rate instruments As the Group s debt is not hedged it is estimated that a general increase in interest rates of 1.0% would have an impact on the Group s profit before tax. As the intercompany loan is cancelled in 2016 the exposure is no longer in place (2015: 1.16 million). This analysis assumes that all other variables, in particular foreign currency rates, remain unchanged. Fair values The fair value of assets and liabilities has been determined either by reference to the market value at the balance sheet date or by discounting the relevant cash flows using current interest rates for similar instruments. Receivables and payables with a remaining life of less than one year are valued at the notional amount, which is deemed to reflect the fair value. All non-current interest-bearing loans have variable interest rates. All non-current interest-bearing loans are valued at amortised cost. The fair value of financial assets and liabilities per 31 December 2016 is equal to the carrying amounts shown in the balance sheet. Wavin Annual Report

27 Fair value hierarchy The management assessed that cash and short-term deposits, other receivables, non-current interest bearing loans, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. These are classified in Level 1 of the fair value hierarchy. The fair value of the financial instruments is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. These are classified in Level 2 of the fair value hierarchy. The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Interest rate swaps are valued using valuation techniques (discounted cash flow) with market observable inputs. 5. Assets held-for-sale The assets and liabilities per 31 December classified as held-for-sale can be specified as follows: Property, plant & equipment Total assets Deferred tax liabilities 71 - Total liabilities 71 - The assets classified as held for sale per 31 December 2016 mainly relate to land and buildings in the Netherlands due to the termination of activities during the year. It is expected that these assets will be sold in the coming year. It is expected that all assets held for sale will be sold at a selling price above the current book value. 6. Discontinued operations In May 2015 we abandoned our activities in Romania. In 2016 we continued with the settlement of the balance sheet positions, which resulted in a loss of 1.4 million (2015: 1.0 million). The results of the activities in Romania can be specified as follows: Revenue - 2,308 Expenses (993) (3,317) Result from operating activities (993) (1,009) Net finance income (448) 1 Income tax expense - - Net profit from operating activities (1,441) (1,008) Result for the period (1,441) (1,008) The result mainly relates to a provision included for a possible VAT claim that we received in 2016 from the local tax authorities. The cash flows of activities in Romania can be specified as follows: Net cash from (used in) operating activities 23 1,071 Net cash from (used in) investing activities - - Net cash from (used in) financing activities (60) (460) Net cash from discontinued operations (37) 611 Wavin Annual Report

28 The effect of abandoned activities in Romania included in the assets and liabilities of the group can be specified as follows: Total non-current assets 233 (1,195) Total current assets 1,357 1,355 Total Assets 1, Total current liabilities 1, Total Equity & Liabilities 1, Revenue Sale of goods 1,134,581 1,170,269 Other revenues 6,856 6,326 Total revenue 1,141,437 1,176,595 Other revenues are mainly related to services rendered, the rental of properties and royalty income for our products and technologies. The income statement regional segmentation is as follows Geographic segmentation income statement Note North West Europe South West Europe Central & Eastern Europe South East Europe Overseas and Other Consolidated 2016 Total external revenue 467, , , ,718 25,869 1,141, Total external revenue 458, , , ,435 29,130 1,176, Other operating income Other income includes amongst others the gain on sale and disposal of tangible and intangible assets, curtailment gains and rental income. In 2015 the change in the pension agreement in the Netherlands resulted in curtailment gains totalling to 5.9 million which positively impacted the other operating income. 9. Other operating expenses Other operating expenses include amongst others the amortisation of assets acquired through business combinations such as order portfolios, customer contracts, customer relations and distribution networks, accrual for long-term incentives and taxes, other than income tax such as real estate tax and increase of specific other provisions. Higher other operating expenses is mainly due to the impairment of brandnames in the UK which are not used anymore as of Wavin Annual Report

29 10. Personnel expenses Note Salaries and wages (202,953) (206,600) Social security contributions (31,540) (32,240) Contributions to defined contribution plans (12,222) (13,938) Expenses related to defined benefit plans 24 (1,385) (5,486) Curtailment gains 24-6,009 Other personnel expenses (12,326) (13,885) Total (260,426) (266,140) Recurring personnel expenses decreased mainly due to a lower workforce. Total average full time equivalents decreased in 2016 by 147 to (see note 11). 11. Personnel employed The total average full time equivalent (FTE) and the number of employees are as follows: Average full time equivalents 5,459 5,606 Number of employees at 31 December 4,977 5,130 Of the average number of FTEs 534 are based in the Netherlands FTEs are based outside the Netherlands (2015: 539 FTEs and 5,067 FTEs respectively). The number of employees can be specified as follows: North West Europe 1,420 1,478 South West Europe 1,399 1,458 Central & Eastern Europe 1,248 1,271 South East Europe Overseas and Other Total 4,977 5,130 Restructuring measures announced in the past year and cost saving measures resulted in a decrease of direct and indirect staff. The number of agencies in 2016 was below last year s level. 12. Finance income and expense Recognised in the income statement Interest income on bank deposits Interest Income group companies 12,512 2,689 Fair value revaluation gains 953 2,316 Total finance income 13,650 5,202 Interest expense on bank deposits (7,597) (9,205) Interest expense group companies (2,776) (3,165) Exchange rate differences (1,483) (736) Interest expenses on defined benefit pension plans (1,538) (2,441) Total finance expense (13,394) (15,547) Total net finance costs recognised in the income statement 256 (10,345) Net finance income increased due to the full year impact of a loan issued to one of our sister companies within the Mexichem Group (see note 17). Wavin Annual Report

30 Finance expenses ended on 13.4 million compared to 15.5 million last year. As a result of different refinancing actions resulting in a lower average net debt position during the year expenses decreased. 13. Income tax expense Recognised in the income statement Current year (10,760) (8,708) Utilisation of / (addition to) not capitalised compensable losses (1,212) (2,765) Adjustments for prior years 250 1,508 (11,722) (9,965) Identified tax exposures - - Tax provision - - Origination and reversal of temporary differences (3,951) 1,127 Changes in tax rate Effect of tax losses (de-) recognition 1,467 - Deferred tax income (expense) (2,039) 1,223 Total income tax recognised in the income statement (13,761) (8,742) The higher income tax expense is in line with the better operating result, tax incentives on innovation and investments as well as other fiscal benefits contribute to the low income tax expense. The change of the corporate income tax rate in the UK, resulted in a release of the deferred tax liabilities with 0.5 million. Recognised in other comprehensive income Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Exchange differences on translating foreign operations 4,309-4,309 8,172-8,172 Remeasurements in defined benefit pension schemes (34,374) 5,807 (28,567) 36,907 (8,858) 28,049 Total (30,065) 5,807 (24,258) 45,079 (8,858) 36,221 Reconciliation of effective tax rate % 1,000 % 1,000 Profit before tax 70,292 51,525 Share of profit of associates (1,812) (1,038) Adjusted profit before tax 68,480 50,487 Income tax using the Dutch tax rate 25.0% (17,120) 25.0% (12,622) Effect of taxes in foreign jurisdictions (2.9%) 1,965 (2.1%) 1,047 Non-taxable income / (non-deductible expenses) (1.1%) 773 (13.2%) 6,684 Movements in tax provisions through the income statement 0.0% - 0.0% - Tax rate adjustments (0.6%) 445 (0.2%) 96 Utilisation of / (addition to) not capitalised losses carried forward (0.4%) % (2,765) Derecognition of previously recognised tax losses 0.0% - 0.0% - Other effects 0.1% (79) 2.3% (1,182) Total 20.1% (13,761) 17.3% (8,742) Wavin Annual Report

31 14. Property, plant & equipment Note Land and buildings Machinery and equipment Other assets Under construction Total Cost Balance at 1 January , ,160 72,819 16,379 1,136,486 Acquisitions through business combinations Investments 3,110 21,918 2,446 34,709 62,183 Transfer to assets classified as held-for-sale 5 11, ,220 Disposals and Divestments (12,111) (14,599) (3,757) - (30,467) Transfer assets in progress 3,389 10,740 1,265 (15,394) - Reclassifications ,127 Effect of movements in exchange rates 2,162 12, (157) 14,744 Balance at 31 December , ,189 73,635 35,537 1,196,332 Balance at 1 January , ,189 73,635 35,537 1,196,332 Investments 5,573 19,025 2,335 9,797 36,730 Transfer to assets classified as held-for-sale 5 (1,356) - (109) - (1,465) Disposals and divestments (3,454) (78,911) (3,632) - (85,997) Transfer assets in progress 13,109 15, (29,756) - Reclassifications 109 2,691 (2,800) - - Effect of movements in exchange rates (10,045) (34,684) (1,845) (2,677) (49,251) Balance at 31 December , ,265 68,276 12,901 1,096,349 Depreciation Balance at 1 January 2015 (143,594) (632,526) (65,537) - (841,657) Acquisitions through business combinations (22) (22) Depreciation charge for the year (7,816) (30,910) (2,970) - (41,696) Impairment losses (216) (216) Transfer to assets classified as held-for-sale 5 (3,673) (3,673) Disposals and Divestments 5,065 13,870 3,470-22,405 Reclassifications (408) (841) (656) Effect of movements in exchange rates (1,375) (11,577) (615) - (13,567) Balance at 31 December 2015 (152,039) (661,984) (65,059) - (879,082) Balance at 1 January 2016 (152,039) (661,984) (65,059) - (879,082) Depreciation charge for the year (7,006) (31,190) (2,788) - (40,984) Impairment losses (991) (4) (88) - (1,083) Transfer to assets classified as held-for-sale Disposals and Divestments 3,241 78,540 3,328-85,109 Reclassification - (2,153) 2, Effect of movements in exchange rates 4,359 28,883 1,680-34,922 Balance at 31 December 2016 (151,505) (587,908) (60,774) - (800,187) Carrying amounts At 1 January , ,634 7,282 16, ,829 At 31 December , ,205 8,576 35, ,250 At 1 January , ,205 8,576 35, ,250 At 31 December , ,357 7,502 12, ,162 Wavin Annual Report

32 Depreciation charge and impairment losses The depreciation charge and impairment losses are recognised in the following line items in the income statement: Cost of sales (31,669) (32,205) Research & development expenses (206) (208) Administrative expenses (10,192) (9,499) Total depreciation (42,067) (41,912) Impairment losses The Group included impairment losses in 2016 for an amount of 1.1 million related to premises held for sale. (2015: 0.2 million). Disposals & divestments Disposals and divestments includes next to the sale of premises in France and plots of land in the UK mainly assets related to our plant in Brandon which was closed in Leased plant and machinery The Group has no material financial lease agreements. Security Like in 2015 no properties were subject to a registered debenture to secure bank loans (see note 24). Assets under construction Assets under construction of 12.9 million (2015: 35.5 million) are mainly related to investments in production equipment and installations. Capitalised borrowing costs Like in 2015 no borrowing costs were capitalised as the assets under construction per 31 December 2016 and investments in 2016 did not classify as qualifying assets. Wavin Annual Report

33 15. Intangible assets Note Goodwill Brand names Customer relations and other IFRS 3 assets Other intangible assets Total Cost Balance at 1 January , , , , ,904 Additions ,313 8,690 Disposals and divestments (1,196) (1,196) Transfer assets in progress (12) 1 Effect of movements in exchange rates 2,551 4,341 2, ,992 Balance at 31 December , , , , ,391 Balance at 1 January , , , , ,391 Additions ,908 6,933 Disposals and divestments (16,751) (16,751) Transfer assets in progress Effect of movements in exchange rates (4,655) (10,924) (6,071) (2,211) (23,861) Balance at 31 December , , , , ,712 Amortisation Balance at 1 January 2015 (5,906) - (58,809) (81,594) (146,309) Amortisation charge for the year - - (4,240) (12,323) (16,563) Impairment 7 (372) (372) Disposals and divestments ,202 1,202 Effect of movements in exchange rates (123) - (825) (471) (1,419) Balance at 31 December 2015 (6,401) - (63,874) (93,186) (163,461) Balance at 1 January 2016 (6,401) - (63,874) (93,186) (163,461) Amortisation charge for the year - - (4,159) (9,432) (13,591) Impairment - (3,996) - (30) (4,026) Disposals and divestments ,674 16,674 Effect of movements in exchange rates ,753 1,633 4,873 Balance at 31 December 2016 (6,087) (3,823) (65,280) (84,341) (159,531) Carrying amounts At 1 January , ,900 65,157 34, ,595 At 31 December , ,241 62,443 30, ,930 At 1 January , ,241 62,443 30, ,930 At 31 December , ,494 54,991 27, ,181 Determination of value-in-use Goodwill and other intangible assets with indefinite useful lives are tested for impairment per cash generating unit in the fourth quarter or whenever an impairment trigger exists. In assessing whether non-current assets including goodwill and brand names have to be impaired, the carrying amount of each cash generating unit is compared to the recoverable amount of this cash generating unit. The five geographic segments are the main cash generating units and the recoverable amount of these cash generating units is based on value-in-use calculations. The operating plan for the coming year is the starting point for the projections for the determination of the value-in-use. These projections include forecasts for revenue and, added value value growth, direct and indirect costs developments, capital expenditures and investments in working capital. We assume that the overall construction market will continue to develop positively and the fundamentals for growth (more single unit housing, substitution of traditional materials, energy efficiency of buildings, more comfort, changed climate / rainfall, infiltration and attenuation needs, etc.) have not changed. Yearly, Wavin invests considerably in product and process development which should drive sales growth. The increase is supported by expected market growth and the impact of efficiency improvement projects and certain cost reduction programmes that have been implemented in recent years. Wavin Annual Report

34 Beyond the projection period of five years, results are extrapolated using an assumed growth rate that does not exceed 2% in mature markets and 2.5% in the emerging markets. This growth rate does not exceed the long-term average growth rate for the market in which Wavin N.V. operates. Management believes that any reasonably possible change in the key assumptions on which Wavin s recoverable amount is based would not cause Wavin s carrying amount to exceed its recoverable amount. Projected cash flows are discounted using a specific discount rate per cash generating unit, taking country risk premiums into account. The pre-tax discount rates used range from 6.53% to 10.42% (2015: 8.29% to 10.21%). The average pre-tax discount rate for the Group was 8.28% (2015: 8.77%). Impairments For 2016 the calculation of the value-in-use of the various cash generating units in comparison to the carrying amount resulted in no impairments. The included impairment charge related to a brandname that is no longer used in the market. Sensitivities The determined values-in-use are sensitive to variations in estimates and assumptions. Therefore we have performed a sensitivity analysis, considering different reasonably possible changes on the base case assumptions, being: - A 200 basis points higher pre-tax discount rate compared to the discount rate used in the base case; - A 50% lower growth rates of revenue in combination with lower growth of costs and investments compared to the base case - An eternal growth of 0.91% The sensitivity analyses did not result in negative excess of the value-in-use in the CGU s. Amortisation charge Intangible assets not being goodwill and brand names are amortised over the estimated economic lifetime. If an impairment indicator exists, an impairment test is performed. In cases where the book value of an asset exceeds the recoverable amount an impairment charge is recognised in the income statement. The amortisation charge is recognised in the following line items in the income statement: Cost of sales (90) (45) Research & development expenses (2,610) (3,452) Administrative expenses (6,916) (9,199) Other operating expenses (8,001) (4,239) Total (17,617) (16,935) Goodwill The carrying amount of goodwill allocated to each CGU is as follows: North West Europe 41,087 40,810 South West Europe 39,895 44,053 Central & Eastern Europe 51,067 51,560 South East Europe 12,437 12,404 Overseas and Other 5,591 5,591 Total 150, ,418 As a result of exchange rate devaluation especially of the Pound Sterling as well as the Polish Zloty the carrying amount of goodwill decreased by 4.3 million in Wavin Annual Report

35 Brand names The carrying amount of brand names can be specified as follows: Brand name South West Europe Hep 2 O 56,894 70,193 South West Europe Warmafloor South East Europe Chemidro 3,000 3,000 South East Europe Pilsa 1,488 1,731 Wavin Group Wavin 154, ,619 Total 216, ,241 The carrying amount of the brand name for the South West Europe region decreased as a result of exchange rate devaluation of the Pound Sterling following the Brexit referendum and the impairment charge included to a brand name that is no longer used in the market. The carrying amount of brand names can be allocated as follows to each CGU: North West Europe 57,027 56,675 South West Europe 108, ,902 Central & Eastern Europe 27,349 27,749 South East Europe 20,013 20,205 Overseas and Other 3,710 3,710 Total 216, ,241 Other intangible assets Development costs The additions in development costs amount to 2.5 million including an amount of 0.2 million (2015: 0.2 million) of capitalised borrowing costs during the period ended 31 December 2016 using an average interest rate of 2.79% (2015: 5.03%). Software The carrying amount of software represents the capitalised expenses related to new (internally developed) software solutions and related implementation expenses. The additions in software for an amount of 3.9 million (2015: 6.1 million) are mainly related to the further development of the Group-wide IT platform. Other Other intangible assets include capitalised expenses related to licenses, trademarks, patents etc. Wavin Annual Report

36 16. Investments in associates The investments in associates for the year amount to 20.3 million. In 2016 the Group received dividends of 2.1 million from its investments in associates. None of the Groups associates are publicly listed entities and consequently do not have published price quotations. The Group s investment in associates relates mainly to our 40% (2015: 40%) shareholding in GF Wavin AG (Switzerland). The (100%) key figures of GF Wavin AG are: Assets Liabilities Equity Revenue Profit/Loss 2016 GF Wavin AG 60,227 16,194 44,033 80,049 4, GF Wavin AG 65,119 19,262 45,857 89,173 2,798 The decrease in assets is partly due to the exchange rate development of the Swiss Franc partly set off by a lower investment level and lower inventory level compared to previous years. 17. Other Financial Assets Interest bearing loans Interest bearing loans to group companies 294, , , ,022 Non-current investments Guaranteed deposit Other non-current investments 614 1,268 Total non-current investments 850 1,497 Total other financial assets 295, ,519 The interest bearing loans to group companies consist of two loans granted in 2015 to a subsidiary of our shareholder for an amount totalling to US$ million. A loan of US$ million has a maturity date of 10 October 2022 and a loan of US$ million has a maturity date of 9 October Deferred tax assets and liabilities Deferred tax assets and deferred tax liabilities are attributable to: Assets Liabilities Assets Liabilities Intangible assets , ,311 Property, plant & equipment 2,194 14,319 3,251 15,940 Financial assets Inventories ,418 Other current assets Tax losses carried forward 12,309-15,909 - Provision for employee benefits 13, , Other provisions 1, , Interest-bearing loans and borrowings Other liabilities 1, , Tax assets / liabilities 32,613 81,052 36,769 89,702 Set off tax assets and liabilities (20,411) (20,411) (26,614) (26,614) Net tax assets / liabilities 12,202 60,641 10,155 63,088 From the total amount of recognized net deferred tax assets, 3.7 million (2015: 2.9 million) is related to entities that have suffered a loss in either 2016 or 2015 and where utilization is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. Wavin Annual Report

37 Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Tax losses carried forward not capitalised 18,817 21,863 Total unrecognised deferred tax assets 18,817 21,863 The tax assets are not recognised because it is not probable that in the near future taxable profits will be available against which the Group can utilise the benefits. The tax losses not capitalised mainly relate to not capitalised losses carried forward in countries where we have a sustainable loss situation and represent losses of 73.0 million. There are no time restrictions on the utilisation of not capitalised tax losses carried forward for an amount of 18.1 million. For the remaining not capitalised tax losses the utilisation expires within 10 years. Movement in temporary differences during the year Balance at 1 January Recognised in the income statement Recognised directly in equity Used for purpose Effect of movements in foreign exchange Balance at 31 December 2016 Intangible assets 71,172 (3,481) (320) - (2,499) 64,872 Property, plant & equipment 12, (308) - (323) 12,125 Financial assets Inventories 761 (565) - - (18) 178 Other current assets 326 (284) - - (13) 29 Tax losses carried forward (15,909) (1,467) 4, (12,309) Provision for employee benefits (10,982) 1,553 (5,807) - 1,465 (13,771) Other provisions (2,946) 1, (1,390) Other liabilities (2,618) (1,735) Tax (assets) liabilities 52,933 (2,039) (6,435) 4,768 (787) 48, Intangible assets 71,340 (1,281) 41-1,072 71,172 Property, plant & equipment 14,326 (1,438) (35) - (164) 12,689 Financial assets Inventories (205) Other current assets 472 (50) (85) - (11) 326 Tax losses carried forward (17,307) - (135) 1, (15,909) Provision for employee benefits (20,510) 1,124 9,039 - (635) (10,982) Other provisions (3,484) 684 (72) - (74) (2,946) Interest-bearing loans and borrowings Other liabilities (4,021) 1,358 (32) - 77 (2,618) Tax (assets) liabilities 41,391 1,223 8,516 1, , Inventories Raw materials and consumables 27,771 33,015 Finished products and merchandise 96, ,824 Other inventories 8,117 10,289 Total 132, ,128 Inventories stated at net realisable value 4,186 2,838 At 31 December 2016, the provision for obsolete stocks amounted to 9.7 million (2015: 11.8 million). The addition to the provision for obsolete stocks amounted to 1.8 million (2015: 3.4 million), which was included in cost of sales. In the current year the provision for obsolete stocks was used for an amount of 3.0 million (2015: 3.2 million). In 2016 raw materials, consumables and changes in finished goods recognised as cost of sales amounted to million (2015: million). This decreased charge reflects the lower sales volumes compared to last year. Wavin Annual Report

38 20. Trade and other receivables Note Trade receivables 4 200, ,960 Amounts receivable from related parties 4 1,244 6,355 Other receivables and prepayments 26,280 27,932 Total 227, ,247 Trade receivables are shown net of an allowance for doubtful debts of 13.6 million (2015: 14.9 million) arising from the possible non-payment by customers. The impairment loss recognised in the current year was 0.9 million (2015: 1.6 million) and for an amount of 1.3 million (2015: 1.4 million) trade receivables were actually written off. The Group s exposure to credit and currency risks and the allocation of the allowance for doubtful debts at the reporting date is disclosed in note Cash and cash equivalents Bank balances 90, ,964 Cash Total 90, ,048 At 31 December the bank balances were freely available. 22. Equity Cumulative translation reserves comprise all foreign exchange differences arising from the translation of the financial statements of foreign operations. Of the shareholders equity of million (2015: million), an amount of 5.6 million (2015: 5.7 million) is not available for distribution subject to relevant provisions of the Company s Articles of Association, local accounting principles and legal requirements. For further details on Wavin N.V. s shareholders equity reference is made to note F of the Company Financial Statements and the statement of changes in equity. 23. Interest-bearing loans and borrowings Non-current liabilities Interest-bearing loans from group companies 85 77,134 Non-Current portion of finance lease liabilities 12 - Total non-current liabilities 97 77,134 Current liabilities Interest-bearing loans from group companies - 38,566 Unsecured bank overdrafts 8,448 6,851 Total current liabilities 8,448 45,417 The million intercompany loan provided by our ultimate parent has been fully repaid in Under the revolving credit facility of the shareholder, Wavin NV may borrow, at any time, up to an aggregate amount of USD 50 million, against US-LIBOR including mark-up depending on utilisation level of the facility and credit rating of our shareholder (between %). Wavin Annual Report

39 Terms and debt repayment schedule* Note Effective interest rate Year of maturity Face value Carrying amount Effective interest rate Year of maturity Face value Carrying amount Unsecured loans related parties 0.00% % ,713 25, % ,421 51, % ,566 38,566 Unsecured bank overdrafts 12.68% ,448 8, % ,851 6,851 Cash and cash equivalents 21 misc (90,138) (90,138) misc (133,048) (133,048) Total (81,605) (81,605) (10,497) (10,497) * For details on financial instruments reference is made to note 4. ** The effective interest rate of the Syndicated Revolving Facility is excluding the effect of the ineffective interest rate swaps and commitment fee. The Group has mostly uncommitted bilateral credit facilities with several banks for an amount of 48.5 million (2015: 55.3 million) of which nil was drawn per 31 December 2016 (2015: 6.8 million). In addition to the credit facilities Wavin has a million uncommitted non-recourse factoring facilities in place of which 71.8 million was used as per 31 December 2016 (2015: 86.4million). In addition Wavin has L/C facilities totalling to 230 million of which million was used (2015: million). Finally we have several bilateral facilities totalling to 37.4 million of which 12.4 million was used. The Company has included the enforceable right for netting with our bankers, which can be summarized as follows: 2016 Gross carrying amounts Gross amounts offset Net amount presented in balance sheet Cash and cash equivalents 261,134 (170,996) 90,138 Bank overdrafts 179,444 (170,996) 8, Employee benefits Present value of unfunded obligations 9,732 10,016 Present value of funded obligations 326, ,017 Total present value of obligations 336, ,033 Fair value of plan assets (253,170) (247,676) Total employee benefits 82,845 58,357 Non-current 82,122 57,391 Current Unfunded obligations Unfunded obligations consist of service awards and jubilee commitments qualifying as other long-term employee benefit plans, which are recognised in the Dutch, Belgian, German, Danish, French, Irish, Polish, Italian and Turkish operating companies. Liability for defined benefit obligations Wavin has defined benefit pension plans in the UK, Ireland and Norway. Wavin Annual Report

40 All other pension arrangements are defined contribution plans. Other defined benefit obligations are in place in Germany, Denmark, France, Italy and Turkey. In 2015 the plan held in the Netherlands has been transformed into a Collective Defined Contribution plan (CDC). After the transition, the employer is no longer liable for the level of the future pension pay-out to entitled members. The release of the liability of 29.9 million has been presented in 2015 as remeasurements in defined benefit pension schemes in other comprehensive income (OCI), and 5.9 million was recognised through the Income Statement. In the UK and Ireland the pension liabilities are covered by company pension funds. The Company has certain obligations in respect of the deficits of these funds. Plan assets of these funds do not include investments in the Company. After the periodic actuarial valuation it was concluded that the Wavin Plastics Pension Scheme, the Hepworth Building Products Pension Scheme (both in the UK) and the Wavin Ireland Pension Scheme have a deficit. It has been agreed with the trustees that in 2016 the Company has paid a contribution for costs and deficits to the Wavin Plastics Pension Scheme of GBP 2.6 million. In the coming years ( ) the yearly contribution for costs and deficits will be GBP 2.3 million. For the Hepworth Buildings Products Pension Scheme it has been agreed to pay additional contributions for costs and deficits of GBP 1.1 million ( ). With the Irish scheme, Wavin Ireland agreed to pay 0.6 million additional contributions in the coming 8years. The increased discount rate contributed to the increase of the net obligation. The net obligation increased by 29.9 million compared to last year. The defined benefit schemes in the UK have been closed to future accrual as per 31 December As a consequence the service costs included for these schemes only include the estimated administrative expenses during the year. The defined benefit schemes of Wavin Norway are outsourced to insurance companies. The exposures related to the pension liabilities in Germany, Denmark, France, Turkey and Italy are fully accrued for. Movements in the present value of the defined benefit obligation for the Group were: Present value of the defined benefit obligation at 1 January 306, ,314 Reclass from ST sundry liab Effect of movements in foreign exchange (38,909) 16,052 Contributions paid into the plan by participants Movements to defined contribution plan 13 (360,402) Benefits paid by the plan (11,841) (12,286) Remeasurements of defined benefit obligation 70,302 (11,248) Curtailment gains - (6,009) Service costs and interest 10,277 16,503 Present value of the defined benefit obligation at 31 December 336, ,033 Plan assets Movements in the plan assets were: Fair value of plan assets at 1 January 247, ,431 Effect of movements in foreign exchange (31,112) 12,875 Contributions paid into the plan by participants Contributions paid into the plan by the Group 5,069 6,174 Benefits paid by the plan (10,860) (11,047) Administration costs (981) (1,240) Movements to defined contribution plan - (330,504) Interest income on plan assets 7,848 12,258 Remeasurements of plan assets 35,484 (4,317) Fair value of plan assets at 31 December 253, ,676 Wavin Annual Report

41 Plan assets consist of the following: Equity instruments 31% 46% Debt instruments 55% 48% Property 0% 0% Other 14% 6% Total fair value of plan assets 100% 100% The fair values of the equity and debt instruments are determined based on quoted market prices in active markets whereas the fair values of the other plan assets are not based on quoted market prices in active markets. Cash flows The Group s subsidiaries fund the cost of the entitlements expected to be earned on a yearly basis. Employees pay a fixed percentage of pensionable salary. The residual contribution is paid by the entities of the Group. The funding requirements are based on the local actuarial measurement framework. Defined benefit cost recognised in the income statement Current service costs 891 1,804 Interest expense on defined benefit obligation 9,386 14,699 Interest income on plan assets (7,848) (12,258) Administration costs 981 1,240 Curtailment gains - (6,009) Expense recognised in the income statement 3,410 (524) The defined benefit cost is recognised in the following line items in the income statement: Cost of sales 1,004 1,770 Selling and distribution expenses Administrative expenses Other operating income - (6,009) Net finance costs 1,538 2,441 Total 3,410 (523) Actual return on plan assets 43,332 7,941 The remeasurements recognised in other comprehensive income can be specified as follows: Experience gains / (losses) arising on the obligations (836) (3,907) Changes in assumptions underlying the present value of obligations 70,857 (7,417) Return on plan assets (greater) / less than discount rate (35,553) 4,316 Release of pension liability (29,899) Total remeasurements 34,468 (36,907) The changes in assumptions is mainly related to changes in financial assumptions. Wavin Annual Report

42 Principal actuarial assumptions at the balance sheet date (% - expressed as weighted average) Discount rate at 31 December Future salary increases * Future pension increases ** Maturity information Weighted average duration of DBO (years) *) Future salary increase applicable for Ireland & Norway only **) Future pension increases applicable for UK only The Group expects to contribute 4.9 million to its defined benefit pension plans in For other benefit plans the contribution for 2017 by the Group is expected to be 0.1 million. Assumptions regarding future mortality are based on published statistics and mortality tables. For the UK plan, the SAPS S2PxA base tables are adopted (rated up by 1 year with the improvements in line with CMI 2015 tables with 1% long term trend). The current longevities underlying the values of the liabilities in the defined benefit plans are as follows: Ireland UK Ireland UK Longevity at age 65 for current pensioners Males Females Longevity at age 65 for current members aged 45 Males Females For the significant actuarial assumptions, like discount rate, expected salary increase and longevity, a sensitivity analysis has been performed. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. If the discount rate is 10 basis points higher (lower), the defined benefit obligation would decrease by 8.3 million (increase by 8.5 million). If the expected salary growth increases (decreases) by 50 basis points, the defined benefit obligation would increase by 0.4 million (decrease by 0.4 million). It has to be noted that the UK pension schemes are not exposed to this kind of risk any more due to the amendment of the pension plan in If the life expectancy increases by 1 year, the defined benefit obligation would increase by 14.7 million. If the expected inflation rate increases (decreases) by 10 basis points, the defined benefit obligation would increase by 3.2 million (decrease by 3.6 million). The sensitivity analyses presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Periodically an Asset-Liability-Modelling study is performed in which the consequences of the strategic investment policies are analysed in terms of risk-and-return profiles. Investment and contribution policies are integrated within this study. Wavin Annual Report

43 25. Provisions Warranty Restructuring Other provisions Total Balance at 1 January ,702 10,468 10,153 25,323 Provisions made during the year 1,090 4, ,921 Provisions used during the year (929) (8,974) (1,286) (11,189) Provisions reversed during the year (626) (953) (2,086) (3,665) Effect of movements in foreign exchange - (549) (389) (938) Other movements - - (2,091) (2,091) Balance at 31 December ,237 4,860 5,264 14,361 Non-current 2,414 (92) 4,714 7,036 Current 1,823 4, ,325 Warranty For products sold, a provision is recognised based on actual claims received and on historical data regarding warranty costs, which were not provided for on an individual claims basis. The product liability insurance cover is taken into account when determining the provision. Claims honoured are charged against the provision. The Group expects to incur the liabilities over the next five years. Restructuring While in 2016 a large part of the provision created in the year before has been used for its purpose, additional restructuring provision charges were made for announced restructuring projects throughout the group including the holding. The reorganisation of the manufacturing footprint in the UK is proceeding as planned and was nearly completed by the end of The other restructuring projects are expected to be completed within one year from the balance sheet date. Other provisions The other provisions per 31 December 2016 mainly consist of provisions for quarry restoration obligations related to the clay activities in the UK, provision for legal claims, provision for early retirement and environmental commitments at the Dutch production site. The majority of the cash outflows related to other provisions are expected to be within one to five years. The decrease of other provisions compared to last year partly relates to the reclassification of received deposits for delivered returnable packaging to other liabilities (see note 29) and the release of some provisions for legal claims due to a favourable settlement. 26. Other non-current liabilities At 31 December 2016 these consist of a liability for the Share-based payment transactions (see note 28) and long-term trade payables of 3.4 million (2015: 0.5 million) relating to investments in machinery equipment. 27. Share based payment transactions In 2015, the shareholder of Wavin initiated a compensation plan known as Long-Term Incentive Plan (LTIP), for a group of executives, whose purpose is to align executive compensation with the interests of shareholders, by conditioning the payment of this incentive upon the Entity s financial performance. In accordance with this program, the shareholder annually grants a determined amount of phantom shares aligned with the value of the real shares of the Entity, based on two vehicles: payments based on restricted phantom shares and payments based on phantom shares for performance, which may be exercised for payment provided that the financial objectives of the shareholder are achieved under the conditions established in the plan. Wavin Annual Report

44 Each year the value of the LTIP is granted to the active executives selected, who have been rendering services for at least six months at the time of the allocation. The number of shares granted depends on the executive level. The amount of the allocation will be based on the value of the share calculated according to the average price of the daily close of the period from October 1 through December 31 of the year immediately prior to the allocation. Payments based on restricted phantom shares: Of the total value allocated, 40% is paid in three proportional parts (13.33% each) a year only if the annual performance targets of the shareholder established in the plan are achieved, and the eligible personnel are active at the time of the payment. The payment to be made in March 2017 will be calculated based on the average price of the daily close of the month immediately prior to that in which the restricted phantom shares are paid. Payment based on phantom shares for performance: 60% of the total value will be paid in the third year of the allocation, only if the financial performance targets of the shareholder accumulated for the three years are achieved, as established in the plan. The amount payable is calculated based on the average price of the daily close of the month immediately prior to that in which the phantom shares for performance are paid. Payments are only made to employees active on the payroll at the time the exercise of the phantom shares is approved. The average price of the shares is in Mexico pesos, and is paid in the local currency of each entity at the exchange rate in effect on the settlement date. In ,976 virtual shares have been granted to executives of Wavin. The liability related to shares granted in 2015 is not taken into account as per 31 December 2016 as the vesting conditions are not expected to be met. In ,037,096 shares have been granted which will vest in The liability related to the LTIP as per 31 December 2016 can be specified as follows: Balance at 1 January ,017 - Charge to results and adjustments (112) 1,017 Balance at 31 December ,017 Non-Current Current Trade and other payables Trade payables 352, ,020 Non-trade payables and accrued expenses 71,803 68,034 Interest instruments - - Amounts payable to related parties 7,020 5,975 Total trade and other payables 431, ,029 The Group s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 4. The increase of non-trade payables and accrued expenses compared to last year relates to the reclassification of received deposits for delivered returnable packaging from other provisions (see note 27). 29. Operating leases Non-cancellable operating leases are payable as follows: Less than one year 13,472 14,196 Between one and five years 26,361 30,057 More than five years 9,037 11,777 Total 48,870 56,030 The Group leases a number of warehouse and factory facilities and internal transport equipment under operating leases. The leases typically run for an initial period of between five and ten years, with an option to renew the lease after that date. None of Wavin Annual Report

45 the leases includes purchase liabilities or contingent rentals. Some leases provide for additional rent payments that are based on changes in a local price index. During the year ended 31 December million was recognised as an expense in the income statement in respect of operating leases and rental costs (2015: 16.8 million). 30. Capital commitments With respect to the purchase of investment goods, per 31 December 2016 obligations have been entered into and orders have been placed to a value of 4.1 million (2015: 15.5 million). 31. Contingent liabilities At 31 December 2016 bank guarantees issued amount to approximately 3.3 million (2015: 3.6 million). Per 31 December 2016 letters of credit were issued for an amount of million (2015: million). The Group is defending its position in different procedures brought up by employees, suppliers, customers and/or local authorities in different countries in Europe. We are also involved in disputes with tax authorities in several jurisdictions. While the outcome of these claims and disputes cannot be predicted with certainty, we believe, based upon legal advice and information received, that the final outcome will not materially affect our consolidated financial position but could be material to our results of operations or cash flows in any one accounting period. Wavin N.V. and the subsidiaries have issued cross guarantees for drawings under the notional cash pool system. Almost all the subsidiaries in The Netherlands form a fiscal unity with Wavin N.V. for the income tax, VAT and tax on wages. Wavin N.V. is severally liable for the tax debts of the fiscal unity. 32. Related parties Identity of related parties The Group has a related party relationship with Mexichem Soluciones Integrales Holding S.A. de C.V. and its associates. The Group also has a related party relationship with Wavin Plastics Pension Scheme, Hepworth Building Products Pension Scheme, Wavin Ireland Pension Scheme, Wavin Ireland Executive Pension Scheme and Stichting Pensioenfonds Owase (for details reference is made to note 25). A related party relationship exists with the Management Board members (for details reference is made to note J of the Company Financial Statements). Other related party transactions During the year 2016, the Group sold goods to associates of the Group for an amount of 6.8 million (2015: 7.4 million) and sold for an amount of 4.7 million to subsidiaries of the shareholder ( 4.6 million in 2015). Sales of associates of Wavin to the Group amounted to 8.8 million (2015: 8.8 million). In 2016 subsidiaries of Mexichem Soluciones Integrales Holding S.A. de C.V. sold goods to the Group for an amount of 9.8 million ( 9.2 million in 2015). At 31 December 2016 the Group owed associates 0.9 million (2015: 0.7 million) and subsidiaries of Mexichem Soluciones Integrales Holding S.A. de C.V. 6.1 million (2015: 5.3 million). Subsidiaries of Mexichem Soluciones Integrales Holding S.A. de C.V. owed the group million (2015: million). For details regarding outstanding receivables and liabilities reference is made to notes 18, 21, 24 and 29. During the year ended 31 December the Group received 2.1 million dividend from associates (2015: 4.1 million). Wavin also purchases and sells goods and services to various other related parties in which Wavin holds a 50% or less equity interest (non-consolidated companies). Such transactions were not significant on an individual or aggregate basis. The transactions were conducted at arm s length with terms comparable to transactions with third parties. 33. Transactions with key management and remuneration The members of the Supervisory Board and Management Board are considered to be key management. In 2016 there have been no transactions, other than remuneration, with key management or any family member of key management. No loans or guarantees have been provided to key management or any family member of such persons. Members of the Management Board and the Supervisory Board are not entitled to equity compensation benefits. For details about the remuneration of key management reference is made to note J of the Company Financial Statements. 34. Group companies The Group s ultimate parent company and controlling party is Kaluz, S.A. de C. V. (a Mexican corporation) owned by several members of the Del Valle family. Please refer to the list of principal direct and indirect participations which we have filed with the Trade Registry of Zwolle. Wavin Annual Report

46 Company Financial Statements Company balance sheet As at 31 December Note Assets Intangible assets B 91,834 93,861 Investments in subsidiaries C 737, ,461 Deferred tax assets Total non-current assets 829, ,556 Trade and other receivables 9 9 Cash and cash equivalents D 76,049 98,230 Total current assets 76,058 98,239 Total assets 905, ,795 Equity Issued capital E 206, ,868 Share premium E 576, ,020 Reserves E (17,128) (21,680) Retained earnings E 138, ,484 Total equity 905, ,692 Liabilities Interest-bearing loans and borrowings F 85 - Deferred tax liabilities Total non-current liabilities Bank overdrafts 33 5 Trade and other payables Total current liabilities Total liabilities Total equity and liabilities 905, ,795 The notes on page 47 to 50 are an integral part of the Company Financial Statements. Company income statement For the year ended 31 December Note Net income from subsidiaries and associates H 53,739 39,763 Other net income (227) 694 Profit for the period 53,512 40,457 The notes on page 47 to 50 are an integral part of the Company Financial Statements. Wavin Annual Report

47 Notes to the Company financial statements A. General The Company Financial Statements are presented in Euro, which is the Company s functional currency. The amounts are rounded to the nearest thousand, unless otherwise stated. The company financial statements 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 company financial statements are the same as those applied in the consolidated financial statements. Foreign currency has been translated, assets and liabilities have been valued, and net income has been determined, in accordance with the valuation principles and determination of income as prescribed in the significant accounting policies. Subsidiaries of Wavin N.V. are accounted for at net asset value. As the financial data of Wavin N.V. are included in the consolidated financial statements, the income statement of Wavin N.V. is condensed in conformity with section 402 of Book 2 of the Dutch Civil Code. B. Intangible assets Goodwill Cost Balance at 1 January ,805 Effect of movements in exchange rates 899 Balance at 31 December ,704 Balance at 1 January ,704 Effect of movements in exchange rates (2,027) Balance at 31 December ,677 Impairment Balance at 1 January 2015 (2,843) Balance at 31 December 2015 (2,843) Balance at 1 January 2016 (2,843) Balance at 31 December 2016 (2,843) Carrying amounts At 1 January ,962 At 31 December ,861 At 1 January ,861 At 31 December ,834 The goodwill fully relates to the acquisition of the shares of Beheermaatschappij Wavin B.V. by Wavin Holdings B.V. in Wavin Annual Report

48 Notes to the Company financial statements C. Investments in subsidiaries Balance at 1 January 705, ,715 Profit for the period 53,739 39,763 Currency differences 6,695 7,830 Capital increase - 273,728 Remeasurements in defined benefit pension schemes (28,568) 28,049 Other movements 340 (624) Balance at 31 December 737, ,461 As a result of a refinancing exercise a capital contribution in kind by our shareholder was pushed down to some operating companies by a contribution in kind as well. D. Cash and cash equivalents The cash and cash equivalents are included in the notional cash pool system. These assets were on demand available per 31 December. E. Shareholder s equity Issued Capital Share premium Legal and statutory reserve Translation reserve Retained earnings Total Revised balance at 1 January , ,847 8,725 (36,163) 50, ,313 Profit (loss) for the period - - 1,038-39,419 40,457 Other comprehensive income Exchange rate differences on translating foreign operations ,802-8,802 Remeasurements in defined benefit pension schemes, net of tax ,049 28,049 Reclassification Total comprehensive income (expense) for the period - - 1,038 8,802 67,706 77,546 Contributions by and distributions to owners Treasury shares issued 186,555 87, ,728 Dividends declared to non-controlling interest Dividends received from associates (4,062) - 4,062 - Other movements (20) Transactions with owners, recorded directly in equity 186,555 87,173 (4,082) - 4, ,833 Balance at 31 December , ,020 5,681 (27,361) 122, ,692 Balance at 1 January , ,020 5,681 (27,361) 122, ,692 Profit (loss) for the period - - 1,812-51,700 53,512 Other comprehensive income Exchange rate differences on translating foreign operations ,665-4,665 Remeasurements in defined benefit pension schemes, net of tax (28,568) (28,568) Reclassification (146) - Total comprehensive income (expense) for the period - - 1,958 4,665 22,986 29,609 Contributions by and distributions to owners Shares issued Dividends paid to shareholder 28 - (13,152) - - (8,998) (22,150) Dividends declared to non-controlling interest Dividends received from associates - - (2,071) - 2,071 - Other movements Transactions with owners, recorded directly in equity - (13,152) (2,071) - (6,927) (22,150) Balance at 31 December , ,868 5,568 (22,696) 138, ,151 Wavin Annual Report

49 Notes to the Company financial statements Share capital and share premium Authorised shares At 31 December 2016, the total authorised ordinary share capital consists of 1,500,000,000 ordinary shares with a par value of 0.40 per share. Issued shares The total issued ordinary share capital per 31 December 2016 consists of shares (2015: 517,168,932 shares) with a par value of million (2015: million) which is fully paid and a share premium of million (2015: million). The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the General Meeting. All shares rank equally with regard to the Company s residual assets. In respect of the Company s shares that are held by the Group (see below), all rights are suspended until those shares are reissued. Dividends In 2016 a dividend was paid of per share totaling to an amount of 22.2 million. In 2015 no dividends were declared. Proposal for profit allocation With observance of article 21, of the Articles of Association, it is proposed that for 2016 no additional dividend will be distributed. Legal and statutory reserves Legal and statutory reserves include non-distributable profits which are not available for dividend payment due to legal restrictions in the countries of domicile of the participations as long as there is a repayment obligation. The legal reserves also include a reserve for capitalised development costs representing the capitalised development costs within the Company. This amount is not available for dividend distribution due to legal restrictions in the Netherlands. Translation reserve Translation reserve represents the translation differences of participations. These amounts are not available for dividend distribution. A negative reserve for translation differences has to be regarded as a reduction of the retained earnings. F. Interest-bearing loans and borrowings This is a debt of Wavin N.V. s towards a related party, Florest B.V. G. Net income from subsidiaries and associates Net income from subsidiaries and associated companies relates to Wavin N.V. s share in earnings of its subsidiaries and associates. For further details reference is made to note C. H. Contingent liabilities In accordance with Dutch legislation on the exemption concerning the preparation and filing of annual accounts, Wavin N.V. has assumed individual liability for debts originating from legal acts by all Dutch group companies (sect. 403, title 9 Book 2 of the Dutch Civil Code). Almost all the subsidiaries in The Netherlands form a fiscal unity with Wavin N.V. for income tax, VAT and tax on wages. Wavin N.V. is severally liable for the tax debts of the fiscal unity. Wavin N.V. and the subsidiaries have issued cross guarantees for drawings under the notional cash pool system. I. Remuneration of the Management Board and Supervisory Board Remuneration of the Management Board The individual service contracts of the members of the Management Board are determined by the Supervisory Board. The remuneration of the Management Board includes salaries, performance related bonuses, emoluments and other compensations. The total remuneration 2016 of the management board amounts to 3.2 million (2015: 2.3 million). Wavin Annual Report

50 Notes to the Company financial statements The 2016 remuneration includes the contractual agreed termination benefit of the former CFO of the Company who left the Company in Remuneration of the Supervisory Board The total remuneration 2016 of the supervisory board amounts to 0.2 million (2015: 0.2 million). J. Shares held by the Management Board and Supervisory Board As per 31 December 2016 members of the Management Board and Supervisory Board did not hold any shares in the Company. K. Auditors remuneration As of 2012 Deloitte Accountants B.V. is appointed as auditor of the Wavin Group. The fees for the audit of the annual report due to the Company s external auditor, Deloitte Accountants B.V. in the Netherlands, and other Deloitte member firms amounted to 0.9 million for 2016 (2015: 0.9 million). The fees as included under administration and general expenses in the income statement can be specified as follows: Deloitte Accountants BV Other Deloitte network Total Deloitte network Deloitte Accountants BV Other Deloitte network Total Deloitte network Audit of the annual report Other audit assignments Tax services Other non-audit activities Total L. Employees The company employed no personnel during the year (2015: no personnel was employed). Wavin Annual Report

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52 Other information Principal Direct and Indirect Participation The list of direct and indirect participations has been filed in conformity with sections 379 and 414 of Book 2 of the Netherlands Civil Code with the Trade Registry of Zwolle. Wavin Annual Report

53 Other information Appropriation of result as provided for by the Articles of Association Allocations of profit Article The company may make distributions to the shareholders and other persons entitled to the distributable profits only to the extent that the company's shareholders' equity exceeds the sum of the paid-in capital and the reserves which it is required by law to maintain. 2. If the adopted profit and loss account shows a profit, it shall be at the disposal of the general meeting, subject to approval of the Supervisory Board. 3. After the approval of the Supervisory Board, the Management Board may make interim distributions only to the extent that the requirements set forth in paragraph 1 above are satisfied as apparent from an (interim) financial statement drawn up in accordance with the law 4. After the approval of the Supervisory Board, the Management Board may decide that a distribution on shares is not made entirely or partly in cash, but rather in shares in the company. 6. After approval of the Supervisory Board, the general meeting may decide to make payments to holders of shares from the distributable part of the shareholders' equity. 7. Any claim a shareholder may have to a distribution shall lapse after five years, to be computed from the day on which such a distribution becomes payable. Wavin Annual Report

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