Financial Statements 2016

Transcription

1 Financial Statements 2016

2 Key figures Net revenue (in million) : : : : 269 Operating result (in 1,000) 12, : -4, : -12, : : 1,723 Operating result before depreciation (in 1,000) 15, : -2, : -9, : 3, : 6,538 Result before tax (in 1,000) 8, : -12, : -24, : -15, : 3,415 Net result (in 1.000) 5, : -11, : -21, : -14, : 2,570 Breakdown of revenue (in million) Development and Advice Building and Technology Total Less: intra-group revenue Net revenue / FINANCIAL STATEMENTS

3 Group equity (in 1,000) 30, : 24, : 36, : 57, : 73,387 Solvency (as % of the balance sheet total) : : : : 44.5 Net cash flow (in 1,000) 10, : -2, : -12, : 9, : -17,554 Operating result (as % of net revenue) : : : : 0.6 Number of employees (average) : : : : 794 Net result (as % of net revenue) : : : : 1.0 Breakdown of revenue Development and Advice Building and Technology : : : : 357 FINANCIAL STATEMENTS / 3

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5 Content Financial Statements Directors report / 6 Consolidated annual accounts 2016 / 7 Consolidated balance sheet / 8 Consolidated profit and loss account / 10 Consolidated cash flow statement / 11 Consolidated statement of comprehensive income / 12 Notes to the consolidated annual accounts / 13 Notes to the consolidated balance sheet / 18 Rights and obligations not included in the balance sheet / 23 Notes to the consolidated profit and loss account / 24 Company annual accounts 2016 / 27 Company balance sheet / 28 Company profit and loss account / 30 Notes to the company balance accounts / 31 Notes to the company balance sheet / 32 Rights and obligations not included in the balance sheet / 35 Other information / 36 Independent auditor s report / 38 Our companies / 40 List of associates / 42 The official annual accounts 2016 of Hurks groep B.V. are stated in the Dutch language of which this document is an English translation. This translation is executed with due care but does not have an official status and as a result no rights can be derived. FINANCIAL STATEMENTS / 5

6 Directors report The report is available for perusal at the company s offices. 6 / FINANCIAL STATEMENTS

7 Consolidated annual accounts 2016 FINANCIAL STATEMENTS / 7

8 Consolidated balance sheet (amounts in euros x 1,000) ASSETS NON-CURRENT ASSETS Tangible fixed assets 1 Land and buildings 3,695 4,079 Plant and machinery 5,018 4,329 Other tangible fixed assets 3,569 3,183 12,282 11,591 Financial fixed assets Other associates Non-consolidated associates 3 3,745 2,524 Amounts due from non-consolidated 4 associates Deferred tax assets 5 0 1,640 4,559 4,527 CURRENT ASSETS Stocks Raw materials and consumables Goods for resale 1,101 1,033 Land and development positions 19,144 24,325 Finished products 2,654 2,491 23,883 28,652 Work in progress 6 0 2,003 Receivables 7 Amounts owed by trade debtors 8 46,434 20,688 From non-consolidated associates 2,181 3,648 Taxes and premiums 576 1,913 Other receivables 1,633 1,825 Accrued income and prepaid expenses 9 2,867 1,858 53,691 29,932 Cash and cash equivalents 10 22,551 12,365 Total 116,966 89,070 8 / FINANCIAL STATEMENTS

9 (before result) EQUITY AND LIABILITIES GROUP EQUITY 11 30,235 24,859 PROVISIONS 12 Deferred tax liabilities Jubilee benefits Other 1,280 1,300 2,302 2,148 LONG-TERM LIABILITIES 13 Debts to credit institutions 3,578 2,500 Other liabilities 4,157 4,050 7,735 6,550 SHORT-TERM LIABILITIES Debts to credit institutions ,355 Trade creditors 50,772 35,362 Debts to non-consolidated associates 56 0 Work in progress 18,318 0 Taxes and social security contributions 2,700 5,495 Pension contributions Other liabilities 4,326 4,888 Accrued expenses and deferred income ,694 55,513 Total 116,966 89,070 FINANCIAL STATEMENTS / 9

10 Consolidated profit and loss account (amounts in euros x 1,000) Net revenues , ,524 Changes in work in progress and stocks -23,950 5,410 Operating revenues 290, ,934 Other operating revenue Total operating revenues 291, ,295 Operating expenses Costs of raw materials and consumables 67,511 58,039 Costs of outsourced work 148, ,295 Personnel costs 16 41,151 36,934 Depreciation of property, plant and equipment 2,793 2,378 Other operating expenses 17 18,045 17,251 Total operating expenses 278, ,897 Operating result 12,962-4,602 Results from non-consolidated associates -4,230-7,958 Financial income Financial expenses ,401-8,101 Result before taxes 8,561-12,703 Taxes 18-3,185 1,301 Net result 5,376-11, / FINANCIAL STATEMENTS

11 Consolidated cash flow statement (amounts in euros x 1,000, based on indirect method) Net cash at 1 January 12,365 15,346 Cash flow from operating activities Operating result 12,962-4,602 Depreciation of property, plant and equipment 2,793 2,378 Change in provisions 154-1,526 Change in working capital Stocks 6,772 4,784 Receivables -25,978-4,709 Debts 30,536-3,228 Cash flow from business operations 27,239-6,903 Financial Income Financial expenses Cash flow from operating activities 27,068-7,046 Cash flow from investment activities Investments in tangible fixed assets -3,656-1,463 Disposals of tangible fixed assets Financial fixed assets -5,228 4,451 Cash flow from investment activities -8,712 3,563 Cash flow from financing activities Draw-down and new long-term loans 1,185 3,350 Repayment of long-term loans 0-9,676 Repayment / draw-down on short-term credit -9,355 6,828 Cash flow from financing activities -8, Net cash at 31 December 22,551 12,365 FINANCIAL STATEMENTS / 11

12 Summary of the total result of the corporate entity for 2016 (amounts in euros x 1,000) Net result after taxes accruing to the corporate entity 5,376-11,402 Total direct changes in the corporate entity s equity 0 0 Corporate entity s total result 5,376-11, / FINANCIAL STATEMENTS

13 Notes to the consolidated annual accounts General notes The annual accounts have been prepared in accordance with the statutory provisions of Civil Code Title 9 Book 2. The valuation of assets and liabilities and the calculation of the result have been made on the basis of historic costs unless specified otherwise. Income and expenses are attributed to the year to which they relate. Profits are only included insofar as they have been realised on the balance sheet date. Obligations and potential losses which originate prior to the end of the year under review are taken into account if they have become known before the annual accounts are prepared. The figures of the previous financial year are classified differently in the notes to the balance sheet whenever this provides better insight. Activities The activities of Hurks groep B.V. (Chamber of Commerce no.: ), with registered offices and place of business at Pastoor Peterstraat 3 in Eindhoven, and its associates consist primarily of the development, construction and maintenance on their own behalf or on behalf of third parties of spaces in which people can comfortably live, work, shop and participate in leisure activities. Group relationships Hurks groep B.V. in Eindhoven is at the head of a group of corporate entities. A summary of the information required under Civil Code section 2:379 and 2:414 is included at the back of the notes in the accounts. Estimates and judgements by the management The information contained in these annual accounts is partly based on estimates and assumptions. The estimates made by Hurks group are based on assumptions with regard to the future. These assumptions are based on past experience and expectations relating to future events as they could reasonably occur. These estimates and assumptions are constantly re-evaluated. Project results In addition to the recorded costs and invoiced instalments for each project, the item work in progress also includes the share of the profit realised up until that moment or the total anticipated loss. Both the profit and loss are based on an individual estimate of the final result for each project. This estimate of the final project result is clouded in uncertainty, which is dependent on - amongst other things - the size and complexity of the project. It can be found subsequently that the actual outcome deviates from the results estimated in advance. Such deviations can be either positive or negative. Uncertainties relating to participation The Dutch State awarded a contract on 17 July by means of a DBFMO (Design Build Finance Maintain and Operate) contract - to a consortium with Strukton, Hurks and Heijmans for the complete design, build, financing, maintenance and operation of the new premises of the Rijksinstituut voor Volksgezondheid en Milieu (National Institute for Public Health and Environment - RIVM) and the College ter Beoordeling van Geneesmiddelen (Medicines Evaluation Board - CBG). Following the awarding of the contract, it was found that the original design did not fully meet the vibration requirements set. After postponement had been agreed with the principal, the StruktonHurksHeijmans consortium took a combination of measures so that the design complied with vibration-related requirements for the laboratories. The commencement certificate was issued mid-january 2017, the construction is expected to start in the spring of Account is taken in these annual accounts of the provisionally estimated additional costs, as well as of a partial reimbursement by the principal. However, the principal and the consortium are still in the process of discussing the financial consequences. Therefore, there is a higher estimation uncertainty regarding the valuation. Hurks believes that the current valuation is at present the best estimation. FINANCIAL STATEMENTS / 13

14 Bankruptcy of Royal Imtech NV Hurks was in a construction consortium with subsidiaries of Royal Imtech NV during the year under review. Subsidiaries of Royal Imtech NV were also involved as subcontractors on a number of projects. The bankruptcy of Royal Imtech NV means that Hurks is still in discussions with the receiver about the settlement of these dossiers. The financial effects of this have been estimated in consultation with our lawyers and have been incorporated in these annual accounts. Provisions Provisions relating to actual obligations are dependent on estimates and judgements. This is linked to the estimate of the size of the actual obligation. These obligations are included in the annual accounts if it is likely that these obligations will arise and if a reasonable estimate can be made of the size. If the actual outcome deviates from the estimate this may have an effect on the financial position and the results. Financial instruments Financial instruments refers to both primary financial instruments (such as receivables and debts), such as derivative financial instruments (derivatives). The notes to the distinguished items in the balance sheet give the actual value of the instrument concerned if it deviates from the book value. If the financial instrument is included on the balance sheet, the information about the actual value is provided in the notes to the Rights and obligations not included in the balance sheet. For the principles of primary financial instruments please see the explanation per balance sheet item of the Consequences for the valuation of assets and liabilities. Financial derivatives are included at the actual value when first included, and are then re-valued at the actual value on the balance sheet date. The profit or loss resulting from the revaluation to the actual value on the balance sheet date is immediately incorporated in the profit and loss account. However, if financial derivatives qualify for hedge accounting, and hedge accounting is applied the incorporation of this profit or loss will depend on the nature of the cover. At year-end 2016, the group does not make use of forward exchange contracts to cover exchange rate risk for which hedge accounting is used. There are no other financial derivatives which the group uses. Conversion of foreign currencies Transactions in foreign currency during the report period are included in the annual accounts at the exchange rate which is applied on the date of the transaction. The exchange differences resulting from the conversion on the balance sheet date are included in the profit and loss account. Accounting policies for the consolidation Hurks groep B.V. s consolidated annual accounts include the financial details of companies which form part of the group and other corporate entities over which dominant control can be exercised or for which central management is provided. The consolidated annual accounts have been prepared with the application of Hurks groep B.V. s accounting principles for the valuation and the calculation of the result. The construction and development consortia have been consolidated proportionally. In respect of the company profit and loss account of the Hurks groep B.V. use has been made of the exemption under Civil Code section 2:402. The financial details of the group companies and the other corporate entities and companies included in the consolidation have been fully included in the consolidated annual accounts with elimination of the relationships and transactions between them. The results of newly acquired group companies and the other corporate entities and companies included in the consolidation are consolidated from the acquisition date. The assets, provisions and debts are valued at the actual value is on that date. The goodwill paid is capitalised and depreciated over the economic lifespan. The results from sold associates are included in the consolidation up until the time when the group link is severed. Accounting policies for valuing assets and liabilities General Unless stated otherwise, the assets and liabilities are valued at face value. Tangible fixed assets The tangible fixed assets are valued at acquisition price less the cumulative depreciation and extraordinary write-offs where applicable. The depreciation is based on the estimated economic lifespan and is calculated on the basis of a fixed percentage of the acquisition price, taking account of any residual value. Depreciation is applied from the moment of commissioning. Costs for periodic major maintenance are charged against the result at the time when they arise. Financial fixed assets The non-consolidated associates in which significant influence is exercised over the commercial and financial policy are valued at the net asset value, but not less than zero. Other long-term interests are thereby also taking into account which must be deemed to be part of the net investment in the participating interest in practice. If the company fully or partly guarantees debts of the participating interest in question, or has the practical obligation to enable the participating interest to pay (its share of ) its debts, a provision is made. In determining the size of this 14 / FINANCIAL STATEMENTS

15 provision, account is taken of provisions for bad debts already deducted from receivables from the participating interest. The net asset value is calculated on the basis of the accounting policies which apply to the group. The other associates comprise the investments in shares in companies which are long-term and are being held on the group s behalf. The other associates are valued at purchase value supplemented with additional costs, and where necessary reduced by extraordinary write-off losses. The book value of the other associates is reviewed annually in order to determine whether there are indications for extraordinary write-offs. If such indications exist, an estimate is made of the realisable value of the asset. Dividend payments are included in the profit and loss account at the moment of receipt. Stocks Stocks of raw materials and consumables and goods for resale are valued at acquisition price or lower net realisable value. This lower net realisable value is determined by individual assessment of the stocks. The valuation of the stocks of raw materials and consumables is made on the basis of fifo. The stocks of goods for resale are valued individually at acquisition price or lower net realisable value. The stock of land and development positions comprises projects purchased for redevelopment and land positions in development. No sales contracts for these have been concluded with third parties or no construction activity has taken place on them which have not yet been structurally completed. These projects are included at cost price or lower anticipated realisable value. The stock of finished products relates to properties which have been structurally completed and not yet sold to third parties. Valuation takes place at cost or lower anticipated realisable value. Work in progress The work in progress on behalf of third parties is valued at the realised project cost plus the attributed profit and less incorporated losses and invoiced instalments. If the result on a work in progress cannot be reliably estimated, no profit is attributed. The project costs comprise the costs relating directly to the project, the costs which are attributable to project activities in general and which can be allocated to the project and other costs which can be contractually charged on to the principal. The work in progress also includes the projects arising from project development if and insofar as an unconditional sales contract has been concluded for units of the project before or during construction. Project income and project costs arising from the work in progress are included in the profit and loss account as income and costs in proportion to the work performed on the balance sheet date. The degree to which the work has been performed is determined on the basis of the project costs incurred up to the balance sheet day in proportion to the estimated total project costs. If the total of all work in progress shows a debit balance, the total balance will be presented under the variable assets. If the total of all work in progress shows a credit balance, the total balance will be presented under the short-term liabilities. Receivables When first recorded, the amounts due are included at the actual value and are then valued at the amortised cost. The actual value and the amortised cost are equal to the face value. Provisions deem necessary for possible losses as a result of bad debts are deducted. These provisions are calculated on the basis of individual assessment of the receivable. The receivables include deferred taxes if and insofar as it is probable that the tax claim can be realised in due course. These tax assets have been valued at present value and are generally of a short-term nature. Cash and cash equivalents Cash and cash equivalents are valued at nominal value. If funds are not free disposable, account is taken of this in the valuation. Provisions Deferred tax liabilities A provision is made for tax to be paid in the future on the basis of differences between the balance sheet valuations for commercial and tax purposes equal to the sum of these differences multiplied by the applicable tax rate. The provision for deferred tax liabilities is valued at present value. Jubilee benefits This involves an accrual of rights. The obligation included is the best estimate of the amounts required to settle the obligations concerned on the balance sheet date. Other This provision includes an item for guarantee obligations. The provision for guarantee obligations is included for the estimated costs which are expected to arise from the guarantee obligations in force on the balance sheet date relating to completed projects. This item also includes provisions for possible claims arising from current legal actions. Other provisions for employee remuneration The pension obligations are covered by various schemes. The schemes, all Dutch, are funded by payments to pension providers, namely industry pension funds and insurance companies. The pension schemes which are covered by insurance companies relate to (dispensation) basic schemes, top up schemes and a net pension saving scheme. The pension obligations are valued using the obligation to the pension provider approach. Under this approach the premium to be paid to the pension provider is included as a liability in the profit and loss account. An assessment is made on the basis of the implementation FINANCIAL STATEMENTS / 15

16 agreement whether obligations exist on the balance sheet date - and if so, which obligations - alongside the payment of the annual premium owed to the pension provider. These additional obligations, including any obligations arising from the pension provider s recovery plan, lead to liabilities for the group and are included in a provision on the balance sheet. The valuation of the obligations is the best estimate of the amounts required to settle this on the balance sheet date. If the effect of the value of money over time is significant, the obligation is valued at the present value. Additions to and releases from the obligations are charged or credited to the profit and loss account respectively. A pension claim is included on the balance sheet if the group has the power of disposal over the pension claim, when it is likely that the future economic benefits inherent in the pension claim will accrue to the group, and when the pension claim can be reliably calculated. Accounting policies for preparing the consolidated cash flow statement The cash flow statement is prepared using the indirect method. The funds in the cash flow statement consist of cash and cash equivalents and tradeable securities. The securities can be viewed as very liquid investments. Cash flows in foreign currencies are converted at an estimated average exchange rate. Taxes on profits, interest received and dividends received are included under the cash flow from operating activities. Interest paid and dividends paid are included under the cash flow from financing activities. An obligation is included for bonus schemes based on the relevant performance schemes. The obligation is included as such under the short-term liabilities. Long-term and short-term liabilities Loans and liabilities taken out are included at the actual value when first included and then valued at the amortised cost. Accounting policies for calculating a result Total operating revenues Net revenue refers to the income from the goods and services delivered in the year under review with deduction of discounts and the taxes levied on the revenue. Income arising from the sale of goods is included at the moment when all significant rights to economic benefits and all significant risks have passed to the buyer. The cost of these goods is attributed to the same period. Income from services is included in proportion to the degree to which the services have been performed, based on the costs incurred in connection with the service provision up to the balance sheet date in proportion to the estimated costs of the total service provision to be provided. The cost of these services is attributed to the same period. Deferred taxes The income tax is calculated at the current rate on the result for the financial year, whereby account is taken of temporary differences between the profit calculation according to the annual accounts and the profit calculation for tax purposes, and whereby deferred tax assets are only valued insofar as they are likely to be realised. 16 / FINANCIAL STATEMENTS

17 JAARREKENING / 17

18 Notes to the consolidated balance sheet (amounts in tables and change summaries in euros x 1000) FIXED ASSETS TANGIBLE FIXED ASSETS (1) The item developed as follows in 2016: Land and buildings Plant and machinery Other tangible fixed assets Total Purchase values Purchase value at 31 December ,097 15,984 13,982 39,063 Investments 246 1,535 1,875 3,656 Disposals Purchase value at 31 December ,188 17,483 15,157 41,828 Accumulated depreciation Depreciation at 31 December ,018 11,655 10,799 27,472 Depreciation ,414 2,793 Depreciation on disposals Depreciation at 31 December ,493 12,465 11,588 29,546 Book value at 31 December ,079 4,329 3,183 11,591 Book value at 31 December ,695 5,018 3,569 12,282 Depreciation percentages 5% / 10% 20% 20% / 50% Renovations of the rented premises are included under business premises. 18 / FINANCIAL STATEMENTS

19 FINANCIAL FIXED ASSETS (amounts in euros x 1,000) Other associates (2) The book value developed as follows in 2016: Position at 31 December Changes 0 Position at 31 December Non-consolidated associates (3) The book value developed as follows in 2016: Position at 31 December ,524 Acquisitions 2,693 Disposals -10 Result for financial year -4,230 Dividend -442 Re-classification / set-off against receivables 3,210 Position at 31 December ,745 Receivables from non-consolidated associates (4) The book value developed as follows in 2016: Position at 31 December Loans / receivables 3,661 Re-classification / set-off from other associates -3,210 Position at 31 December For the sum of 215,000 this relates to the amounts due by the non-consolidated participating interest in HB Bau GmbH and for the sum of 451,000 to MEET RIVM CBG B.V. Deferred tax assets (5) The book value developed as follows in 2016: Position at 31 December ,640 Changes -1,640 Position at 31 December Total financial fixed assets 4,559 * Deferred tax assets The carry-forward loss at 31 December 2016 is 2.6 million. At year-end 2016, the full offsettable loss was valued in the annual accounts. This corresponds to a deferred tax asset of 0.6 million, whereby account has been taken of the anticipated results for tax purposes over the coming years. Of the deferred asset on the basis of the carry-forward of losses included at year-end 2016, the full amount is expected to have a term of less than one year. This sum has been included under the current assets. FINANCIAL STATEMENTS / 19

20 CURRENT ASSETS Stocks The stocks include a provision for obsolete stock of zero (2015: nil). Work in progress (6) Costs entered including the results taken 329, ,004 Invoiced instalments -347, ,001 Position of work in progress -18,318 2,003 The position of the work in progress at the end of the financial year shows the balance of work in progress with a positive and negative balance. These break down as follows: Work with a positive balance 53,588 37,330 Work with a negative balance -71,906-35,327 Position of work in progress -18,318 2,003 Amounts due (7) The terms of the receivables at year-end 2015 can be broken down as follows: 2016 Total > 1 year 2015 Total > 1 year Trade debtors 46, ,688 0 Non-consolidated associates 2, ,648 1,608 Taxes and premiums ,913 0 other receivables 1, , Accrued income and prepaid expenses 2, ,858 0 Total amounts due 53, ,932 1,855 Trade debtors (8) The trade debtors item is made up as follows: Trade debtors 46,743 Provision for bad debts -309 Total trade debtors 46,434 The provision for bad debts at 31 December 2015 was 295,000. Accrued income and prepaid expenses (9) The accrued income and prepaid expenses consist of prepaid costs relating to Cash and cash equivalents (10) At year-end 2016 the sum of 578,000 (2015: 355,000) was held in escrow accounts and is therefore not freely disposable. In addition, the cash and cash equivalents include a sum of 9.0 million relating to other liquid assets of construction and development consortia in which Hurks is participating. Hurks also has its own credit facilities which are explained in more detail below under the liabilities to credit institutions. 20 / FINANCIAL STATEMENTS

21 GROUP EQUITY (11) (amounts in euros x 1,000) The group equity developed as follows in 2016: Position at 31 December ,859 Net result ,376 Position at 31 December ,235 PROVISIONS (12) The provisions developed as follows in 2016: Deferred tax liabilities Jubilee benefits Other Total Position at 31 December ,300 2,148 Additions Withdrawals Releases Position at 31 December ,280 2,302 The other provisions item can be itemised as follows: Guarantees 1,237 Current legal actions 43 1,280 LONG-TERM LIABILITIES (13) Total > 5 year Total > 5 year Kop Grasweg, 3 month Euribor % 2,500-2,500 - Pilon Ridderkerk, 3 month Euribor % 1, Total debt to credit institutions 3,578-2,500 Echt Bocage, -0.2% / 0% 4,157-4,050 - Total other debts 4,157-4,050 Total long-term liabilities 7,735-6,550 - The long-term liabilities relate to project financing arranged by limited partnerships in which the company participates. A mortgage has been established on the underlying registered property as surety. Repayment has been made dependent on the progress of the relevant projects and is expected to take place within a period of one to five years. The proportion to be repaid within one year is zero. FINANCIAL STATEMENTS / 21

22 SHORT-TERM LIABILITIES (14) Debts to credit institutions The company has a total overdraft facility of 19.2 million. This is divided across ING Bank ( 15.0 million) and Deutsche Bank ( 4.2 million). For both facilities there is a cash pool of which the company and its full associates make use. In summary: Bank Current account facility Used Scope Interest ING Bank 15,000-15,000 3 month euribor+2,6% Deutsche Bank 4,200-4,200 1 month euribor+1,5% 19,200-19,200 The following sureties have been provided for the guarantee facility and overdraft with ING Bank - first mortgage on property in Nuenen, Rosmalen and Goirle (current book value at year-end 2016: 7.9 million) for 7.5 million; - compte joint and shared liability agreement for the company and its group companies. In addition a minimum liability capital of 30.0 million, a solvency ratio 30% and a return ratio of 2% for 2016 and future years are agreed upon. The balance sheet total in 2016 increased as a result of (i) increased activity level, (ii) improved liquidity, and (iii) improved working capital. As a result, solvency is not at the level of the financial agreement yet despite the positive result. The bank granted a waiver on account of not meeting the solvency requirement. The following sureties have been provided for the guarantee facility and overdraft with Deutsche Bank: - first mortgage on properties in Helmond (current book value at year-end 2016: 1.3 million) for 2.2 million to be supplemented with 40% for interest and costs; - compte joint and shared liability agreement for the company and its group companies. 22 / FINANCIAL STATEMENTS

23 Rights and obligations not included in the balance sheet Bank guarantees The conditional obligations arising from guarantees provided to third parties amount to 56,968,000 at 31 December 2016 (31 December 2015: 41,370,000). The available guarantee facility at 31 December 2016 is 84,500,000. For sureties provided to ING Bank and Deutsche Bank please see the information provided about these in the short-term liabilities to credit institutions. Agreements have been made in connection with the 25.0 million guarantee facility provided by Nationale Borg concerning a shared liability agreement for the company and its group companies under the same conditions and financial agreements as agreed with ING Bank. The bank granted a waiver on account of not meeting the solvency requirement. Agreement was reached with Zurich in 2016 for raising a guarantee facility of 20,000,000 under under the same conditions and financial agreements as agreed with ING Bank. The bank granted a waiver on account of not meeting the solvency requirement. Sureties for project financing in associates in which the group is participating have been issued to banking institutions in the sum of 2,937,000. Operational lease The obligation relating to lease contracts involves a total sum of 3,826,000 at 31 December 2016 (31 December 2015: 4,141,000). The lease contracts have a term varying from 2017 to For 2017 the expenses amount to 1,396,000 (2016: 1,594,000). Rental obligations The company has entered into obligations relating to the rental of real estate in the sum of 18,300,000 (2015: 21,273,000). The term of the leases ranges from ending in 2017 to For 2017 the rent amount is 3,920,000 (2015: 4,137,000). The obligation with a term of more than five years is 849,000. Joint and several liability for construction and development consortia The company has joint and several liability for all general partnerships in which it or its group companies participate directly. Joint and several liability for tax liabilities The company has joint and several liability for the liabilities arising from corporation tax and turnover tax for the tax grouping of which it forms part. Joint and several liability for guarantees given Group guarantees in the sum of 78,372,000 had been issued by Hurks groep B.V. for the current projects at 31 December Hurks groep B.V. has also provided guarantees in the context of various contracts with suppliers and principals for its operating companies compliance with their obligations. Currency transactions At 31 December 2016 the company has no obligations (2015: GBP 2,875,000) to sell foreign currency in GBP to hedge the currency risk on future cash flows. The actual value of the unrealised transactions are not included in the balance sheet and amounts to zero at the end of the financial year (2015: positive 169,543). Investment obligation Obligations in the sum of 4,375,000 have been incurred with regard to the purchase of land positions. These obligations are all unconditional. Financial risks The group s policy with regard to financial risks is set out below: - General: The most important financial risks to which the group is exposed are the currency risk, the interest risk, the liquidity risk and credit risk. Apart from forward exchange contracts, the group makes no use of financial derivatives; - Currency risk: the group s policy is to minimise currency risks arising from sales and to reduce the effects of exchange rate fluctuations to zero in the short and long term by means of forward exchange contract if necessary; - Interest risk: the group has a number of credit facilities with variable interest rates. The risks arising from financing and credit facilities are analysed regularly. For the available facilities, please see the notes on the long-term liabilities and the debts to credit institutions. - Liquidity risk: liquidity budgets are prepared periodically. Interim monitoring and possible adjustment are used to control liquidity risks. - Credit risk: the group limits the credit risk by making use of credit limits and periodically assessing the creditworthiness of debtors and partners. There were no unacceptable concentrations of credit risks on the balance sheet date which had not been foreseen. FINANCIAL STATEMENTS / 23

24 Notes to the consolidated profit and loss account (amounts in tables and statement of changes in euros x 1,000) NET REVENUE (15) Breakdown of turnover Development and Advice 59,000 43,000 Building and Technology 390, ,000 Total 449, ,000 Intra-group revenue -134,000-80,000 Total net revenue 315, ,000 Of this net revenue, approximately 100 million was realised abroad. Personnel costs (16) The personnel costs item is made up as follows: Wages and salaries 32,774 29,663 Pension costs 3,596 3,335 Other social security payments 4,781 3,936 Total 41,151 36,934 Various pension schemes apply within Hurks group and its operating companies. There are various industry pension schemes, namely BPF Beton, BPF Bouw, Hibin and BPF Metalectro. Participation in the industry pension scheme has been made obligatory in the collective labour agreements which cover the operating companies concerned. There are also a limited number of excess schemes concluded with insurance companies for salaries up to 100,000 and from 100,000. These are all defined contribution schemes. Based on the implementation agreements, the group has no other obligations other than the annual premium payments. Staffing The average workforce calculated on a full-time basis was: The average number of employees employed in the group calculated on a full-time basis can be broken down according to activities as follows: Development and Advice Building and Technology Total / FINANCIAL STATEMENTS

25 OTHER OPERATING EXPENSES (17) The fees of the auditor organisations as included in the 2016 annual accounts can be broken down as follows for 2016: Foederer Other Total Audit of the annual accounts Tax advice services Other Total TAXES (18) The company and its Dutch full associates form a tax grouping for the purposes of income tax. Future taxable profits can be offset against the tax losses suffered in the past up to a sum of 2,600,000. The effective tax burden is 37.2% and can be itemised as follows: 2016 % 2015 % Profit before tax 8,561-12,703 Tax on the basis of the Dutch nominal rate of 25% -2,140 3,176 Non-tax-deductible costs Exempt income (result of associates) ,990 Effect of offset tax losses 0 48 Subsequent tax income/expenses from previous years Other Total effective tax burden -3, % 1, % TRANSACTIONS WITH ASSOCIATED PARTIES Transactions with associated parties exist if a relationship exists between the company, its associates and their directors and senior executives. In its normal business activities the company buys and sells goods and services from and to various associated parties in which the company has a participating interest of 50% or less. These transactions take place on a commercial basis on terms which are comparable to those for transactions with third parties. REMUNERATION OF DIRECTORS AND SUPERVISORY DIRECTORS Remuneration of directors During the year, the Executive Board of the company comprised of three directors, with various people occupying the positions. The total remuneration in 2015, including expenditure arising from pension schemes and severance payments, was 930,000 (2015: 1,877,000). Remuneration of supervisory directors The remuneration of the company s supervisory directors in 2016 amounted to 170,000 (2015: 61,000) consisting of payments regarding 2016 of 110,000 and settlement for the previous years amounting to 60,000. FINANCIAL STATEMENTS / 25

26 26 / FINANCIAL STATEMENTS

27 Company annual accounts 2016 FINANCIAL STATEMENTS / 27

28 Company balance sheet (amounts in euros x 1,000) ASSETS FIXED ASSETS Tangible fixed assets Other tangible fixed assets 1,388 1,181 Financial fixed assets Associates in group companies 9,358 2,043 Other associates Loans to group companies 4,228 15,705 Deferred tax assets 0 1,640 13,611 19,413 CURRENT ASSETS Receivables from group companies 9,000 5,487 Taxes and social security contributions 822 2,106 Non-group companies Other receivables and accrued income and prepaid expenses 751 1,054 10,598 8,671 Cash and cash equivalents 10,389 3,846 Total 35,986 33, / FINANCIAL STATEMENTS

29 (before result) LIABILITIES SHAREHOLDERS EQUITY Paid-in share capital Other reserves 24,258 35,660 Undistributed result 5,376-11,402 30,235 24,859 PROVISIONS Deferred tax liabilities Jubilee benefits SHORT-TERM LIABILITIES Debts to credit institutions 0 3,839 Trade creditors 1, Group companies 2,749 1,548 Taxes and social security contributions Other liabilities 723 1,234 Accrued expenses and deferred income ,036 7,739 Total 35,986 33,111 FINANCIAL STATEMENTS / 29

30 Company profit and loss account (amounts in euros x 1,000) Result from associates 7,338-8,645 Balance of other income and expenditure -2,616-3,830 Income tax 654 1,073 Net result 5,376-11, / FINANCIAL STATEMENTS

31 Notes to the company annual accounts Accounting policies for valuation and calculation the result The accounting policies set out in the notes to the consolidated annual accounts also apply to the company annual accounts where applicable. The following valuation policies also apply to the company annual accounts. Associates in group companies Associates in group companies in which significant influence is exercised over the commercial and financial policy are valued at net asset value, but not less than zero. This net asset value is calculated on the basis of Hurks group s accounting principles. If the net asset value is negative, the participating interest is valued at zero. Other long-term interests are thereby also taking into account which must be deemed to be part of the net investment in the participating interest in practice. If the company fully or partly guarantees debts of the participating interest in question, or has the practical obligation to enable the participating interest to pay (its share of) its debts, a provision is made. In determining the size of this provision, account is taken of provisions for bad debts already deducted from receivables from the participating interest. FINANCIAL STATEMENTS / 31

32 Notes to the company balance sheet (amounts in tables and statement of changes in euros x 1,000) FIXED ASSETS TANGIBLE FIXED ASSETS The item developed as follows in 2016: Other fixed Business assets Purchase values Purchase value at 31 December ,614 Investments 608 Disposals 0 Purchase value at 31 December ,222 Accumulated depreciation Depreciation at 31 December Depreciation Depreciation on disposals 0 Depreciation at 31 December Book value at 31 December ,181 Book value at 31 December ,388 Depreciation percentages 20%-50% 32 / FINANCIAL STATEMENTS

33 FIXED ASSETS FINANCIAL FIXED ASSETS Associates in group companies The development in 2016 was as follows: Position at 31 December ,043 Result for financial year 7,338 Settoff against loans group company -23 Position at 31 December ,358 Other associates The item other associates consist of HB Bau and the development over 2016 was as follows: Position at 31 December Sales 0 Position at 31 December Loans to group companies The development in 2016 was as follows: Position at 31 December ,705 Setoff against participation group companies 23 Repayments -11,500 Position at 31 December ,228 Deferred tax assets The item Deferred tax assets relates to the long-term deferred tax assets, the development in 2016 was as follows: Position at 31 December ,640 Withdrawal -1,640 Position at 31 December CURRENT ASSETS Other receivables Insurance and other costs paid in advance Other sums to be received Total other receivables 751 1,054 FINANCIAL STATEMENTS / 33

34 (amounts in euros x 1,000) EQUITY Paid-in capital The authorised capital is 3,000,000, divided into 59,988 ordinary shares each with a nominal value of 50 and 12 priority shares each with a nominal value of 50. Of these, 12,000 ordinary shares and 12 priority shares have been issued and fully paid up. No changes occurred in the share capital during the financial year. Other reserves The development in 2016 was as follows: Position at 31 December ,660 Result for previous financial year -11,402 Position at 31 December ,258 Undistributed result The development in 2016 was as follows: Position at 31 December ,402 Result for previous financial year to reserves 11,402 Result for financial year 5,376 Position at 31 December ,376 PROVISIONS Deferred tax liabilities Position at 31 December Transfer from deferred asset 235 Withdrawal -34 Position at 31 December / FINANCIAL STATEMENTS

35 Rights and obligations not included in the balance sheet The company has accepted liability in accordance with Civil Code section 2:403 for the debts arising from legal acts by the group companies named in the list of associates. Hurks group shares overdraft facilities with the group companies for which the company is jointly and severally liable. For an explanation please see the consolidated annual accounts. Group guarantees in the sum of 78,372,000 had been issued by Hurks groep B.V. for the current projects at 31 December Hurks groep B.V. has also provided guarantees in the context of various contracts with suppliers and principals for its operating companies compliance with their obligations. Other notes Appropriation of the result for the financial year 2015 The 2015 annual accounts were approved at the general meeting held on 03 August The general meeting approved the appropriation of the result in accordance with the proposal made to that end. Appropriation of the result for the financial year 2016 The net result achieved in 2016 was a profit of 5,375,615. The result is at the disposal of the general meeting. The conditional obligations arising from guarantees issued to third parties total 2,937,000 at 31 December 2016 (31 December ,237,000). The company is at the head of the tax grouping for the purposes value added tax and income tax in The Netherlands. Consequently the company is jointly and severally liable for the tax debts of the tax grouping as a whole. The company has entered into rental obligations ending in 2016 and The associated annual cost for 2017 is 190,000. The remaining rent expenditure at 31 December 2016 was 1,177,000 (31 December ,350,000). The total obligation relating to the lease contracts still outstanding for the fleet at 31 December 2016 amounts to 154,000 (31 December ,000), ending in 2017 to FINANCIAL STATEMENTS / 35

36 Other information For the audit certificate please see the auditor s statement given below. Provisions of the articles of association concerning the profit appropriation: Article 29 paragraph 1 to 5 of the articles of association reads: 1. a percentage of the profit to be determined by the executive board with the approval of the supervisory board can be added to the reserves annually. 2. the remaining profit is at the free disposal of the general meeting of shareholders. A resolution to appropriate the profit requires approval from the meeting of holders of priority shares. 3. the company can only make distributions to shareholders and any other parties entitled to the profit available for distribution insofar as the equity is greater than the paid-in and called part of the capital supplemented with the reserves which must be maintained under the law or the articles of association. 4. a shortfall may only be set against the reserves prescribed by law insofar as the law allows. Extraordinary control rights under the articles of association Priority shares have rights to give approval for resolutions concerning issues including the issuing and acquisition of shares, stipulating the number of members of the Supervisory Board, the appointment and dismissal of a delegated supervisory director, the appointment of an auditor and the dissolution of the company. The priority shares together with the Supervisory Board must also give approval with regard to resolutions of the Executive Board on issues including amendment of the articles of association, reduction of the issued capital, the issuing and acquisition of shares, bearer depositary receipts or debentures against the company or the limited partnership for the general partnership in which the company is a liable partner, long-term collaboration with another corporate entity or company, participation in associates of which the equity is more than 25% of the company s equity, investments of more than 25% of the company s equity, significant changes in working conditions and simultaneous termination of contracts of employment and dissolution of the company. The priority shares are held by Stichting Administratiekantoor Hurks. The sole director of this foundation is Mr Th.J.G.M. Hurks in Eindhoven. 5. distribution of profit will take place after the adoption of the annual accounts which show that this is justified. And so on / FINANCIAL STATEMENTS

37 Eindhoven, 15 March 2017 Signature by the Executive Board Signature by the Supervisory Board The Executive Board, on its behalf Mr. C.H.G. de Vries Mr. A.A.M. Deterink Mrs G.H.A.M. Hurks Mr. G.Th.J.M. Hurks FINANCIAL STATEMENTS / 37

38 Independent auditor s report To: The shareholders of Hurks Groep B.V. Report on the audit of the financial statements 2016 included in the annual report Our opinion We have audited the financial statements 2016 of Hurks Groep B.V. based in Eindhoven. In our opinion the accompanying financial statements give a true and fair view of the financial position of Hurks Groep B.V. as at 31 December 2016, and of its result for 2016 in accordance with Part 9 of Book 2 of the Dutch Civil Code. The financial statements comprise: 1. the consolidated and company balance sheet as at 31 December the consolidated and company profit and loss account for 2016; and 3. the notes comprising a summary of the accounting policies and other explanatory information. Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the Our responsibilities for the audit of the financial statements section of our report. We are independent of Hurks Groep B.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics). We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Report on the other information included in the annual report In addition to the financial statements and our auditor s report thereon, the annual report contains other information that consists of: - The management board s report; - Other information as required by Part 9 of Book 2 of the Dutch Civil Code. Based on the following procedures performed, we conclude that the other information: - is consistent with the financial statements and does not contain material misstatements; - contains the information as required by Part 9 of Book 2 of the Dutch Civil Code. We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements. Management is responsible for the preparation of the management board s report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code. Description of responsibilities regarding the financial statements Responsibilities of management and supervisory board for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the financial statements, management is responsible for assessing the company s ability to continue as a going concern. Based on the financial reporting framework mentioned, management should prepare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, 38 / FINANCIAL STATEMENTS