Notes to the Company Financial Statements

26 GENERAL INFORMATION

The company financial statements have been prepared in accordance with the statutory provisions of Part 9, Book 2, of the Dutch Civil Code and the financial reporting requirements as set forth in the Guidelines for Annual Reporting in Netherlands.

Since the income statement for 2019 of Koninklijke HaskoningDHV Groep B.V. is included in the consolidated financial statements, an abridged income statement has been disclosed (in the company financial statements) in accordance with Section 402, Book 2, of the Dutch Civil Code. 

The accounting policies for the company financial statements and the consolidated financial statements are the same.bParticipating interests in group companies are accounted for in the Company financial statements according to the equity accounting method on the basis of net asset value. For details we refer to the accounting policy for financial fixed assets in the consolidated financial statements (2.7). 

As per year end, the financial instruments that have the legal form of equity, are presented in the equity of the company financial statements. 

The share of result of participating interests concerns the Company’s share of the profit or loss of these participating interests. Results on transactions involving the transfer of assets and liabilities between the Company and its participating interests and mutually between participating interests themselves, are eliminated to the extent that they can be considered as not realised. 

For accounting policies for the company balance sheet and income statement, reference is made to the notes to the consolidated balance sheet and income statement in the Notes to the Consolidated Finance Statements.

The number of employees per end of year was 2 (2018: 2). Both employees are located in Netherlands.

27 INTANGIBLE FIXED ASSETS

Movements in intangible fixed assets can be broken down as follows:

At each balance sheet date the Group tests whether there are any indicators of intangible assets being subject to impairment. If any such indicators exists, the Group carries out impairment tests on capitalised goodwill, based on the estimated cash flows of the related CGU. The CGU, defined as Business Unit or entity represents the lowest level within the Group at which the goodwill is monitored for internal management purposes. The recoverable amount of the relevant CGU is determined on the basis of their value in use. Determination of the value in use is performed by using estimated future cash flows based on historical performance and expected future market developments, forecast 2019, budget 2020 and further financial projections for 2021-2024. 

Cash flows after five years are extrapolated by perpetual growth rate to calculate the terminal value. 

To calculate the present value of the estimated future cash flows, post-tax discount rates have been applied. 

Above mentioned tests have led to impairment of the CGU South Africa of €3.0 million based on the historical performance and future expectations.

28 Financial Fixed Assets

Movements in financial fixed assets can be broken down as follows:

Participating interests

Koninklijke HaskoningDHV Groep B.V. can not be held fully or partially liable for the debts of associates.

The reclassification of €11.5 million relates to a direct investment in Royal HaskoningDHV (Pty) Ltd.'s share premium. The reclassification of €0.8 million relates to intercompany debtors written off in Poland and Portugal. 

Dividend has been paid by HaskoningDHV Nederland B.V. (€10.0 million) , DHV China B.V. (€0.3 million) and DHV Hydroprojekt Sp. z o.o. (€0.2 million).

In the other movements the remeasurement of the United Kingdom pension fund is included (€3.4 million). 

The participating interests are 100% related to group companies. For an extensive list of participating interests we refer to the Appendix.

Loans to participating interests

Receivables from participating interests includes loans to RoyalHaskoningDHV (Pty) Ltd. of €0.0 million (2018: €5.8 million), InterVISTAS Holding Inc. of €1.1 million (2018: €1.2 million), HaskoningDHV Consulting Pvt. Ltd. of €2.3 million (2018: €2.3 million), HaskoningDHV UK Holdings Ltd. of €3.5 million (2018: €3.3 million), Haskoning International B.V. of €2.3 million (2018: €3.9 million) and Hydroinformatics Institute PTE Ltd. of €0.5 million (2018: €0.0 million). The loans are provided for funding and cash management purposes. The majority of the loans have a permanent nature.

Nothing has been agreed in respect of securities. All loans are at arm’s length. 

The interest income on loans to associates amounted to €1.1 million (2018: €0.9 million).

Deferred income tax assets

The deferred income tax asset includes a deferred tax benefit of €3.2 million for the liquidation of the entities in Portugal and Russia.

29 RECEIVABLES

Amounts owed from participating interests, like joint ventures, are treated similar to trade receivables; no interest is charged. All receivables fall due in less than one year. The fair value approximates the book value.

30 SHAREHOLDERS' EQUITY

The authorised and issued share capital amounts to €5,098,736, divided into ordinary shares of €1.00 each, split by A and B class shares (with equal voting rights). For further information regarding the shareholder structure we refer to the Appendix.

Depositary receipts (DRs) of the B class shares are sold to employees during an annual trade round. In the event that more DRs are offered than requested by employees in any future year, there is an intention to buy back DRs by Stichting Administratiekantoor HaskoningDHV (the “Trust Office”) to a maximum of 2.5% of the total number of A and B-shares in Koninklijke HaskoningDHV Groep B.V. This is subject to approval of the Supervisory Board.

During the annual trade round in May 2019 the Trust Office sold a balance of 47,227 DRs to employees (72,432 DRs sold and 25,205 DRs purchased). In connection therewith the company issued 47,227 B class shares to the Trust Office (total value €1.6 million – issue price €32.94). The amount of the issue price that exceeds the par value has been presented as Share Premium (€1.5 million).

Subject to adoption of the financial statements 2019 by the Annual General Meeting, the price will rise by 6.2% to €34.98. Including the proposed dividend of €0.90 (see Proposed profit appropriation, Notes to the Company Financial Statements) the total return for the DR holdersis 8.9%.

The movement in DR's is as follows:

Statement of changes in shareholders' equity

Movement of shareholders' equity can be broken down as follows:

The reconciliation of the statutory and consolidated equity of Koninklijke HaskoningDHV Groep B.V. is as follows:

The reconciliation of the statutory and consolidated result of Koninklijke HaskoningDHV Groep B.V. is as follows:

We have included DHV Education Foundation as a consolidated company, given the fact that we have control. In the company statements, DHV Education Foundation is not included. In above tables you can see the effect of this exclusion.

Foreign currency translation reserve

Exchange gains and losses arising from the translation of foreign operations from functional to reporting currency are accounted for in this statutory reserve. The foreign translation reserve of €10.2 million includes a.o. investments in South Africa, Turkey and Canada.

Legal and Statutory reserves

The legal reserve for participating interests which amounts €3.0 million (2018: €2.4 million) pertains to participating interests that are measured at net asset value. The reserve is equal to the share in the results and direct changes in equity (both calculated on the basis of the Company’s accounting policies) of the participating interests since the first measurement at net asset value, less the distributions that the Company has been entitled to since the first measurement at net asset value, and less distributions that the Company may effect without restrictions. As to the latter share, this takes into account any profits that may not be distributable by participating interests that are Dutch limited companies based on the distribution tests to be performed by the management of those companies. The legal reserve is determined on an individual basis. 

A legal reserve has been formed for capitalised development costs of €0.6 million. The reserves required under the articles of association (€0.3 million) are related to Portugal, Belgium and China.

Other reserves

Included in the line other movements in other reserves is the Defined Benefit Pension Plan United Kingdom. The movement relates to the net balance of actuarial gains and losses, after deduction of deferred tax, in respect of the closed pension scheme in the United Kingdom, which has been directly charged to the reserves. Further reference is made to note 12.

Proposed profit appropriation

Given the profit over 2019, the Executive Board proposes that a dividend of €0.90 per B-share will be distributed to holders of B-shares, representing a value of €343,000. Due to the depositary receipts Rules and Regulations this dividend will be distributed to the depositary receipt holders on a one-to-one basis.

The Executive Board proposes that no dividend will be distributed to the A-shares (see also Dividend per share in the Notes to the Company Financial Statements). The remaining profit of €8,842,000 will be added to the other reserves. 

31 PROVISIONS

The provision is related to long-term employee benefits. 

32 NON-CURRENT LIABILITIES

For terms and conditions of the loan and guarantee facility, refer to note 13 in the Notes to the Consolidated Financial Statements.

33 CURRENT LIABILITIES

All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the carrying amount due to their short-term character. The amount owed to group companies/subsidiaries decreased with €6.1 million, because of a payment to HaskoningDHV UK Ltd.

34 COMMITMENTS AND CONTINGENCIES NOT INCLUDED IN THE BALANCE SHEET

At December 31, 2019 the company had contingent liabilities in respect of guarantees provided to third parties in the ordinary course of business to the value of €14.0 million. 

Koninklijke HaskoningDHV Groep B.V. has issued a corporate guarantee to Castor (Amersfoort) B.V., in which it guarantees the fulfilment of the rental obligations related to the head office in Amersfoort. The guarantee amounts to a rental period of maximum five years and the term of the guarantee is equal to that of the lease.

35 TAX GROUP LIABILITIES

Together  with its Dutch subsidiaries, the Company forms a fiscal unity for corporate income tax purposes and value- added tax; the standard conditions stipulate that each of the companies is liable for the tax payable by all companies belonging to the fiscal unity. Recharges between the Company and its subsidiaries are settled through current account positions. The following method is applied with regard to recharges/allocation of corporate income taxes within the fiscal unity: 

Because the Company recharges corporate income taxes within the fiscal unity under the assumption that all group companies are independent tax entities, all deferred tax positions, both deferred tax assets and deferred tax liabilities, are in principle deferred receivables and deferred liabilities of these group companies to the Company.

36 JOINT AND SEVERAL LIABILITIES AND GUARANTEES

The company has issued no declarations of joint and several liabilities for debts arising from legal acts of Dutch consolidated participating interests.

Amersfoort, Netherlands
March 6, 2020