Equity and liabilities
2.2.6.1 26. Equity
A. Share capital and share premium
In thousands of euro | Ordinary shares (number) | Amount | ||
31 December 2018 | 31 December 2017 | 31 December 2018 | 31 December 2017 | |
Ordinary shares – par value €0.01 | 106,261,040 | 106,261,040 | 144,617 | 144,617 |
Priority share – par value €0.01 | 1 | 1 | - | - |
In issue at 31 December – fully paid | 106,261,041 | 106,261,041 | 144,617 | 144,617 |
On 15 April 2016, it was resolved to amend the Articles of Association of the Company, to change the legal form of the Company into a public limited company, and the par value of the shares was reduced from €1.00 to €0.01 per share with an effective date per 23 May 2016. As at 31 December 2018, the share capital consists of 106,261,040 ordinary shares and 1 priority share. At balance sheet date the shares were issued and fully paid up. The share premium consists of the positive difference between the issue price and the nominal value of the issued shares.
On 26 April 2017, the Annual General Meeting of Shareholders authorised ForFarmers to initiate a programme to repurchase its own shares for a period of 18 months for (a) an amount between €40 million and €60 million and (b) in addition to purchase shares for the implementation of employee participation plans. In 2018 ForFarmers repurchased 802,291 shares (2017: 5,747,993) for a total amount of €8.1 million (2017: €56.7 million) (including purchasing costs). From the total number of repurchased shares 179,579 (2017: 358,465) at an amount of €1.8 million (2017: €3.0 million) are reissued as certificates for employee participation plans, bringing the balance of repurchased shares to €60.0 million (2017: €53.7 million) (including purchasing costs).
During 2018 the Group has completed the share buy-back programme.
(i) Ordinary shares
All holders of ordinary shares have equal rights. Holders of these shares are entitled to dividend as declared from time to time, and are entitled to one vote per share at annual general meetings of shareholders of the Company. On the shares held by the Company no dividend is paid and no voting rights are excercised.
(ii) Priority share
The priority share is held by Coöperatie FromFarmers U.A. As a result of the treasury shares held by the Company, Coöperatie FromFarmers U.A., on the latest reference date of 1 January 2019, could exercise the voting right for 48.5% of votes to be cast on the total of ordinary shares on the shares it holds (refer to Note 1). Furthermore, the Coöperatie FromFarmers U.A. could give voting instructions with regard to the shares held by the Trust Office Foundation (7.4%), which would give Coöperatie FromFarmers U.A. 55.9% of voting rights. As priority share holder Coöperatie FromFarmers U.A.:
(i) has a recommendation right for four of the six members of the Supervisory Board;
(ii) may appoint a member of the Supervisory Board as Chairman after consultation with the Supervisory Board;
(iii) has an approval right as regards the decisions of the Executive Board regarding:
- moving the Company’s head office outside the east of the Netherlands (Gelderland and Overijssel);
- an important change in the identity of nature of the Company or its enterprise as a result of (1) transfer of the enterprise or practically all of the enterprise to a third party or (2) entering into or breaking off a long-term partnership of the Company or a subsidiary thereof with another legal entity or company, or as fully liable partner in a limited partnership or general partnership, if such partnership or its termination represents a fundamental change to the Company;
- taking or disposing of a participating interest in the capital of a company to a value of at least a third of the amount of the Company’s equity according to the balance sheet with explanatory notes or, in the event the Company draws up consolidated balance sheets, according to the consolidated balance sheet with explanatory notes, according to the most recently adopted annual accounts of the Company, or any of its subsidiaries;
- changes to the Company’s articles of association;
- affecting a merger or division.
Please refer to the Corporate Governance Statement for the conditions for holding the priority share and the special control rights associated thereto if that voting right and/or voting instruction can be exercised or given for 50% or less.
The priority share is classified as equity, because the share does not contain any obligations to deliver cash or other financial assets and does not require settlement in a variable number of the Group’s equity instruments.
B. Nature and purpose of reserves
(i) Treasury share reserve
The reserve for the Company’s treasury shares comprises the cost of the Company’s (depositary receipts) shares held by the Group. The treasury shares are accounted for as a reduction of the equity attributable to the owners of the parent.
Treasury shares are recorded at cost, representing the market price on the acquisition date, where the par value of treasury shares purchased is debited to the treasury share reserve. When treasury shares are sold or re-issued, the par value of the instruments is credited to the treasury share reserve. Any premium or discount to par value as result of the market price is shown as an adjustment to retained earnings.
During the reporting period the Company purchased 802,291 of its shares as part of the share buy-back programme and to be able to re-issue the depositary receipts in relation to the employee participation plans. At 31 December 2018, the Group held 6,092,004 of the Company’s shares.
In 2017 the Company purchased 5,747,993 of its shares as part of the share buy-back programme and to be able to re-issue the depositary receipts in relation to the employee participation plans. Besides the repurchase of the abovementioned number of shares, the 358,465 treasury shares, which were obtained on behalf of the previous liquidity provider agreement (SNS) which ended on May 24 2016, were used for the purpose of employee participation plans. At 31 December 2017, the Group held 5,469,292 of the Company’s shares.
The movement in the treasury shares can be summarised as follows:
The movement of treasury shares | ||||
Number of shares | Amount par value in thousand euro | |||
2018 | 2017 | 2018 | 2017 | |
Balance at 1 January | 5,469,292 | 77,580 | 55 | 1 |
Repurchase Employee participation plan | 186,502 | 301,560 | - | - |
Re-issuance Employee participation plan | -179,579 | -358,465 | - | - |
Share buyback | 615,789 | 5,446,433 | 6 | 54 |
Adaptation par value shares | - | - | - | - |
Other movements | - | 2,184 | - | - |
Balance as at 31 December | 6,092,004 | 5,469,292 | 61 | 55 |
The other movements 2017 relate to depositary receipts which are settled with outstanding receivables.
(ii) Translation reserve
The translation reserve comprises all foreign currency differences arising from the activities of foreign subsidiaries. The decrease in this reserve as at 31 December 2018 is caused by the devaluation of the pound sterling partly off set by the revaluation of the Polish zloty.
(iii) Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss as the hedged cash flows affect profit or loss. This mainly relates to the result on derivatives for the acquisition of Tasomix and fuelhedges.
(iv) Other reserves and retained earnings
Other reserves are held by the Company for statutory purposes. Retained earnings comprise the balance of accrued profits that have not been distributed to the shareholders.
A reference is made to the section Other information regarding the result appropriation scheme under the Articles of Association.
For a further clarification of the other reserves and retained earnings a reference is made to Note 48 Shareholders’ equity of the Company financial statements.
C. Dividends
The following dividends were declared and paid by the Company for the year:
Distributed in the year | ||
In thousands of euro | 2018 | 2017 |
€0.30 per qualifying ordinary share (2017: €0.24) | 30,053 | 25,716 |
30,053 | 25,716 | |
The dividend is based on the total number of shares issued at year end of 100.2 million (2017: 100.8 million). In accordance with the dividend policy the payable dividend is adjusted for outstanding trade receivables and the receivable from the Coöperatie FromFarmers U.A. (€1.0 million in 2018). As a result the total dividend paid in 2018 amounts to €29.5 million (including €0.4 million dividend to the minority shareholder of Thesing GmbH). The treasury shares are not entitled to dividend.
After the respective reporting date, the following dividends were proposed by the Executive Committee. The dividends have not been recognised as liabilities and there are no tax consequences.
Proposed over the year | |||
In thousands of euro | Note | 2018 | 2017 |
€0.30 per qualifying ordinary share (2017: €0.30) | 48 | 30,051 | 30,238 |
30,051 | 30,238 | ||
The total dividend of €30,051 thousand consist of a dividend of €28,360 thousand and a special dividend of €1,691 thousand.
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D. Other comprehensive income accumulated in reserves, net of tax
Attributable to shareholders of the Company | |||||||
In thousands of euro | Note | Translation reserve | Hedging reserve | Other reserves and retained earnings | Total | Non- controlling interest | Total OCI |
2018 | |||||||
Remeasurement of defined benefit liabilities | 15B , 16B | - | - | 9,864 | 9,864 | - | 9,864 |
Foreign operations – foreign currency translation differences | 16B | -961 | - | - | -961 | - | -961 |
Cash flow hedges - effective portion of changes in fair value | 16B | - | -330 | - | -330 | - | -330 |
Cash flow hedges - reclassified to statement of profit or loss / statement of financial position | 16B | - | -566 | - | -566 | - | -566 |
Equity-accounted investees - share of other comprehensive income | 16B | - | - | -11 | -11 | - | -11 |
Total | -961 | -896 | 9,853 | 7,996 | - | 7,996 | |
2017 | |||||||
Remeasurement of defined benefit liabilities | 15B , 16B | - | - | 4,168 | 4,168 | - | 4,168 |
Foreign operations – foreign currency translation differences | 16B | -2,083 | - | - | -2,083 | - | -2,083 |
Cash flow hedges - effective portion of changes in fair value | 16B | - | 6 | - | 6 | - | 6 |
Cash flow hedges - reclassified to statement of profit or loss / statement of financial position | 16B | - | -33 | - | -33 | - | -33 |
Equity-accounted investees - share of other comprehensive income | 16B | - | - | 5 | 5 | - | 5 |
Total | -2,083 | -27 | 4,173 | 2,063 | - | 2,063 | |
2.2.6.2 27. Alternative performance measures
The Executive Committee has defined 'underlying metrics' as performance measures, as they believe these measures are relevant to understand the Group’s financial performance. These performance measures are monitored both at a consolidated and an Operating Segment level. These underlying metrics are used as Management believe they provide a better perspective of ForFarmers' business development and performance, as they exclude the impact of significant incidental items, which are considered to be non-recurring, and are not directly related to the operational performance of ForFarmers. The underlying metrics are reported at the level of EBITDA, EBIT and profit for the shareholders.
Four types of adjustments are distinguished: i) Impairments on tangible and intangible assets; ii) Business Combinations and Divestments, including the unwind of discount/fair value changes on earn-outs and options, dividend relating to non-controlling interests at anticipated acquisitions, and divestment related expenses; iii) Restructuring; and iv) Other, comprising other incidental non-operating items.
Underlying metrics are Alternative performance measures (APM) not defined by IFRS. The Group’s definition of underlying EBIT(DA) and underlying profit to shareholders of the company for the year may not be comparable with similarly titled performance measures and disclosures by other entities. ForFarmers has earlier issued its guidance for the medium term of an on average annual underlying EDITDA growth in the mid single digits at constant currencies.
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Impairments
- €0.6 million (€0.4 million after tax) for the reversal of a past impairment in 2014 on the (second) feed mill in Deventer, which was reopend to produce nongenetically modified (non-GMO) feed.
Business Combinations and Divestments
- €4.5 million (€3.4 million after tax) incidental gain on the divestment of the arable activities in the Netherlands;
- €0.4 million (€0.3 million after tax) subsequent payment regarding the disposal of Adaptris (United Kingdom);
- €0.5 million (€0.5 million after tax) as a result of the accrual of the contingent considerations of the acquisition of VleutenSteijn, Maatman, Van Gorp and Tasomix;
- €1.8 million (€1.8 million after tax) as a result of the accrual put option liability of the acquisition of Tasomix.
Restructuring
- €0.1 million (€0.1 million after tax) restructurings costs of a sales office in the United Kingdom.
Other
- €0.9 million (€0.7 million after tax) addition for past service costs to the (closed) Defined Benefit pension scheme in the United Kingdom, due to the High Court ruling on the equal pension rights for man and woman (GMP case).
The 2017 APM items comprise:
Impairments
- €1.9 million (€1.7 million after tax) impairment of a production location in the United Kingdom as a result of the supply chain optimalisation.
Business Combinations and Divestments
- €0.3 million (€0.2 million after tax) net gain on the disposal of Adaptris (United Kingdom);
- €0.1 million (€0.1 million after tax) net gains on the disposal of property in the Netherlands;
- €0.1 million (€0.1 million after tax) as a result of the accrual of the contingent consideration of the acquisition of VleutenSteijn.
Restructuring
- €0.2 million (€0.1 million after tax) restructuring costs related to the introduction of a financial shared service center on the Continent.
2.2.6.3 28. Capital Management
ForFarmers’ monitors capital using a ratio return on average capital employed (ROACE). This ratio is defined as the underlying EBIT(DA) to average capital employed (the 12-month average of the sum of equity and non-current liabilities adjusted for cash and cash equivalents, bank overdrafts, assets held for sale and interests in equity-accounted investees). The average capital employed for 2018 was €434.5 million (2017: €417.0 million) and the EBITDA ROACE was 23.0% (2017: 24.3%). This ratio is calculated for all clusters and increases the comparability of the clusters. The EBIT ROACE was 16.4% (2017: 18.2%).
Funding
ForFarmers’ long term target is to have a net debt to normalised EBITDA ratio of maximum 2.5. Normalised EBITDA is defined as agreed in the covenant guidelines of the bank facility, a reference is made to Note 29. ForFarmers’ net debt to normalised EBITDA ratio at 31 December 2018 and 31 December 2017 was as follows:
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In thousands of euro | Note | 2018 | 2017 |
Loans and borrowings | 29 | 55,503 | 44,536 |
Bank overdrafts | 24 | 13,307 | 49,690 |
Less: cash and cash equivalents | 24 | -51,756 | -161,297 |
Net debt | 17,054 | -67,071 | |
Operating profit before depreciation, amortisation and impairment (EBITDA) | 103,920 | 101,649 | |
Adjustments as per financing agreement | 7,137 | 142 | |
Normalised EBITDA | 111,057 | 101,791 | |
Leverage ratio (net debt to normalised EBITDA ratio) | 0.15 | -0.66 | |
Interest coverage ratio (operating profit to net financing interest expense on loans) | -70.96 | -72.36 | |
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The long term target is lower than the ratios in the credit facility, see Note 29. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
Share buy-back programme own shares
On 26 April 2017, the Annual General Meeting of Shareholders authorised ForFarmers to initiate a programme to repurchase its own shares for a period of 18 months. The total number of shares that has been repurchased based on the share buy-back programme is 6,062,222 shares (excluding shares for the share-based payment arrangements) , for a total amount of €60.0 million, reference is made to Note 26A for more information.
2.2.6.4 29. Loans and borrowings
In thousands of euro | Note | 31 December 2018 | 31 December 2017 |
Unsecured bank loans | 39,083 | 44,429 | |
Secured bank loans | 29C | 10,220 | - |
Finance lease liabilities | 186 | 79 | |
Loans from related parties | 3,051 | - | |
Total non-current | 52,540 | 44,508 | |
Unsecured bank loans | 131 | - | |
Secured bank loans | 29C | 2,432 | - |
Finance lease liabilities | 400 | 28 | |
Total current | 2,963 | 28 | |
The financing arrangement, concluded in 2014, has no short term repayment obligations as at 31 December 2018 (nor as per 31 December 2017). For information regarding the financing, please refer to the subsection 'multicurrency revolving facility agreement'.
Information about the Group’s exposure to interest rate, foreign currency and liquidity risks is disclosed in Note 32.
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A. Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
Currency | Nominal interest rate | Year of maturity | Face value 31 December 2018 | Carrying amount 31 December 2018 | Face value 31 December 2017 | Carrying amount 31 December 2017 | |
In thousands of euro | % | ||||||
Unsecured bank loan (floating rate) | GBP | LIBOR + 0,7% | 2020 | 39,456 | 39,214 | 45,086 | 44,429 |
Secured bank loan (floating rate) | PLN | WIBOR + 0,85% - 1,2% | 2019 - 2027 | 12,286 | 12,285 | - | - |
Secured bank loan (floating rate) | EUR | EURIBOR + 1,6% | 2019 | 367 | 367 | - | - |
Finance lease liabilities | GBP | 4,2% - 7,9% | 2019-2021 | 107 | 72 | 147 | 107 |
Finance lease liabilities | PLN | 3,7% - 4,2% | 2022 | 533 | 514 | - | - |
Loans from related parties | PLN | 3,8% | 2021 | 3,051 | 3,051 | - | - |
Total interest-bearing liabilities | 55,800 | 55,503 | 45,233 | 44,536 | |||
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B. Unsecured bank loans
(i) Multicurrency revolving facility agreement
In 2014, the Group concluded a financing agreement (multicurrency revolving facility agreement) with ABN AMRO Bank, Rabobank, Lloyds Bank and BNP Paribas, that is free from securities. The agreement has a term up to 31 January 2020. The amount of the facility amounts to a maximum of €300 million, consisting of €200 million loan facility and €100 million bank overdraft facility, of which a total nominal amount of £35.0 million (39.1 million) (31 December 2017: £40.0 million (€44.4 million)) was used as at 31 December 2018. The applicable interest is based on Euribor and/or Libor (depending on the currency in which the facility is drawn) plus a margin between 0.7% and 1.6%. The margin depends on the leverage ratio; on the basis of the 2018 ratio the said margin amounts to 0.7% (2017: 0.7%).
Covenant guidelines
Existing guidelines for financial ratios:
- Leverage ratio, that is determined by net debt divided by normalised EBITDA. The leverage ratio shall not exceed 3.0; whereas in a maximum of three relevant but not consecutive periods during the duration of the agreement the leverage ratio is allowed to be between 3.0 and 3.5.
- Interest coverage ratio, that is determined by operating profit (EBIT) divided by net interest expense and shall not be between zero and 4.0.
Net debt means the total amount of all debts to credit institutions and other financial institutions (including financial lease commitments) less cash and cash equivalents.
EBITDA means operating profit (EBIT) after adding back amortisation and depreciation of assets.
Normalised EBITDA means, in respect of a relevant period, EBITDA for that relevant period:
- Including EBITDA of a business combination acquired during the relevant period for that part of the relevant period prior to its becoming a business combination;
- Excluding EBITDA attributable to any member of the Group (or to any business) disposed of during the relevant period prior to its disposal unless the purchase price in relation to such disposal has not yet been received during the relevant period, in which case EBITDA of the disposed member of the Group or business shall be included in normalised EBITDA provided that, in the event that the purchase price is partially (and not fully) received during the relevant period, EBITDA attributable to that member, calculated on a pro-rata basis, shall be included in normalised EBITDA.
- Including, at the indication of the Group, extraordinary costs incurred in the relevant period related to the integration of business combinations acquired in the relevant period, or the disentanglement after disposal of members of the Group provided that the aggregated amount of such costs does not exceed €25 million at any time during the life of the agreement, and €10 million in any financial year of the Group. In such event, the Group shall deliver a compliance certificate that specifies any such extraordinary costs.
As per 31 December 2018 the leverage ratio amounts positive and the interest coverage ratio amounts negative in accordance with the applicable accounting standards. As per 31 December 2017 the leverage ratio and interest coverage ratio amount both negative. Herewith ForFarmers fully complies with the terms and conditions of the covenants as per 31 December 2018 as well as per 31 December 2017.
(ii) Other unsecured loan facilities
ForFarmers Thesing, Germany, has an unsecured financing agreement with Bremers Landesbank, with a maximum amount of €6 million. At the balance sheet date an amount of €1.8 million is used (31 December 2017: the facility is not used).
C. Secured bank loans
The secured bank loans of €12.7 million relate to the entities Voeders Algoet (Belgium) and Tasomix (Poland), which are acquired in 2018. The following securities have been provide for these loans:
Voeders Algoet - ING Bank
- Assignment of inventories.
Tasomix - Credit Agricole, PKO BP S.A.
- Silent assignment of receivables for a total amount of €3.5 million (PLN 15 million).
- Mortgage on real estate of €20.9 million (PLN 89.7 million).
- Pledge on machinery, equipment and inventories.
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D. Finance lease liabilities
Finance lease liabilities are payable as follows:
31 December 2018 | 31 December 2017 | |||||
In thousands of euro | Future minimum lease payments | Interest | Present value of minimum lease payments | Future minimum lease payments | Interest | Present value of minimum lease payments |
Less than 1 year | 427 | 27 | 400 | 39 | 11 | 28 |
Between 1 and 5 years | 213 | 27 | 186 | 108 | 29 | 79 |
More than 5 years | - | - | - | - | - | - |
Total | 640 | 54 | 586 | 147 | 40 | 107 |
The increase of the future lease payments has been caused by the acquisition of Tasomix (Poland).
E. Reconciliation of movements of liabilities to cash flows arising from financing activities
In thousands of euro | Note | Other loans and borrowings | Finance lease liabilities | Reserves | Other reserves and retained earnings | Unap- propriated result | Non- controlling interest | Total |
Balance at 1 January 2018 | 44,429 | 107 | -5,747 | 207,781 | 58,554 | 4,629 | ||
Changes from financing cash flows | ||||||||
Proceeds from purchase and sale of treasury shares | - | - | -6 | -5,873 | - | - | -5,879 | |
Proceeds from sale of treasury shares relating to employee participation plan | - | - | - | 1,503 | - | - | 1,503 | |
Repurchase of treasury shares relating to employee participation plan | - | - | - | -2,192 | - | - | -2,192 | |
Payment of finance lease liabilities | - | -1,115 | - | - | - | - | -1,115 | |
Proceeds from borrowings | 1,608 | - | - | - | - | - | 1,608 | |
Redemption bank loan | -5,928 | - | - | - | - | - | -5,928 | |
Payments of settlement of derivatives | - | - | - | -81 | - | - | -81 | |
Dividend paid | 26 | - | - | - | -29,077 | - | -400 | -29,477 |
Total changes from financing cash flows | -4,320 | -1,115 | -6 | -35,720 | - | -400 | -41,561 | |
The effect of changes in foreign exchange rates | -120 | 30 | - | - | - | - | -90 | |
Changes in fair value | 460 | - | - | - | - | - | 460 | |
New finance lease liabilities | - | 125 | - | - | - | - | 125 | |
Other changes / Liability related | ||||||||
Acquisition of subsidiary | 6 | 14,468 | 1,439 | - | - | - | - | 15,907 |
Total liability-related other changes | 14,808 | 1,594 | - | - | - | - | 15,907 | |
Non cash settled dividend | 26C | - | - | - | -976 | - | - | -976 |
Total equity-related changes | - | - | -1,857 | 68,905 | 36 | 937 | 68,021 | |
Balance as at 31 December 2018 | 54,917 | 586 | -7,610 | 239,990 | 58,590 | 5,166 | ||
In thousands of euro | Note | Other loans and borrowings | Finance lease liabilities | Reserves | Other reserves and retained earnings | Unap- propriated result | Non- controlling interest | Total |
Balance at 1 January 2017 | 45,564 | 214 | -3,583 | 229,816 | 53,260 | 4,880 | ||
Changes from financing cash flows | ||||||||
Proceeds from purchase and sale of treasury shares | - | - | -54 | -53,504 | - | - | -53,558 | |
Proceeds from sale of treasury shares relating to employee participation plan | - | - | - | 2,335 | - | - | 2,335 | |
Repurchase of treasury shares relating to employee participation plan | - | - | - | -3,151 | - | - | -3,151 | |
Payment of finance lease liabilities | - | -130 | - | - | - | - | -130 | |
Dividend paid | - | - | - | -24,672 | - | -1,000 | -25,672 | |
Total changes from financing cash flows | - | -130 | -54 | -78,992 | - | -1,000 | -80,176 | |
The effect of changes in foreign exchange rates | -1,628 | -7 | - | - | - | - | -1,635 | |
Changes in fair value | 493 | - | - | - | - | - | 493 | |
Other changes / Liability related | ||||||||
Acquisition of subsidiary | 6 | - | 30 | - | - | - | - | 30 |
Total liability-related other changes | - | 30 | - | - | - | - | 30 | |
Non cash settled dividend | 26C | - | - | - | -1,044 | - | - | -1,044 |
Total equity-related changes | - | - | -2,110 | 58,098 | 5,294 | 749 | 62,031 | |
Balance as at 31 December 2017 | 44,429 | 107 | -5,747 | 207,878 | 58,554 | 4,629 | ||
2.2.6.5 30. Provisions
2018 | ||||||
In thousands of euro | Soil deconta-mination | Demolition costs | Restructuring | Onerous contracts | Other | Total |
Balance at 1 January 2018 | 684 | 383 | 398 | 572 | 1,344 | 3,381 |
Acquisitions through business combinations | 150 | - | - | - | 180 | 330 |
Provisions made during the year | 32 | 39 | 227 | 1,137 | 297 | 1,732 |
Provisions released during the year | -88 | -220 | -134 | -453 | -213 | -1,108 |
Provisions used during the year | - | - | -285 | -597 | -270 | -1,152 |
Effect of discounting | 6 | 3 | - | 2 | 8 | 19 |
Other movement | - | - | - | - | 199 | 199 |
Translation difference | - | - | -2 | - | -3 | -5 |
Balance as at 31 December 2018 | 784 | 205 | 204 | 661 | 1,542 | 3,396 |
Non-current | 784 | 129 | - | - | 1,111 | 2,024 |
Current | - | 76 | 204 | 661 | 431 | 1,372 |
Balance as at 31 December 2018 | 784 | 205 | 204 | 661 | 1,542 | 3,396 |
2017 | ||||||
In thousands of euro | Soil deconta-mination | Demolition costs | Restructuring | Onerous contracts | Other | Total |
Balance at 1 January 2017 | 791 | 371 | 1,518 | 583 | 2,082 | 5,345 |
Provisions made during the year | - | 129 | 344 | 414 | 275 | 1,162 |
Provisions released during the year | -100 | - | -46 | -53 | -41 | -240 |
Provisions used during the year | -7 | -117 | -1,386 | -380 | -953 | -2,843 |
Effect of discounting | - | - | - | 8 | - | 8 |
Translation difference | - | - | -32 | - | -19 | -51 |
Balance as at 31 December 2017 | 684 | 383 | 398 | 572 | 1,344 | 3,381 |
Non-current | 534 | 129 | 2 | 450 | 1,134 | 2,249 |
Current | 150 | 254 | 396 | 122 | 210 | 1,132 |
Balance as at 31 December 2017 | 684 | 383 | 398 | 572 | 1,344 | 3,381 |
2.2.6.5.1
A. Soil decontamination
The soil decontamination provision relates to the expected unavoidable costs of cleaning polluted sites. The Group conducts periodical assessments to ascertain whether sites have been polluted. At the moment pollution has been determined the unavoidable costs to clean the site are estimated and provided for. The increase in the provision relates to the acquisitions.
B. Demolition costs
A provision for demolition costs was recognised in prior years resulting from the closure of a site in the Netherlands. Based on the estimated period during which the remaining provision will be utilised, it is classified as current. The non-current provision for demolition costs is recognized for assets in use and will be utilized at the end of the useful lifetime of these assets. The release is related to the re-opening of the Deventer site.
C. Restructuring
During the year the restructuring provision for the financial shared service centers on the continent was used and the remaining part has been released. In 2018 a provision has been formed for the restructuring of a sales office in the United Kingdom.
D. Onerous contracts
The release of the provision for onerous contracts relates to a rent agreement, which was declassified as onerous, following the decision to use the warehouse till the end of the rent contract. The additions to the provision mainly relate to a number of loss-making forward sales contracts due to price increases in raw materials.
E. Other
The other provisions mainly relate to legal disputes and claims.
Furthermore, ForFarmers is involved in several cases, of which the Group considers the impact to be not material, highly unlikely to result in a financial impact, or is unable to reliably estimate the magnitude of a potential impact (see also Note 36 regarding contingencies).
2.2.6.6 31. Trade and other payables
In thousands of euro | 31 December 2018 | 31 December 2017 | |
Trade payables due to related parties | 37 | 2,847 | 1,893 |
Other trade payables | 160,280 | 109,927 | |
Accrued expenses | 87,669 | 88,814 | |
Trade payables | 250,796 | 200,634 | |
Taxes (other than income taxes) and social securities | 6,206 | 6,348 | |
Contingent consideration | 6 | 19,211 | 8,255 |
Derivatives | 32A | 461 | - |
Put option liability | 6 | 32,279 | - |
Other payables | 58,157 | 14,603 | |
Total | 308,953 | 215,237 | |
Non-current | 41,258 | 8,255 | |
Current | 267,695 | 206,982 | |
Total | 308,953 | 215,237 | |
The increase in trade payables and other payables is mainly caused by acquisitions. The net effect of acquisitions and divestments amounts to €85.7 million.
The increase of the contingent consideration mainly relates to the acquisitions of Tasomix, Maatman, Van Gorp and Algoet. The put option liability relates to the acquisition of Tasomix and concerns a long-term liability which is discounted with a rate higher than 10%. For more information about the acquisitions refer to Note 6.
The accrued expenses are, amongst others, related to invoices to be received and accrued personnel expenses.
Information about the Group’s exposure to relevant currency and liquidity risks is disclosed in Note 32C.