Annual Report 2012
Contents
Key financial figures
2
Profile
3
Financial Statements 2012 Consolidated income statement Consolidated statement of comprehensive income
Directors Report
14
Introduction and financial performance in 2012 Key developments Financial result and position Compliance, safety, health and environment and quality HRM policy Diversity Risk management Forward looking statement
23
Consolidated statement of changes
24
in equity
14 14 15
21 22
Consolidated statement of financial position Consolidated cash flow statement
25 26
Contents of notes to the financial
15 15 15 16 16
27
statements Explanatory notes to consolidated financial statements
28
Company income statement of Fokker Technologies Group B.V.
65
Company balance sheet of
Report of the Supervisory Board
17 17 17
Fokker Technologies Group B.V.
financial statements
66
the Board of Management
17
Other information
68 68
The Fokker Technologies Group
19
Introduction Composition of the Supervisory Board
65
Explanatory notes to the company
Composition of and consultation with
Independent Auditor’s Report Provisions of the articles of association regarding profit distribution
70
List of major consolidated operating companies 2012
71
Annual report Fokker Technologies 2012
1
Key financial figures — Fokker Technologies Group B.V. (in EUR million, unless stated otherwise)
2012
2011
2010
2009
Fokker Technologies Net turnover
769
685
616
602
Operational EBITDA */**/***
76
74
77
66
Operational EBIT */**/*** Operational result *
44
46
53
35
21
26
35
(1)
Order book at 31 December **** Number of employees at 31 December
*
886
805
840
3,853
3,722
3,573
Excluding the settlement of the pension recovery premiums.
**
Operational EBIT(DA) is a non GAAP measure.
***
Unaudited.
****
Orders for the next 24 months.
Net turnover
Operational EBITDA
(in EUR million)
(in EUR million)
Number of employees
800
85
5,000
640
68
4,000
480
51
3,000
320
34
2,000
160
17
1,000
0
2
884 3,946
2009
2010
2011
2012
Annual report Fokker Technologies 2012
0
2009
2010
2011
2012
0
2009
2010
2011
2012
Profile
Fokker Technologies Fokker Technologies is a leading global aerospace specialist that designs, develops and manufactures highly engineered aircraft systems to aircraft manufacturers and provides through-life aircraft fleet support services. Fokker’s main competitive advantage is its engineering capabilities that are based on its heritage of complete aircraft manufacturing and its ability to approach aircraft systems and equipment design from the perspective of an aircraft manufacturer, or integrator. Fokker consistently invests in new distinctive technologies, products and programs. As a recognized innovation leader, the Company is well represented as sole source supplier on several of the most technologically advanced aerospace and defense platforms. As a sole source supplier, Fokker is typically involved throughout the program lifetime, which can last 20 to 40 years.
The Company operates through its principal units (Fokker Aerostructures, Fokker Elmo and Fokker Services), which have welldefined and recognized specialties and capitalizes seamlessly on the deep involvement in a broad base of programs. The widespread participation in development, manufacturing and sustainment of aircraft platforms across civil and defense applications contributes strongly to customer intimacy, (joint) technology development and risk balance.
Annual report Fokker Technologies 2012
3
Profile
4
Annual report Fokker Technologies 2012
Strong customer base Fokker Technologies as a pure play aerospace specialist has a wide range of relationships with the leading companies in the industry across fixed wing, helicopters and space. Key to our value proposition is that Fokker Technologies supports customers in outperformance in terms of availability, affordability and reduced capital intensity in both the development and operation of aircraft. The customer base spans Airbus, the Boeing company, Bombardier, Comac, Gulfstream Aerospace Corporation, Lockheed Martin, Northrop Grumman, KLM, Austrian Airlines and many other leading aerospace companies and airlines.
Sustainable innovations With a history of close cooperation with high graded knowledge institutes in the Netherlands, partnerships are built with customers and technology centers to advance on this joint innovation agenda. Increasing awareness that the environment and materials have to be treated differently and more carefully is leading to changing views on the environment and sustainability among aircraft manufacturers and suppliers. A number of developments by the Fokker companies underline the irreversible trend towards greater sustainability. That with the distinctive ability for advanced design and development of unique integrated solutions that feature distinctive technologies for structures and wiring systems, and in-service support of aircraft. Fokker’s main advantage is its capability to approach aircraft systems design from the perspective of an aircraft manufacturer and understanding the aircraft and its operation as a whole.
Lightweight materials such as Glare and thermoplastics in aerostructures, composites in landing gear, the unique WDMS for the design, production and configuration management of electrical systems, the use of LED lighting in aircraft and the Electronic Flight Bag Solution for the iPad are a perfect fit with the ambition to reduce the environmental footprint of the aerospace industry and at the same time deliver highly advanced products that improve the competitive position and performance of platforms that Fokker works on.
Global footprint Headquartered in Papendrecht, the Netherlands, Fokker operates facilities in the Netherlands, Romania, Turkey, Canada, Mexico, the USA, Singapore and China. In April 2012 a new facility in Chihuahua, Mexico has been opened for the production of empennages for business jets. In February 2012 a new Regional Aircraft Maintenance Facility in Singapore has been opened with the full capabilities to support Fokker and ATR platforms, demonstrating Fokker Technologies’ commitment to the Asia Pacific region.
Annual report Fokker Technologies 2012
5
Profile
Fokker Aerostructures Fokker Aerostructures is internationally recognized as a specialist in the design, industrialisation and manufacturing of lightweight aerostructures for the aerospace and defense industry. The company has a clear focus on three product groups: fuselages, empennages and wing movables.
Fokker Aerostructures delivers structure assemblies to all the leading aircraft manufacturers including Airbus, Boeing, Cessna, Dassault, Gulfstream, Lockheed Martin, NH Industries, and Raytheon.
Supported by proven methodologies, knowledge based engineering tools and global supply chain management expertise, products are designed and manufactured with advanced technologies such as metal bonding and optimum applications of lightweight, smart materials; for example Glare® (glass fiber reinforced aluminium) and thermoplastic composites. Fokker is a frontrunner in the use of advanced materials, which is a key factor for weight reduction and efficiency improvement. Engineering and manufacturing teams in the Netherlands, Romania, the USA and Mexico work closely together with customer teams. This makes the company a highly engaged specialist supplier, at an early stage of the design phase. This favors incorporating the most advanced structure assemblies.
6
Annual report Fokker Technologies 2012
Annual report Fokker Technologies 2012
7
Profile
Fokker Elmo Fokker Elmo is recognized as a specialist in Electrical Wiring Interconnection Systems for aircraft and aircraft engines for the aerospace and defense industry.
Fokker Elmo delivers wiring systems, electrical panels and boxes to all the leading aircraft and system manufacturers including Airbus, AgustaWestland, Boeing, Bombardier, GKN, Hamilton Sundstrand, Honeywell, Lockheed Martin, Pratt & Whitney, Raytheon and Rolls-Royce.
8
Annual report Fokker Technologies 2012
As wiring is affected by almost any configuration change of the aircraft, the efficient management of complex and frequent design changes into production is core to Fokker Elmo’s business. The design and manufacturing process of Fokker Elmo enable our systems to be connected with those of our customers. Fokker Elmo’s proprietary Wiring Design and Manufacturing System (WDMS) toolset integrates all aspects of wiring management including perfect configuration management into one powerful system. With WDMS Fokker Elmo offers its customers a single process across multiple sites, resulting in a consistent quality product that supports all our customers’ needs over the entire life-cycle of their products.
Annual report Fokker Technologies 2012
9
Profile
Fokker Services Fokker Services is an independent specialist for Availability Services for selected platforms in the regional market and for selected systems in the narrow and wide body market. Next to that it also provides Redelivery & Upgrade Services to support lessors with the full range of asset integrity management when aircraft are changed over from one airline to a new one. The combination of OEM (design) knowledge and independent after-sales support services makes Fokker Services a valuable partner for the aerospace industry.
With its uniquely positioned FLY and availability programmes, Fokker Services supports airlines around the globe in all phases in the life-cycle from start-up, to mature and phase-out operational and technical requirements. This entails that with the extensive fleet that Fokker Services supports, airlines get access to a vast amount of data that helps them improving availability and reliability, and thereby reduce cost and capital. With a presence in the USA, Europe and Singapore Fokker Services is located in close proximity to its customer base.
Fokker Services delivers its range of services to airlines and operators, such as KLM, Austrian Airlines, Ocean Air and Skywest as well as a number of other airlines and operators.
10
Annual report Fokker Technologies 2012
Fokker Landing Gear* Fokker Landing Gear is a specialist in the design, development and manufacturing of landing gear systems for small to midsize aircraft and helicopters. It has full life cycle capabilities including MRO and spares support and a good track record in delivering weight- and cost-efficient landing system designs.
Fokker Landing Gear delivers and supports landing gear systems to leading aircraft and system integrators including Boeing, Lockheed Martin, NH Industries, and UTC Aerospace Systems.
For many years Fokker Landing Gears has been actively engaged in the development of technology for the application of thick-walled Polymer Matrix Composites (PMC) for flight critical primary structural components for landing gears. As a leader in this field it underlines our innovation character in developing smart integrator solutions that provide better weight and performance characteristics, but that are also more sustainable.
* Part of Fokker Aerostructures.
Annual report Fokker Technologies 2012
11
Profile
Global footprint
12
Annual report Fokker Technologies 2012
Annual report Fokker Technologies 2012
13
Directors Report Strong revenue growth and progress in positioning as a super specialist Introduction and financial performance in 2012 Fokker Technologies is a Tier 1 super specialist in the Aerospace & Defence (A&D) business featuring distinctive technologies and delivering smart integrator solutions based on a strong foundation in the Netherlands.
In August 2012, as part of the Stork Group refinancing, stand-alone financing for Fokker Technologies was arranged. Together with the establishment of a Supervisory Board at Fokker Technologies level, whereby the Dutch Structuur Regime has been applied. This is an important step for the future of Fokker Technologies outside the Stork Group.
In 2012 net revenue increased with 12% to EUR 769 million in 2012. Over the last two years revenue has grown by 25%, whereby Fokker Services revenue remained flat at around EUR 220 million during that period. The revenue of ‘design & build’ activities of Aerostructures, landing gear and wiring business units continued to benefit from Fokker Technologies’ participation in a broad portfolio of important aircraft programs. Despite the economic uncertainty, the outlook for new build commercial aircraft remains very healthy, as demonstrated by record order books at both Airbus and Boeing. The defense budgets face more uncertainty, however high technology programs continue to have strong support.
Operational EBIT* was EUR 44 million compared to EUR 46 million in 2011 and did not follow the same trend as revenue growth. The mix of programs with several programs in the start of development or early phase of the learning curve drives temporarily lower margins with return on sales in 2012 at 5.7%. Growth in ramp up of new programs, learning curve effects and cost control are to step up the return on sales towards the companies mid-term objective of 10%.
During 2012 Fokker Technologies continued to make progress in the positioning as a Tier 1 super specialist. A good example is the major step in the development of the Chinese market, building on the success of Fokker Services by signing the first contract for wiring support on the ARJ21 for Fokker Elmo. Hereby Fokker Technologies is recognized for the integrator knowledge that the Fokker Technologies companies as former aircraft manufacturer still possess.
Key developments Strong growth of new programs Fokker Aerostructures, Fokker Elmo and Fokker Landing Gear revenues increased with 14% compared to 2011. This was especially seen from the new programs such as G650 / A350 / SMS Dassault and Bombardier CSeries. As these programs are either still in their design phase or in the early cycle of the learning curve this had a temporary negative impact on margins and EBITDA. On the other hand the B747-8 program was finalized and was transferred to China as contractually agreed with Boeing. This resulted in a drop in revenue compared to 2011 of almost EUR 40 million.
Fokker Technologies realized significant improvement in streamlining working capital of stocks with lower stock levels whilst revenue growth was 12%.
New production facilities in Singapore and Mexico started to show good increase in volume.
Robust Fokker fleet Fokker Services net revenue was EUR 222 million in 2012. The non-Fokker revenue of Fokker Services is currently at 30%. The Bombardier Dash-8 component support revenue continues to grow slowly, whereby most contracts are won in case of repositioning of aircraft to new operators. Furthermore, the contract on the NH90 standard parts component support was awarded, which contributes to building a position for rotorcrafts at Fokker Services. * Operational EBIT is a non GAAP measure.
14
Annual report Fokker Technologies 2012
In 2012 Fokker Services’ operational EBITDA improved by EUR 3 million to EUR 14 million. This should be seen in the context of the gradually declining Fokker fleet. In the mid-term some large operators are expected to phase out their Fokker fleet, which will migrate into smaller fleets across the globe. The focus of Fokker Services is on reshaping the organization to achieve a sustainable profit margin on other non-Fokker activities and platforms.
Financial result and position Operational EBITDA of Fokker Technologies increased by 2.6% to EUR 76.1 million from EUR 74.1 million in 2011. The net profit of Fokker Technologies for 2012 amounts to EUR 10.3 million. In 2011 the net profit was EUR 30.4 million, including an exceptional income of EUR 18.5 million. As per August 16, 2012, Fokker Technologies is financed through a EUR 150 million senior debt facility and a EUR 50 million Revolver facility. Prior to this date Fokker Technologies was financed through a shareholder loan of Stork B.V. of EUR 127.5 million.
Compliance, safety, health, environment and quality In 2010 a subsidiary has discovered a potential violation of certain US export regulations. Fokker Technologies is investigating the matter in full cooperation with the related authorities. Pending this investigation and the outcome thereof, the financial implications of the related contingent liability cannot be accurately quantified. As a result no provision for this matter has been recorded. We are in constructive dialogue with the authorities to solve this issue. Compliance processes have been upgraded across all companies, including the necessary adjustments in IT systems to prevent deliveries to embargoed countries. Furthermore, the company made further improvements in relation to IT security.
For Fokker Technologies compliance, safety, health, environment and quality are core values and are promoted by management, for example through mandatory guidelines. This is a license to operate in the highly regulated environment Fokker Technologies operates in. Furthermore, increasing safety awareness and improving safety among employees are subjects of continuous focus by means of thematic actions, instruction and training. Satisfactory progress has been made in this essential area.
HRM policy Fokker Technologies continues to value the importance of a skilled and ambitious workforce at all levels in the organization to consistently deliver on Fokker Technologies’ pay-off ‘Aircrafting’. Fokker Technologies has its own program to train people, develop leadership and incorporate change management skills in the organization. The ambition to grow in(to) new markets is creating the need for new programs to facilitate the human capital and leadership requirements accompanying the (international) growth and to continuously build the companies distinctive capabilities. Considering the specialist technological and integrator knowledge required in many of Fokker Technologies’ activities, but in particular in the aerospace industry, Fokker Technologies undertakes to be present at activities at universities and technical colleges as well as to support other initiatives to increase the interest of young people in technology.
Diversity The size and composition of the Board of Management and Supervisory Board positions are based on the national and international profile and strategy of the company. The expertise, experience and various competencies of the members of the Board of Management and Supervisory Board should contribute to this profile and strategy. The company aims to find the best people suited for the job in which it has no specific policy for diversity. The company does have females in senior management position and its trainee program more and more shows an even split between males and females. Over time the company expects this will be reflected in the Board of Management and Supervisory Board positions.
Annual report Fokker Technologies 2012
15
Directors Report
Risk management The Fokker Technologies’ internal risk management system is based on the COSO framework. The significant risks to which Fokker Technologies can be and/or is exposed, are identified and assessed at unit level and are then, according to guidelines, discussed and addressed at corporate level. This also applies to the exposure of Fokker Technologies from its use of financial instruments relating to credit risk, liquidity risk, market risk and capital management. Further details on the objectives, policies and processes to measure and manage these risks are described in the disclosure notes to the financial statements.
In relation to the financial reporting risks management is of the opinion that the risk management and monitoring processes provide an adequate degree of certainty and that the financial reporting is free of material misstatements. The policy remains focused on the constant assessment and improvement of the risk management system, with the aim of continuous optimization of the reliability and effectiveness of these processes and way of working of all staff.
Forward looking statement The next year is crucial in preparing Fokker Technologies for its next step. Management is of the opinion that consolidation of A&D companies in Europe and abroad will gain traction in the next couple of years. Continuous streamlining of the operational activities, including expanding the global operations and alliances, will allow the Fokker Technologies’ companies to adequately deal with competitive and economic challenges, thereby positioning to stay in sync with the consolidation. The main objectives for 2013 are to finalize the US compliance file, to improve the long term outlook of Fokker Services by developing new revenue streams to focus on right sizing indirect cost and to continue to progress in our main new programs.
At the close of this management report we would like to thank all Fokker employees and associates for their continuous commitment to excellence during the past year.
Papendrecht, The Netherlands, 23 April 2013
The Board of Management: Sjoerd Vollebregt (Chairman and CEO) Hans Büthker (COO) Remco Smit (CFO)
From left to right: Remco Smit, Sjoerd Vollebregt and Hans Büthker.
The executive board of Fokker Technologies is composed of the Board of Management and the presidents of Fokker Services (Peter Somers) and Fokker Elmo (Jan Lagasse, who will be succeeded by Tim Hayter as per 1 July 2013. Jan Lagasse has taken on the responsibility for M&A and special projects at Fokker Technologies). Hans Büthker is also president of Fokker Aerostructures.
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Annual report Fokker Technologies 2012
Report of the Supervisory Board
Introduction Mid 2012, the Stork group of companies was refinanced resulting in separate financing arrangements at the level of each of Fokker Technologies and Stork Technical Services as the two main groups of Stork. Following the refinancing, the existing corporate governance structure of Stork BV was changed resulting in separate yet similar governance structures for each of Fokker Technologies and Stork Technical Services. Both companies apply the Dutch structure regime and have their own twotier Board. The refinancing and change in the governance structure are steps that were made to enable Fokker Technologies and Stork Technical Services to each establish and grow their own distinct, international businesses. Stork BV will consequently limit its role to that of shareholder of both companies.
Fokker Technologies Group B.V. is a limited liability company according to Dutch Law, with its corporate seat in Amsterdam, the Netherlands. Since Fokker Technologies Group B.V. is not a listed company, the Netherlands Corporate Governance Code is not applicable to Fokker Technologies Group B.V. Nonetheless, Fokker Technologies Groups’ corporate governance practices are in conformity with most of the best practice provisions of the Code.
The Supervisory Board of Fokker Technologies was established on 28 December 2012 and convened for the first time on 23 January 2013. The Supervisory Board therefore cannot now provide a report on the execution of supervisory tasks in 2012, but would nonetheless like to report on its composition and consultation with management.
Composition of the Supervisory Board Fokker Technologies’ new Supervisory Board consists of six members, five of which are (former) members of the Stork Supervisory Board thereby providing continuity in the supervision of Fokker Technologies. The Supervisory Board is chaired by Mr. Jacques Schraven, who remains chairman of the Supervisory Board of the shareholder of Fokker Technologies, Stork BV.
Mr. Carel van den Driest has served on the Supervisory Board of Stork BV since 2006 and continues to serve on the Supervisory Board of Stork Technical Services only. The company is grateful to Mr. van den Driest for his support to Fokker Technologies. Mr. Hans Peter Ring, former CFO of EADS, has been appointed as new and sixth member of the Supervisory Board. The composition of the Supervisory Board is as follows: •
Jacques Schraven, (chairman)
•
N.I. Stoesser (vice-chairman)
•
A.O. Thordarson
•
R.G. Bruining
•
P.F. Hartman
•
H.P. Ring
The current composition of the Supervisory Board is in line with the profile of the Supervisory Board and assures the required mix of knowledge, skills and expertise relevant to the company.
Mr. Schraven, Mr. Hartman and Mr. Ring are independent members within the meaning of the Dutch Corporate Governance Code. Mr. Hartman and Mr. Ring are appointed on the basis of the enforced recommendation right of the works council.
The Supervisory Board has installed an Audit & Compliance Committee, consisting of Mr. Stoesser (chairman) and Mr. Schraven, and a Remuneration Committee, consisting of Mr. Hartman (chairman) and Mr. Stoesser.
Composition of and consultation with the Board of Management The Board of Management of the company consists of three statutory directors and is composed as follows: •
Sj.S. Vollebregt, Chairman and CEO
•
R. Smit, CFO
•
H. Büthker, COO
Annual report Fokker Technologies 2012
17
Regular meetings of the Supervisory Board and its committees have been scheduled for 2013. The meetings of the Supervisory Board will be held on a quarterly basis with in principle two additional meetings, one to specifically discuss the annual report for the previous year and one to discuss the operational plan for the following year. Presidents of the respective business units will be invited from time to time for a presentation on their respective business unit. Furthermore, human capital and technology/R&D are topics that will each be specifically dealt with at a Supervisory Board meeting once a year. In addition to the (regular) meetings specifically the chairman of the Supervisory Board and Mr. Stoesser as chairman of the Audit & Compliance Committee maintain intensive contacts with the CEO and the CFO.
Significant parts of the meetings of the Supervisory Board of Stork BV in 2012 were devoted to the refinancing of Stork BV which formed part of structuring an exit strategy for the private equity owner of Stork BV. In relation to Fokker Technologies, the Supervisory Board also considered the operational plan of Fokker Technologies in its meeting of 16 December 2012 but left the final approval to the new Supervisory Board of Fokker Technologies which approved on the operational plan in its first meeting of 23 January, 2013.
Members of the Supervisory Board (at that time still the Supervisory Board of Stork B.V.) were present at the regularly scheduled consultative meetings with the Central Works Council (also at that time of Stork B.V.) a well as at informal meetings with the chairman, vice-chairman and secretary of the Central Works Council. Specifically the refinancing of the Stork group and the new corporate governance structure following the refinancing were discussed. We like to thank the Group Workers Council for their contribution.
The Supervisory Board is confident that the Company is well positioned to deliver on its objectives for the future. The Supervisory Board would like to thank all employees of the Company for their contribution and continuing dedication in 2012, and would like to thank the investors for continuing to support further investments that enable the Company to further enhance its capabilities and position in the market place.
Papendrecht, the Netherlands, 23 April 2013
The Supervisory Board
18
Annual report Fokker Technologies 2012
The Fokker Technologies Group
The shares in the Fokker Technologies Group are directly held by Stork B.V. The shares in the Stork Group are indirectly held by funds managed by amongst others Arle Capital Partners, Eyrir Invest and management participation funds. Stork Topco B.V. is the ultimate Dutch holding company and head of the Dutch fiscal unity. Stork Topco B.V. and Stork Holding B.V. can be classified as the financial holding companies of the Group. Stork B.V. is the parent company of a number of operating companies. The Fokker Technologies Group structure is as follows:
Fokker Technologies Group B.V.
Fokker Technologies Holding B.V.
Fokker Aerostructures
Fokker Elmo
Fokker Services
Fokker Landing Gear
Annual report Fokker Technologies 2012
19
* Not identical to legal structure.
20
Annual report Fokker Technologies 2012
Financial Statements 2012 Fokker Technologies Group B.V.
Consolidated income statement (in EUR x 1,000)
2012 Revenue 3
768,999
684,681
Cost of sales 4
(630,705)
(538,807)
Gross profit
138,294
Selling expenses 4
(35,658)
General administrative expenses
4
Other operating income 8 Pension recovery expense (general administrative expense)
24
Effect of change in accounting principle to OCI 24
Financial expenses
10
Share of profit of associates 14
Profit for the year
*
(120,372)
21,443
25,502
14,199
–
(35,007)
–
39,268 21,443
43,962
226
2,242
(16,595)
(13,697)
4,556
966
Result before tax Income tax 11
(84,818) (116,851)
–
Operating result after pension and other effects Financial income 9
145,874
(35,554)
(81,193)
Operating result before pension and other effects
22
2011*
9,630
698
33,473
(3,068) 10,328
The comparatives represent the Fokker Group companies prior to the financial restructuring as explained in note 1.2.
Annual report Fokker Technologies 2012
30,405
Consolidated statement of comprehensive income (in EUR x 1,000)
Profit for the year
2012
2011*
10,328
30,405
Other comprehensive income Actuarial gains and losses 24 Foreign currency translation differences for foreign operations Effective portion of changes in fair value of cash flow hedges
(2,179)
(12,070)
366
590
4,793
(5,954)
4,992
6,984
Net change in fair value of cash flow hedges transferred to income statement 26 Other comprehensive income (loss) for the period, net after tax
7,972
(10,450)
18,300
19,955
Total comprehensive income for the period, net after tax
*
The comparatives represent the Fokker Group companies prior to the financial restructuring as explained in note 1.2.
Annual report Fokker Technologies 2012
23
Consolidated statement of changes in equity (in EUR x 1,000)
Share capital Balance as at 01-01-2011
Profit for the year
Cashflow hedge reserve
Other reserve
Total
18
131,461
4,804
(22,990)
33,941
147,234
–
–
–
–
30,405
30,405
Total comprehensive income / (loss)
–
–
590
1,030
(12,070)
(10,450)
Other movements
–
–
–
–
149
149
18
131,461
5,394
(21,960)
52,425
167,338
Contribution**
–
21,175
–
–
–
21,175
Profit for the year
–
–
–
–
10,328
10,328
Balance as at 31-12-2011*
Total comprehensive income / (loss)
–
–
366
9,785
(2,179)
7,972
Other movements
–
–
–
–
25
25
18
152,636
5,760
(12,175)
60,599
206,838
Balance as at 31-12-2012
24
Share Translation premium reserve
*
The comparatives represent the Fokker Group companies prior to the financial restructuring as explained in note 1.2.
**
The contribution is explained in note 19.
Annual report Fokker Technologies 2012
Consolidated statement of financial position (in EUR x 1,000)
2012
2011*
Non-current assets Property, plant and equipment 12 Goodwill
101,788
13
Intangible assets 13 Investments in associates 14 Derivative financial instruments
25
103,406
98,590
98,590
152,113
171,470
37,175
31,460
–
2,131 389,666
407,057
Current assets Inventories 15 Construction contracts in progress – due from customers 16 Trade and other receivables
17
Cash and cash equivalents 18
148,348
148,723
95,601
77,341
133,246
117,572
25,349
17,873
Assets
402,544
361,509
792,210
768,566
Equity 19 Share capital
18
18
152,636
131,461
5,760
5,394
Cashflow hedge reserve
(12,175)
(21,960)
Other reserve
60,599
52,425
Share premium Translation reserve
Total equity
206,838
167,338
Non-current liabilities Long-term loans third parties 21 Long-term loans Stork Group companies Employee benefits
21
24
Derivative financial instruments 25 Deferred tax liabilities
20
205,882
51,030
–
127,500
26,017
32,625
24,548
44,444
20,102
18,482 276,549
274,081
Current liabilities Construction contracts in progress – due to customers 16
106,623
120,268
Trade and other payables 22
168,697
172,299
13,029
17,573
1,412
1,187
Employee benefits
24
Current portion of long-term loans 21 Current tax payable Provisions 23
Liabilities
*
3,799
282
15,263
15,538 308,823
327,147
792,210
768,566
The comparatives represent the Fokker Group companies prior to the financial restructuring as explained in note 1.2.
Annual report Fokker Technologies 2012
25
Consolidated cash flow statement (in EUR x 1,000)
2012
2011*
Cash flows from operating activities Result before income tax
9,630
33,473
Depreciation and impairment of property, plant and equipment
16,629
15,414
Amortisation and impairment of intangible assets
23,275
21,819
–
(14,826)
Financial income and expenses (net)
11,813
10,285
Changes in provisions and employee benefits
(11,428)
(8,887)
Adjustments for:
Result from divestments of property, plant, equipment and others
Changes in working capital (excluding the effects of acquisition and exchange differences on consolidation): Inventories
375
(9,750)
Current receivables
(15,675)
232
Current liabilities
(36,261)
Cash generated from operating activities
Income tax paid Interest paid Financial instruments
(7,950) (1,642)
39,810
(301)
(357)
(11,000)
(10,964)
(7,430)
Net cash generated from operating activities
(5,571) (20,373)
22,918
Cash flows from investing activities Interest received
567
2,242
Dividends received
920
920
Proceeds from sale of property, plant and equipment
265
22,936
–
(581)
(15,439)
(25,739)
Acquisition of subsidiary, net of cash Investments in property, plant and equipment Investments in intangible assets
(3,917)
Net cash used in investing activities
(16,024) (17,604)
(16,246)
Cash flows from financing activities Proceeds from long-term loans
151,695
10,538
Repayments of long-term loans
(105,400)
(22,841)
Net cash from/ (used in) financing activities Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at opening balance
(12,303)
8,318
(5,631)
17,873
21,114
Net (decrease)/increase in cash and cash equivalents
8,318
(5,631)
Exchange rate and translation differences on cash held
(842)
2,390
25,349
17,873
Cash and cash equivalents at 31 December
*
26
46,295
The comparatives represent the Fokker Group companies prior to the financial restructuring as explained in note 1.2.
Annual report Fokker Technologies 2012
Contents of notes to the financial statements
Explanatory notes to the consolidated
1
22
Trade and other payables
51
financial statements
28
23
Provisions
51
General
28
24
Employee benefits
52
1.1
General
28
25
Financial risk management
55
1.2
Common control transaction
28
26
Currency management
57
1.3
Statement of compliance
28
27
Overview financial instruments
60
1.4
Basis of preparation
28
28
Interest management
60
Significant accounting policies
30
29
Contingent liabilities
62
2 2.1
Consolidation principles
30
30
Related parties
62
2.2
Foreign currency
31
31
Capital commitments
62
2.3
Determination of fair values
32
32
Lease commitments
63
2.4
Financial instruments
33
33
Other commitments
63
2.5
Revenue
34
34
Estimates and judgments
2.6
Cost of sales
35
2.7
Leases
35
2.8
Financial income and expenses
36
2.9
Income tax
36
Company income statement of
2.10
Property, plant and equipment
36
Fokker Technologies Group B.V.
2.11
Intangible assets
37
Company balance sheet of
2.12
Leased assets
38
Fokker Technologies Group B.V.
2.13
Inventories
39
Explanatory notes to the company
2.14
Construction contracts in progress
39
financial statements
66
2.15
Impairment
39
36
General
66
2.16
Equity
40
37
Principles for valuation and
2.17
Long-term loans
40
2.18
Provisions
40
2.19
Employee benefits
41
2.20
Cash flow statement
2.21
35
by management
63
Events after the reporting period
64
65
65
determination of the result
66
38
Financial fixed assets
66
39
Equity
67
42
40
Contingent liabilities
67
41
Events after the reporting period
67
Discontinued operations and assets held for sale
42
3
Revenue
42
4
Expenses by nature
42
5
Employee benefit expenses
43
6
Personnel
43
7
Remuneration of Management
43
8
Other operating income
43
9
Financial income
43
10
Financial expense
43
11
Income tax
44
12
Property, plant and equipment
45
13
Goodwill and Intangible assets
45
14
Investment in associates
46
15
Inventories
47
16
Construction contracts in progress
47
17
Trade and other receivables
48
18
Cash and cash equivalents
48
19
Equity
48
20
Deferred tax position
49
21
Long-term loans
50
Annual report Fokker Technologies 2012
27
Explanatory notes to consolidated financial statements
1
General 1.1 General Fokker Technologies Group B.V. (further referred to as ‘Fokker Technologies’ or ‘the Company’), a private company with limited liability, was founded on 22 May 2012. Fokker Technologies has its statutory seat in Amsterdam, the Netherlands. Its headoffice is located in Papendrecht. Stork B.V. is the parent and London Acquisition Luxco S.a.r.l. the ultimate parent company of Fokker Technologies Group B.V.
The consolidated financial statements of the Company as at and for the year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entities’) and the Group’s interest in associates and jointly controlled entities. Fokker Technologies is primarily involved in the development and production of structural components, electrical wiring systems and landing gears for aircrafts as well as being a supplier of spare parts, maintenance repair support and engineering services.
1.2 Common control transaction On 8 August 2012, Stork B.V. announced the refinancing of its two businesses Fokker Technology Holding B.V. (‘FTH B.V.’) and Stork Technical Services Holding B.V. (‘STSH B.V.’). Stork B.V. decided to change from a group-level financing structure to two separate financing structures. The purpose of financing Stork B.V. into two separate capital structures was to establish and grow its two distinct, international businesses. On 16 August 2012, the refinancing and related corporate reorganization process was executed. On this date, FTH B.V. entered into a EUR 200 million syndicated loan facility, consisting of a EUR 150 million term loan and a EUR 50 million revolving facility. With the drawdown of the term loan, FTH B.V. settled its intercompany debt with Stork B.V. and certain other intecompany paybles.
On this date Stork B.V. also transferred 100% of the shares in FTH B.V. against the book value as per 16 August 2012 to Fokker Technologies Group B.V. The book value (and consequently share premium) of this transfer amounted to EUR 184,976. Fokker Technologies Group B.V. consequently became the head of the Fokker Technologies Group. The direct parent and the ultimate shareholder remain unchanged.
The economic entity to which the consolidated financial statements relate is essentially unchanged compared to 2011, except for adding a new head to the group. Consequently, the consolidated financial statements of the previous year are unchanged and continued in 2012 as if the same economic entity was in place. Relevant changes in the legal structure are disclosed where required.
1.3 Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union and with Title 9 Book 2 of the Netherlands Civil Code. The consolidated financial statements were authorised for issue by the Directors on 23 April 2013.
1.4 Basis of preparation a)
Functional and presentation currency
The consolidated financial statements are presented in Euros, rounded to the nearest thousand, unless explicitly stated otherwise. The Euro is the functional and presentation currency of Fokker Technologies.
b)
Basis of measurement
The consolidated financial statements are prepared on historical cost basis, except that the following assets and liabilities are stated at fair value: derivative financial instruments, financial instruments at fair value through profit or loss, available-for-sale financial assets and plan assets associated with defined benefit plans. Assets held for sale are stated at the lower of carrying amount or fair value minus the cost to sell, except for inventories, financial assets, deferred tax assets and employee benefit assets which continue to be measured in accordance with the Group’s accounting policies.
28
Annual report Fokker Technologies 2012
c)
Use of estimates and judgements
The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the specific circumstances. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in note 34.
d)
New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2012 that would be expected to have a material impact on the Group.
e)
New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2012 and not yet adopted
IAS 19, ‘Employee benefits’ was amended in June 2011. The standard is effective for annual periods beginning on or after 1 January 2013. The amendments include the requirment that actuarial gains and losses are recognized in other comprehensive income, thus removing the corridor method. In addition, the expected return on plan assets recognized in the statement of income is calculated based on the rate used to discount the defined benefit obligation, instead of applying an expected rate of return on plan assets. Fokker Technologies does not expect the impact of the applicability of the new standard to be significant.
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. Although the standard is not yet endorsed by the EU, the implementation date is currently set at 1 January 2015, with early adoption permitted. Fokker Technologies is currently assessing the future impact of IFRS 9 on the financial statements.
IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess.
IFRS 11, ‘Joint Arrangements’ explains the factors in determining the type of joint arrangements, which can be classifiied as a ‘joint-operation’ in which parties have the rights to the assets and obligations for the liabilities, or a ‘joint venture’, in which parties have rights to net assets. A ‘joint operation’ will be accounted for on the basis of the Company’s interest in those individual assets and liabilities, while an interest in a ‘joint venture’ will follow the equity method for accounting.
IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.
Implementation of IFRS 10, 11 and 12 is, under EU endorsement, postponed to financial years starting on or after 1 January 2014 with early adoption permitted. Fokker Technologies Group is currently assessing the impact of these standards.
Annual report Fokker Technologies 2012
29
Explanatory notes to consolidated financial statements
IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. Implementation of the standard is 1 January 2013 with earlier adoption permitted. The Group is yet to assess IFRS13’s full impact.
Other new, revised or amended IFRS accounting standards and IFRIC interpretations that are not yet effective are not expected to have a significant impact on the Group financial statements.
2
Significant accounting policies The accounting policies set out below have been consistently applied by all subsidiaries and equity-accounted investees to all periods presented in these consolidated financials statements. Some comparative information is restated for comparison purposes.
2.1 Consolidation principles a)
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The Group measures goodwill at the acquisition date as: •
the fair value of the consideration transferred; plus
•
the recognised amount of any non-controlling interests in the acquiree; plus
•
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less
•
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
b)
Subsidiaries
Subsidiaries are entities controlled by Fokker Technologies. Control exists when Fokker Technologies has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
c)
Investments in associates and jointly controlled entities (equity accounted investees)
Associates are those entities in which Fokker Technologies has a significant influence on the financial and operational policy but not control. Significant influence is presumed to exist if Fokker Technologies holds between 20 and 50 per cent of the voting power of another entity. Jointly controlled entities are those entities over which Fokker Technologies has joint control, established by contractual agreement and requiring unanimous consent for strategic, financial and operational decisions.
Investments in associates and jointly controlled entities are accounted for using the equity method and are initially recognised at cost. The cost of the investment includes transaction costs.
30
Annual report Fokker Technologies 2012
The investment of Fokker Technologies includes goodwill as determined on acquisition, net of any cumulative impairment losses. The consolidated financial statements include the share of Fokker Technologies in the total result and the movements in equity of equity accounted investees, after adjustments to align the accounting policies with the policies of Fokker Technologies, from the date on which Fokker Technologies first held a significant influence until the date that significant influence or joint control ceases to exist.
When Fokker Technologies’ share of losses exceeds the carrying amount of the equity-accounted investee, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that Fokker Technologies has entered into an obligation or has made payments on behalf of the investee.
d)
Jointly controlled operations
A jointly controlled operation is a joint venture in which each participant uses its own assets for the joint activities. The consolidated financial statements include the assets controlled by Fokker Technologies and the obligations which Fokker Technologies enters into in carrying out the joint activity, as well as the costs incurred by Fokker Technologies and the share of the income earned by Fokker Technologies in the joint operation.
e)
Transactions eliminated on consolidation
Intragroup balances and transactions and any unrealised gains and losses on intragroup transactions or income and expenses are eliminated in the preparation of the consolidated financial statements. Unrealised profits from transactions with associates and jointly controlled entities are eliminated to the extent of the interest held by Fokker Technologies in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
f)
Common control transactions
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls Fokker Technologies are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established; for this purpose comparatives are revised. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within Group equity except that any share capital of the acquired entities is recognised as part of the share premium. Any cash paid for the acquisition is recognised directly in equity.
2.2 Foreign currency Foreign currency transactions and translation Transactions in foreign currencies are translated into Euro at exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated into Euro at the exchange rates at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in Euro at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to Euros at the exchange rate at the date that the fair value was determined. Exchange rate differences arising on retranslation are recognised in the income statement, except for a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective, or qualifying cash flow hedges to the extent that the hedge is effective, which are recognised directly in other comprehensive income.
The main currencies used by Fokker Technologies are the Euro and the US Dollar. A summary of the exchange rate applied in the year under review and preceding year is included in note 26.
Annual report Fokker Technologies 2012
31
Explanatory notes to consolidated financial statements
Translation of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Euro at the foreign exchange rates applying on the reporting date. The income and expenses from foreign operations are translated into Euro at exchange rates effective at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income, and presented in the translation reserve in equity.
Net investments in foreign activities Exchange rate differences arising on the translation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income to the extent that the hedge is effective, and are presented within equity in translation reserve. To the extent that the hedge is ineffective, such differences are recognised in the income statement. When the hedged part of a net investment is disposed of, the relevant amount in the translation reserve is transferred to the income statement as part of the result on disposal.
2.3 Determination of fair values Some of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and nonfinancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
a)
Trade and other receivables
The fair value of trade and other receivables, excluding construction work in progress, is estimated at the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
b)
Derivatives
The fair value of forward exchange contracts is based on their quoted price, if available. If a quoted price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a credit-adjusted risk-free interest rate (based on inter-bank interest rates).
c)
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
32
Annual report Fokker Technologies 2012
Fair value hierarchy Fokker Technologies adopted the amendment to IFRS 7 for financial instruments that are measured in the balance sheet at fair value, being derivative financial instruments. This requires disclosure of fair value measurements by level of fair value measurement hierarchy. The fair values of Fokker Technologies derivative financial instruments are measured using a level 2 valuation method. Level 2 fair values are based on inputs rather than quoted prices.
2.4 Financial instruments a)
Offsetting
Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
b)
Non-derivative financial assets
Non-derivative financial assets comprise of trade and other receivables as well as cash and cash equivalents.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Fokker Technologies initially recognizes loans and receivables on the date that they originated. Derecognition of a financial asset takes place when the contractual rights to the cash flows from the assets expire, or it transfers the rights to receive the contractual cash flows on the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by Fokker Technologies is recognised as a separate asset or liability.
Trade and other receivables Trade and other receivables are recognised initially at fair value plus any directly attributable transaction costs and are subsequently valued at amortised cost, less any provisions considered necessary for doubtful debtors.
Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. These are used together with bank overdrafts to manage the short-term commitments.
c)
Non-derivative financial liabilities
The non-derivative financial liabilities comprise loans and borrowings, bank overdrafts and trade payables.
Fokker Technologies initially recognizes financial liabilities on trade date, which is the date that Fokker Technologies becomes a party to the contractual provisions of the instrument. Derecognition takes place when its contractual obligations are discharged, cancelled or expired.
The non-derivative financial liabilities are initially recognised at fair value plus any directly attributable transaction cost. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
d)
Derivative financial instruments, including hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency exposure and exposure to interest rate risk.
On initial designation of the derivative as a hedging instrument, Fokker Technologies formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging
Annual report Fokker Technologies 2012
33
Explanatory notes to consolidated financial statements
relationship. Fokker Technologies makes an assessment, both at the inception of the hedge relationship as well as on an on-going basis, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80% – 125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that ultimately could affect reported profit or loss.
Derivative financial instruments are initially recognised at fair value, attributable transaction costs are recognised in the income statement as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
Cash flow hedges When a derivative is designated as a hedge instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of the changes in fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassified to profit or loss in the same period and under the same line item in the income statement that the hedged item affects profit or loss.
Any ineffective portion of the changes in fair value of the derivative is recognised immediately in profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, the cumulative gain or loss remains in equity when the hedged transaction is still expected to occur. The amount accumulated in equity is reclassified to profit or loss in the same period that the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is reclassified to profit or loss.
Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
Other non-trading derivatives When a derivative is not designated in a qualifying hedge relationship, all changes in its fair value are recognised in profit or loss.
2.5 Revenue Revenue from goods sold Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
34
Annual report Fokker Technologies 2012
Revenue from services rendered Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed. When the services under a single arrangement are rendered in different reporting periods, the consideration is allocated on a relative fair value basis between the services.
Revenue arising from construction contracts Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue is recognised in profit or loss in proportion to the stage of completion of the contract. Contract expenses are recognised as incurred unless they create an asset related to future contract activity.
The stage of completion is assessed by reference of cost incurred compared to total expected costs. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
Government grants Grants received from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with the costs that they are intended to compensate.
2.6 Cost of sales Cost of sales include the direct attributable costs of producing the goods and services sold.
2.7 Leases Lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Determining whether an arrangement contains a lease At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. This will be the case if the following two criteria are met: •
the fulfilment of the arrangement is dependent on the use of a specific asset or assets; and
•
the arrangement contains a right to use the asset(s).
At inception or on reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Group’s incremental borrowing rate.
Annual report Fokker Technologies 2012
35
Explanatory notes to consolidated financial statements
2.8 Financial income and expenses Finance income comprises interest income on funds invested, dividend income and the unwinding of the discount on receivables. Interest income is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in profit or loss on the date that Fokker Technologies right to receive payment is established.
Finance costs comprise interest expense on borrowings, commitment fees and unwinding of provisions. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
2.9 Income tax Income tax comprises both current and deferred tax. Income tax is recognised in profit or loss, except to the extent that it relates to a business combination or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable/receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable/receivable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: •
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
•
temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable
and that affects neither accounting nor taxable profit or loss;
that they will not reverse in the foreseeable future; and •
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
2.10 Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Costs includes expenditure that is directly attributable to the acquisition of the asset. The costs of self-constructed assets include: •
the costs of material and direct labour;
•
any other directly attributable costs to bringing the assets to a working condition for their intended use;
•
when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and
•
36
capitalised borrowing costs.
Annual report Fokker Technologies 2012
Cost also includes transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in profit or loss under other operating income.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. On-going repairs and maintenance is expensed as incurred.
Items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated useful lives of each component and taking into account any residual value. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that Fokker Technologies will obtain ownership by the end of the lease term. Land is not depreciated.
Property, plant and equipment included as a result of a business combination are initially recognised at fair value, which is based on the market value. The market value of property is the estimated value on the value date for which an immovable property can be traded between an informed buyer and a seller in an objective business transaction in which both parties acted carefully and without compulsion.
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives for each asset category are: Buildings Machines and equipment Other productive assets Assets not used in production
25 – 30 years 5 – 15 years 3 – 11 years 10 – 30 years
Depreciation methods, residual values and useful lives are reviewed at each reporting date and adjusted if appropriate.
2.11 Intangible assets Goodwill Goodwill that arises on the acquisition of subsidiaries is presented with intangible assets. For the measurement of goodwill at initial recognition, see note 2.1.a.
Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
Annual report Fokker Technologies 2012
37
Explanatory notes to consolidated financial statements
Development costs Costs incurred for research activities carried out with the aim of gaining new scientific or technical knowledge and understanding are charged to profit or loss as incurred. Development activities involve a plan or design for the production of new or significantly improved products and processes. Development costs are capitalised only if the product or process is technically and commercially feasible, future economic benefits are probable and Fokker Technologies intends to and has sufficient resources to complete the development and to use or sell the assets.
The capitalised costs comprise material costs, direct labour costs and indirect costs directly attributable to preparing the asset for its intended use and capitalised borrowing costs. The other development costs are charged to profit or loss as incurred. Current development costs mainly relate to aerospace production programs.
The capitalised development costs are measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets from acquisitions Intangible assets acquired as part of a business combination are initially recognised at fair value. The fair value of acquired patents and trademarks is determined using the discounted estimated royalties avoided by the ownership of said patent or trademark. The fair value of other intangible assets acquired as part of a business combination is based on the discounted cash flow from the use and final sale of the assets. Intangible assets from acquisitions are included in the column Other in note 13.
Other intangible assets Other intangible assets acquired by Fokker Technologies are measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation Except for goodwill, capitalised development costs and intangibles with an indefinite life, intangible assets are amortised on a straight line basis to profit or loss over their estimated useful lives. The amortisation of capitalised development costs related to Fokker Technologies programmes takes place per sale of an aircraft component and is based on the total estimated number of aircraft components that will be sold. Amortisation of other intangible assets starts as soon as the assets are ready for use. The estimated useful lives are as follows: Patents and trademarks Capitalised development costs Other intangible fixed assets
10 – 30 years 3 – 15 years 10 – 20 years
Amortisation methods, residual values and useful lives are reviewed at each reporting date and adjusted if appropriate.
Impairment losses are recognised in profit or loss.
2.12 Leased assets Leases in which Fokker Technologies assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Other leases are operating leases and the leased assets are not recognised in the statement of financial position.
38
Annual report Fokker Technologies 2012
2.13 Inventories Inventories are measured at the lower of cost or net realisable value.
The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Manufactured inventories include an appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated sale price in the ordinary course of business, less the estimated costs of completion and selling expenses.
2.14 Construction contracts in progress Construction contracts in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses.
Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity.
Construction contracts in progress is presented as part of current assets in the statement of financial position for all contracts in which costs incurred plus recognised profits exceed progress billings. If progress billings exceed costs incurred plus recognised profits, then the difference is presented as current liabilities in the statement of financial position.
The stage of completion is assessed by reference to surveys of work performed. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contracts costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
2.15 Impairment Non-derivative financial assets Each reporting date is determined whether there is objective evidence that a financial asset is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to Fokker Technologies on terms that would not be considered otherwise and indications that a debtor or issuer will enter bankruptcy.
The Group considers evidence of impairment for financial assets measured at amortised cost at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics. In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Annual report Fokker Technologies 2012
39
Explanatory notes to consolidated financial statements
Non-financial assets The carrying amounts of non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have an indefinite life, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount.
The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted, using a cash generating unit specific discount rate, to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill (if applicable) allocated to the cash-generating units and then to reduce the carrying amounts of other assets in the unit on a pro rata basis.
Impairment losses are not reversed in relation to goodwill. For other assets, impairment losses are only reversed to the extent that the carrying amount of the asset does not exceed the carrying amount after deduction of depreciation or amortisation in a situation in which no impairment loss would have been recognised.
2.16 Equity Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.
Share premium Share premium is classified as equity. The share premium account is the capital that a company raises upon issuing shares that is in excess of the face value of the shares.
Dividend Dividends are recognised as liabilities in the period in which these are declared.
2.17 Long-term loans Long-term loans are recognised initially at fair value, less attributable transaction costs. Subsequent to initial recognition, interest bearing loans are valued at amortised cost using the effective interest method.
2.18 Provisions Provisions are recognised for present legal or constructive obligations, as a result of a past event, that can be estimated reliably and where it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
40
Annual report Fokker Technologies 2012
Restructuring A provision for restructuring is recognised when Fokker Technologies has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced. Future operating losses are not provided for.
Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by Fokker Technologies from a contract are lower than the unavoidable costs of meeting its obligations under the contract. If material, the provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, Fokker Technologies recognises any impairment loss on the assets associated with that contract.
2.19 Employee benefits Fokker Technologies has several pension plans in place in accordance with local rules and conditions. The pension plans comprise both defined benefit plans as well as defined contribution plans. In general, these plans are funded by payments to insurance companies or to funds administered by third parties. For the majority of its employees, Fokker Technologies has pension plans in which the liabilities to employees are based primarily on the number of years of service and the salary levels.
Defined contribution plans A defined contribution plan is a plan to provide benefits after retirement in which an entity makes fixed contributions to a separate entity, and legally has no constructive obligation to make further contributions. Obligations relating to defined contribution pension plans are charged to the income statement as employee remuneration expenses when the contributions are payable. Contributions paid in advance are presented as assets to the extent that cash repayment or a reduction in future contributions is available. The main pension obligations are administered in the multi-employer of the ‘Stichting Pensioenfonds voor de Metalektro’ (PME), which classifies as a defined benefit plan. As insufficient information is available to apply defined benefit accounting for this plan, the plan is accounted for as a defined contribution plan.
Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Fokker Technologies’ net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of Fokker Technologies’ obligations and that are denominated in the currency in which the benefits are expected to be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to Fokker Technologies, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
Actuarial gains and losses arising from defined benefit plans are immediately recognised in other comprehensive income in the period in which they arise and all expenses related to defined benefit plans are recognised in profit or loss in the period in which they arise.
Annual report Fokker Technologies 2012
41
Explanatory notes to consolidated financial statements
The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on settlement comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation, any related actuarial gains and losses and past service cost that had not previously been recognised.
2.20 Cash flow statement The consolidated statement of cash flows is prepared using the indirect method. The cash flow statement distinguishes between operating, investing and financing activities. Cash flow in foreign currencies are converted at exchange rate at the dates of the transactions. Currency exchange differences on cash held are separately shown. Payments and receipts of corporate taxes are included as cash flow from operating activities and interest paid is shown as cash flow from operating activities. Cash flows as a result from acquisition/divestment of financial interest in subsidiaries and equity accounted investees are included as cash flow from investing activities, taking into account the available cash in these interests. Dividends paid are part of the cash flow from financing activities.
2.21 Discontinued operations and assets held for sale Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale, and represents a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale. Non-current assets held for sale and discontinued operations are measured at the lower of carrying amount or fair value less cost to sell. Any gain or loss from discontinued operations, together with the results of these operations until the date of disposal, is reported separately as result on discontinued operations. The financial information of discontinued operations is excluded from the respective captions in the financial statements and related notes for all years presented. Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.
3
4
Revenue
2012
2011
Revenue from sale of goods and rendering of services
223,788
204,387
Revenue from construction contracts
545,211
480,294
768,999
684,681
Expenses by nature The cost of sales, selling expenses and general administrative expenses can be split by nature as follows:
2012
2011*
Employee benefit expenses 5, 24
224,412
212,558
Materials and production costs
334,902
272,299
62,796
49,580
Externally hired personnel Depreciation and amortization expenses
39,904
37,233
Other
85,542
73,308
747,556
644,980
Expenses for research and development were EUR 5,680 (2011: EUR 4,450).
*
42
Restated for comparison purposes.
Annual report Fokker Technologies 2012
5
Employee benefit expenses Total salaries, social security contributions and pension expenses can be split as follows:
Salaries Social security contributions Pension premiums and other post-retirement expenses
Of which in the Netherlands
2012
2011
179,569
166,665
23,488
21,794
21,355
24,099
224,412
212,558
204,033
193,921
The pension and other post-retirement expenses exclude the items recorded in other comprehensive income.
6
Personnel The average number of employees of Fokker Technologies is 3,946 (2011: 3,853).
7
Remuneration of Management Salaries* Profit sharing and bonus payments** Post-employment benefits***
*
Includes crisis levy for an amount of EUR 180 thousand in 2012.
**
Proposed for financial year 2012 (subject to approval).
2012
2011
1,239
1,007
394
187
41
69
1,674
1,263
*** Severance payments, pension expenses etc.
8
Other operating income In December 2011 Fokker Aerostructures entered into a sale and (operating) leaseback transaction with respect to land owned in the Netherlands for an amount of EUR 21.9 million. After deduction of the carrying value of EUR 7.1 million and related expenses, a net gain from the sale and leaseback of EUR 14.2 million is recorded in 2011.
9
Financial income Interest income from banks Other interest income
10
2012
2011
161
2,234
65
8
226
2,242
2012
2011*
Interest expenses on long-term debts third parties
9,284
2,596
Interest expenses government loans
2,324
1,987
Interest expenses on long-term debts parent
4,945
8,351
Financial expense
Financial expenses Exchange rate differences
*
3
204
39
559
16,595
13,697
Restated for comparison purposes.
Annual report Fokker Technologies 2012
43
Explanatory notes to consolidated financial statements
11
Income tax Recognised in the income statement
Current income tax charge to be paid and/or settled Corrections for previous years
2012
2011
(943)
(7,606)
–
(2,681)
(943)
(10,287)
1,641
7,219
1,641
7,219
698
(3,068)
698
(3,068)
698
(3,068)
Deferred income tax Origination and reversal of temporary differences
Total income tax in the income statement
Allocation of income tax Income tax on result of subsidiaries
Fokker Technologies Group B.V. is part of the Dutch fiscal unity of Stork Topco B.V. (which is not part of Fokker Technologies) for corporation tax purposes. The fiscal unity is in a loss making position and as such no current tax is recognised with regard to the Dutch Fokker Technologies entities. Deferred tax positions relating to temporary differences of the Dutch Fokker Technologies entities are recognised in the Fokker Technologies Group, except for the unrecognised tax losses carried forward, which are accounted for at Stork Topco B.V. The change in the recognised deferred taxes of the Dutch Fokker Technologies entities is settled directly in the current account with Stork B.V. and therefore not recognised in the income tax line in the consolidated income statement of Fokker Technologies. Consequently the line income tax in the consolidated income statement solely concerns the current and deferred tax regarding the foreign Fokker Technologies subsidiaries. As such the numerical tax reconciliation of Fokker Technologies as stated below relates only to the foreign income tax.
The Company made an accounting policy choice for measuring the current and deferred taxes of the Dutch Fokker Technologies entities to be recognised in the financial statements of Fokker Technologies.
Reconciliation of effective tax
2012
2011
Result before tax in the income statement
9,630
33,473
minus: Share of profit of associates
4,556
966
Result before tax for income tax purposes
5,074
32,507
698
1,580
–
–
Weighted average legal corporation tax rate* Non-deductible costs Current year losses not resulting in a deferred tax asset
–
(1,967)
Correction for previous years
–
(2,681)
698
(3,068)
Effective tax
The amounts recognised in other comprehensive income are net of tax using the Dutch tax rate of 25.0% in 2012 (2011: 25.0%) as these amounts only relate to Dutch taxation and these deferred taxes are also settled directly in the current account with Stork B.V.
*
44
The results from dutch entities are levied against 0% as explained above.
Annual report Fokker Technologies 2012
12
Property, plant and equipment Land and Machines and buildings equipment Historic costs
Other productive assets
Not used in Under the production process construction
Total
115,321
130,463
42,113
11,027
14
298,938
Depreciation and impairment losses
(70,726)
(96,458)
(28,337)
(6)
(5)
(195,532)
Carrying amount as at 31-12-2011
44,595
34,005
13,776
11,021
9
103,406
1,504
3,766
3,672
6,457
–
15,399
(56)
(123)
(80)
3
(9)
(265)
(3,957)
(6,983)
(5,689)
–
–
(16,629)
–
–
–
–
–
–
Exchange rate differences
(75)
(47)
(11)
–
–
(133)
Other movements
39
(46)
17
–
–
10
Investments Disposals Depreciation Impairment
Completed property, plant and equipment
3,170
586
664
(4,420)
–
–
Carrying amount as at 31-12-2012
45,220
31,158
12,349
13,061
–
101,788
120,543
132,545
45,110
13,064
1
311,263
Depreciation and impairment losses
(75,323)
(101,387)
(32,761)
(3)
(1)
(209,475)
Carrying amount as at 31-12-2012
45,220
31,158
12,349
13,061
–
101,788
Historic costs
Security Fokker Technologies has pledged certain assets on behalf of the syndicate credit facility of Fokker Technologies. See note 21.
Leased building Fokker Technologies leases a building under a finance lease agreement. The leased building secures lease obligations. At 31 December 2012, the net carrying amount of the leased asset was EUR 2.8 million (2011: EUR 2.8 million). During the year, Fokker Technologies acquired no leased assets.
13
Goodwill and Intangible assets Development costs Historic costs
Customer relationships
Trade names
Other
Sub total
Goodwill
Total
179,395
25,400
33,512
49,588
287,895
98,590
386,485
Amortisation and impairment losses
(79,428)
(18,900)
(6,702)
(11,395)
(116,425)
–
(116,425)
Carrying amount as at 31-12-2011
99,967
6,500
26,810
38,193
171,470
98,590
270,060
3,917
–
–
–
3,917
–
3,917
Amortisation and impairment losses
(15,195)
(2,800)
(1,675)
(3,604)
(23,274)
–
(23.274)
Carrying amount as at 31-12-2012
88,689
3,700
25,135
34,589
152,113
98,590
250,703
183,312
25,400
33,512
49,588
291,812
98,590
390,402
Amortisation and impairment losses
(94,623)
(21,700)
(8,377)
(14,999)
(139,699)
–
(139,699)
Carrying amount as at 31-12-2012
88,689
3,700
25,135
34,589
152,113
98,590
250,703
Investments
Historic costs
Annual report Fokker Technologies 2012
45
Explanatory notes to consolidated financial statements
Amortisation and impairment losses The amortisation is shown under the following items in the income statement:
Cost of sales General administrative expenses
2012
2011
(15,195)
(12,298)
(8,079)
(9,521)
(23,274)
(21,819)
Impairment testing for cash-generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to cash-generating units which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.
The recoverable amounts of the cash-generating units that carry goodwill are determined based on calculations of value in use. Value in use was determined by discounting the expected future cash flows from the continuing use of the units. Unless indicated otherwise, value in use in 2012 was determined similarly as in 2011. The calculation of the value in use was based on the following key assumptions: •
The period for the discounted cash flow calculations is five years, with a final value based on a perpetual cash flow with a growth rate (positive or negative) in line with the business model of the specific cash generating units.
•
Cash flows in the first five years of the forecast are based on the base case prepared for the refinancing of the company in 2012. The anticipated annual revenue growth for the following years has been based on average growth levels ranging from 0 to 3%.
•
The discount rate (pre-tax) used in the calculation amounted to 11.4% (2011: 10.7%).
For all cash generating units the recoverable amounts exceeded the carrying amounts and as a consequence no impairment losses were recognised in 2012 (2011: nil). As at 31 December 2012, no cumulative impairment losses have been recognised (2011: none).
14
Investment in associates The investments mainly concerns Société Anonyme Belge de Constructions Aéronautiques (S.A.B.C.A.), Brussels for 43.6% and Business Park Aviolanda B.V. for 20% and several associated participating interests that are not individually significant. Total Carrying amount as at 01-01-2012
4,556
Contribution of investment
2,081
Impairments Dividends received Acquisition Other movements Carrying amount as at 31-12-2012
46
31,460
Share of profit of associates
Annual report Fokker Technologies 2012
– (920) – (2) 37,175
The table below shows the summarised financial data of the significant associates, based on the latest available information. For S.A.B.C.A. N.V. the 2012 figures are based on the December 2012 financial figures, For Business Park Aviolanda B.V. the 2012 figures are based on the latest available information, namely 30 June 2012.
2012 (millions of euros)
Assets
Liabilities
Turnover
Profits/ (Loss)
S.A.B.C.A. N.V.
347.9
237.7
175.8
10.9
25.5
15.1
1.8
(0.9)
2011 (millions of euros)
Assets
Liabilities
Turnover
Profits/ (Loss)
S.A.B.C.A. N.V.
350.8
251.3
159.1
12.3
2012
2011
Raw materials and consumables
39,895
38,894
Semi-finished products
61,602
62,862
Trading inventories and finished products
46,851
46,967
148,348
148,723
Business Park Aviolanda B.V.
15
Inventories
The trading inventories and finished products are shown net of an obsolete inventory provision amounting to EUR 16.6 million (2011: EUR 15.5 million).
16
Construction contracts in progress
2012
2011
Due from customers, recognised under current assets
95,601
77,341
Due to customers, recognised under current liabilities
(106,623)
(120,268)
(11,022)
(42,927)
485,621
409,720
Direct costs of current projects Profits minus losses taken on these projects Billed on current projects
Provisions for foreseeable losses on current projects
43,947
43,079
(516,970)
(466,549)
12,598
(13,750)
(23,620)
(29,177)
(11,022)
(42,927)
The provision for loss orders regarding major Fokker Technologies programmes is calculated at actual exchange rates. For programmes where cash flow hedge accounting is applied an amount equal to the exchange rate difference is reclassified from the cash flow hedge reserve to provisions for foreseeable losses on current projects.
Annual report Fokker Technologies 2012
47
Explanatory notes to consolidated financial statements
17
Trade and other receivables Debtors Prepaid costs
2012
2011
107,587
98,507
5,832
5,475
–
17
1,650
–
Accrued interest Amounts due from parent company Other receivables
18,177
13,573
133,246
117,572
2012
2011
Gross trade receivables
98,555
88,392
Receivables from associates
10,774
15,984
109,329
104,376
(1,742)
(5,869)
107,587
98,507
Debtors
Provision for doubtful debtors
Reference is made to note 25 and note 26 for detailed information on the credit and currency risks, and impairment losses related to trade receivables.
18
Cash and cash equivalents Cash and banks
2012
2011
25,349
17,873
All cash is at free disposal of the company, within the confines of the syndicated credit facility.
19
Equity The summary of movements in equity is presented in the Consolidated statement of changes in equity.
Share capital The authorised share capital comprises of 90,000 ordinary shares of EUR 1.–. Per 31 December 2012 18,000 ordinary shares were issued and fully paid.
Share premium The share premium is exempted from tax in the Netherlands and freely available for payment to shareholders. A contribution to share premium was made in 2012, which comprised the participation in Business Park Aviolanda and the redemption of certain intercompany loans.
Reserve for development costs A legal reserve is held for capitalised development costs.
Translation reserve The translation reserve comprises all differences in foreign currency arising as a result of the translation of the financial statements of subsidiaries with a functional currency other than the euro.
Cash flow hedge reserve Fokker Technologies applies cash flow hedge accounting for a large proportion of the currency forward contracts and interest
48
Annual report Fokker Technologies 2012
rate swaps concluded with banks. The currency forward contracts are primarily euro/US dollar contracts. The cash flow hedge reserve comprises the effective part of the changes in value of the financial instruments for which cash flow hedge accounting is applied. In addition, the cash flow hedge reserve is reduced by a correction made for hedged Fokker Technologies programmes that would become wholly or partly loss-making on the basis of calculations at the current exchange rate, as described in note 16. The cash flow hedge reserve is also reduced by the inclusion of a deferred tax position.
Dividend proposal The directors proposed to make no dividend payment for 2012.
20
Deferred tax position Opening balance as at 01-01-2012
2012 movements recognised via
Balance as at 31-12-2012
Income statement
Equity
(1,829)
(418)
–
(2,247)
(37,577)
4,189
–
(33,388)
Inventories
(1,624)
(101)
–
(1,725)
Debts
1,201
970
–
2,171
12,233
(3,034)
–
9,199
1,821
9
–
1,830
(27)
27
–
–
Property, plant and equipment Intangible fixed assets
Provisions: •
employee benefits
•
guarantees
•
others
–
Interest rate swap Foreign currency forwards and swaps Deferred tax assets / (liabilities)
–
–
301
301
7,320
–
(3,563)
3,757
(18,482)
1,642
(3,262)
(20,102)
The deferred tax position in the consolidated balance sheet consists of the deferred tax positions of each company that is individually liable for taxation (as an independent tax payer or as part of a consolidated tax group). The deferred tax assets and liabilities are attributable to the following categories:
2012
Assets
Liabilities
2011
Balance
Assets
Liabilities
Balance
Property, plant and equipment
–
(2,247)
(2,247)
–
(1,829)
(1,829)
Intangible fixed assets
–
(33,388)
(33,388)
–
(37,577)
(37,577)
Inventories Debts
–
(1,725)
(1,725)
–
(1,624)
(1,624)
2,171
–
2,171
1,201
–
1,201
Provisions: •
employee benefits
9,199
–
9,199
12,233
–
12,233
•
guarantees
1,830
–
1,830
1,821
–
1,821
•
others
(27)
–
(27)
Interest rate swap Foreign currency forwards and swaps
–
–
–
301
–
301
3,757
–
3,757
7,320
–
7,320
Gross tax assets / (liabilities)
17,258
(37,360)
(20,102)
22,548
(41,030)
(18,482)
Balance of tax assets and liabilities
(17,258)
17,258
–
(22,548)
22,548
–
–
(20,102)
(20,102)
–
(18,482)
(18,482)
Net tax assets / (liabilities)
Annual report Fokker Technologies 2012
49
Explanatory notes to consolidated financial statements
Unrecognised deferred tax assets Carry forward tax losses in the Netherlands have not been accounted for by Fokker Technologies as they are accounted for by Stork Topco B.V. as head of the Dutch fiscal unity for corporate income tax purposes to which Fokker Technologies belongs. Deferred tax assets have not been recognised for certain foreign subsidiaries as it is not probable that future taxable profits will be available against which the Group can utilise these benefits. These amounts are presented below:
Tax losses not recognised (gross) Duration unlimited
2011
–
–
–
–
10,094
8,868
Duration 5 > 10 years
–
336
Duration 1 > 4 years
–
–
Duration > 10 years
Duration < 1 year
21
2012
–
–
10,094
9,204
Currency
Nominal interest rate
Year of maturity
Debt 31-12-2012
Debt 31-12-2011
Long-term loans
Long-term loans: •
Senior term loan Stork B.V.
EUR
5.50%
2012
–
127,500
•
Senior term loan bank syndicate
EUR Euribor + 8.00%/ + 6.00%
2017
150,000
–
•
Revolving credit facility
EUR Euribor + 6.50%/ +4.50%
2017
5,000
–
•
Loans provided by Agentschap NL
EUR
62,168
49,467
•
Other loans
EUR
2,769
2,750
219,937
179,717
(12,643)
–
(1,412)
(1,187)
205,882
178,530
25,872
40,052
Average interest 4.65%
Capitalised finance costs Repayments due within one year
Of which with a remaining term of more than five years
The loans provided by Agentschap NL have no fixed term. The repayment of these loans depends on the success of the program that is being funded.
Syndicate credit facilities On 6 August 2012 credit facilities have been arranged with a syndicate of credit institutions. On 16 August 2012 Fokker Technologies first drew on these facilities. The credit facilities comprise of a EUR 150 million term loan and a EUR 50 million revolving credit facility. The credit facilities are secured by bank accounts, IP, receivables and movable assets of the major operating companies and have an original term of five years.
All syndicated facilities have a floating interest rate basis. Part of the floating interest rate exposure of the syndicate facilities has been hedged and converted into fixed rates (please refer to note 28). The term loan is fully drawn. The revolving facility was drawn for an amount of EUR 5 million at year end.
50
Annual report Fokker Technologies 2012
In respect of the syndicated credit facility, Fokker Technologies has to comply with four financial covenants on a quarterly or semi-annual basis. The financial covenants are: •
cash flow cover, defined as consolidated cash flow divided by total net debt service;
•
leverage, defined as total net debt divided by consolidated EBITDA;
•
capital expenditure, defined as a fixed amount per annum not to be exceeded;
•
minimum liquidity, defined as available cash, cash equivalents and undrawn revolving facility.
Fokker Technologies has complied with its coventants for 2012.
22
Trade and other payables
2012
2011
85,494
71,889
–
13,581
7,695
7,074
433
3,089
2,813
1,374
665
–
71,597
75,292
168,697
172,299
Balance at 01-01-2012
Addition charged to income statement
Release amount credited to income statement
Movements*
Balance at 31-12-2012
4,333
196
–
(3,073)
1,456
360
–
–
(18)
342
9,539
9,972
(4,346)
(2,276)
12,889
Trade creditors Amounts due to parent company and related parties Other taxes and social insurance contributions Pensions Prepayments received Accrued interest Other liabilities
23
Provisions
Reorganisation provision Environmental provision Warranties Liabilities relating to employees
Of which short-term Provisions with a remaining term longer than five years
*
1,306
–
(136)
(593)
576
15,538
10,168
(4,482)
(5,972)
15,263
3,610
3,546
–
–
Movements relates to deductions for the use for the intended purpose and unwinding of discounts.
Reorganisation provision This provision is formed on the basis of several plans agreed by management with individual employees. The provision is expected to be used during the next two years.
Environmental provision The provision is to cover the estimated payments in relation to environmentally beneficial measures and noise nuisance reduction as well as other factors. The estimated payments are based on research reports. The provision is expected to be used within one to three years based on a detailed plan.
Annual report Fokker Technologies 2012
51
Explanatory notes to consolidated financial statements
Warranties The provision for warranties is to cover warranties issued contractually on products and services supplied and covers the best estimate for possible costs arising from not meeting agreed quality requirements under normal conditions of use. The provision is based on estimates derived from historic warranty data relating to comparable products and services. In general the liabilities are expected to arise in the next two years, with the exception of a number of major aircraft programmes.
Liabilities relating to employees This provision relates to other employee benefits based on agreed compensation schemes as well as other factors, some of which have a longer term. These are not included in the employee benefits provision (refer to note 24 below).
24
Employee benefits (in EUR x million) General Fokker Technologies has several pension plans in accordance with local rules and conditions. The majority of these plans are in the Netherlands. Based on IAS 19, the most significant of these plans are classified as defined contribution plans, following the transfer of the pension obligations to the Stiching Pensioenfonds voor de Metalelektro (PME). Several other plans are classified as defined benefit plans. In general, these plans are funded by payments to insurance companies or to funds administered by third parties. For the majority of its employees, Fokker Technologies has pension plans in which the liabilities to employees are based primarily on the number of years of service and the salary levels.
The Netherlands Stichting Pensioenfonds voor de Metalelektro (PME) In October 2011, the Dutch Stork operating companies, the Stichting Pensioenfonds Stork and the industry pension fund Stichting Pensioenfonds voor de Metalelektro reached an agreement on the transfer of all pension and most of the early retirement commitments from Stichting Pensioenfonds Stork to PME per 1 January 2012. After the transfer, the only remaining liability of the Dutch Stork operating companies with respect to early retirement plans consists of early retirement rights granted in excess of the basic rights as defined in the Central Labour Agreement of the Dutch metal industry.
The total cost for the Dutch Fokker Technologies operating companies as a result of the above agreements is EUR 55.5 million on a discounted basis. In 2011 and 2012 an amount of EUR 25.4 million has been paid to Stichting Pensioenfonds Stork and PME. The remaining amount of EUR 28.0 million is included in the employee benefits liability and is payable to PME over the next 3 years, with EUR 13.0 million (on a discounted basis) becoming due in 2013.
Other plans The other defined benefit plans in the Netherlands concern an early retirement plan (‘VPL’) arrangement, a SUM plan and a jubilee scheme. Additionally there are several smaller arrangements which are classified as defined contribution plans.
The early retirement plan (‘VPL’) is the main remaining defined benefit plan after the settlement of the pension plan in May 2011, as described above. Since the early retirement plan is unfunded a provision under IAS 19 is required. After the transfer to PME, the remaining unfunded defined benefit obligation in relation to the scheme in excess of the basic rights as defined in the Central Labour Agreement amounts to EUR 9.6 million, which has been provided for as at 31 December 2012.
52
Annual report Fokker Technologies 2012
Employee benefits obligation The breakdown of the employee benefits obligation as per 31 December 2012 and 31 December 2011: The Netherlands
Defined benefit obligation Plan assets Net position
The effect of limiting the asset*
2012
2011
(11.1)
(7.9)
–
–
(11.1)
(7.9)
–
–
Subtotal – balance liability
(11.1)
(7.9)
Other liabilities relating to pensions
(28.0)
(42.3)
Pension liabilities
(39.1)
(50.2)
*
A net pension asset will be recognised for the first time when economic benefits become available.
Defined benefit obligation The Netherlands
2012
2011
Opening balance as per 1 January
7.9
994.5
Service costs including participant contributions
0.5
11.3
Interest costs
0.4
19.5
–
–
Actuarial gains and losses
Plan participants contributions
2.5
11.5
Benefits paid
(0.2)
(18.7)
–
(1,010.1)
11.1
7.9
Settlements Balance as at 31 December
Plan assets The Netherlands
2012
2011
Opening balance as per 1 January
–
970.3
Expected returns on plan assets
–
23.7
Employer’s contribution
0.2
13.0
Plan participants contributions
–
5.3
Actuarial gains and losses
–
(5.0)
(0.2)
(18.7)
Settlements
Benefits paid
–
(988.6)
Balance as at 31 December
–
–
Annual report Fokker Technologies 2012
53
Explanatory notes to consolidated financial statements
The net period pension costs of the above pension plans: The Netherlands
2012
2011
Service costs
0.5
6.0
Interest costs
0.4
19.5
–
(23.7)
Expected returns on plan assets Actuarial gains and losses The effect of settlement Pension expense
0.3
0.4
–
(21.6)
1.2
(19.4)
The pension contribution expected to be paid by Fokker Technologies for the defined benefit plans in 2013 is EUR 0.8 million (2012: EUR 0.8 million). Cumulative actuarial losses in other comprehensive income amount to EUR 57,113 (2011: 54,934).
The weighted average assumptions on which the calculation of the pension obligations is based are as follows: The Netherlands
2012
2011
Pension obligation as at 31 December: Discount rate used
3.3
4.4
Future salary increases
3.0
3.0
Future pension increases
2.0
1.0
The mortality table used for the Netherlands is based on the Prognosis table 2012-2062 of the ‘Actuarieel Genootschap’ (2010: Prognosis table 2010-2060 of the ‘Actuarieel Genootschap’ with an additional correction of 7%).
The assumptions for the expected return on plan assets have been reached on the basis of assessment of the historic returns of the various categories in which the investments are made. The historic returns on these asset categories are weighted on the basis of the expected long-term allocation of the plan assets.
Historical summary
Cash value of the obligations related to defined benefit plans Fair value of the plan assets Net assets/(obligations)
Experience adjustments incurred on obligations of the plan Experience adjustments incurred on plan assets
54
Annual report Fokker Technologies 2012
2012
2011
(11.1)
(7.9)
–
–
(11.1)
(7.9)
0.2
(51.8)
–
5.0
25
Financial risk management Financial risk management Fokker Technologies has exposure to the following risks from its use of financial instruments: •
market risk
•
credit risk
•
liquidity risk
•
capital management
This note presents information about the exposure of Fokker Technologies to each of the above risks including the objectives, policies and processes to measure and manage risk. Further quantitative disclosures are included in the notes to the consolidated financial statements.
Risk management framework Management has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established and monitored on a consistent and regular basis. Risk management is firmly embedded in the normal course of business. Management oversees the adequacy and functioning of the entire system of risk management and internal control.
Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices will affect Fokker Technologies’ income or the value of its holdings of financial instruments.
The objective of the market risk management of Fokker Technologies is to manage and control market risk exposure within acceptable parameters.
Credit risk Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from accounts receivable from customers and the fair value of derivative financial instruments.
Fokker Technologies’ exposure to credit risk is limited to the balance sheet items receivables from associates, derivative financial instruments, trade and other receivables and cash and cash equivalents.
Fokker Technologies follows an active policy to minimise credit risks. The ways in which this is achieved include the recruitment and training of professional credit managers, the use of sales information systems, strict internal guidelines, the consultation of external sources, requesting security for payment or prepayment and concluding credit-risk insurances. There is no concentration of credit risks for significant amounts at debtors. Fokker Technologies does not purchase credit derivatives to hedge the credit risk on customers.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of financial assets mentioned below:
Carrying amounts
Trade and other receivables, including construction contracts in progress Cash and cash equivalents
2012
2011
228,847
194,913
25,349
17,873
Annual report Fokker Technologies 2012
55
Explanatory notes to consolidated financial statements
As at 31 December 2012, trade and other receivable amounts to EUR 133 million (2011: EUR 118 million). This amount includes a bad debt provision of EUR 1.7 million (2011: EUR 5.9 million). Fokker Technologies does not purchase credit derivatives to hedge the credit risk on customers. Fokker Technologies concludes credit risk insurances.
Allowance for impairment represents the estimate of incurred losses in respect of trade and other receivables. The main components of the allowance are a specific loss component that relates to individually significant exposures and a collective loss component for similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data.
Fokker Technologies limits its exposure to credit risk for cash and cash equivalents by where possible only holding cash with counterparties (banks) that have a credit rating of at least single A-.
Impairment losses The allowance for impairment represents the estimate of incurred losses in respect of trade and other receivables. The main components of the allowance are a specific loss component that relates to individually significant exposures and a collective loss component for similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.
The ageing of trade receivables as at the reporting date is as follows:
2012
2011
Not yet due
74,642
59,681
Due 0 – 30 days
10,252
14,124
Due 31 – 60 days
2,855
1,597
Due 61 – 120 days
4,564
3,862
Due more than 120 days
6,242
9,128
98,555
88,392
As of 31 December 2012, trade receivables of EUR 22.2 million (2010: 22.8 million) were past due but not impaired, these receivables relate to independent customers for whom there is no recent history of write off or indications of insolvency.
Liquidity risk Liquidity risk is the risk that Fokker Technologies will encounter difficulty in meeting the obligations regarding financial liabilities that are settled by delivering cash or another financial asset.
Fokker Technologies’ approach is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, both under normal and stressed conditions, without incurring unacceptable losses or risking damage to Fokker Technologies’ reputation. Fokker Technologies ensures by working capital management and other procedures that it has sufficient cash on demand to meet expected operational expenses for a certain period, including the servicing of financial obligations. In addition, through the syndicate credit facility Fokker Technologies has secured credit lines to cover for any temporary shortfall of available cash.
56
Annual report Fokker Technologies 2012
The following are the contractual maturities (including interest payments) of financial liabilities.
Carrying amount
Contractual cash flows
6 months or less
6-12 months
1-2 years
2-5 years
More than 5 years
Long-term debt
205,882
(283,052)
(12,002)
(7,475)
(15,985)
(219,564)
(28,026)
Trade and other payables
168,697
(168,697)
(168,697)
–
–
–
–
374,579
(451,749)
(180,699)
(7,475)
(15,985)
(219,564)
(28,026)
Fixed
(2,957)
(239)
(241)
(621)
(1,856)
–
Floating
3,287
172
455
765
1,895
–
(1,025,715)
(275,182)
(153,676)
(268,857)
(317,504)
(10,496)
31-12-2012 Non-derivative financial liabilities
Derivative financial assets/ (liabilities) Interest rate swaps
Forward foreign exchange contracts
(1,204)
(23,344)
Outflow Inflow
1,002,280
269,546
150,347
261,970
310,274
10,143
(24,548)
(23,105)
(5,703)
(3,115)
(6,743)
(7,191)
(353)
Carrying amount
Contractual cash flows
6 months or less
6-12 months
1-2 years
2-5 years
More than 5 years
Long-term debt
179,717
(230,424)
(4,248)
(6,206)
(9,210)
(151,555)
(59,205)
Trade and other payables
172,299
(172,299)
(172,299)
–
–
–
–
352,016
(402,723)
(176,547)
(6,206)
(9,210)
(151,555)
(59,205)
(808,275)
(128,334)
(131,067)
(181,123)
(350,945)
(16,806)
782,679
121,486
123,452
166,975
326,056
44,710
(25,596)
(6,848)
(7,615)
(14,148)
(24,889)
27,904
31-12-2011 Non-derivative financial liabilities
Derivative financial liabilities Forward foreign exchange contracts (hedge accounting)
(44,444)
Outflow Inflow (44,444)
Financial liabilities more than 5 years relates to government loans including accumulated interest. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. The gross inflows/(outflows) disclosed in the table above with respect to derivative financial liabilities represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are usually not closed out prior to contractual maturity.
26
Currency management Currency risk Fokker Technologies uses derivatives in order to manage currency risks. Generally, Fokker Technologies seeks to apply hedge accounting or make use of natural hedges in order to minimise the effects of foreign currency fluctuations in the income statement.
Derivatives used are forward exchange contracts and are entered into with a limited number of counterparties with credit ratings of at least A- or equivalent.
Annual report Fokker Technologies 2012
57
Explanatory notes to consolidated financial statements
Foreign currency hedging operations are governed by internal policies and rules approved and monitored by Management. The business is exposed to currency risk whenever it has expected cashflows in currencies other than its functional currency. Cash inflows and outflows of the business are offset if they are denominated in the same currency.
The main exposures being hedged are directly related to individual programs and are US dollar denominated. Currency risks in the tender stage are managed through tender conditions and are not hedged by derivatives. After signing of a contract, the currency exposure is hedged in accordance with Fokker Technologies’ FX Hedging policy.
With respect to currency risk exposure, Fokker Technologies distinguishes the currency exposure directly and indirectly related to individual programs. Please find below a further explanation of the categories:
Currency exposure directly related to individual programs More than 90% of the FX derivatives Fokker Technologies enters into are directly related to individual programs. The main exposure is on the US dollar position and due to the size and the long-term nature of the contracts the US Dollar exposure is significant for Fokker Technologies in total.
The FX hedging policy of Fokker Technologies aims to hedge substantially all of the estimated expected cash flows, although market or other factors, such as the (long) term nature of forecasted cashflows, might lead to a decision not to fully hedge. Fokker Technologies has applied a structural and consistent method for all programs to estimate the expected cash flows. Based on these projected cash flows, Fokker Technologies enters into FX derivatives to mitigate the risk.
Please find below the best estimate of the expected FX cash flows per 31 December 2012 for the period 2013 till 2022. Dollar – net forecast transaction exposure in USD million 2013
2014
2015
2016
2017
2018-2022
Total
272
243
233
185
189
588
1,710
Of the total expected cash flow for the 10 year period as shown above per 31 December 2012 of USD 1,710 million (2011: USD 1,497 million), 51% was hedged by FX derivatives (2011: 69%). At the end of 2012, Fokker Technologies hedged some 90% of the expected cash flows up to and including 2016, with forward exchange contracts. For this purpose Fokker Technologies has substantial credit facilities with three banks for forward exchange contract transactions with terms up to five years.
For these derivatives cash flow hedge accounting is applied to mitigate the impact of exchange rate fluctuations on operational result. Please find below a movement table of the derivatives and accordingly the cash flow hedge reserve.
The policy of Fokker Technologies is to link the term of the foreign currency contracts with the expected cash flows. If this is not possible a roll-over strategy is applied.
Derivatives individual programs (in EUR x million)
58
Fair value
Notional (in USD million)
Derivatives as per 1 January 2012
(44.4)
1,042.7
movement 2012
20.1
(170.0)
Derivatives as per 31 December 2012
(24.3)
872.7
Annual report Fokker Technologies 2012
Movements in cash flow hedge reserve Foreign exchange 2012
Interest rate swaps 2012
Total
Foreign exchange 2011
Interest rate swaps 2011
Total
29,280
–
29,280
27,347
–
27,347
Increase through effective hedge
(7,594)
1,204
(6,390)
(7,377)
–
(7,377)
Recycling to income statement
(5,303)
–
(5,303)
9,312
–
9,312
Ineffectiveness
(1,354)
–
(1,354)
(2)
–
(2)
15,029
1,204
16,233
29,280
–
29,280
–
–
–
–
–
–
(3,757)
(301)
(4,058)
(7,320)
–
(7,320)
11,272
903
12,175
21,960
–
21,960
Gross cash flow hedge reserve opening balance
Gross cash flow hedge reserve ending balance
Cash flow hedge provision Cash flow hedge deferred tax position Net cash flow hedge reserve ending balance
Currency management for other activities Fokker Technologies’ treasury policy extends also to procedures for exposures not directly related to individual programs. No cash flow hedge accounting is applied on these derivaties and as a result the fair value changes of these derivatives are recognised in the income statement. As per 31 December 2012, the fair value of these derivatives amounted to EUR 0.9 million (2011: EUR 2.1 million).
Derivatives – other (in EUR x million) Fair value
Notional in EUR
Derivatives as per 1 January 2012
2.1
50.8
Fair value movement 2012
(1.2)
1.7
Derivatives as per 31 December 2012
0.9
52.5
The exposure mainly consists of contracts for GBP 14.8 million and USD 27.4 million (2011: GBP 14.6 million and USD 25.1 million). The other derivatives have a term of up to one year.
The following exchange rate applied during the year: Average rate
EUR-USD
Year-end
2012
2011
2012
2011
1.29
1.39
1.32
1.29
Sensitivity analysis A 10% appreciation of the US Dollar and related currencies in relation to the Euro would have had a very limited effect on Fokker Technologies’ 2012 result as almost all cash flows subject to currency risks were covered by forward foreign exchange contracts, on which hedge accounting is applied. The effect on equity (which has been fully accounted for in the cash flow hedge reserve) would have been an increase of EUR 73 million. A 10% depreciation of the US Dollar against the Euro would have had the equal but opposite effect.
Annual report Fokker Technologies 2012
59
Explanatory notes to consolidated financial statements
27
Overview financial instruments Overview derivative financial instruments (in EUR x million) 31-12-2012
31-12-2011
Carrying amount
Fair value
Carrying amount
Fair value
(24.3)
(24.3)
(44.4)
(44.4)
Forward exchange contracts: •
Individual programs
•
Other
0.9
0.9
2.1
2.1
•
Interest rate swaps
(1.2)
(1.2)
–
–
(24.6)
(24.6)
(42.3)
(42.3)
The fair values used are calculated based on data from external sources (Bloomberg).
Overview non-derivatives financial instruments (in EUR x million) 31-12-2012
Trade and other receivables Cash and cash equivalents Trade and other payables Long-term debts
28
31-12-2011
Carrying amount
Fair value
Carrying amount
Fair value
133
133
118
118
25
25
18
18
(168)
(168)
(172)
(172)
(206)
(206)
(179)
(179)
(216)
(216)
(215)
(215)
Interest management Interest rate risk Fokker Technologies has an external exposure to changes in interest rates on certain financial assets and liabilities. Fokker Technologies has entered in interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk of a large part of the syndicated term loan.
Fokker Technologies is exposed to floating interest rate risk, mainly resulting from the syndicated credit facilities (please refer to note 21). Fokker Technologies’ policy in respect of interest rate risk is to protect at least 2/3 of the aggregate of outstanding senior debt (excluding any outstanding debt under the revolving credit facility) from interest rate risk, amongst others by means of interest rate swaps.
On 31 December 2012, the notional values of the interest rate swaps amount to EUR 125 million till 2014 and EUR 100 million till 2016 (2011: nil).
Swaps have rates for the fixed leg ranging from 0.38% to 1.06%. Cashflow hedge accounting is applied on these interest rate swaps, the movement in the cash flow hedge reserve is presented in note 26.
interest rate risk profile At the reporting date the interest rate profile of Fokker Technologies’ interest-bearing financial instruments were as follows:
60
Annual report Fokker Technologies 2012
Fixed rate instruments (in millions of EUR)
Financial liabilities
2012
2011
(65)
(180)
(125)
–
(190)
(180)
2012
2011
Financial liabilities
(155)
–
Interest rate swaps - notional amounts
125
–
(30)
–
Interest rate swaps - notional amounts
Variable rate instruments
A change of 100 basis points in interest rates constantly applied during the reporting period would have increased (decreased) equity and income statement by the amounts shown below (after tax). This analysis assumes all other variables remain constant and excludes any possible change in fair value of derivatives at period-end because of a change in interest rates. The analysis is performed on the same basis for 2011.
31 December 2012 (in millions of euros)
Income statement 100 bp increase
Income statement 100 bp decrease
Equity 100 bp increase
Equity 100 bp decrease
Variable rate instruments
(0.8)
0.8
(0.8)
0.8
Net interest rate swaps floating to fixed
0.6
(0.6)
0.6
(0.6)
Sensitivity (net)
(0.2)
0.2
(0.2)
0.2
Variable rate instruments
–
–
–
–
Net interest rate swaps floating to fixed
–
–
–
–
–
–
–
–
31 December 2011 (in millions of euros)
Capital management There were no major changes in Fokker Technologies’ approach to capital management during the year. Management’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of business and acquisitions. Capital is herein defined as equity attributable to equity holders of Fokker Technologies (total equity minus non-controlling interests).
Fokker Technologies is not subject to externally imposed capital requirements other than the legal reserves explained in note 19 and the financial covenants related to syndicate credit facilitities as explained in note 21.
Annual report Fokker Technologies 2012
61
Explanatory notes to consolidated financial statements
29
Contingent liabilities Guarantees issued At 31 December 2012 guarantees issued to third parties totalled EUR 21.0 million (2011: EUR 3.6 million). Of this amount EUR 11 million relates to bankguarantees. The remainder relates to corporate guarantees.
Fokker Technologies is part of the Dutch tax fiscal unity for corporate income tax purposes headed by Stork Topco B.V. Each of the companies included in a Dutch tax fiscal unity is individually and severally liable for all (Dutch corporate income) tax liabilities of the companies included in the fiscal unity.
Contingencies In 2010 a subsidiary has discovered a potential violation of certain US export regulations. Fokker Technologies is investigating the matter in full cooperation with the related authorities. Pending this investigation and the outcome thereof, the financial implications of the related contingent liability cannot be accurately quantified. As a result no provision for this matter has been recorded.
Fokker Technologies and its consolidated companies are involved in a number of (potential) legal actions. Based on currently available information and legal opinions, management believes that the outcomes of these legal actions, except for the matter discussed above, will either have no significant adverse effect on the financial position of Fokker Technologies, or that any possible adverse effects are adequately reflected in provisions and disclosed in the financial statements.
30
Related parties The ultimate parent company of Fokker Technologies Group B.V. is London Acquisition Luxco S.a.r.l., with its statutory seat in Luxembourg. Stork Topco B.V. is the head of the Dutch tax fiscal unity for corporate income tax purposes. According to the standard conditions, each of the companies is liable for corporate income tax payable of all the companies included in the legal entity.
The shares in the Fokker Technologies Group are indirectly held by funds managed by Arle, Eyrir Invest and management participation funds. Certain senior staff members of Fokker Technologies participate.
Loans for a total of EUR 218 thousand (2011; nil) have been granted to certain senior staff members of Fokker Technologies.
The Dutch subsidiairies of Fokker Technologies Group B.V. pledged most of their assets in the Netherlands to secure the syndicated credit facilities granted to Fokker Technologies Group B.V.
Relationships between related parties exist between Fokker Technologies, Stork B.V., Stork Holding B.V. and its subsidiaries, associates and joint ventures (see note 14), the Stork Pension Fund (see note 24) and the directors and higher management of the company.
All transactions and outstanding balances with related parties are in the ordinary course of business and priced at arm’s length basis.
31
Capital commitments Investment commitments relating to assets on order are EUR 0.5 million (2011 EUR 0.4 million).
62
Annual report Fokker Technologies 2012
32
Lease commitments Commitments relating to rental (mainly buildings) and operational leasing contracts (mainly cars) are EUR 117.8 million (2011: EUR 120.9 million).
2012
2011
Shorter than 1 year
10.9
10.5
Between 1 and 5 years
33.7
33.9
Longer than 5 years
73.2
76.5
117.8
120.9
The leases typically run for a period of ten to thirty years, with an option to renew the lease after that date. During the year ended 31 December 2012 an amount of EUR 10.5 million was recognised as an expense in the income statement in respect of operating leases (2011: EUR 7.9 million).
33
Other commitments Fokker Technologies Group B.V. participates in one joint venture, namely the NH90 Helicopter joint venture with Eurocopter and Augusta, in which it has accepted individual liability for the obligations entered into by the joint venture. For this purpose Fokker Technologies has issued corporate guarantees (see note 29).
34
Estimates and judgments by management The Directors have discussed the development and selection of, and gaining information about, the critical principles for financial reporting and estimates, as well as the application of these principles and estimates. Primary sources of uncertainties in estimates relate to:
Impairment testing Note 2.15 contains information about the assumptions and the corresponding risk factors relating to impairment of goodwill and intangible fixed assets resulting from business combinations. Note 2.4 gives an analysis of the financial instruments, as well as of the risks relating to changes in currency values.
Recoverability of development costs The most important part of development costs consists of non-recurring costs for aircraft programmes within Fokker Technologies. The recoverability of the carrying amount is assessed periodically on the basis of expected cash flows based on market and customer estimates of quantities sold. These estimates are based on management’s best estimate. The carrying amount of development costs is included in note 13.
Assumptions concerning pensions Note 24 contains information concerning the valuation of pension obligations. A decline in the long-term market interest rate and therefore the applied discount rate would mean an increase in the obligations and could result in actuarial gains and losses. Due to the transfer of the pension obligations to PME the risk related to pension obligations has been significantly reduced for Fokker Technologies.
Assumptions work in progress Note 16 contains information concerning the valuation of work in progress. Assumptions are based on management’s best estimate related to results on completion of work in progress.
Annual report Fokker Technologies 2012
63
Explanatory notes to consolidated financial statements
Assumptions concerning the valuation of the deferred tax position Note 2.9 provides information about the assumptions and the corresponding risk factors in relation to the valuation of the deferred tax position.
35
Events after the reporting period No events with a significant impact on the financial statements as at 31 December 2012 have occurred.
64
Annual report Fokker Technologies 2012
Company income statement of Fokker Technologies Group B.V. (in EUR x 1,000)
22-5-2012 to 31-12-2012 Income from subsidiaries after taxes*
1,157
Other results after tax
–
Net result
*
1,157
Relates to the period 16-8-2012 to 31-12-2012.
Company balance sheet of Fokker Technologies Group B.V. (in EUR x 1,000)
After appropriation of profit
2012
22 May 2012
Non-current assets Financial fixed assets 38
206,820 206,820
Current assets Cash and cash equivalents
18
Assets
18 18
18
206,838
18
Equity 39 Share capital 39
18
18
122,832
–
Legal reserve
39
90,885
–
Other reserve
39
(6,897)
Share premium 39
Liabilities
– 206,838
18
206,838
18
Annual report Fokker Technologies 2012
65
Explanatory notes to the company financial statements
36
General The company financial statements are part of the 2012 financial statements of Fokker Technologies Group B.V. For the company income statement of Fokker Technologies Group B.V., use is made of the exemption pursuant to Section 2:402 of Book 2 of the Netherlands Civil Code.
Fokker Technologies Group B.V. has been incorporated on 22 May 2012. On 16 August 2012 the shares of Fokker Technologies Holding B.V. were transferred to Fokker Technologies Group B.V. by Stork B.V.
37
Principles for valuation and determination of the result For setting the principles for the recognition and measurement of assets and liabilities and determination of the result for its company financial statements, Fokker Technologies Group B.V. makes use of the option provided in Section 2:362 (8) of the Netherlands Civil Code. This means that the principles for the recognition and measurement of assets and liabilities and determination of the result for the company financial statements of Fokker Technologies Group B.V. are the same as those for the consolidated financial statements. In this context, investments in companies in which significant control is exercised are measured according to the net asset value method. The consolidated financial statements are prepared according to the standards set by the International Accounting Standards Board (IASB) and adopted by the European Union and with Title 9 Book 2 of the Netherlands Civil Code. For a description of these accounting principles, reference is made to the accounting principles with the consolidated financial statements.
The share in the result of enterprises in which the company has holdings comprises the share of Fokker Technologies Group B.V. in the result of these participating interests. Results on transactions in which transfer of assets and liabilities has occurred between Fokker Technologies Group B.V. and its participating interests, and mutually between participating interests with each other, are not recognised insofar as these can be considered as not realised.
38
Financial fixed assets
Interest in group companies
Total
–
–
184,976
184,976
1,157
1,157
20,680
20,680
7
7
206,820
206,820
Carrying amount as at 22-05-2012 Transfer of shares 16 August 2012 Result of subsidiairies Other comprehensive income Other Carrying amount as at 31-12-2012
Fokker Technologies Group B.V. has (directly or indirectly) capital interests in the group companies presented on page 71. The results of subsidiairies represents the result as from the date of the transfer of the shares.
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Annual report Fokker Technologies 2012
39
Equity The movement of equity in the Fokker Technologies Group B.V. company financial statements is presented below. For details of the components of equity reference is made to note 19.
Share capital Balance as at 22-05-2012 Incorporation on 22 May 2012
Share premium
Legal reserve
Retaimed earnings
Total
–
–
–
–
–
18
–
–
–
18
Contribution in kind
–
21,175
–
–
21,175
Transfer of FTH to FTG
–
101,657
62,126
–
163,783
Profit 16-8-2012 to 31-12-2012
–
–
–
1,157
1,157
Total comprehensive income 16-8-2012 to 31-12-2012
–
–
22,859
(2,179)
20,680
Movement legal reserve 16-8-2012 to 31-12-2012
–
–
5,900
(5,900)
–
Other movements
–
–
–
25
25
18
122,832
90,885
(6,897)
206,838
Balance as at 31-12-2012
The legal reserve represents the aggregate of legal reserves (reserves for translation, investments in subsidiairies and cashflow hedge) of the subsidiaries of Fokker Technologies.
40
Contingent liabilities Fokker Technologies is part of the Dutch tax fiscal unity for corporate income tax purposes headed by Stork Topco B.V. Each of the companies included in a Dutch tax fiscal unity is individually and severally liable for all (Dutch corporate income) tax liabilities of the companies included in the fiscal unity.
At 31 December 2012 no guarantees have been issued to third parties.
For most the Dutch companies listed on page 71, declarations in accordance with article 403 of the Dutch civil code have been issued by Fokker Technologies Group B.V. and as a consequence Fokker Technologies Group B.V. is jointly and severally liable for all debts of these subsidiairies.
41
Events after the reporting period No events with a significant impact on the financial statements as at 31 December 2012 have occurred.
Papendrecht, 23 April 2013
Directors Sjoerd Vollebregt (Chairman and CEO) Hans Büthker (COO) Remco Smit (CFO)
Annual report Fokker Technologies 2012
67
Other information
Independent Auditor’s Report To the general meeting of shareholders of Fokker Technologies Group B.V.
Report on the financial statements We have audited the accompanying financial statements 2012 of Fokker Technologies Group B.V., Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated statement of financial position as at 31 December 2012, consolidated income statement, the consolidated statements of comprehensive income, changes in equity and cash flow for the year then ended, and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company balance sheet as at 31 December 2012, the company income statement for the period 22 May – 31 December 2012 and the notes, comprising a summary of the accounting policies and other explanatory information.
Management’s responsibility Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the Directors report in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of Fokker Technologies Group B.V. as at 31 December 2012 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.
Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of Fokker Technologies Group B.V. as at 31 December 2012 and of its result for the period 22 May - 31 December in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
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Annual report Fokker Technologies 2012
Report on other legal and regulatory requirements Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have no deficiencies to report as a result of our examination whether the Directors report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and if the information as required under Section 2:392 sub 1 at b - h has been annexed. Further, we report that the Directors report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Netherlands Civil Code.
Rotterdam, 23 April 2013
KPMG Accountants N.V.
J.B.L. Verhoeff RA
Annual report Fokker Technologies 2012
69
Other information
Provisions of the articles of association regarding profit distribution (article 14) 1.
At the expense of the profit a reserve will be made as the Directors will determine subject to the approval of the Supervisory Board, if any.
2.
The then remaining profit will be at the disposal of the General Meeting of Shareholders.
3.
Resolutions to discontinue the reserves formed by virtue of paragraph 1 in part of in full can only be passed by the General Meeting of Shareholders on a proposal of the Directors with the approval of the Supervisory Board, if any.
4.
Distribution of profits to the shareholders and others entitled to distribution of profits may be made only insofar in accordance with the law.
5.
Subject to due observance of the provision of paragraph 4 the company may pay an interim dividend or make distributions at the expense of any reserve.
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Annual report Fokker Technologies 2012
List of major consolidated operating companies 2012 (100% owned, unless otherwise stated)
Fokker Technologies Fokker Technologies Holding B.V., Papendrecht, (NL)* Fokker Aerostructures B.V., Papendrecht, Hoogeveen (NL)* Fokker Elmo B.V., Hoogerheide (NL)* Fokker Elmo Electrical Systems Co Ltd., Langfang (CN) Fokker Elmo Aerospace Industries LLC, Izmir (TR) Fokker Landing Gear B.V., Helmond (NL)* Fokker Services B.V., Hoofddorp (NL) Fokker Aircraft Services B.V., Hoogerheide (NL) Fokker Services Asia Pte. Ltd., Singapore (SG) Fokker Services Inc., Atlanta (US) Aerotron AirPower Inc., LaGrange (US)
*
For these entities use has been made of the exemption provided by Section 2:403, Part IX, Book of the Netherlands Civil Code.
Annual report Fokker Technologies 2012
71
Colophon Publication: Fokker Technologies Group B.V. Concept and realisation: C&F Report Amsterdam B.V.
72
Annual report Fokker Technologies 2012
Fokker Technologies Industrieweg 4 3351 LB Papendrecht Postbus 1, 3350 AA Papendrecht T: +31 (0)78 – 641 9911 E:
[email protected]
www.fokker.com
