Notes to the consolidated balance sheet as at 31 December 2023

1. tangible fixed assets

Building has been pledged in full to the mortgage loan under note 8.

Land has been pledged for an amount EUR 282 thousand to the mortgage loan under note 8.

2. financial fixed assets

The investment in financial fixed assets of EUR 500 thousand relates to a capital contribution in NV Vonk Culinary Cheese. The long term loan, for an amount of EUR 1,300 thousand, relates to a subordinated loan issued to NV Vonk Culinary Cheese.

The provision relates to 50% share in the negative equity position of NV Vonk Culinary Cheese.

The group has the following capital interests:

The participation in NV Vonk Culinary Cheese is classified as a joint venture in light of the cooperative agreement that the Company has concluded with the other shareholder of NV Vonk Culinary Cheese. In this joint venture, the Company is entitled to 50% of the profits and losses (constructive obligation).

The long term loan had been provided to a certificate holder for a tenure of 10 years. 3.5% interest is being charged on this loan. No collateral has been provided. 

3. inventories

Goods for sale are pledged to credit institutions for the amount of EUR 27 million (2022: EUR 9 million). The pledged amount to credit institutions is determined by the pledging conditions of the asset-based facility.

4. trade and other receivables

All trade and other receivables are due within one year. 

The carrying values of the recognised receivables approximate their respective fair values, given the short maturities of the positions and the fact that allowances for doubtful debts have been recognised, if necessary.

Trade receivables EUR 44 million (2022: EUR 55 million) have been pledged as collateral for current liabilities to credit institutions as part of the asset-based facility. The pledged amount to credit institutions is determined by the pledging conditions of the asset-based facility.

StoneX, Marex, Macquarie and Rabobank are the Company’s brokers for commodity futures, options and over-the-counter instruments. In order to eliminate the variability of cash flows in commodity contracts, the Company hedges its exposures with the aforementioned derivatives. (Cash flow hedge accounting is applied.) The amount included in the current account serves as collateral for margin calls.

Numidia B.V. has a credit insurance agreement with Credendo as a coverage for non-payment by customers. With this insurance, 90% of the risk with debtors is covered.

Other receivables

5. cash and cash equivalents

All credit balances on bank accounts are at the free disposal of the Company. The Company maintains a minimum cash position, as the asset-based facility allows the Company to withdraw from the amount available within the facility.

6. shareholders’ equity

For disclosure of the shareholders’ equity reference is made to note 26 on the Company financial statements.

7. provisions

The provision for onerous contracts is recognised for the negative difference between the value of the performance to be received from third parties after reporting date and the value of the performance to be delivered by the Company after the reporting date. The provision is determined based on the expected and unavoidable costs that will have to be incurred at a minimum to settle the related sales agreements. All related sales agreement are due within 1 year.

8. non-current liabilities

Subordinated loans

Nilina Holding B.V. and Loma Holding B.V. are the shareholders of Numidia Holding B.V. Repayment of the subordinated loans totalling EUR 500 thousand will commence from 29 September 2026 linear onwards over a period of ten years. 4.5% interest is being charged on this loan. No security has been provided. The loans are subordinated to the ING Bank.

The subordinated loan originally amounted to EUR 2000 thousand, to be repaid in four instalments of EUR 500 thousand. The last two instalments have been paid in March and June of 2023. 

Mortgage loans

In 2016, the Company entered into a mortgage agreement with the ING Bank for the financing of the Company building in the Netherlands. The building and land will act as security for this mortgage. The loan consists out of 2 components of EUR 900 thousand each.

Repayment of the mortgage loan began on 1 March 2018 and will continue up to 1 August 2026. Repayment will be made through monthly instalments of EUR 7,500 thousand and a one-time repayment of the remaining debt (EUR 1,042 thousand) on 1 August 2026. 2.46% interest is being charged on the first part of this loan. The fixed interest rate period on the second part expired in August 2023. 5.58% interest is being charged as of August 2023.

9. current liabilities

The current liabilities all have a remaining term shorter than 1 year.

The carrying values of the recognised current liabilities approximate their respective fair values, given the short maturities of the positions.

Debt to credit institutions

On 9 October 2023, the Company amended and extended the working capital financing facility with Deutsche Bank and ING Bank. Rabobank participates as a new lender in the amended facility. The amended and extended facility has a tenure of 4 years (up to August 2027) and consists of:

• A committed asset-based lending facility of EUR 180 million, of which EUR 30 million conditional.

• A bilateral bank guarantee facility of EUR 10 million.

The credit facility bears an effective interest rate of 6.2% per 31 December 2023. The effective interest rate is calculated on the one-month EURIBOR (for EUR utilisations), SOFOR (for USD utilisations) or SONIA (for GBP utilisations) plus a fixed mark-up.

In connection with the asset-based facility, the following securities are provided:

• Joint and several liability.

• Pledge of accounts receivable amounting to EUR 44 million (2022: EUR 55 million).

• Pledge of stocks amounting to EUR 27 million (2022: EUR 9 million).

• Security by Intercreditor Agreement with Numidia Holding B.V. Numidia B.V. ,Cheese and More B.V., Deutsche Bank AG, ING Commercial Finance and Coöperatieve Rabobank U.A. 

At year-end, all debt covenants were met.

Accruals and deferred income

10. off-balance sheet assets and liabilities

Rental commitments for immovable property

The Company has entered into a long-term financial commitment with regard to the rental of business premises. The rental costs are recognised on a straight-line basis in the profit and loss account over the lease period. The remaining term can be specified as follows:

Lease commitments with regard to movable property

The Company has entered into long-term financial commitments with regard to lease cars, printers and office supplies. The related costs are recognised on a straight-line basis in the profit and loss account over the lease period. The remaining term can be specified as follows:

The Company does not make any use of contingent lease payments.

In addition to this, bank guarantees in the form of performance bonds were issued to customers at year-end 2023, on behalf of consolidated participating interests, for EUR 2.7 million (2022: EUR 8.5 million).

11. financial instruments

General

During the normal course of business, the Company uses various financial instruments that expose it to market, currency, interest, cash flow, credit, and liquidity risks. To control these risks, the Company has instituted a policy, including a code of conduct and procedures, that are intended to limit the risks of unpredictable adverse developments in the financial markets and thus for the financial performance of the Company.

The Company uses derivatives, including forward, future and option commodity contracts and forward exchange contracts, to control its risks. 

Currency risk

The Company is exposed to currency risk on sales and purchases that are denominated in a currency other than Euro. The main currencies in which these transactions are denominated are USD and GBP. The net currency position (EUR) as of 31 December 2023 is presented below:

The contracted transactions that have been hedged cover the period 1 January 2024 – 27 December 2024.

In the case of the exchange rate of the Euro against USD and GBP strengthening by 10 percent and leaving all other variables constant, the pre-tax result as of 31 December 2023 would be EUR 1,194 thousand higher.

In the case of the exchange rate of the Euro against USD and GBP weakening by 10 percent and leaving all other variables constant, the pre-tax result as of 31 December 2023 would be EUR 1,327 thousand lower.

As per 31 December 2023 the outstanding foreign exchange contracts are:

1) Contract values

2) Delta Fair Value FX contracts per currency per end of year

All outstanding foreign exchange contracts have a remaining duration of less than one year and mature in 2024.

Commodity risk: futures and options

Numidia uses future and option commodity contracts in order to hedge the risk of commodity price fluctuations on commodity purchase contracts. The fair value of these commodity contracts is EUR 8,490 thousand (2022: EUR 8,908 thousand) as a result of more advantageous commodity market prices than agreed upon with the derivative commodity contracts. Future and option commodity contracts for which no hedge accounting is applied have a total fair value of EUR 8,192 thousand (2022: EUR 8,520 thousand) and are fully accounted for in the profit and loss account. This accounts for 96% of the net position (2022: 96%).

The total fair value of the futures and option contracts for which hedge accounting is applied amounts negative EUR 89 thousand (2022: positive EUR 388 thousand). There are no contractual provisions that affect the value, timing and certainty of future cash flows.

The mark-to-market of FX derivatives and commodity derivatives are calculated based on observable market date (on the reporting date) for the derivatives, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Credit risk

Credit risk arises principally from the receivables presented under trade and other receivables, cash, and the positive fair value of derivatives. The Company has drawn up guidelines for limiting the credit risk associated with each financial institution and debtor. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the management also considers the demographics of the Company’s customer base, including the default risk of the industry and country in which those customers operate, as these factors may have an influence on credit risk. There is no concentration of credit risk.

The company has a risk management policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the management, and these limits are reviewed every quarter. Customers who fail to meet the Company’s benchmark of creditworthiness may only transact with the Company on the basis of prepayment.

The maximum amount of credit risk that the Company incurs is 6.3% of trade receivables. Trade receivables are covered by a credit insurance company and the use of open letters of credit and documentary credits on behalf of third parties which are not credit insured. Numidia B.V. has a credit insurance agreement with Credendo to cover non-payment by customers. This insurance covers 90% of the risk with debtors and 95% of the political risk.

Interest rate and cash flow risks

The Company runs an interest rate risk on interest bearing liabilities and on the refinancing of existing loans. For liabilities with variable interest rate agreements, the Group runs a risks of future cash flows and for fixed interest rate loans, a fair value risk. The Company does not use any interest rate derivatives to reduce the interest risk of variable interest rate loans. The interest rate risk is presented by the interest payment schedule presented below:

In the case of interest rates rising by 1% as of 31 December 2023 and assuming all other variables are constant, interest expenses would rise by EUR 712 thousand in 2023 (2022: EUR 640 thousand).

Liquidity risk

The Company monitors its cash position by using successive liquidity budgets. The management ensures that the cash position is sufficient to meet the Company’s financial obligations towards creditors and to stay within the limits of its loan covenants. The loan covenants apply to the working capital financing facility with Deutsche Bank, ING Bank and Rabobank.

The financial obligations as at 31 December 2023 are:

Of trade receivables, EUR 18.2 million is not freely available to the Company due to collateral obligations at the Company’s brokers for commodity futures and options. This obligation consists of security for possible future negative value developments outside the agreed bandwidth (initial margin) and coverage for actual negative value developments outside the agreed bandwidth at year end (maintenance margin).

The Company shall ensure that sufficient balances are available to cover the expected operational costs, including meeting its financial obligations. The potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters, are not taken into account. In addition, the Company has a working capital credit facility of EUR 180 million, of which the Company used EUR 71.1 million as per 31 December 2023.

Fair value

The fair value of most of the financial instruments stated on the balance sheet, including receivables, cash and cash equivalents, long term liabilities and current liabilities, is approximately equal to their carrying amount. The fair value of derivatives that do not involve an exchange of collateral is determined by discounting the cash flows to present value, applying the relevant swap curve, and making our own and counterparty value adjustments.