ANNUAL REPORT
2017
2
Atlas Professionals Annual Report 2017
Contents
4
6
8
11
16
17
19
20
21
22
24
25
54
55
56
64
66
Performance highlights
Our values
Consolidated statement of cash flows for the year ended 31 December 2017
Other information
Mission statement & timeline
Consolidated statement of financial position as at 31 December 2017
Notes to the 2017 Consolidated financial statements
Message from the Supervisory Board
Consolidated statement of profit or loss account 2017
Company balance sheet as at 31 December 2017
Message from the Board of Directors
Consolidated statement of other comprehensive income for 2017
Company income statement for the year ended 31 December 2017
Our company
Consolidated statement of changes in equity for the year ended 31 December 2017
Notes to the 2017 separate financial statements
Independent auditor’s report
Atlas Professionals Annual Report 2017
3
Performance highlights
in EUR 1,000
Revenues
169,401 22,846 2,224
4
INCREASE
Atlas Professionals Annual Report 2017
18,531
TURNOVER
1.3%
TURNOVER
in EUR 1,000
5.3%
INCREASE
in EUR 1,000
Group equity
13.5%
in EUR 1,000
Net income
20,0
14.8%
in EUR 1,000
Gross margin
Conversion ratio (EBITDA/ Gross margin)
2,075
14,792
8.8%
120.9% INCREASE
681.4% INCREASE
Solvency ratio %
INCREASE
in EUR 1,000
Net cash flow
in %
Net debt/ (net cash)
30
23.7%
21
16.7%
DECREASE
Number of offices (year-end)
INCREASE
in EUR 1,000
Revenues
180,225
189,755
in EUR 1,000
Gross margin
28,576
183,954 169,401
9,983
27,988
27,699
147,606
in EUR 1,000
EBITDA
9,904
9,394
22,846 21,144
2013
2014
2015
2016
2017
in EUR 1,000
Net income
2013
2014
2015
2016
4,013
2017
in %
Solvency ratio
7,207
2014
2015
2016
2017
in %
Conversion ratio
36.0 6,220
5,995
2013
4,570
39.3
34.7
34.3
33.6 30
3,120
20.2 2,224
2013
2014
2015
2016
2017
19.0
10.2 2013
2014
2015
2016
2017
2013
2014
2015
2016
20
2017
Atlas Professionals Annual Report 2017
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1982 1986 1999 2000 2001 2002 2004 2006 2007 Atlas Transport Services Establishment of Atlas was founded Personnel Services
Company name changes Acquisition of Tristar to Atlas Services Group Well Service Pool B.V. Acquisition of Eurosailor B.V.
Commencement of Atlas Employability Services
Acquisition of staffing Acquisition of Dietsmann Technologies activities Dutch Onshore Offshore Recruitment activities (D.O.O.R.) Participation in Participation in Mariteam Personnel Jaymar La Crosse Services B.V.
Acquisition of Techno Work Group activities Acquisition of HR activities Focus Oil & Gas Opening of new Atlas Jaymar do Brasil office in Brasil
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Atlas Professionals Annual Report 2017
Participationin International Crew Services (ICS) B.V.
2008 2010 2011 2012 2013 2014 2015 2016 2017 Opening of offices in Australia and Kazakhstan Acquisition of Seistech (Newquay, UK) and GSS (Gibraltar) Foundation of Atlas Ship Delivery
One brand “Atlas Services Group� for all 100% owned legal entities
HAL Investments B.V. takes 45% interest in Atlas Services Group Holding B.V.
Opening of new office in Participation in South Singapore West Surveys (UK) Limited Atlas Services Group opens office in Moscow Atlas Services Group starts activities in Norway
Atlas Services Group celebrates 30th anniversary Acquisition of Cerno AS Norway Acquisition of MSOP activity Bristol
Acquisition of G.O.S.S. Consultants Limited and G.O.S.S. North Sea Limited (UK) Acquisition of Geomotive activities (Spain)
Acquisition minority stake (25%) in Subserv Pro Limited (UK) Trade name changes to Atlas Professionals
Acquisition remaining shares (75%) in Subserv Pro Limited (UK)
HAL Investments B.V. Acquisition of purchased an additional Programmed Marine 25% interest International, with offices and activities in Aberdeen (UK), Singapore, Houston (US) and Dubai (UAE). Acquisition of 50% interest in the Joint Venture Atlas Programmed Marine Holdings Pty Ltd, with offices and activities in Australia and New Zealand.
Participation in 7Seas Renewable Energy B.V.
Atlas Professionals Annual Report 2017
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Message from the Supervisory Board The Supervisory Board is in charge of supervising and advising the Board of Directors in setting and achieving the objectives, strategy, policies and succession planning of Atlas Professionals.
Composition of the Board In 2017, the Supervisory Board consisted of four members: Name
Age
First appointment
Latest appointment
Appointed until
R. van Gelder
72
30 March 2011
30 March 2015
30 March 2019
A.P.P.M. van Beurden
69
30 March 2011
30 March 2014
30 March 2018
J.N. van Wiechen
45
30 March 2011
30 March 2013
31 March 2021
P.E. Wit
50
1 July 2013
1 July 2017
30 June 2021
General The Supervisory Board convened six times in 2017. The Board of Directors prepared detailed supporting documents and attended the formal meetings with the Supervisory Board. On one occasion the Supervisory Board met without the presence of the Board of Directors to discuss the audit findings with the external auditor.
Although the strategy of the Group is discussed during each meeting, one Supervisory Board Meeting was dedicated to discussing and shaping the future strategy of the Group. The Supervisory Board acknowledges the findings by the Board of Directors that the environment in which Atlas Professionals operates is changing rapidly. Therefore, the Supervisory Board fully endorses the strategic growth initiatives which are being initiated. Furthermore, the focus on autonomous as well as selected acquisitive growth and strengthening of the balance sheet were fully endorsed. Various managers from the organisation attended (part of) Supervisory Board meetings or gave presentations regarding their area of expertise. On 14 July Atlas Professionals acquired the shares from Programmed Marine International and also created a Joint Venture with Programmed Maintenance Services Ltd (Australia) in Australia & New Zealand.
Major topics reviewed in 2017 The main subjects discussed and or approved in this year were: • Organisation structure and changes • Vision and strategy • Mergers and acquisitions • Management and financial reports • Quality, health, safety & environment procedures • Operating plan and budget • IT • Governance • Remuneration within the Group as a whole and of the Board of Directors • HR, including diversity and senior management appointments • Evaluation of the external auditor • Financial structure and bank relationships • Culture and checks and balances within the Group 8
Atlas Professionals Annual Report 2017
The remuneration of the Board of Directors was reviewed and reduced in 2017. In respect of culture and checks and balances, the Supervisory Board fully endorses the increasing focus by the Board of Directors to ensure effective risk management and proper ethical behaviour. In 2017 the Supervisory Board met once with the Group’s external auditor to discuss the outcome of the audit of the 2016 financial statements, the 2016 management letter, and the proposed planning and risk analysis for the audit of the 2017 financial statements.
Financial results were discussed with the Board of Directors, with a particular focus on the development of existing businesses and new business initiatives. The latter included the discussion of potential acquisition candidates. In addition to the regular meetings, the Supervisory Board received monthly business updates from the Board of Directors throughout the year primarily concerning topics regarding financial results, overall strategy, organizational changes and compliance often discussed by telephone conference. Receiving these frequent monthly updates allows the Supervisory Board meetings to focus on in depth, non-day-to-day issues relating to strategy, growth initiatives and shaping the organisation for future growth and the like.
2017 financial statements The financial statements for the year ending 31 December 2017 were prepared by the Board of Directors and examined by our auditors KPMG Accountants N.V. These statements were discussed by the Supervisory Board in the presence of the Board of Directors and the external auditor. KPMG Accountants N.V. issued an unqualified opinion on the 2017 financial statements. We recommend the following to the General Meeting of Shareholders: 1. The adoption of the financial statements; 2. The discharge of the members of the Board of Directors in respect of their management activities during 2017; 3. The discharge of the members of the Supervisory Board for their supervision of management during 2017.
We would like to thank the Board of Directors and all the direct and indirect employees of Atlas Professionals for their effort and achieved results in 2017. We look forward to 2018. In December 2017 it was announced that P.E. Wit, would join the Group as its Chief Operations Officer and consequently would resign from the Supervisory Board effective February 1st. Hoofddorp, 13 March 2018 The Supervisory Board R. van Gelder (Chairman) A.P.P.M. van Beurden J.N. van Wiechen Atlas Professionals Annual Report 2017
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R.G.H.A.M. Neelissen - Managing Director, M.J.M. Burghouwt - Managing Director
10
Atlas Professionals Annual Report 2017
Message from the Board of Directors Dear Stakeholder,
The financial results
The Marine business with revenues of EUR 56 million, showed an increase of EUR 6.3 million primarily due to growth in Offshore Marine.
The comparison of 2017 and 2016 results, is as follows: For 2017, we set a conservative budget, anticipating a slow recovery of the markets. Despite a new initial drop of the oil price to a year low of USD 45 in June, we witnessed a stable rise to USD 66 by the end of the year. Our clients remained cost conscious throughout 2017, resulting in a steady decline of both day rates and margins. Day rates dropped by 6% and margins decreased from 14.3% to 13.5%. As a result, our absolute margin per day worked was lower than it was in 2016.
EUR x 1,000
The acquisition of Programmed Marine and the creation of a Joint Venture with Programmed Maintenance Services Ltd (Australia), both in July 2017, were important milestones for the company. With Programmed Marine, we added worldwide offices in strategic locations (Aberdeen, Dubai, Houston and Perth) to our network. These acquisitions bring us vast experience in total crewing and ship management, thus enhancing the portfolio of services we can offer to clients globally. The Joint Venture also gives us access to the Australian and New Zealand markets.
2016 %
EUR
%
169,401
100.0%
147,606
100.0%
146,555
86.5%
126,462
85.7%
22,846
13.5%
21,144
14.3%
71
0.0%
0
0.0%
12,665
7.5%
11,497
7.8%
763
0.5%
687
0.5%
6,665
3.9%
5,634
3.8%
20,093
11.9%
17,818
12.1%
Operating profit
2,824
1.6%
3,326
2.2%
Net finance costs
-740
-0.4%
560
0.4%
984
0.6%
67
0.0%
3,068
1.8%
3,953
2.6%
844
0.5%
833
0.5%
2,224
1.3%
3,120
2.1%
Revenues Cost of sales
Gross profit Other income Indirect personnel expenses
In this difficult market we were nevertheless able to grow our volumes (total days sold) by 11% and thus increased our market share. This partly compensated for the drop in margin, resulting in an absolute margin (excluding acquisitions) that was 6% below that of 2016.
2017 EUR
Depreciation and amortisation Other expenses
Total operating costs
"Share of profit of equity-accounted investees, net of tax" Profit before taxes Income tax expense
Profit
Profit and loss account To get us ready for growth, we further streamlined our invoicing and payment processes in 2017, using Atlas4Sales and our shared services center in Odessa. We also invested significantly in processes around Master Data for professionals, bank accounts and debtors, this to ensure that we operate in a scalable, compliant and efficient manner.
Full year revenues increased by 14.8% versus 2016, primarily due to the acquisition in 2017. In 2017 the Energy business increased by EUR 15.5 million to total revenues of EUR 113.5 million. Mainly explained by growth in Survey and Seismic, the renewable business Offshore Wind & Subsea Cables and the acquired drilling business.
On a reported basis the gross margin decreased from 14.3% to 13.5%. Operating costs increased by EUR 2.3 million, mainly due to the acquisition and higher operating expenses. The Group’s conversion ratio (EBITDA / gross margin) increased from 19.0% to 20.0%, reflecting the fixed nature of most of the Group’s operational costs. As a result of the weakening exchange rate of the Euro versus the US Dollar and the British Pound, net exchange rate results were positive. Combined with the net interest payments this results in the Group’s 2017 net financial result of EUR 0.7 million negative. The profit before tax decreased by EUR 0.9 million to EUR 3.1 million, resulting from a higher gross margin offset by higher operating costs and higher net finance costs. The overall reported tax rate for 2017 was 27.5% (2016: 21.1%). The overall reported tax rate is higher compared to 2016 due to the write off deferred tax assets in Norway. Net income attributable to minority interests mainly represents the share of third party shareholders in the 2017 result of Atlas Consultancy A/S. As a result of all of the above, the Group’s overall 2017 net income decreased by EUR 0.9 million to EUR 2.2 million, equivalent to 1.3% of revenues.
Atlas Professionals Annual Report 2017
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Balance sheet and cash flow statement
Key performance indicators
Mainly as a result of retained earnings in 2017 and the repayment on the ING bank credit facility, the Group’s solvency ratio decreased from 39.3% in 2016 to 30.0% at year-end 2017.
Key performance indicators for the period 2013 - 2017 can be summarised as follows (2017, 2016 and 2015 reported on IFRS. 2014 and 2013 reported on Dutch GAAP): EUR x 1,000
The cash flow from operations increased by EUR 6.9 million (to EUR 3.3 million) compared to 2016 (EUR -3.6 million). The cash outflow from investing activities amounted to EUR -7.1 million. After subtracting the repayments of financial loans and exchange rate differences, the net change in cash and cash equivalents amounted to EUR 2.1 million (2016: EUR -9.9 million).
2017
2016
2015
2014
2013
Revenues
169,401
147,606
183,954
189,755
180,225
% change
14.8%
-19.8%
-3.1%
5.3%
15.2%
Gross margin
22,846
21,144
27,988
28,576
27,699
% of turnover
13.5%
14.3%
15.2%
15.1%
15.4%
EBITDA
4,570
4,013
9,394
9,904
9,983
% of turnover
2.7%
2.7%
5.1%
5.2%
5.5%
Net income
3,860
3,120
6,220
7,207
5,995
% of turnover
2.3%
2.1%
3.4%
3.8%
3.3%
Conversion ratio % (EBITDA/Gross margin)
20.0%
19.0%
33.6%
34.7%
36.0%
Groups equity
18,451
17,038
16,081
10,575
5,097
Net cash flow
2,075
-9,944
532
3,399
790
14,792
1,893
-2,668
5,178
11,394
57.5
49.0
36.8
42.1
50.9
30.0%
39.3%
34.3%
20.2%
10.2%
21
18
21
20
19
Net debt / (net cash) DSO trade debtors Solvency ratio % Number of offices (year-end)
12
Atlas Professionals Annual Report 2017
Market development and outlook The steady rise of the oil price give us the confidence that 2018 will be a year of renewed growth, in which we can leverage our increased market share and the acquisition of Programmed Marine. As we do not expect margins to return to pre-2017 levels, focus on operational excellence will be crucial. We will evaluate and benchmark our portfolio of clients and services, and target our efforts to areas that return a healthy economic return. In addition, we will actively pursue a change in our mix of services with more focus on added value activities and long term relationships. In the first half of 2018, we will fully integrate Programmed Marine’s international offices (Aberdeen, Dubai, Singapore and Houston) into the Atlas Service Group. The Australian and New Zealand Joint Venture operations will initially be ran as a separate business out of Perth. However, we will seek synergy under the Atlas brand and prepare for the implementation of Atlas4Sales in the Perth and New Plymouth offices by the end of the year. Another important objective is to adopt Programmed Marine’s Zero Harm program across the Atlas Group. To promote and implement a stringent HSE culture for the group, Programmed Marine’s HSE procedures and best practices will be rolled out and integrated into Atlas’ processes and management systems.
Risk management Atlas Professionals aims to ensure that the risks of the Group are identified and managed effectively, and that the operational and financial objectives are met in compliance with local applicable laws and regulations at a proper level of assurance. A system of internal controls providing adequate financial reporting is in place and monitored.
Atlas Professionals is widely recognised for its professionalism, consistency and financial discipline. Across the Group we are continuously seeking opportunities for growth, while taking controlled risks. A strong balance sheet together with a strong cash flow forms the basis for a healthy business. Our worldwide activities are exposed to varying degrees of risk and uncertainty. Some of these risks may result in material impact at the level of a particular operating company if not identified or effectively managed, but they may not have material impact at Group level. Atlas Professionals is active globally and while most of our businesses are related to the Oil & Gas industry, we are becoming less dependent on a limited number of markets by diversifying our services portfolio to other markets. Taking and managing risks is a part of the daily business within our Group. In our endeavour to become first choice in the provision of professionals in specific niche markets, risk assessments are included in business planning, performance monitoring processes, common processes, system implementations, acquisitions and integration activities. We are reviewing and adapting these assessments to remain in balance with the growing size of the Group and the accompanying changes in risk profile. In 2017, we prioritized the mitigation of key financial risks and of ICT risks related to our in-house servers. Additional financial controls have been implemented and business critical applications have been moved to an external data centre which provides redundancy to mitigate possible hardware failure, power outage and network disturbances. After the acquisition of the Programmed International offices and the creation of the Joint Venture the group will have €360 million of revenues, more than double the revenues of 2017. We will
therefore further strengthen our Risk management team with the appointment of a Risk Officer, who will be Driving and continuously improving the risk management process, strategy and supporting framework. Furthermore, we included our Risk Management process in our Quality Management system, so that can be included in our ISO9001:2015 certificate and thus be subject to regular external audits. The Risk Management team includes the main disciplines and functions to ensure that all necessary information and measures are properly discussed, communicated and implemented. The risk management team identified several key risks that were discussed and further mitigated during the year. The Group consists of several legal entities in various countries. To minimize operational and financial risks, the (re)assessment of our (legal) group structure is a continuous process that is reviewed on a regular basis. We communicate frequently with our shareholders, who fully support the strategic direction of Atlas Professionals. We value their input as well as their support. Atlas is exempt from the large companies’ regime. Atlas’ company-wide internal governance framework includes: (i) the Code of Conduct (“Code”) which includes the Atlas Professionals Values and Principles which apply to all our decisions, thereby ensuring that we make the right ethical choices. The Code will help to develop trust in Atlas Professionals from our clients and business partners. (ii) the Whistleblower Policy which ensures staff members may adequately and safely report any suspected irregularity at Atlas Professionals. Doing so will help Atlas Professionals to maintain a culture of transparency and integrity Atlas Professionals Annual Report 2017
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and address potential problems before they can negatively affect Atlas Professionals or stakeholders, and (iii) the risk management team which has become part of Atlas’ structure to continuously assess and address risks.
activities provide additional assurance on the financial reporting. Within the scope of the external auditors’ financial auditing assignment, they also report on internal control issues through their management letters.
Atlas Professionals operates on a global scale which means that our offices are also located in places which may be vulnerable to (geo) political unrest. We have identified this risk and adequate measures have been put in place to mitigate the impact of such an event taking place. For Atlas Professionals, the safety of our employees and professionals is a top priority.
Atlas Professionals considers it key that all staff members are informed about the existing procedures and processes. To ensure that all new and existing staff members have up to date knowledge, we have further invested in the standardisation and communication of procedures and processes to our staff to minimize the risks. This also involves knowledge and procedures related to the noncompliancy during the start of the assignment of the professional so that the on-boarding process is compliant.
Atlas operates in many geographical and strictly regulated markets exposing the company to changing regulatory environments. Hence there is a risk of non-compliance to laws and regulations that can lead to fines, claims and reputational damage. The Group aims to reduce this specific risk by working with a set of standards and procedures, and by employing relevant experts locally, who can train and advise local staff on the job. Atlas Professionals is continuously developing and implementing processes on a Group-wide basis, supported by common and tailor made IT systems with embedded key control frameworks. This will ensure the integrity of information processing in supporting day-today transactions and financial and management reporting. These systems are being rolled out to all of the operating companies of Atlas Professionals. For financial reporting, the risk management and control systems include clear accounting policies and a standard chart of accounts. The operating companies have already implemented the common systems and embedded control frameworks, which support common accounting and regular financial reporting in standard forms. Testing of key controls is part of the internal audit approach in operating companies on common systems. The external audit 14
Atlas Professionals Annual Report 2017
The Group’s main balance sheet assets are trade receivables and revenues to be invoiced. These receivables are spread over numerous clients without a high concentration risk. The Group monitors the creditworthiness of these clients and the dates of amounts outstanding. Despite these internal procedures, relatively significant uncollectible debts cannot be ruled out. If these were to occur, it is not expected that they would have a materially negative impact on the Group’s operating result. Atlas Professionals functional and main operating currency is the Euro, but the Group has sizeable parts of its business denominated in British Pounds, US Dollars, Brazilian Reals and Norwegian Kroner. It is Group policy that if turnover is not in Euro, the related cost of sales should be denominated in the same currency in which the turnover is made. In addition to operating foreign exchange risks, there are some translation risks in connection with foreign participants. The company does not hedge (net) foreign currency positions.
Financing Atlas Professionals has an arrangement with ING Bank N.V. for the funding of its activities. Aside from a revolving credit facility of EUR 2.25 million, the bank has made available a working capital facility of EUR 11.5 million. At the year-end, Atlas had complied with the ratios and financial covenants as stipulated in the arrangement.
Quality, health, safety & environment The integrated Management System, incorporating Quality, Health, Safety and Environmental standards, ensures confidence in services for both clients and personnel. By complying with these standards, Atlas reassures clients that it can provide a high quality workforce, delivering an efficient service, while maintaining strict health and safety standards, minimizing harm to any person or the environment. With the acquisition of new organizations and the introduction of new sales systems, an effective and streamlined management system remains a priority, with staff and customers alike seeing an improvement in customer satisfaction levels, demonstrated by an innovative evaluation process, delivering an 8+ rating (out of 10) of Atlas services. Atlas Professionals is also subject to a range of internal, certification, and client led audits, with output shaping continual improvement of systems to meet customer demands and improve service delivery. Atlas has maintained certification to ISO 9001:2008 Quality Management System, VCU/SCT 2011/05 Safety Checklist for temporary and secondment Agencies, and maintains Attestation of compliance to the Maritime Labour Convention 2006 for applicable offices. In 2018, the group plans for upgrading the ISO 9001:2008 certificate to the new ISO 9001:2015 standard. Atlas will continue to identify system improvements to maximize the talents of those working within the organization, to be able to provide professionals with the best opportunities and clients with the best professionals.
Research and development
Gender balance
Our continued investment in our online platform that connects clients, professionals and office staff shows our commitment to innovation. Streamlining our invoicing and payment processes have helped us prepare for growth, so that we can now absorb the increased volumes from our acquisitions.
The law in the Netherlands stipulates that membership on a Board of Directors must be divided more or less equally between genders. The conditions of the law will be met if at least 30% of the seats are taken by men and at least 30% by women.
As in many industries, ICT will have a significant impact on processes, services and business models. This will be no different in recruitment. Atlas needs to be at the forefront of these developments and lead the change in Oil and Gas recruitment and other markets that we move into. For 2018, we will further invest in online interaction with professionals and clients. We will use online portals to give Professionals control over their personal data and contributing to our compliance with the requirements from the General Data Protection Regulation (GDPR). As organizational change and technology development go hand in hand, we have implemented Scrum as our project management methodology. Agile, multi-disciplinary teams identify opportunities for new services and/or process optimization. Together they define and implement the required changes in organisation, process and technology.
Pursuant to Article 2:391 sub 7 of the Dutch Civil Code, we report with regard to both the Supervisory Board and the Board of Directors as at December 31, 2017 that their gender composition does not meet the target set in law. We have discussed the possibilities of implementing this law with the Supervisory Board based on the contents of this law, taking into account both the size of the Board of Directors and the Supervisory Board, including the control structure of the holding.
Human resources Given the core activity of the Group, human resources are key to the Group’s success. Atlas Professionals encourages personal development of both direct and indirect (staff) personnel and offers benefit packages that are attractive for every market in which the Group is active. Continuous training, both external and on-the-job, is considered to be a key element in keeping people motivated and competitive in the marketplace.
As a final note, we wish to thank all employees of Atlas Professionals for their dedicated efforts during the past financial year. Hoofddorp, 13 March 2018 The Board of Directors M.J.M. Burghouwt, Managing Director R.G.H.A.M. Neelissen, Managing Director P.E. Wit, Chief Operations Officer Atlas Professionals Annual Report 2017
15
Our company Our mission
Global presence
We offer the complete range of specialist recruitment & HR services in the Energy and Marine industries. For an Energy and Marine industry that always looks towards the next frontier. And for the Energy and Marine specialists with the talent and determination to get there.
Global presence is essential for Atlas Professionals to respond adequately to market trends and client needs. Since our creation, Atlas Professionals has opened 21 offices in 16 countries, and since incorporation we have successfully acquired fifteen companies with specific market positions and knowledge. With these growth achievements we have acquired the critical mass needed to effectively compete on a worldwide scale.
From freight to personnel In 1982, we started as an agent for worldwide transport over water. The first Atlas Transport Services office was established in Weesp, a small town near Amsterdam. A few years after the business started, we were asked if we could also provide personnel. We accepted the challenge and four years later we expanded into personnel services, trading under the name of ‘Atlas Personnel Services’.
Energy: a new millennium We provided personnel for waterway contracting until 2000. Encouraged by our success, we acquired a specialist in Well Services and began providing professionals for the Oil and Gas industry as well.
Specialists Our focus lies in the provision of technical professionals for specific market segments in the Energy and Marine industries. We are committed to inspiring and developing our professionals, thereby enabling them to perform at the highest possible level. We match top worldwide industry leaders to the most highly qualified, valuable specialists available.
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Atlas Professionals Annual Report 2017
Healthy growth An essential factor when assessing growth opportunities is the continued financial stability of the Group. In a move to help ensure this stability, HAL Investments B.V. took a 70% interest in the Group (Initially 45% in 2011 and an additional 25% interest in 2016). As a result, additional funding and resources became available enabling the further expansion and professionalization of our business.
At the frontier of Energy & Marine After unveiling a new, forward-looking brand identity that goes beyond recruitment, we will continue to build on our long tradition of development and innovation. Every day, our clients entrust us with complex recruitment tasks that cross oceans and borders. With over 30 years of experience, we meet demands by offering a full suite of recruitment, taxation, administration, logistics, and legal services – including up-to-date compliance advice. Our power lies with recognising the importance of matching the right people to the right positions. By combining the appropriate skills, knowledge, and experience, we are able to provide our professionals with the best opportunities and our clients with the best professionals. We are here for the industry that always looks towards the next frontier, and for the professional with the talent and determination to get there.
Our values We know our business We are experts. We know our clients, their businesses, our professionals and our businesses. We know and understand the details.
We conduct business with integrity We treat each other with respect. We adhere to and follow local laws and regulations. Health and safety, whilst respecting the environment, is really important for us.
We are pro-active We take initiatives and find solutions. We communicate with clients and candidates as much as possible. We listen and we act.
We keep our promises We honour our agreements. We are a dependable partner and we deliver what we promise.
We are responsible We are ambitious. We conduct our business in a responsible manner and are accountable for our actions and results.
We are open and straightforward We encourage open communication. We are straight to the point. We listen and express our views. We are unambiguous.
We invest in people We continually train and guide our professionals. We encourage personal development and stimulate them to improve their skills.
Atlas Professionals Annual Report 2017
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Atlas Professionals Annual Report 2017
Consolidated statement of financial position as at 31 December 2017 (Before appropriation of profit) Note
31 DEC 2017
31 DEC 2016
EUR 1,000
EUR 1,000
Assets
Note Shareholder’s equity
Property, plant and equipment
1
911
1,067
Share capital
Intangible assets and goodwill
2
1,393
1,015
Reserves
Equity Accounted investees
3
9,425
273
Trade and other receivables
4
1,255
Deferred tax assets
18
Non-current assets Current tax assets
31 DEC 2016
EUR 1,000
EUR 1,000
6 225
225
6,049
65
Retained earnings
12,177
16,667
1,400
Equity attributable to owners of the Company
18,451
16,957
1,553
1,863
Non-controlling interests
80
81
14,537
5,618
Total equity
18,531
17,038
882
3,767
Liabilities
Trade and other receivables
4
42,446
31,686
Cash and cash equivalents
5
3,918
2,306
Current assets
47,246
Total assets
61,783
The notes are an integral part of the consolidated financial statements.
31 DEC 2017
Loans and borrowings
8
13,299
2,250
Employee benefits
10
205
182
37,759
Trade and other payables
8
-
100
43,377
Provisions
9
200
-
Deferred tax liabilities
18
Total non-current liabilities
314
589
14,018
3,121
Loans and borrowings
8
5,206
1,667
Provisions
9
60
-
Employee benefits
10
13,928
11,487
Trade and other payables
11
8,860
7,483
1,180
2,581
Total current liabilities
29,234
23,218
Total liabilities
43,252
26,339
Total equity and liabilities
61,783
43,377
Current tax liabilities
The notes are an integral part of the consolidated financial statements.
Atlas Professionals Annual Report 2017
19
Consolidated statement of profit or loss account 2017 Note Revenues Cost of direct labour / personnel
2017
2016
EUR 1,000
EUR 1,000
13
169,401
147,606
14
146,555
126,462
Gross profit Other income Indirect personnel expenses
15
Depreciation and amortisation Other expenses
16
687
6,665
5,634 17,818
2,824
3,326 858
-833
-298
17
Profit before taxes 18
Profit
The notes are an integral part of the consolidated financial statements.
Atlas Professionals Annual Report 2017
20,093
93
Share or profit of equity-accounted
20
0
763
Finance income
Income tax expenses
71 11,497
Total operating costs
Net finance costs
21,144
12,665
Operating profit
Finance cost
22,846
-740
560
984
67
3,068
3,953
844
833
2,224
3,120
Consolidated statement of other comprehensive income for 2017 2017
2016
EUR 1,000
EUR 1,000
Profit
2,224
3,120
Items that are or may be reclassified to profit or loss Foreign operations- foreign currency translation differences
Other comprehensive income, net of tax Total comprehensive income
-731
-1,563 -731
-1,563
-731
-1,563
1,493
1,557
2017
2016
EUR 1,000
EURO 1,000
Owners of the Company
2,219
3,105
Non-controlling interests
5
15
2,224
3,120
Owners of the Company
1,494
1,538
Non-controlling interests
-1
19
1,493
1,557
Profit attributable to:
Total comprehensive income attributable to:
The notes are an integral part of the consolidated financial statements. The tax effect of foreign operations - currency translation differences amounted to EUR 183 thousand (2016: EUR 391 thousand).
Atlas Professionals Annual Report 2017
21
Consolidated statement of changes in equity for the year ended 31 December 2017 Attributable to owners of the Company
Restated balance as at 1 January 2017
Share capital
Translation reserve
Other reserves
Retained earnings
Unappropriated profit
Total
Non-controlling interest
Total equity
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
225
-1,280
1,345
15,129
1,538
16,957
81
17,038
1,538
-1,538 2,219
5
2,224
Total comprehensive income Appropriation of profit
2,219
Profit Legal reseve in subsidiaries
-6,709
-
-725
-
-725
-6
-731
-
-725
6,709
-5,171
681
1,494
-1
1,493
-
-
-
-
-
-
-
-
225
-2,005
8,054
9,958
2,219
18,451
80
18,531
Translation of foreign operations Total comprehensive income
6,709
Transactions with owners of the Company Changes in ownership interests: Transactions with owners of the company Acquisition of subsidiary with non-controlling interests
Total changes in ownership interests Total transactions with owners of the Company Balance as at 31 December 2017
The notes are an integral part of the consolidated financial statements.
22
Atlas Professionals Annual Report 2017
Attributable to owners of the Company
Restated balance as at 1 January 2016
Share capital
Translation reserve
Other reserves
Retained earnings
Unappropriated profit
Total
Non-controlling interest
Total equity
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
225
287
1,349
7,754
6,404
16,019
62
16,081
6,404
-6,404
-
3,105
3,105
15
3,120
-1,567
4
-1,563
Total comprehensive income Appropriation of profit Profit -1,567
Translation of foreign operations Total comprehensive income
-
-
-1,567
-
6,404
-3,299
1,538
19
1,557
-
-
-600
-
-600
-
-600
-
-
-600
-
-600
-
-600
Transactions with owners of the Company Changes in ownership interests: Transactions with owners of the company Acquisition of subsidiary with non-controlling interests
Total changes in ownership interests Total transactions with owners of the company Balance as at 31 December 2016
-
-
-
-600
-
-600
-
-600
225
-1,280
1,349
13,558
3,105
16,957
81
17,038
The notes are an integral part of the consolidated financial statements.
Atlas Professionals Annual Report 2017
23
Consolidated statement of cash flows for the year ended 31 December 2017 Note
2017
2016
EUR 1,000
EUR 1,000
2,224
3,120
Cash flows from operating activities
2017
Proceeds from debt and other financial liabilities
Profit Adjustments for:
2016
Cash flows from financing activities 8
Acquisition of non-controlling interests Repayment of borrowings
8
6,800
-
-
-309
-1,000
-4,750 -5,059
Depreciation
1
366
381
Net cash from (used in) financing activities
5,800
Amortisation
2
397
306
Net increase/decrease in cash and cash equivalents
2,075
-9,944
17
740
-560
Cash and cash equivalents at 1 January
2,306
12,975
3
-984
-67
Effect of movements in exchange rates on cash held
18
844
833
Cash and cash equivalents at 31 December *
3,587
4,013
The notes are an integral part of the consolidated financial statements.
499
-7,127
-3,200
1,784
*) For the disclosure on the immediate accessibility on cash and cash equivalents reference is made to note 5.
Net finance costs Share of profit of equity-accounted investees, net of tax Tax expenses
5
-463
-725
3,918
2,306
Changes in: Trade and other receivables Trade and other payables Provisions and employee benefits
Cash generated from operating activities
2,464
-93
-237
-5,436
3,350
-1,423
Interest paid
-615
-342
Taxes paid
592
-1,810
3,327
-3,575
Net cash from operating activities Cash flows from investing activities Acquisition of subsidaries, net of cash acquired
20
Interest received
-
83
100
Investments in other non-current assets
4
145
-1,270
Acquisition of property, plant and equipment
1
-218
-129
Acquisition of other investments
2
-122
-211
Dividends from equity-accounted investees
3
-
200
-7,052
-1,310
Net cash from (used in) investing activities
24
-6,940
Atlas Professionals Annual Report 2017
Notes to the 2017 consolidated financial statements General Atlas Professionals B.V. (“the company�), having its legal address in Amsterdam and office in Hoofddorp, is a private limited liability company under Dutch law, with 70% (2016: 70%) of its shares held by HAL Investments B.V., 15 % (2016: 15%) by Elburg Invest S.a.r.l. and 15% (2016: 15%) by Erneco Management B.V. The company is a holding company. The main activity of the group which the company is the parent, is seconding technical professionals to the international energy, marine and geophysical industries. Financial Reporting period These financial statements cover the year 2017, which ended at the balance sheet date of 31 December 2017.
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25
Basis of preparation Statement of compliance
Use of estimates and judegments
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRSs) and with Section 2:362(9) of the Netherlands Civil Code.
In preparing these consolidated financial statements, management has made 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 consolidated financial statements were authorised for issue by the Board of Directors on 13 March 2018. With reference to the income statement of the company, use has been made of the exemption pursuant to Section 402 of Book 2 of the Netherlands Civil Code.
Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date: • derivative financial instruments are measured at fair value (note 12); • liabilities for cash-settled share-based payment arrangements are measured at fair value (note 10). Functional and presentation currency These consolidated financial statements are presented in EUR, which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Judegments Information about judgements made in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the note 4 – classification of joint arrangement.
Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 December 2017 is included in the note 17 – recognition of deferred tax assets: availability of future taxable profit against which carry forward tax losses can be used. Measurement of fair values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and nonfinancial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
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Atlas Professionals Annual Report 2017
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: • share based payments arrangements (note 10); • financial instruments (note 12).
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27
Significant accounting policies The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements.
Non-controlling interests NCI are measured at their proportionate share of the acquirer’s identifiable net assets at the acquisition date.
Business Combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any non-controlling interests and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Principles for the translation of foreign currencies
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Interests in equity-accounted investees The Group’s interests in equity-accounted investees comprise interests in associates and a joint venture.
Transactions in foreign currency Transactions denominated in foreign currency are translated into the relevant functional currency of the group companies at the exchange rate applying on the transaction date.
Any contingent consideration payable is measured at fair value at the acquisition date. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. 28
Atlas Professionals Annual Report 2017
Interests in associates and the joint venture are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-accounted investees, until the date on which significant influence or joint control ceases.
Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. A complete listing of the Group’s subsidiaries and equity interests is presented in note 21.
Monetary assets and liabilities denominated in foreign currency are translated at the balance sheet date into to the functional currency at the exchange rate applying on that date. Exchange differences resulting from the settlement of monetary items, or resulting from the translation of monetary items denominated in foreign currency, are recognised in the profit and loss account in the period in which they arise, except for exchange differences on monetary items that are part of a net investment in a foreign operation. Non-monetary assets and liabilities denominated in foreign currency that are stated at historical cost, are translated into EURs at the exchange rates applying on the transaction date. Non-monetary assets and liabilities denominated in foreign currencies that are stated at current value, are converted into EURs at the exchange rate at the time when the actual current value was determined. Exchange rate differences arising from the
translation are directly recognised in other comprehensive income and accumulated in the revaluation reserve. Foreign operations The assets and liabilities that are part of the net investment in a foreign operation are translated into Euros at the exchange rate prevailing at the balance sheet date. The revenues and expenses of such a foreign operation are translated into Euros at the exchange rate on the transaction date. Currency translation differences are recognised as other comprehensive income and accumulated in the translation reserve. A group company that has received a loan from the parent recognizes any translation differences in the profit and loss account, even if the loan is regarded by the parent as part of a net investment in a foreign operation.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. The estimated useful lives for current and comparative periods are as follows: • Development costs: 5 years
Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. The construction cost comprises mainly salaries of staff involved. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses. A legal reserve is formed for the capitalised development costs that have not yet been amortised and/or impaired.
The following depreciation percentages are applied: • Buildings: 5%; • Other fixed operating assets: 20%. Maintenance expenditures are only capitalised when the maintenance leads to extension of the useful life of the asset.
Financial instruments Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Intangible assets and Goodwill Research and development Expenditure on research activities is recognised in profit or loss as incurred.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each item of the tangible fixed assets. Land, tangible fixed assets in production and prepayments on tangible fixed assets are not depreciated. Depreciation starts as soon as the asset is available for its intended use, and ends at decommissioning or divestment.
Property, plant and equipment Property, plant and equipment and prepayments on tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. The Group classifies non-derivative financial liabilities into the following categories: financial liabilities at fair value through profit or loss and other financial liabilities.
The cost consists of the price of acquisition or manufacture, plus other costs that are necessary to get the assets to their location and condition for their intended use. The cost of self-constructed assets includes the cost of materials and consumables and other costs that can be directly allocated to the construction. The cost of construction furthermore includes a reasonable portion of the indirect costs and the interest on debts during the period of construction of the asset. Investment grants are deducted from the cost of the assets to which the grants relate.
Atlas Professionals Annual Report 2017
29
Non-derivative financial assets and financial liabilities – recognition and derecognition The Group initially recognises loans and receivables and debt securities issued on the date when they are originated. All other financial assets and financial liabilities are initially recognised on the trade date when the entity becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. Financial assets and financial liabilities are offset and the net amount 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 them on a net basis or to realise the asset and settle the liability simultaneously.
Non-derivative financial assets – measurement Held-to-maturity financial assets These assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method.
30
Atlas Professionals Annual Report 2017
Loans and receivables These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method.
Non-derivative financial liabilities – measurement A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial liabilities at fair value through profit or loss are measured at fair value and changes therein, including any interest expense, are recognised in profit or loss. Other non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.
Impairment Non-derivative financial liabilities – measurement Financial assets not classified as at fair value through profit or loss, including an interest in an equity-accounted investee, are assessed at each reporting date to determine whether there is objective evidence of impairment. Objective evidence that financial assets are impaired includes: • default or delinquency by a debtor; • restructuring of an amount due to the Group on terms that the Group would not consider otherwise; • indications that a debtor or issuer will enter bankruptcy; • adverse changes in the payment status of borrowers or issuers; • the disappearance of an active market for a security; • observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets. For an investment in an equity security, objective evidence of impairment includes a significant or prolonged decline in its fair value below its cost. The Group considers a decline of 20% to be significant and a period of nine months to be prolonged.
incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends. An impairment loss is calculated as the difference between an asset’s 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. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss. Equity-accounted investees An impairment loss in respect of an equity-accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit or loss, and is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.
synergies of the combination. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted 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. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Non-financial assets Financial assets measured at amortised cost The Group considers evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is carried out by grouping together assets with similar risk characteristics. In assessing collective impairment, the Group uses historical information on the timing of recoveries and the amount of loss
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment. For 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. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the Atlas Professionals Annual Report 2017
31
Shareholders’ equity
Commissions
Financial instruments that are designated as equity instruments by virtue of the economic reality are presented under shareholders’ equity. Payments to holders of these instruments are deducted from the shareholders’ equity as part of the profit distribution.
If the Group acts in the capacity of an agent rather than as the principal in a transaction, then the revenue recognized is the net amount of commission made by the Group.
Defined contribution plans Costs of outsourced work and other external costs
Financial instruments that are designated as a financial liability by virtue of the economic reality are presented under liabilities. Interest, dividends, income and expenditure with respect to these financial instruments are recognised in the profit and loss as financial income or expense. The purchase of own shares is deducted from the other reserves. Ordinary shares Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction are accounted for in accordance with IAS 12.
Non-controlling interest Non-controlling interests are valued at the proportionate share of third parties in the net value of the assets and liabilities, determined in accordance with the company’s measurement principles.
Revenue recognition Rendering of services Revenues from services rendered are recognised in the Profit and Loss account when the amount of the revenue can be determined reliably, collection of the related compensation to be received is probable, the extent to which the services have been performed on the balance sheet date can be determined reliably, and the costs already incurred and (possibly) yet to be incurred to complete the service can be determined reliably.
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Atlas Professionals Annual Report 2017
date and at settlement date based on the fair value of the share appreciation rights. Any changes in the liability are recognised in profit or loss.
This concerns costs that are directly attributable to net turnover.
Share in result of equity accounted investees The share in the result of equity accounted investees consists of the share of the group in the results of these investees, determined on the basis of the accounting principles of the group. Results on transactions, where the transfer of assets and liabilities between the group and the non-consolidated investee and mutually between non-consolidated investees themselves, are not recognised as they can be deemed as not realised. The results of interests acquired or sold during the financial year are stated in the group result from the date of acquisition or until the date of sale respectively.
Employee benefits/pensions Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
Defined benefit plans The Group’s 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 the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to 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. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period
as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Other long-term employee benefits The Group’s net obligation in respect of long-term employee benefits is 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. Remeasurements are recognised in profit or loss in the period in which they arise.
Finance income and finance cost The Group’s finance income and finance costs include: • interest income; • interest expense; • dividend income; • the net gain or loss on the disposal of available-for-sale financial assets; • the foreign currency gain or loss on financial assets and financial liabilities; • the gain on the remeasurement to fair value of any preexisting interest in an acquiree in a business combination; • the fair value loss on contingent consideration classified as financial liability; • impairment losses recognized on financial assets (other than trade receivables); Interest income or expense is recognised using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established.
Corporate income tax Corporate income tax comprises the current and deferred corporate income tax payable and deductible for the reporting period. Corporate income tax is recognised in the Profit and Loss account except to the extent that it relates to items recognised as other comprehensive income, in which case it is recognised in OCI.
Deferred tax assets are recognised for unused tax losses, unused 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 used. 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; such reductions are reversed when the probability of future taxable profits improves.
Current tax Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the financial year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to the tax payable in respect of previous years.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
If the carrying values of assets and liabilities for financial reporting purposes differ from their values for tax purposes (tax base), this results in temporary differences.
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.
Current tax assets and liabilities are offset only if certain criteria are met.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not rebutted this presumption.
Deferred tax 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 and that affects neither accounting nor taxable profit or loss; • temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; • and taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Atlas Professionals Annual Report 2017
33
Leasing Determining whether an arrangement contains a lease At inception of an arrangement, the Group determines whether an arrangement is or contains a lease. At inception or on reassessment of an arrangement that contains a lease, 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. Leased assets Assets held by the Group under leases that transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset. Assets held under other leases are classified as operating leases and are not recognised in the Group’s statement of financial position. Lease payments Payments made under operating leases are recognised in profit or loss 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.
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Atlas Professionals Annual Report 2017
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.
IFRS 15 Revenue from Contracts with Customers IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.
New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2016, and have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early. IFRS 9 Financial Instruments IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. IFRS 9 is endorsed by the EU. In 2017 the Group assessed the potential impact on its consolidated financial statements resulting from the application of IFRS 9. There is no significant impact expected on the Group’s financial statements.
IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. IFRS 15 is endorsed by the EU.
Cash flow statement The cash flow statement is prepared using the indirect method. Cash flows in foreign currency are translated into EURs using the weighted average exchange rates at the dates of the transactions. Cash flows from derivative financial instruments that are accounted for as fair value hedges or cash flow hedges, are classified in the same category as the cash flows from the hedged balance sheet items. Cash flows from derivative financial instruments whereby hedge accounting is no longer applied, are classified in accordance with the nature of the instrument, from the date at which hedge accounting is ended.
In 2017 the Group assessed the potential impact on its consolidated financial statements resulting from the application of IFRS 15. There is no significant impact expected on the Group’s financial statements. IFRS 16 Leases For lessees, IFRS 16 (issued on January 13, 2017) requires most leases to be recognized on-balance (under a single model), eliminating the distinction between operating and finance leases. Under IFRS 16 a lessee recognizes a right-of-use asset and a lease liability. The right-of-use asset is treated similarly to other nonfinancial assets and is depreciated accordingly. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined, and the liability accrues interest. IFRS 16 must be applied for periods beginning on or after January 1, 2019, with earlier adoption permitted if abovementioned IFRS 15 has also been applied. IFRS 16 is not yet endorsed by the EU. The Group is assessing the potential impact on its consolidated financial statements resulting from the application of IFRS 16. Atlas Professionals Annual Report 2017
35
1
2
Property, plant and equipment
Intangible assets The movements in intangible fixed assets can be shown as follows:
Buildings
Other
Total
Development costs
Customer relationships
Other
Total intangibles
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
1,439
-
-
1,439
211
-
-
211
-
-
1,650
Cost
Cost 921
1,721
2,642
Additions
20
109
129
Acquisition - internally developed
Disposals
-16
-67
-83
Balance at 31 December 2016
1,650
Balance at 1 January 2017
1,650
Balance at 1 January 2016
Effect of movements in exchange rates
-19
18
-1
Balance at 31 December 2016
906
1,781
2,687
Acquisitions through business combinations
Balance at 1 January 2017
906
1,781
2,687
Other acquisition internally developed
4
214
218
Balance at 31 December 2017
Acquisitions
59
202
261
Accumulated amortisation and impairment
Disposals
-15
15
-
-8
-65
-73
9
-9
-
955
2,138
3,093
Additions
Effect of movements in exchange rates Other movements Balance at 31 December 2017 Accumulated depreciation and impairment losses Balance at 1 January 2016 Depreciation Disposals Effect of movements in exchange rates
-258
-1,047
-1,305
-
-
1,650
481
172
653
122
-
-
122
1,772
481
172
2,425
Balance at 1 January 2016
-329
-
-
-329
Amortisation
-306
-
-
-306
Balance at 31 December 2016
-635
-
-
-635
Balance at 1 January 2017
-635
-
-
-635
Amortisation
-344
-36
-17
-397
Balance at 31 December 2017
-979
-36
-17
-1,032
losses
-99
-282
-381
-
30
30
Carrying amounts
19
17
36
At 1 January 2016
1,110
-
-
1,110
1,015
-
-
1,015
793
445
155
1,393
Balance at 31 December 2016
-338
-1,282
-1,620
At 31 December 2016
Balance at 1 January 2017
-338
-1,282
-1,620
At 31 December 2017
-86
-280
-366
7
-7
-
-59
-182
-241
5
55
60
-9
-6
-15
-480
-1,702
-2,182
Depreciation Disposals Acquisitions Effect of movements in exchange rates Other movements Balance at 31 December 2017 Carrying amounts At 1 January 2016
663
674
1,337
At 31 December 2016
568
499
1,067
At 31 December 2017
475
436
911
ING Bank N.V. has first priority ranking right of pledge on all assets. 36
Balance at 1 January 2016
Atlas Professionals Annual Report 2017
A legal reserve for the carrying amount of the total intangibles is accounted for in the company’s financial statements. Development costs The capitalised development costs relate to the development of the Atlas4Sales platform, which is already in use by the company since 2014. The development of the Atlas4Sales platform is ongoing and therefore costs will be capitalised in 2018 as well. As per balance date the remaining estimated economic useful life is 5 years. Customer relationships The valuation of customer relationships acquired in a business combination is based on the present value of estimated future cash flows. Customer relationships are initially recognised at fair value and subsequently amortized on a straight line basis over an estimated useful life of maximum seven years.
3
4
Equity accounted investees
Trade and other receivables
The movements in financial fixed assets can be shown as follows:
Interested in joint ventrue interests in associates Balance at 31 December
2017
2016
2017
2016
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
9,425
373
Trade receivables
26,696
18,886
-
-
Sales to be invoiced
13,708
11,177
9,425
273
Joint ventures The Group participates in two joint ventures: Atlas Programmed Marine Holdings Pty Ltd and Mariteam Personnel Services B.V. All joint ventures are principally engaged in the seconding professionals to the marine and offshore industry. The valuation in the acquired share in the joint venture APMH is initially at cost. The initial recognition is for a significant part based on a contingent consideration for which an initial valuation has been determined. The valuation of this, so called vendor loan, is mainly based on forecasted cash flows and observable market data available for average market participants. The following table summarises the financial information of the joint ventures as included in its own financial statements, adjusted for fair value adjustments at acquisition and differences in accounting policies. The table also reconciles the summarised financial information to the carrying amount of the Group’s interest in both joint ventures.
Percentage ownership interest Non-current assets Current assets
2017
2016
EUR 1,000
EUR 1,000
50%
50%
5,782
13
39,485
1,002
-3,429
-
Current liabilities
-27,317
-469
Net assets (100%)
14,521
546
Non-current liabilities
Group’s share of net assets (50%)
7,261
273
Carrying amount of interest in joint venture
9,425
273
83,843
3,136
Revenue Profit and total comprehensive income (100%)
1,968
133
Profit and total comprehensive income (50%)
50%
50%
Group’s share of profit and total comprehensive income Dividends received by the Group
984
67
-
200
Prepayments and other receivables
Non-current Current
3,297
3,023
43,701
33,086
1,255
1,400
42,446
31,686
43,701
33,086
Non-current other receivables relate to loans provided to third parties with an amount of EUR 1,249 and the average interest accrues at 4% per annum. Non-current other receivables relate to employees and third parties with an amount of EUR 6 and the average interest accrues at 6% per annum. Trade receivables for an amount of EUR 17,636 (2016: EUR 16,936) have been pledged as collateral to credit institutions. Information about the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables is included in note 12.
Atlas Professionals Annual Report 2017
37
5
6
Cash and cash equivalents
Group equity
An amount of EUR 441 (2016: EUR 168) is not immediately accessible. This amount relates to blocked accounts used for future tax payments.
Share Capital
Issued at 1 January
2017
2016
EUR 1,000
EUR 1,000
225
225
-
-
Issued at 31 December
225
225
Authorised – par value EUR 45
900
900
Issue of Shares
The authorised capital of the company amounts to EUR 900 (2016: EUR 900) and consist of 20,000 ordinary shares of EUR 0,045 each. 5,000 ordinary shares have been issued.
38
Atlas Professionals Annual Report 2017
7 Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Group monitors capital using a ratio of adjusted net debt to adjusted equity. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. The Group’s policy is to keep the ratio below 2.5 The Group’s adjusted net debt to equity ratio at 31 December 2017 was as follows:
Total liabilities
2017
2016
EUR 1,000
EUR 1,000
43,252
26,339
3,918
2,306
Adjusted net debt
39,334
24,033
Total equity
18,531
17,038
2.12
1.41
Less: cash and cash equivalents
Adjusted net debt to adjusted equity ratio
Atlas Professionals Annual Report 2017
39
8 Loans & borrowings Non-current Liabilities
Debts to credit institutions Trade and other payables
The interest rate of the working capital facility is based on a 1-month Euribor plus a margin of 190 bps for 2017. Once a year the ING Bank N.V. can change this margin. 2017
2016
EUR 1,000
EUR 1,000
-
2,250
-
100
Shareholders loan
6,800
Other non-current liabilities
6,499
-
13,299
2,350
The parties to this credit facility and Atlas Professionals B.V. are jointly and severally liable. The security provided to ING Bank N.V. for these facilities consists of: • First priority ranking right of pledge on all receivables, all inventory, all capital equipment and all other business assets of each borrower and guarantor. At the year-end, Atlas had complied with the ratios and financial covenants as stipulated in the arrangement. Atlas has met the requirements for the bank covenants in 2017.
Current Liabilities 2017
2016
EUR 1,000
EUR 1,000
Debts to credit institutions
2,250
1000
Bank overdraft
2,956
667
5,206
1,667
Debts to Shareholders The shareholder loans are related to the acquisitions with Programmed Marine in 2017. These loans are subordinated to the ING Bank N.V. and carried a fixed interest rate of 8% per annum; interest is due at the end of each year, in arrears, based on 360 days a year.
Other non-current Liabilities The principal amount of the other non-current liabilities related to debt to the third parties. The related Net Present Value of EUR 6,499 assumes a discount factor of 13.7% per annum.
Debts to credit institutions In 2013 Atlas Professionals B.V., together with its Dutch subsidiaries (borrowers) and its Cypriot and United Kingdom subsidiaries (guarantors), entered into a credit facility with ING Bank N.V. for a total amount of EUR 25,500 divided in a revolving credit facility amounted to EUR 10,500 and a working capital facility amounted to EUR 15,000. The revolving credit facility is for refinancing purposes and carries a variable interest based on 3-month Euribor plus a margin of 210 bps. As from 1 October 2013 the limit will be reduced every quarter by EUR 250. The maturity date of this facility is 1 June 2018. As at 31 December 2017, the working capital facility amounted to EUR 11,500 (2016: EUR 11,500) and the revolving credit facility amounted to EUR 2,250 (2016: EUR 3,250).
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Atlas Professionals Annual Report 2017
Terms and repayment schedule The terms and conditions of outstanding loans are as follows: Nominal
Year of
Face
Carrying
Face
interest rate
maturity
value
amount
value
Carrying amount
31DEC 2017
31 DEC 2017
31 DEC 2016
31 DEC 2016
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
2.1
2018
2,250
2,250
3,250
3,250
Other non-current liabilities
5
2018/2033
14,146
6,499
100
100
Shareholders Loan
8
2020/2022
Debts to credit institutions
Total interestbearing liabilities
6,800
6,800
-
-
23,196
15,549
3,350
3,350
9 Provisions Onerous contracts EUR 1,000 Balance at 1 January 2017 Consolidation (acquisitions) / deconsolidation Effect of movements in exchange rates
260 -
Balance at 31 December 2017
260
Non-current
200
Current
60 260
The provision onerous contracts is related to rent office in Houston. The obligation for the discounted future payments, net of expected rental income, has been provided for.
Atlas Professionals Annual Report 2017
41
10 Employee benefit liabilities
Wages and salaries Social security contributions
2017
2016
EUR 1,000
EUR 1,000
11,359
9,463
2,191
1,531
Other employee benefit expenses
378
493
Cash-settled share-based payments
205
182
14,133
11,669
Non-current Current
205
182
13,928
11,487
14,133
11,669
In Norway we have a specific group of employees working in the Norwegian maritime sector who participate in a specific fund for seaman and who are able to retire from the age of 60 according to the Norwegian Pension Scheme Act for seaman. This pension scheme is a defined benefit scheme. The pension plan provides defined future benefits depending on the years of service, the salary and the age of the employee, besides the payment by the collective pension scheme in Norway. The Norwegian entity has a legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. Yearly an actuarial calculation is made by the broker to check if the contribution by the company is sufficient at that time.
Funding The Norwegian plan is fully funded by the Group’s subsidiaries, except for the obligation for directors and executive officers, which is funded by the Company. The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of the plan. The funding of Plan A is based on a separate actuarial valuation for funding purposes for which the assumptions may differ from the assumptions above. Employees are not required to contribute to the plans. The Group has determined that, in accordance with the terms and conditions of the defined benefit plans, and in accordance with statutory requirements (including minimum funding requirements) of the plans of the respective jurisdictions, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. This determination has been made on a plan-by-plan basis. As such, no decrease in the defined benefit asset was necessary at 31 December 2017 and 31 December 2016. The Group expects no material payments or contributions to its defined benefit plans in 2018.
Cash-settled share-based payment arrangement The Group granted share appreciation rights (SARs), to key employees that entitle them to a cash payment. The SARs are measured at fair value and expire at the end of 2019. Details of the liabilities arising from SARs were as follows:
The defined benefit plan is administered by a single pension fund that is legally separated from the Group. The board of the pension fund comprises three employee and two employer representatives and an independent chair. The board of the pension fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation policies) of the fund. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.
42
Atlas Professionals Annual Report 2017
Total carrying amount of liabilities for SARs Total intrinsic value of liabilities for vested benefits Settlement of liabilities for SARs
2017
2016
EUR 1,000
EUR 1,000
182
583
23
110
-
-511
205
182
11 Trade and other liabilities 2017
2016
EUR 1,000
EUR 1,000
Trade payables
2,470
1,559
Deferred revenue
1,333
2,662
Other payables
5,057
3,262
8,860
7,483
All current liabilities are due within one year.
Atlas Professionals Annual Report 2017
43
12 Financial instruments Financial Risk Management During the normal course of business, the company uses various financial instruments that expose the company to currency, interest, liquidity, credit and or market risks. The company does not trade in financial derivatives and follows procedures to limit the size of the risk with each counterparty and market. If a counterparty fails to meet its payment obligations to the company, the resulting losses are limited to the fair value of the instruments in question. The Group has exposure to the following risks from its use of financial instruments: • Credit risk • Liquidity risk • Market risk This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies, and processes for measuring and managing risk.
Risk Management framework Management has the overall responsibility for the establishment and oversight of the Group’s risk management framework and is responsible for developing and monitoring the Group’s risk management policies. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers. Loans, receivables and cash contain credit risks. The Group has no significant concentration of credit risk. The Group has policies in place to ensure that sales of services are made to customers with an appropriate credit history.
44
Atlas Professionals Annual Report 2017
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. At 31 December 2017, the maximum exposure to credit risk for trade and other receivables by type of service line was as follows: 2017
2016
EUR 1,000
EUR 1,000
Marine
14,301
6,058
Energy
26,104
24,005
40,405
30,063
The management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and in some cases our own assessment based on specific knowledge of the customer. Purchase limits are established for each customer which represents the maximum open amount without requiring approval from the management; these limits are reviewed periodically. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis. At 31 December 2017, the ageing of trade and other receivables that were not impaired was as follows:
Neither past due nor impaired
2017
2016
EUR 1,000
EUR 1,000
17,753
20,088
Past due 1 - 30 days
5,285
7,472
Past due 31 - 90 days
3,709
1,988 533
Past due 90 - 120 days
158
Past due 120 –270 days
36
33
Past due >270 days
92
883
27,033
30,997
The biggest part of the Group’s customers has been transacting with the Group for many years, and no major impairment loss has been recognised against these customers. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, geographic location, industry, aging profile, maturity and existence of previous financial difficulties. Trade and other receivables relate mainly to the Group’s industrial customers. Customers that are graded as ‘high risk’ are placed on a restricted customer list and monitored by the Group’s management, and future sales are made on a prepayment basis.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and excluding the impact of netting agreements:
31 DEC 2017
Carrying
Contractual cash flows
amount Total
The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows:
2 months
2 - 12
1-2
2-5
More than 5
or less
months
years
years
years
EUR
EUR
EUR
EUR
EUR
EUR
1,000
1,000
1,000
1,000
1,000
1,000
Bank overdrafts
2,956
2,956
2,956
Secured bank loans
2,250
2,250
-
2,250
Debts to shareholders
6,800
6,800
12,006
12,006
2,956
2,250
EUR 1,000
Non-derivative financial liabilities Individual impairments EUR 1,000 Balance at 1 January 2016
-916
Impairment loss recognised
-44
Other movements Balance at 31 December 2016
26
Impairment loss recognised Balance at 31 December 2017
6,800
-
-934
Impairment loss recognised Amounts written off
6,800 -
31 DEC 2016 679
Carrying
Contractual cash flows
amount
-82
Total
-337
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group periodically monitors cash flow requirements and optimises its cash return on investments. The Group ensures that it has sufficient cash on demand to meet expected operational expenses for a certain period, including the servicing of financial obligations. The Group has an overdraft facility. More details about the overdraft facility are disclosed under the current liabilities.
2 months
2 - 12
1-2
2-5
More than 5
or less
months
years
years
years
EUR
EUR
EUR
EUR
EUR
EUR
1,000
1,000
1,000
1,000
1,000
1,000
EUR 1,000
Non-derivative financial liabilities Bank overdrafts Secured bank loans
667
667
667
-
-
-
-
3,250
3,250
-
1,000
2,250
-
-
3,917
3,917
667
1,000
2,250
-
-
The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change. The future cash flows on contingent consideration (see note 33) and derivative instruments may be different from the amount in the above table as interest rates and exchange rates or the relevant conditions underlying the contingency change. Except for these financial liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
Atlas Professionals Annual Report 2017
45
Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. Currency risk The main part of the Group’s business is EUR denominated. The Group has exposure to foreign exchange risk as a consequence of activities denominated in non-EUR currencies, mainly the US Dollar, British Pound, Brazilian Real, Norwegian Kroner, Russian Rubbles and the Australian Dollar. These exposures are not being hedged, but it is the Group’s standard operating procedure that incoming and outgoing cash flows in relation to people seconded have to be in the same currency. The net currency position for currencies with a net position exceeding EUR 0.5 million is presented below: 31 DEC 2017
31 DEC 2016 1,269
A fluctuation of the EUR, USD, AUD, NOK, SGD or GBP against all other currencies at 31 December might have affected the measurement of financial instruments denominated in a foreign currency. The Group’s policy is to match the income currency and expenses currency on a project basis. Therefore fluctuations of the aforementioned currencies against all other currencies have no significant impact on the Groups’ financial statements. Interest rate risk and cash-flow risk The Group has no specific policy regarding a split percentage between fixed interest rate loans and variable interest rate loans to finance its operations. The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group has no significant interestbearing assets. The company runs an interest rate risk on interest bearing assets and liabilities and on the refinancing of existing loans. For assets and liabilities with variable interest rate agreements, the Group runs a risk of future cash flows and for fixed interest rate loans a fair value risk. The interest rate profile of the Group’s interest-bearing financial instruments as reported to management of the Group is as follows:
USD
1,356
AUD
2,798
79
NOK
975
1,581
2017
2016
SGD
1,168
104
EUR 1,000
EUR 1,000
GBP
1,172
668
Carrying amount
Fixed-rate instruments Financial assets Financial liabilities
The following significant exchange rates have been applied during the year: Average Rate 2017
46
USD 1
0.8871
0.9034
2017 0.8347
2016 0.9509
AUD 1
0.6797
0.6720
0.6516
0.6849
SGD 1
0.6418
0.6545
0.6245
0.6577
NOK 1
0.1073
0.1076
0.1016
0.1102
GBP 1
1.1416
1.2210
1.1263
1.1736
Atlas Professionals Annual Report 2017
1,400 -3,250
-21,941
-1,850
-2,956
-667
-2,956
-667
Variable rate instruments
Year-end spot rate 2016
1,255 -23,196
Financial liabilities
Off-balance sheet assets and commitments and contingencies
Contingencies
Long-term financial obligations Long-term unconditional obligations have been entered into in respect of rent, operating leases and put options on shares.
A subsidiary of the Group (Atlas Professionals do Brasil Ltda) is in a litigation with the Brazilian tax authorities, which relates to the normal course of business in Atlas. The dispute concerns a federal Brazilian VAT claim (infraction for PIS/COFINS taxes issued against Atlas in August 2017) for the services of providing local personnel to perform offshore activities in Brazilian territorial waters in 2012.
Rent As at 31 December 2017, the liabilities arising from office rents amounted to EUR 3,594 thousand (2016: EUR 2,639 thousand). EUR 2,606 thousand (2016: EUR 2,069 thousand) of the total commitments is not due within one year, and EUR 458 thousand (2016: EUR 662 thousand) is due after five years.
Atlas anticipates that this case will not have a material unfavorable impact on its financial position or operating results.
Other Commitments and guarantees Leasing As at 31 December 2017, the liabilities arising from operating lease agreements for company cars amounted to EUR 705 thousand (2016: EUR 878 thousand). EUR 460 thousand (2016: EUR 622 thousand) of the total commitments is not due within one year, and no amounts are due after five years. As at 31 December 2017, the liabilities arising from operating lease and maintenance agreements for office equipment amounted to EUR 1,024 thousand (2016: EUR 525 thousand). EUR 652 thousand (2016: EUR 295 thousand) is not due within one year and no amounts are due after five years. At 31 December, the future minimum lease payments under non-cancellable operating leases were receivable as follows:
2017
2016
EUR 1,000
EUR 1,000
Non-cancellable operating lease agreements current
1,606
1,056
Non-cancellable operating lease agreements 1-5 years
3,259
2,324
Non-cancellable operating lease agreements > 5 years
458
662
5,323
4,042
For financial year 2017, Atlas Professionals B.V. has deposited with the trade register of the Chamber of Commerce a joint and several liability statement (a statement based on Article 2:403 of the Dutch Civil Code) for the following group companies: • Atlas Services Group B.V. • Atlas Services Group Financial Services B.V. • Atlas Services Group Merchant B.V. • Atlas Services Group Dredging B.V. • Atlas Services Group Flex B.V. • Atlas Services Group Energy B.V. • Atlas Services Group Russia B.V. • Atlas Services Group Geophysics B.V. • Atlas Consultancy Services B.V. • Atlas Professionals ANZ Holding B.V. • International Crew Services (ICS) B.V.
Investments At year-end 2017, there are no liabilities arising from investments in other fixed assets (2016: EUR 0).
Atlas Professionals Annual Report 2017
47
14
13
Cost of direct labour / personnel
Revenue Revenue per service line can be specified as follows: 2017
2016
2017
2016
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
Marine
55,908
49,645
Marine
48,079
41,482
Energy
113,493
97,961
Energy
98,476
84,980
169,401
147,606
146,555
126,462
Cost of sales by cost category can be specified as follows:
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Atlas Professionals Annual Report 2017
2017
2016
EUR 1,000
EUR 1,000 61,677
Wages and salaries
88,192
Social security costs
6,240
3,108
Pension costs
1,494
1,243
Other employee expenses
11,644
13,695
Subcontracted work/consultants
38,985
46,739
146,555
126,462
15
16
Indirect personnel expenses
Other operating expenses
2017
2016
2017
2016
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
Wages and salaries
10,121
9,106
Marketing & publicity expenses
623
435
Social security costs
1,391
1,361
IT expenses
712
535
Pension costs
364
295
Travel
686
586
Other employee expenses
789
735
Transport expenses
549
514
12,665
11,497
Rent & other housing expenses
1,063
1,026
Other operating expenses
3,032
2,538
6,665
5,634
Field staff During the 2017 financial year, the average number of field employees in the Group, converted into full-time equivalents, amounted to 1,878 (2016: 1,666) employees. Field staff (average number) can be split into the following categories: 2017
2016
Field staff by activity: Energy
860
661
Marine
1,018
1,005
1,878
1,666
Office staff During the 2017 financial year, the average number of employees in the Group, converted into full-time equivalents, amounted to 260 (2016: 209) employees. 2017
2016
260
209
260
209
Office staff by company: Fully consolidated companies
Atlas Professionals Annual Report 2017
49
17
18
Net finance costs
Taxation 2017
2016
EUR 1,000
EUR 1,000
Deposits
34
84
Loans
59
21
-
753
Interest income on:
Foreign exchange differences Finance income Financial liabilities measured at amortised cost – interest expense Other financial expenses
93
858
-762
-108
-
-190
-71
-
Finance costs
-833
-298
Net finance costs recognised in profit or loss
-740
560
Foreign exchange differences
For corporate income tax purposes, the company constitutes a fiscal unity with Atlas Services Group B.V., Atlas Services Group Flex B.V., Atlas Services Group Dredging B.V., Atlas Services Group Merchant B.V., Atlas Services Group Energy B.V., Atlas Services Group International B.V., Atlas Services Group Geophysics B.V., Atlas Consultancy Services B.V., Atlas Services Group Financial Services B.V. and International Crew Services (ICS) B.V. Corporate income tax is allocated to each company according to the portion for which the company involved would be assessed if it were an independent tax-payer, taking account of any tax relief facilities available to the company.
Amounts recognised in profit or loss 2017
2016
EUR 1,000
EUR 1,000
Current year
721
-239
Adjustment for prior years
482
14
1,203
-225
-458
1,058
Current tax expense
Deferred tax expense Origination and reversal of temporary differences Change in recognised deductible temporary differences
Income tax expense
99
-
-359
1,058
844
833
Income tax expense exclude the Group’s share of income tax expense of the equity-accounted investees of EUR 237 thousand (2016: EUR 17 thousand), which has been included in ‘share of profit of equity accounted investees, net of tax’.
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Atlas Professionals Annual Report 2017
Reconciliation of effective tax rate
Movement in deferred tax balances
The applicable weighted average tax rate is 22.4% (2016: 21.4%). The tax charge in the Profit and Loss account over 2017 amounts to EUR 844 thousand or 27.5% of the result before taxation (2016: 21.1%). The 2017 tax charge is higher compared to 2016, due to the write off of deferred tax assets in Norway. The tax charge includes the following components: 2017 %
%
3,068
Tax using the Company’s domestic tax rate
741
24.15%
Effect of tax rates in foreign jurisdictions
-61
-1.99%
EUR 1,000 3,953
25.00% -9.26%
Intangible assets Employee benefits
2016
EUR 1,000
Profit before tax from continuing operations
2017
988 -366
Other items
Acquired
Net balance at
Recognised in
1 January
profit or loss
EUR 1,000
EUR 1,000
-252
85
-163
-330
-330
-68
-4
0
-72
-72
Other
inbusiness combinations
EUR 1,000
Net balance at
Deferred
Deferred tax
31 December
tax assets
liabilities
EUR 1,000
EUR 1,000
EUR 1,000
306
182
0
488
400
Carry forward tax loss
1,288
-73
-62
0
1,153
1,153
Tax assets (liabilities) before set-off
1,274
190
-62
-163
1,239
1,553
Set off of tax
0.05%
2
1.33%
53
Effect of share of profits of equity-acounted investees
-8.02%
-246
-0.42%
-17
Tax incentives
-0.12%
-4
-0.08%
-3
8.29%
254
4.86%
192
Non-deductible expenses
Acquired
-314
-
-
1,553
-314
Net balance at
Deferred
Deferred tax
31 December
tax assets
liabilities
Net tax assets (liabilities)
Tax effect of:
88
Net balance at
Recognised in
1 January
profit or loss
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
-277
25
-252
-
-252
46
-114
-68
-68
-
Unrecognised deferred tax assets
Other items
1,063
-757
306
643
-337
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits. The unrecognised deferred tax assets increased due to the write off of the Norwegian deferred tax assets.
Carry forward tax loss
1,406
-212
94
0
1,288
1,288
-
Tax assets (liabilities) before set-off
2,238
-1,058
94
0
1,274
1,863
-589
Current year losses for which no deferred tax asset was recognised
Change in estimates related to prior years
5.15%
158
-0.35%
-14
27.51%
844
21.07%
833
2016
Intangible assets Employee benefits
2017
2016
EUR 1,000
EUR 1,000
1,275
608
1,275
608
Tax losses
Set off of tax Net tax assets (liabilities)
Other
inbusiness combinations
EUR 1,000
-
-
1,863
-589
Tax losses carried forward Unrecognised tax losses carried forward expire as follows: 2017 EUR 1,000 Expire
1,275
Expiry date 2018-2032
2016 EUR 1,000 608
Expiry date 2018-2031
Atlas Professionals Annual Report 2017
51
19 Transactions with related parties Transactions with related parties are assumed when a relationship exists between the company and a natural person or entity that is affiliated with the company. This includes, amongst others, the relationship between the company and its subsidiaries, shareholders, directors and key management personnel. Transactions are transfers of resources, services or obligations, regardless whether anything has been charged. There have been transactions with the related parties for EUR 8,634 thousand.
Other related party transactions Transaction values for the
Balance outstanding as at
year ended 31 December
31 December
2017
2016
2017
2016
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
8,434
1,775
736
270
Sale of goods and services Other non-consolidate group companies Others Remuneration of managing directors
200
300
-
-
8,634
2,075
736
270
All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cash within two months of the end of the reporting period. None of the balances is secured. No expense has been recognised in the current year or prior year for bad of doubtful debts in respect of amounts owed by related parties. To support the activities of the joint venture, the Group and the other investors in the joint venture have agreed to make additional contribution in proportion to their interests to make up any losses, if required.
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Atlas Professionals Annual Report 2017
20 Acquisition of subsidiaries On 14 July 2017, the Group acquired 100% of the shares and voting interest in total six Skilled entities (hereafter: Skilled): Skilled International (Holdings) LLC, Skilled International LLC, Skilled International FZ-LLC, Skilled International Pte. Ltd., Skilled Group UK Limited and Skilled International (UK) Ltd. Skilled is engaged in secondment of professionals to the marine and offshore industry. In the six months ended 31 December 2017, Skilled contributed total revenue of EUR 18,889 thousand and a net profit of EUR 507 thousand to the Group’s results. If the acquisition had occurred on 1 January 2017, management estimates that consolidated revenue would have been approximately EUR 36,382 thousand, and consolidated profit for the year would have been EUR 476 thousand. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2017.
Details of the net assets acquired are set out as below: EUR 1,000 Property, plant and equipment Intangible assets Other financial assets Cash Non-current provisions Deferred tax liabilities
Cash paid Fair value of net assets acquired Goodwill
The goodwill is not expected to be taxable for tax purposes.
1,284 -284 -333 6,734
Other current assets
1,640
Income tax payable
-313
Accounts payable
-977
Other current liabilities EUR 1,000
60
Account receivable
Accrued expenses
Details on the acquisitions performed during the year are as follows:
20 653
Fair value of net assets acquired
-1,695 -356 6,433
6,256 -6,433 -177
The Group incurred acquisition-related costs of EUR 70 thousand on legal fees and due diligence costs. These costs have been included in ‘administrative expenses’. On 14 July 2017, the Group formed a joint venture with Programmed Maintenance Services Limited and acquired 50% of the shares in Atlas Programmed Marine Holdings Pty Ltd. The joint venture is focusing mainly on offshore activities in Australia and New Zeeland. The purchase price of the shares for this acquisition was EUR 1.7 million and was furthermore financed by Vendor Loan which is disclosed in note 8. The market based value of the joint venture amounts EUR 9.1 million based on management expectations on future performance of the business, discounted against the rate of 13.7%.
Atlas Professionals Annual Report 2017
53
Company balance sheet as at 31 December 2017 Note
2017
2016
EUR 1,000
EUR 1,000
Fixed assets Financial fixed assets
21
10,759
12,614
493
Deferred tax Total fixed assets
0 11,252
12,614
Current assets Trade and other receivables
22
8,498
Cash and cash equivalents
23
0
Total current assets Total assets Shareholder’s equity
0 8,498
4,882
19,750
17,496
24
Issued share capital Translation reserve
225
225
-2,005
-1,280
Other statutory reserves
8,054
1,345
Retained earnings
9,958
15,129
Unappropriated result
2,219
Total equity Current liabilities Total equity and liabilities
54
4,882
Atlas Professionals Annual Report 2017
1,538 18,451
25
16,957
1,299
539
19,750
17,496
Company income statement for the year ended 31 December 2017 Share in results from participating interests, after taxation Other result after taxation Net result
2017
2016
EUR 1,000
EUR 1,000
2,807
3,053
-588
52
2,219
3,105
Atlas Professionals Annual Report 2017
55
Notes to the 2017 separate financial statements General
Result in participating interests
The consolidated financial statements are part of the 2017 financial statements of the company. For the separate profit and loss account, use has been made of the exemption pursuant to Section 2:402 of the Netherlands Civil Code.
The share in the result of participating interests consists of the share of the Company in the result of these participating interests. Results on transactions involving the transfer of assets and liabilities between the Company and its participating interests and mutually between participating interests themselves, are eliminated to the extent that they can be considered as not realised.
In so far as no further explanation is provided of items in the separate balance sheet and the separate profit and loss account, please refer to the notes to the consolidated balance sheet and profit and loss account.
Accounting policies The company financial statements have been prepared in accordance with Title 9, Book 2 of the Netherlands Civil Code. For setting the principles for the recognition and measurement of assets and liabilities and determination of the result for its company financial statements, the Company 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 (hereinafter referred to as principles for recognition and measurement) of the company financial statements of the Company are the same as those applied for the consolidated EU-IFRS financial statements. See pages 27 to 37 for a description of these principles.
Participating interest in group companies Participating interests in group companies are accounted for in the company financial statements according to the equity method. Refer to the basis of consolidation accounting policy in the consolidated financial statements.
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Atlas Professionals Annual Report 2017
Notes to the reconciliation of equity and income statement A - Equity, investments in subsidiaries, result and share in results from subsidiaries For the reconciliation of equity and profit and loss for the year between Dutch GAAP and IFRS measurement principles, reference is made to note 3 of the consolidated financial statements, explaining the effects of the transition to IFRS. The respective transition adjustments have a corresponding effect on the separate balance sheet and profit and loss captions.
Atlas Professionals Annual Report 2017
57
21 Financial fixed assets As at 31 December 2017, the company’s participations in the financial statements of Atlas Professionals B.V. are: Change
Share in
Change
compared
issued
compared
issued
to 2016%
capital %
to 2016%
capital %
Fully consolidated subsidiaries:
58
Share in
Atlas Services Group Germany GmbH
Emmerich am Rhein, Germany
100%
Atlas Services Group B.V.
Amsterdam, the Netherlands
100%
Subserv Pro Limited
Banbury, United Kingdom
100%
Atlas Services Group Financial Services B.V.
Amsterdam, the Netherlands
100%
Orca (Offshore) Ltd
Banbury, United Kingdom
-100%
Atlas Services Group Energy B.V.
Amsterdam, the Netherlands
100%
Skilled International (Holdings) LLC
Houston, United States
100%
100%
Atlas Services Group Merchant B.V.
Amsterdam, the Netherlands
100%
Skilled International LLC
Houston, United States
100%
100%
Atlas Services Group Latvia Sia
Riga, Latvia
100%
Skilled International FZ- LLC
Dubai
100%
100%
Atlas Services Group Ukraine LLC
Odessa, Ukraine
100%
Skilled International Pte. Ltd.
Singapore
100%
100%
Atlas Services Group Guernsey Ltd
St. Peter Port, Guernsey
100%
Skilled Group UK Limited
Aberdeen, United Kingdom
100%
100%
Atlas Services Group Flex B.V.
Amsterdam, the Netherlands
100%
Skilled International (UK) Ltd
Aberdeen, United Kingdom
100%
100%
Atlas Services Group Dredging B.V.
Amsterdam, the Netherlands
100%
Atlas Professionals Australia Pty. Ltd.
Perth, Australia
100%
100%
Atlas Services Group Geophysics B.V.
Amsterdam, the Netherlands
100%
Atlas Professionals Inc.
Houston, United States
100%
100%
50%
50%
Atlas Services Group Energy Ltd
Bristol, United Kingdom
100%
Atlas Services Group International B.V.
Amsterdam, the Netherlands
100%
Joint ventures
Atlas Services Group Cyprus Ltd
Limassol, Cyprus
100%
Atlas Programmed Marine Holdings Pty Ltd
Perth, Australia
Atlas Consultancy Services B.V.
Amsterdam, the Netherlands
100%
Mariteam Personnel Services B.V.
Capelle a/d IJssel, the Netherlands
Atlas Services Group Singapore Pte Ltd
Singapore
100%
LLP Atlas Services Group Kazakhstanz
Aktau
50% -50%
International Crew Services (ICS) B.V.
Amsterdam, the Netherlands
100%
Atlas Services Group Marine Cyprus Ltd
Limassol, Cyprus
100%
Atlas Jaymar Ltd
Limassol, Cyprus
100%
2017
2016
EUR 1,000
EUR 1,000
10,416
8,391
Atlas Professionals do Brasil Ltda
Rio de Janeiro, Brazil
100%
Atlas Jaymar Servicos de Consultoria Ltda
Macae, Brazil
100%
Participating interests in group companies
Atlas Professionals ANZ Holding B.V.
Amsterdam, the Netherlands
100%
Other participating interests
Atlas Services Group Russia B.V.
Amsterdam, the Netherlands
100%
Accounts receivable from group companies
LLC Atlas Services Group
Moscow, Russia
100%
Atlas Professionals (UK) Ltd
Exeter, United Kingdom
100%
Atlas Services Group Norway A/S
Stavanger, Norway
100%
Atlas Cerno A/S
Stavanger, Norway
100% 100%
Atlas Drift A/S
Stavanger, Norway
Atlas Consultancy A/S
Stavanger, Norway
51%
Geomotive S.L.
Vic, Spain
100%
Atlas Professionals Annual Report 2017
343
273
-
3,950
10,759
12,614
The movements in financial fixed assets can be shown as follows:
Balance at 1 January 2017
Participating
Other
Accounts
interests in group
participating
receivable from
companies
interests
group companies
EUR 1,000
EUR 1,000
EUR 1,000
EUR 1,000
8,391
273
3,950
12,614
Total
Changes during the financial year: 13
13
-725
-725
Investments and loans provided Exchange differences
-3,950
Disvestment and redeemed loans Share in result of participating interests
70
2,807
2,025
70
-3,950
-1,855
10,416
343
-
10,759
-
Dividends received from participating interests
Balance at 31 December 2017
-3,950
2,737
Other participating interest Other participating interest relates to Mariteam Personnel Services B.V.
Atlas Professionals Annual Report 2017
59
22
23
Trade and other receivables Accounts receivable from group companies Corporate income tax Other receivables
Cash and cash equivalents
2017
2016
EUR 1,000
EUR 1,000
8,317
3,863
135
1,017
46
2
8,498
4,882
Receivables from group companies include a total amount of EUR 7,626 (2016: EUR 3,863) not due within one year.
60
Atlas Professionals Annual Report 2017
All amounts are available on demand.
24 Shareholder’s equity Please refer to the consolidated statement of changes in equity on page 24 for a quantitative description of changes in equity. Issued capital The authorised capital of the company amounts to EUR 900 (2016: EUR 900) and consist of 20,000 ordinary shares of EUR 0,045 each. 5,000 ordinary shares have been issued. Other legal reserves Other legal reserves consist of a legal reserve for participating interests and a legal reserve for capitalised development costs. • EUR 7,261 thousand (2016: EUR 330 thousand) relates to profits retained from participating interests. • In accordance with applicable legal provisions, a legal reserve of EUR 793 thousand (2016: EUR 1,015 thousand) had to be formed for capitalized development costs. Unappropriated results The General Meeting of Shareholders will be asked to approve the addition of the 2017 profit after tax (EUR 2,219 thousand) to other reserves. Translation reserve The translation reserve comprises of all foreign currency differences arising from the translation of the financial statements of foreign operations.
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61
25 Current liabilities EUR 1,000 Debts to group companies Accounts payable to suppliers and trade creditors Other liabilities
2017
2016
EUR 1,000
EUR 1,000
1,031
351
86
19
182
169
1,299
539
Auditor’s fees With reference to Section 2:382a (1) and (2) of the Dutch Civil Code, the following fees for the financial year have been charged by KPMG Accountants N.V. to the company, its subsidiaries, and other consolidated entities:
Off-balance sheet assets and liabilities Several liability and guarantees As described under note 7, the company is jointly and severally liable for the funding provided by ING Bank N.V. to Atlas Services Group Financial Services B.V. and certain of its group companies.
Statutory audit of annual accounts Tax advisory services
Fiscal unity The Company constitutes a fiscal unity with its Dutch subsidiaries for corporate income tax purposes the standard conditions prescribe that each of the companies is liable for the corporate income tax payable by all companies belonging to the fiscal unity.
Atlas Professionals Annual Report 2017
Other KPMG
Total
network
KPMG
2017
2017
2017
EUR 1,000
EUR 1,000
EUR 1,000
203
113
316
-
8
8
203
121
324
KPMG
Other KPMG
Total
Accountants N.V.
network
KPMG
2016
2016
2016
EUR 1,000
EUR 1,000
EUR 1,000
Statutory audit of annual accounts
164
125
289
Other-Non audit services
33
-
33
-
10
10
197
135
332
Tax advisory services
62
KPMG Accountants N.V.
Remuneration of managing and supervisory directors The emoluments, including pension costs as referred to in Section 2: 383(1) of the Netherlands Civil Code, charged in the financial year to the company and group companies amounted to EUR 200 thousand (2016: EUR 300 thousand) for managing directors, and EUR 64 thousand (2016: EUR 64 thousand) for supervisory directors. Hoofddorp, 13 March 2018 The Board of Directors:
The Supervisory Board:
M.J.M. Burghouwt R.G.H.A.M. Neelissen P.E. Wit
R. van Gelder (Chairman) A.P.P.M. van Beurden J.N. van Wiechen
Atlas Professionals Annual Report 2017
63
Other information Provisions in the Articles of Association governing the appropriation of profit According to article 22 of the company’s Articles of Association, the profit is at the disposal of the General Meeting of Shareholders. This meeting can allocate the profit wholly or partly to general or specific reserve funds. The company can only make distributions to the shareholders to the extent that shareholders’ equity is greater than the paid-up and called-up part of the capital plus legally required reserves.
Proposal for profit appropriation The General Meeting of Shareholders will be asked to approve the following appropriation of the 2017 profit after tax: an amount of EUR 2,219 thousand (2016: EUR 3,105 thousand) to be added to the other reserves. The result after taxes for 2016 is included under the unappropriated result item in the shareholders’ equity. The company can only make payments to the shareholders and other parties entitled to the distributable profit in so far as (1) the company can continue to pay its outstanding debts after the distribution (the so-called distribution test), and (2) the shareholders’ equity exceeds the legal reserves and statutory reserves under the articles of association to be maintained (the so-called balance sheet test). If not, management of the company shall not approve the distribution.
Branch Offices The company has a branch office in Kazakhstan.
64
Atlas Professionals Annual Report 2017
Atlas Professionals Annual Report 2017
65
Independent auditor’s report To: the General Meeting of Atlas Professionals B.V.
Report on the accompanying financial statements Our opinion We have audited the financial statements 2017 of Atlas Professionals B.V., based in Amsterdam. The financial statements include the consolidated financial statements and company financial statements. In our opinion: • the accompanying consolidated financial statements give a true and fair view of the financial position of Atlas Professionals B.V. as at 31 December 2017 and of its result and its cash flows 2017 in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code; • the accompanying company financial statements give a true and fair view of the financial position of Atlas Professionals B.V. as at 31 December 2017 and of its result 2017 in accordance with Part 9 of Book 2 of the Dutch Civil Code. The financial statements comprise: 1. the consolidated and company statement of financial position as at 31 December 2017; 2. the following consolidated and company statements for 2017: the profit or loss account, the statements of comprehensive income, changes in equity and cash flows; and 3. the notes comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise: 1. the company balance sheet as at 31 December 2017; 2. the company profit and loss account 2017; and 3. the notes comprising a summary of the accounting policies and other explanatory information. Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
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Atlas Professionals Annual Report 2017
We are independent of Atlas Professionals B.V. in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Report on the other information included in the annual report In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of: • management board’s report; • other information pursuant to Part 9 of Book 2 of the Dutch Civil Code; • supervisory board’s report. Based on the following procedures performed, we conclude that the other information: • is consistent with the financial statements and does not contain material misstatements; • contains the information as required by Part 9 of Book 2 of the Dutch Civil Code. We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements. The Board of Directors is responsible for the preparation of the other information, including the management board’s report, in accordance with Part 9 of Book 2 of the Dutch Civil Code, and other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.
Description of the responsibilities for the financial statements Responsibilities of the Board of Directors and the Supervisory Board for the financial statements The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Directors is responsible for such internal control as the Board of Directors determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to errors or fraud. As part of the preparation of the financial statements, the Board of Directors is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Board of Directors should prepare the financial statements using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.
• obtaining an understanding of internal control relevant to the audit 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 Company’s internal control; • evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors; • concluding on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company ceasing to continue as a going concern; • evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and • evaluating whether the financial statements represents the underlying transactions and events in a manner that achieves fair presentation.
The Supervisory Board is responsible for overseeing the company’s financial reporting process. Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud during our audit.
On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.
Misstatements can arise from fraud or errors and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. Breda, 13 March 2018
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.: • identifying and assessing the risks of material misstatement of the financial statements, whether due to errors or fraud, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from errors, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
KPMG Accountants N.V.
R.J.H.A. Jansen RA
Atlas Professionals Annual Report 2017
67
ANNUAL REPORT
2017