Annual report 2014
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Notes to the consolidated financial statements

1. Significant accounting policies

Corporate information

Telegraaf Media Groep N.V. (the company) domiciled in Amsterdam, the Netherlands is a Media company with a leading market position and recognized brands in the Netherlands. The activities primarily are the publication of printed Media and the operation of, and participation in, digital Media and radio. The Company’s shares are listed on the NYSE Euronext in Amsterdam.

The consolidated financial statements of the Company for the year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as TMG) and jointly controlled entities and TMG’s interest in associates.

The financial statements have been compiled by the Executive Board, and have together with the Supervisory Board been signed on 10 March 2015.

Statement of compliance

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB) and as adopted by the European Union, and the interpretations of these standards by the IASB.

Basis for preparation

The financial statements are presented in Euros, rounded to the nearest thousand. The principles for the valuation of assets and liabilities and the determination of the result of the company financial statements of Telegraaf Media Groep N.V., are in conformity with article 402, Book 2 of the Netherlands Civil Code.

Changes in accounting policies

The accounting policies have been applied consistently for the years 2014 and 2013 as presented in these consolidated financial statements except for the following. Within January 2014 the following changes in IFRS guidelines are mandatory. The consequences of these new standards are as follows:

Amendments IFRS 10, IFRS 12 and IAS 27 Investment Entities

These amendments provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under IFRS 10 Consolidated Financial statements. A subsidiary recognised as an investment is valued at fair value.

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

This amendment clarifies the accounting for contributions made by employees or third parties to defined benefit plans that are linked to services to defined benefit plans, based on whether those contributions are dependent on the number of years of services of the employee. Contributions independent of the years of service, may be recognised as a reduction of the service costs, in the period in which the related service is rendered.

IAS 32 Financial instruments

Offsetting financial assets and liabilities are mainly changes in presentation. This amendment clarifies the meaning of “currently has a legally enforceable right to set-off”. IAS 36 Recoverable amount disclosures for non-financial assets This amendment clarifies the required disclosure of the recoverable amounts of assets for which an impairment loss has been recognised or reversed during the period.

IAS 36 Impairment losses current assets

This amendment clarifies the disclosure on recoverable amount of assets with an impairment loss.

IAS 39 Financial instruments

This amendment provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria.

IFRIC 21 Levies

The interpretation clarifies in which circumstances levies imposed by governments needs to be recognised as a liability. IFRIC 21 also clarifies the accounting of a levy when the timing and amount are certain.

For now the changes has no impact on financial position and accounting policies of TMG. Where necessary the disclosure and presentation will change in accordance with IFRS guidelines.

Changes in presentation

The presentation of, and certain terms used in, the statement of financial position, statement of comprehensive income and certain notes has been changed in 2014 to provide additional and more relevant information. Also changes in effective IFRS guidelines have resulted for it. Certain comparative amounts have been reclassified to conform to the current period presentation. For example onerous contracts (2013: 1,757) and disputes (2013: 4,000) were separately presented as in 2013 as tax payables, account payables and other current liabilities. In 2014 are those, including comparative figures 2013, presented as provisions.

Critical accounting estimates and judgements

In the process of applying TMG’s accounting policies, management has made judgements, estimates and assumptions, which affect the application of the accounting principles and the amounts recognised in the financial statements. The estimates and the related assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances. The outcomes of these form the basis for the evaluation of the carrying value of assets and liabilities where this is not easily apparent from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of the estimates are applied in the period during which the estimate is revised, if the revision only has consequences for the period in question. If the revision has consequences for both the period under review and future periods, the estimate is revised in both the period of revision and future periods.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated statements are:

  • business combinations (discount rate and future cashflows – see note 3);
  • intangible assets (useful life, discount rate and impairment – see note 14);
  • property, plant and equipment (useful life - see note 15);
  • trade receivables (impairment - see note 19);
  • post employment benefit liabilities (discount rate and actuarial assumptions - see note 26);
  • restructuring provision (the amount of severance payments and severance alternatives - see note 27);
  • deferred income tax assets - and liabilities (rate and recoverability deferred tax - see note 28).

 Judgements made by management in the application of IFRS that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the accompanying notes.

Basis of consolidation

The consolidated financial statements of TMG comprise the company and all of its subsidiaries. The consolidation is based on the valuation and the accounting principles of the parent company.

Subsidiaries

Subsidiaries are entities controlled by the company. Control exists when the company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The company has the opportunity to influence the advantages. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Profit and Loss and each component of other comprehensive income are attributed to the owners of the subsidiary or ots non-controlling interests.

Joint arrangements

Investments in joint arrangements are classified as joint operations or joint ventures, depending on contractual rights and obligations of the investor and not based on the legal structure of the joint arrangement. At joint arrangements has TMG joint control, control bonded legally and in which strategic decisions are taken by unanimous consent. The consolidated financial statements include TMG’s proportional share of the entities assets, liabilities, revenues and expenses with items of a similar nature on a line-by-line basis, from the date that joint control commences until the date that joint control ceases. Investments in joint ventures are valued at equity method.

A joint operation is a joint arrangement wherby the parties hthat have joint control of the arrangement have rights to the asstes, and obligations for the liabilities, relating to the arrangement.For activities under joint operations the following will be recognised in relation to its interest in a joint opeeration:

  • its assts and liabilities; and
  • its share of the revenue and its share of any expenses.

Associated companies

Associates are those entities in which TMG has a significant influence, but no control, over the financial and operating policies. Subsidiaries and joint arrangements are no associated companies. The consolidated financial statements include TMG’s share of the total result of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases.

TMG’s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include TMG’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of TMG, from the date that significant influence or joint control commences until the date significant influence or joint control ceases. Impairment is accounted for immediately in the statement of profit and loss. When TMG’s share of losses exceeds its interest in the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that TMG has incurred legal or constructive obligations or made payments on behalf of an associate.

Transactions eliminated on consolidation

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of TMG’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. The results of the subsidiaries acquired or disposed of during the financial year are included in the consolidated financial statements as of or till the effective transaction date. If necessary, changes are made to the figures of subsidiaries to align the accounting principles with those of TMG.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated into Euros at the foreign exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Euros at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currency are translated at the exchange rate applying on the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Euros at foreign exchange rates ruling at the dates the fair value was determined.

Financial statements of foreign operations

The assets and liabilities of foreign operations (accounted for in the result), including goodwill and fair value adjustments arising on consolidation, are translated to Euros at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Euros at the date of the transaction. Foreign exchange differences arising on translation are recognised directly in a separate component of equity. Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in equity in the translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred to the statement of profit and loss.

Intangible assets

Goodwill

Goodwill represents amounts arising on acquisitions of subsidiaries, associates and joint arrangements.

The consideration of a subsidiary, joint arrangement or associate is equal to the amount paid for the acquisition of the interest.

In respect of acquisitions, goodwill represents the difference between the cost of the acquisition and the fair value of the identifiable assets liabilities and contingent liabilities acquired. Goodwill is stated at cost less any accumulated impairment losses.

Goodwill is attributed to cash generating units and is not amortised. Instead, it is tested annually for impairment (see accounting policy impairments). In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate. Whenever an interest in a subsidiary, associate or joint arrangement is sold, the corresponding goodwill is included in the determination of the result of the transaction. Negative goodwill that arises during an acquisition is included directly in the statement of profit and loss. Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions.

Other intangible assets

Other intangible assets concern licences, (internally developed) software, trademarks and publishing rights. The other intangible assets acquired by TMG are stated at cost less accumulated amortisation and impairment losses (see accounting policy impairments). Expenditure for development activities, whereby the research results are applied to a plan or design for the production of new or substantially improved products and processes, are capitalised if the product or process is technically and commercially feasible can be separately identified, the expenses are estimated reliably, and TMG has sufficient resources to complete the development.

The capitalised costs comprise the cost of material, direct labour and an appropriate proportion of overheads. With regard to the capitalised internal hours, a legal reserve is stated. Other development expenditure is recognised in the statement of profit and loss as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortization and impairment losses.

Subsequent expenditure 

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. in that case, the costs are capitalised in so far as they increases the economic benefits.

Borrowing costs 

Borrowing costs are capitalised on qualifying assets.

Amortisation 

Amortisation is charged to the statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Other intangible assets are amortised from the date they are available for use.

The estimated useful lives are as follows:

  • trademarks and publishing rights 5 - 20 years
  • licences 6 years
  • software 3 - 5 years

The amortisation method and estimated useful lives are assessed annually.

Lease

Lease agreements, where TMG has substantially all the risks and rewards of ownership are classified as financial leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases, which assets are not recognised in TMG’s statement of financial position.

Property, plant and equipment

Owned assets

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (see accounting policy impairments). Property, plant and equipment that is being constructed or developed for future use is stated at cost until construction or development is complete.

Subsequent expenditure

TMG recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to TMG and the cost of the item can be measured reliably. All other costs are recognised in the statement of profit and loss as an expense when incurred.

Borrowing costs 

Borrowing costs are capitalised on qualifying assets.

Depreciation

Depreciation is charged to the statement of profit and loss on a straight-line basis over the estimated useful life of each part of a property, plant and equipment. Land is not depreciated.

The estimated useful lives are as follows:

  • buildings 10 - 25 years
  • machinery and equipment 5 - 10 years
  • other tangible fixed assets 3 - 5 years

 The depreciation method, estimated useful life and residual value are assessed annually.

Other receivables

Prepaid operational leases comprise the purchased leaseholds of the land of the campus of Amsterdam. These are amortised on a straight-line basis over the duration of the leaseholds concerned. Non-current receivables are initially recorded at fair value less attributable transaction costs. They are then capitalised at amortised cost, whereby a difference between the cost and the redemption amount on the basis of the effective interest method is included in the statement of profit and loss over the duration of the receivables.

Inventories

Inventories are stated at the lower of cost or net realisable value. the net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the selling expenses. The cost of the inventories is based on the ‘first in, first out’ principle (fifo) and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

Securities

Investments in debt instruments and shares

Financial instruments held for trading are classified as current assets and are stated at fair value, with any gain and loss recognised in the statement of profit and loss.

When TMG has the positive intent and ability to hold financial instruments to maturity, they are stated at amortised cost less impairment losses. Other financial instruments held by TMG are classified as being available for sale and are stated at fair value, with any resulting gain or loss being recognised in the shareholders’ equity, except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange gains and losses. When these investments are derecognised, the cumulative gain or loss recognised directly to the shareholders’ equity is recognised in the statement of comprehensive income.

Financial instruments

TMG uses restricted derivative financial instruments to hedge interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through the statement of profit and loss.

TMG does not apply hedge accounting.

Trade and other receivables

Trade and other receivables are stated at initial recognition at fair value. Subsequent to initial recognition are stated at amortised cost less impairment losses.

Cash and cash equivalents

Cash comprises cash balances and call deposits.

Impairments

The carrying amount of TMG’s assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is an indication of impairment. If such indication exists, the asset’s recoverable amount is estimated (see the policy for calculation of recoverable amount).

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date to determine whether there is an indication for impairment. An impairment loss is recognised whenever the carrying amount of an asset, or the cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in the statement of profit and loss. Impairment losses recognised for cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (or groups of units) and then to reduce the carrying amount of the other assets in the unit (or groups of units) on a pro rata basis.

When a decline in the fair value of an available for sale financial asset has been recognised directly in the shareholders’ equity, and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of profit and loss, even though the financial asset has been derecognised. The amount of cumulative loss that is recognised in the statement of profit and loss is the difference between the cost and the current fair value, less any impairment loss on that financial asset previously recognised in the statement of profit and loss.

Calculation of recoverable amount

The recoverable amount of TMG’s investments in securities held to maturity and receivables valued at the amortised cost of acquisition is calculated as the present value of the expected future cash flows, discounted at the original effective interest rate (i.e. the effective interest calculated at the time at which these financial assets are initially entered). Receivables with a short residual term are not discounted to the present value.

For the other assets and associates, the realisable value is the fair value less cost to sell, or the value in use if this is higher. When determining the value in use the present value of the estimated future flows is calculated using a pre-tax discount rate that reflects both the current market valuations of the time value of money and the specific risks related to the asset. For an asset that generates no cash receipts which are significantly independent of those of other assets, the realisable value is determined for the cash generating unit to which the asset belongs.

Reversal of impairment

An impairment loss for a security held to maturity or a receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

Impairment loss on goodwill will not be reversed. Impairments on non-quoted equity instruments (financial instrument), that is not carried on fair value, because its fair value cannot be reliably measured, will not be reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Impairment is only reversed 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.

Issued capital

TMG’s ordinary shares are designated as the company’s equity.

Non-controlling interests

Non-controlling interests are the portion of the profit and loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by TMG. In the event of both a written put and a call option on the shares, these shares will be included in TMG’s economic interest, and not classified as a minority interest. The remaining interest is classified as a liability, based on the most realistic estimate.

Changes in non-controlling interests

Changes in TMG’s ownership interests in subsidiaries that not result in a loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts are adjusted accordingly. Any difference between the amount by which non-controlling interests are adjusted and the fair value paid or received is recognised directly in equity.

Withdrawal shares

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is net of any tax effects and is recognised as a deduction from equity. For repurchased shares classified as treasury shares that are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained earnings. Withdrawn shares are deducted from issued capital for nominal value, and the resulting surplus or deficit on the transaction is transferred to/from retained earnings.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognised initially at fair value. Subsequent to initial recognition, interest-bearing loans are stated at amortised cost, with any difference between cost and redemption value being recognised in the statement of profit and loss over the period of the borrowings on an effective interest basis.

Post-employment benefit liabilities

TMG has established various pension schemes, some under its own management, with Stichting-Telegraafpensioenfonds 1959 and some placed with external parties such as industry wide pension funds and insurance companies.

a. defined benefit plans

TMG’s net obligation in respect of defined benefit plans is calculated separately for each scheme by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of plan assets are deducted hereon. The discount rate is the yield as at the balance sheet date on credit rated bonds of at least AA, that have maturity dates approximating to the terms of TMG’s obligations. The calculation is performed by a certified actuary using the ‘projected unit credit’ method.

In respect of actuarial gains and losses that arise while calculating TMG’s obligation in respect of a plan, the effect of the changes in asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur.

Where the calculation results in a benefit for TMG, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized as an expense in the statement of financial position on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in the statement of profit and loss. The result ensuing from the curtailment or termination of a defined benefit plan is incorporated in the statement of profit and loss immediately when the curtailment or termination exists. The result consists of service costs and net interest expense and /or –income. Other changes are stated in the financial position.

b. defined contribution plans

Obligations for contributions to defined contribution plans are recognised as an expense in the statement of profit and loss as incurred.

Industry wide pension funds of which no reliable information is available, are stated as a defined contribution plans.

Provisions

A provision is recognised in the statement of financial position when TMG has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic assets will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the specific risks related to the liability.

Restructuring provision

A provision for restructuring is recognised when TMG and the works council have approved a detailed and formalised restructuring plan and the restructuring has either commenced or has been announced publicly. TMG has no possibility to withdraw the reorganisation plan. Termination benefits are recognised as an expense when TMG is demonstrably committed to either terminating the employment of current employees and/or function categories. To the extent they can be reliably estimated, benefits falling due more than 12 months after the balance sheet date are discounted to their present value.

Onerous contracts

TMG recognises a provision for an onerous contract when total contract costs exceed the economic benefits expected to be received from the contract.

Accounts payable and other current liabilities

Accounts payable and other current liabilities are stated at fair value. Subsequent to initial recognition is valuation at amortised cost.

Determination of fair values

A number of TMG’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.

Intangible assets

The fair value of publishing rights and trademarks acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

Property, plant and equipment

The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. the market value of items of other plant, equipment, fixtures and fittings is based on the quoted market prices for similar items.

Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

Derivatives

The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on terms and maturity of each contract and using market interest rates for similar instruments at the measurement date.

Assets and liabilities classified as held for sale

The fair value of assets and liabilities held for sale is based on discounted future cash flows or market observations and/or a taxation of a broker which valued the expected price.

When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Revenue

The revenues exclude value added tax and are after discounts. Revenues from the sale of goods are recognised in the statement of profit and loss when the significant risks and rewards of ownership have been transferred to the buyer. Revenues relating to services provided are included in the statement of profit and loss in proportion to performance in the same financial year. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods, or when there is continuing management involvement with the goods.

Barter transactions

If advertisement space or time are exchanged or swapped for advertisement space or time which are similar as regards the nature, fair value and same target population, such an exchange is not recognised as a revenue-generating transaction. If this condition is not applicable, the exchange will be regarded as a transaction which generates revenue. The amount of the revenue is determined on the basis of the fair value of the goods or services received, plus or minus any cash or assets which have been received or paid which can be converted into cash, on short term.

If the fair value of the received goods or services cannot be reliably determined, the revenue is determined on fair value of the exchanged goods or services plus or minus cash or assets which can be converted into cash, on short term.

Government grants

Government grants are recognised in the statement of financial position initially as received in advance and are recognised as income when there is reasonable assurance that it will be received and that TMG will comply with the conditions attached to it. Grants that compensate TMG for the expenses are recognised in the statement of profit and loss on a systematic basis in the same period the expenses are made.

Expenditure

Lease payments

Payments made under operating leases are recognised in the statement of profit and loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in the statement of profit and loss as an integral part of the total lease expense.

Minimum lease payments from financial leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic interest rate on the remaining balance of the liability. Conditional lease payments are incorporated by revising the minimal lease payments during the remaining lease term as soon as the adaptation of a lease is confirmed.

Financial income and expenses

Result from associates concerns TMG’s share in the total result of the associate, when TMG has significant influence. Result on the sale of the associate is stated on the date the transaction is affected.

A change in valuation of financial instrument through profit and loss is stated as financial income and expense.

The financial income and expenses comprise interest payable on borrowings calculated using the effective interest method, interest income on funds invested, dividend income and foreign exchange gains and losses.

Interest income and expenses are recognised in the statement of profit and loss as it accrues using the effective interest calculation method. Dividend income is recognised in the statement of profit and loss on the date of the entity’s right to receive payments. Foreign currency gains and losses are reported on a net basis. Borrowing costs that are not directly attributable to an acquisition are recognised in the statement of profit and loss using the effective interest method.

Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in shareholders’ equity, in which case it is recognised in shareholders’ equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: non tax-deductible goodwill, the initial recording of assets or liabilities which affect neither the commercial nor the fiscal profit, and differences related to investments in subsidiaries in so far as these are probably not going to be settled in the foreseeable future.

The amount of the provision for deferred tax liabilities is based on the way in which the carrying amount of the assets and liabilities is expected to be realised or settled, with the tax rates being used as determined on the balance sheet date, or to which a material decision has already been taken on the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The deferred tax liabilities and assets are netted if there is a legal entitlement to settle current and deferred tax, the income tax is charged by the same Tax Authorities and TMG intends to net the amounts.

Segment reporting

An operating segment is a clearly distinguishable component of TMG that is engaged in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with other TMG components. All operating segments’ operating results are reviewed regularly by the Executive Board to make decisions about allocation of resources. The segment reporting is in line with the internal management reporting.

Assets classified as held for sale and discontinued operations

Assets classified as held for sale are available for direct sale and sale is highly probable. On the assets related liabilities are classified as liabilities held for sale. From the moment classified as held for sale, the assets are not depreciated anymore.

On initial classification as held for sale, non-current assets and disposal groups are recognised at the lower of the carrying amount and fair value less costs to sell. For the valuation, if necessary, external valuation took place. Impairment losses on held for sale are included in the statement of profit and loss, even when there is a revaluation. The same applies to gains and losses on subsequent re-measurement.

A discontinued operation is a component of TMG’s business that represents a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view of resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also qualify.

Cash flow statement

The consolidated statement of cash flows is stated in accordance with the indirect method. A distinction is made between the operating, investment and financing activities. The cash flow from operating activities is adjusted for items in the statement of profit and loss and changes in the statement of financial position which have no effect on the cash flow for the year.

New accounting standards and interpretations not yet adopted

Certain new standards, amendments to standards and interpretations are not mandatory and therefore are not early adopted in these financial statements.

The following standards are applicable as from 1 January 2015 (unless otherwise stated) and will then be adopted by TMG:

Amendments

IFRS 11 Accounting for acquisitions of interest in joint operations (effective on or after 1 January 2016)

IAS 16/IAS 38 Clarification of acceptable methods of depreciation and amortisation (effective on or after 1 January 2016)

IAS 16/IAS 41 Agriculture: bearer plants (effective on or after 1 January 2016)

Amendments to IFRS annual improvements to IFRS 2011-2013 Cycle

TMG expects that the adoption of these new standards, amendments to standards and IFRIC interpretations in the future will not have significant impact for the financial statements of TMG.

 

2. Segment reporting

 

TMG Landelijke Media

Holland Media Combinatie

Sky Radio Group

Keesing Media Group

Facilitating services

Headoffice/Eliminations

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In thousands of euros

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from third-party transactions

271,998

293,637

113,754

120,950

36,796

40,248

67,982

67,009

22,033

20,126

138

260

512,701

542,230

Intercompany transactions

6

111

2

1

3

-51

92

6

117,666

131,457

-117,769

-131,524

-

-

Total revenues

272,004

293,748

113,756

120,951

36,799

40,197

68,074

67,015

139,699

151,583

-117,631

-131,264

512,701

542,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment result before depreciation, amortisation and impairment losses

15,236

25,420

6,473

274

15,892

15,058

19,190

13,716

5,288

7,571

-16,004

-40,993

46,075

21,046

Total depreciation, amortisation and impairment losses

3,381

3,601

1,541

1,733

51,904

10,800

4,906

5,218

12,982

10,021

2,761

19

77,475

31,392

Operating result

11,855

21,819

4,932

-1,459

-36,012

4,258

14,284

8,498

-7,694

-2,450

-18,765

-41,012

-31,400

-10,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Result from associates

-5,130

81

-

-

-

-

-

-277

-

-

-7

230,540

-5,137

230,344

Financial income

48

52

-

-

1

-26

190

123

-

-

1

29

240

178

Financial expenses

-86

479

-

-

-1,118

-1,360

-206

-162

-

-

-851

-3,550

-2,261

-4,593

Income tax

-1,917

-5,830

-824

650

-1,267

-539

-3,580

-1,878

2,170

794

5,912

11,788

494

4,985

Net result from continued operations

4,770

16,601

4,108

-809

-38,396

2,333

10,688

6,304

-5,524

-1,656

-13,710

197,795

-38,064

220,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net result from discontinued operations after tax

-

-

-

-

-

-

-

-

-

-

-23

-42,694

-23

-42,694

Net result for the year

4,770

16,601

4,108

-809

-38,396

2,333

10,688

6,304

-5,524

-1,656

-13,733

155,101

-38,087

177,874

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment assets

132,787

111,663

72,935

48,981

78,573

132,630

154,984

159,131

58,814

66,541

-22,996

37,071

475,097

556,017

Investments in associates

159

334

-

-

-

-

-

-

-

-

-

-

159

334

Total assets at 31 December

132,946

111,997

72,935

48,981

78,573

132,630

154,984

159,131

58,814

66,541

-22,996

37,071

475,256

556,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment liabilities

50,145

82,652

22,059

21,279

46,633

57,583

34,418

35,094

9,978

10,815

61,322

52,306

224,555

259,729

Total liabilities at 31 December

50,145

82,652

22,059

21,279

46,633

57,583

34,418

35,094

9,978

10,815

61,322

52,306

224,555

259,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment investments

2,134

9,116

522

872

991

1,358

1,193

1,363

4,665

8,240

3,437

1,718

12,942

22,667

Total investments

2,134

9,116

522

872

991

1,358

1,193

1,363

4,665

8,240

3,437

1,718

12,942

22,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs

-

-

-

-

1,212

795

-74

4,138

-

-

-924

32,075

214

37,008

Impairment losses intangible assets

-

-

-

-

40,929

-

-

-

-

-

1,977

-

42,906

-

Impairment losses property, plant and equipment

-

-

-

-

-

-

99

-

5,950

2,700

-

-

6,049

2,700

Other material non-cash items

-

-

-

-

42,141

795

25

4,138

5,950

2,700

1,053

32,075

49,169

39,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of fte

820

904

665

749

103

104

277

309

328

387

148

132

2,341

2,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating segments

The group comprises the following main operating segments:

TMG Landelijke Media: The publishing of national newspapers, magazines, print-related internet activities and video productions.

Holland Media Combinatie: The publishing of regional newspapers, free door-to-doorpapers and print-related internet activities.

Sky Radio Group: The operation of several radio stations in the Netherlands.

Keesing Media Group: The publishing of puzzle booklets within Europe.

Facilitating services: Other activities include, amongst others, the printing and distribution of newspapers, providing of office space and related facilities.

Headoffice/Eliminations In 2013 segment online activities is discontinued. The results from these discontinued operations are stated under Headoffice eliminiations (see further 13.).

Segment information is presented in respect of TMG’s business and geographical segments. The segment results are based on the organisational management structure used within TMG and the nature of the publishing activities. On a monthly basis, results are reported to the Executive Board to make decisions about performance and allocation of resources within the publishing segments. The facilitating activities such as printing and distribution are reviewed at Head office and not allocated to operating segments. The intersegment pricing, principally the printing and distributing of newspapers and the support of IT projects and -infrastructure, are determined at arm’s length basis. The intercompany financing is unallocated. Segment results, assets and liabilities include items directly attributable to the segment as well as, those that can be allocated on reasonable basis.

The decline in revenues at TMG Landelijke Media and Holland Media Combinatie is caused by lower advertisement - and circulation revenues. The decline in revenues at Sky Radio Group is due to a lower spot sales, as a result of lower radio audience share at Radio Veronica. The operating results at Keesing Media Group rose due to lower restructuring costs, which were necessary in 2013 due to the closure of print plants in France. The operating result in France increased. At facilitating services the increase in revenues is the result of insourcing distribution activities of de Persgroep Nederland. The restructeringcosts of the other FTE reductions are reported at Headoffice. The investments of a segment include the total cost incurred during the reporting period for the acquisition of assets of the segment which are expected to be in use for more than one reporting period.

Geographical segments

For the presentation of information based on geographical segments, the geographical location of the clients is used for the segments’ revenues. The segments’ non-current assets are determined on the basis of the geographical location of those non-current assets.

Revenues and non-current assets are divided in geographical segments as follows:

 

 

2014

In thousands of euros

Revenues

Non-current assets1

 

 

 

The Netherlands

452,597

268,306

Other countries

60,104

41,666

Total

512,701

309,972

  • With the exception of deferred tax assets.

 

 

2013

 

Revenues

Non-current assets1

 

 

 

The Netherlands

482,309

336,408

Other countries

59,921

43,249

Total

542,230

379,657

  • With the exception of deferred tax assets.

Van de omzet en van de vaste activa in overige landen heeft respectievelijk 42,577 (2013: 42,092) en 41,400 (2013: 42,993) betrekking op puzzelactiviteiten in Frankrijk.


3. Business combinations

In 2014 and 2013 no acquisitions of subsidiaries or operations occurred.

4. Revenues

In thousands of euros

2014

2013

 

 

 

Circulation

273,653

280,069

Advertisements

174,952

199,935

Print third parties

3,489

3,170

Distribution

18,459

16,824

E-commerce

18,436

22,957

Video productions

5,309

7,014

Other activities

18,403

12,261

Total

512,701

542,230

The revenue of 512,701 (2013: 542,230) includes barter transactions of 5,541 (2013: 4,384). The other activities increased by the growth of digital bundles by printing companies and the iPad mini proposition of De Telegraaf.


5. Other operating income

In thousands of euros

2014

2013

 

 

 

Net gain on fixed assets

2,165

88

Total

2,165

88

The gain on sale on fixed assets in 2014 consists of the sale of the intellectual property of My Radio as well as the sale of several properties of Holland Media Combinatie.

6. Raw and auxiliary materials

In thousands of euros

2014

2013

 

 

 

Paper and ink

36,265

40,776

Auxiliary materials

1,998

1,880

Total

38,263

42,656

7. Personnel costs

In thousands of euros

Notes

2014

2013

 

 

 

 

Wages and salaries

 

128,418

141,257

Compulsory social security contributions

 

21,064

22,911

Contributions to pension schemes

27.

11,838

13,767

Other personnel costs

 

20,185

16,511

 

 

181,505

194,446

Restructuring costs

28.

214

37,008

Total

 

181,719

231,454

The average number of employees (FTE) is 2,341 (2013: 2,585), of which 201 (2013: 233) in foreign countries. The wages and salaries, compulsory social security contributions and other personnel costs declined mainly due to the outflow of employees as a result of the cost reduction programme. As a consequence also the compulsory social security contributions and the contributions to pension schemes declines. In 2013 the other personnel costs included a one time release caused bij harmonisation of the jubilee plan. Furthermore the costs of temporary personnel increased in 2014. In 2013 were additional measures announced to decline the amount of FTE which caused a addition of 37.008 to the restructuring provision.

8. Depreciation, amortisation and impairment losses

In thousands of euros

Notes

2014

2013

 

 

 

 

Depreciation

15.

10,691

10,612

Impairment losses property, plant and equipment

15.

6,049

2,700

Amortisation

14.

17,829

18,080

Impairment losses intangible assets

14.

42,906

-

Total

 

77,475

31,392

Impairment losses of property, plant and equipment in 2014 and 2013 are mainly related to lower valuation on properties classified as assets held for sale. Furthermore in 2014 an impairment loss is recognised on reduction of the production capacity. This will be effected in the last six months of 2015.

The impairment losses intangible assets concerns an impairment on goodwill relating to the brands of Sky Radio Group and an impairment on software.

9. Other operating expenses

In thousands of euros

2014

2013

 

 

 

Transport and distribution costs

77,053

80,063

Subcontracted work and technical production costs

37,042

37,051

Sales costs

34,536

29,307

Editorial costs

17,585

17,807

Cost of goods sold e-commerce

16,716

19,594

Impairment of trade receivables

2,506

1,819

Other operating expenses

63,371

61,521

Total

248,809

247,162

The transport and distribution costs decreases due to cost savings in own distributing activities and discontinuance of free daily newspaper Spits. The sales costs increased by the sales- and promotionactivities around Word Cup football and Radio Veronica, brandcampaign and tabloid introduction of De Telegraaf.

The other operating expenses of 63,371 (2013: 61,521) consist of IT expenses 22,687 (2013: 20,688), housing expenses 12,876 (2013: 12,779) and other general expenses 27,808 (2013: 28,054). A decrease in other operating expenses is realised due to less employees.

10. Financial income and expense

In thousands of euros

2014

2013

 

 

 

Result from associates

 

 

 

 

 

ProSiebenSat.1 Media AG

 

 

Share in result associated company

-

12,224

Realised change in fair value financial instrument

-

218,275

Result from ProSiebenSat.1 Media AG

-

230,499

Other result from associates

-5,137

-155

Result from associates

-5,137

230,344

 

 

 

Financial income

240

178

 

 

 

Financial expenses

-2,261

-4,593

 

 

 

Total

-7,158

225,929

In 2014 Ticketsplus B.V., ZOOM.IN Nederland B.V. and Cammio GmbH, all part of the segment Landelijke Media, were sold. The loss from these disposals amounted to 4,902 and is recognized under participations.

The share in results 2013 of ProSiebenSat.1 Media AG amounted 12,224 and is only recognised until August 19. On August 19 2013, the 12% shares with voting rights of TMG in ProSiebenSat.1 Media AG were converted to quoted shares. On September 6 2013, TMG completed the sale of its ordinary shares in ProsiebenSat.1 Media AG.



11. Income tax

In thousands of euros

Notes

2014

2013

 

 

 

 

 

 

 

 

Current tax

 

 

 

Current year

 

6,172

4,540

Adjustment from prior years

 

-745

264

 

 

 

 

Deferred tax

 

 

 

Origination and reversal of temporary differences

29.

-5,918

-16,175

Total income tax

 

-491

-11,371

 

 

 

 

Hereof:

 

 

 

Income tax from continued operations

 

-494

-4,985

 

 

 

 

Income tax from discontinued operations

13.

3

-5,213

Income tax from realised sale discontinued operations

13.

-

-1,173

Income tax from discontinued operations

 

3

-6,386

 

 

 

 

Total income tax

 

-491

-11,371

 

 

2014

2013

 

 

 

 

Result from continued operations before tax

 

-38,558

215,583

Result from discontinued operations before tax

 

-20

-44,386

Loss on sale from discontinued operations before tax

 

-

-4,694

Result before tax

 

-38,578

166,503

 

 

 

 

Tax rate in the Netherlands

 

25.0%

25.0%

 

 

 

 

Income tax based on Dutch tax rate

 

-9,645

41,626

Effect of tax rate in foreign jurisdictions

 

-980

-1,299

Non-deductible expenses

 

9,968

5,895

Results of associates exempt from income

 

944

-57,439

Tax exempt results

 

20

140

Advantage from unrecognised prior losses carried forward

 

-5

-301

Tax facilities

 

-48

-257

Over (-)/ under provided prior years

 

-745

264

Total

 

-491

-11,371

Results of associates exempt from income in 2014 relates mainly to the non-deductible losses on the sale of ZOOM.IN Nederland B.V., Ticketsplus B.V. and Cammio Gmbh. The exemption in 2013 mainly relates to the share in the result of ProSiebenSat.1 Media AG. In particular, the gain on the sale of the 6% interest ProSiebenSat.1Media AG. The non-deductible expenses in 2014 and 2013 mainly concern the impairment losses on intangible assets (2013: included in discontinued operations).

Reconciliation of the effective tax rate

The effective tax rate on the result from all activities was 1.3% in 2014 (2013: -6.8%).The relationship between the tax rate in the Netherlands and the effective tax rate on income from total operations is as follows:

In percentages

 

2014

2013

 

 

 

 

Dutch income tax rate

 

25.0

25.0

 

 

 

 

Tax effects of:

 

 

 

Deviating rates

 

2.5

-0.8

Tax-exempt results and non-deductible costs

 

-28.2

-31.2

Other effects

 

1.9

0.2

Effective tax rate

 

1.3

-6.8

12. Current tax assets and liabilities

At balance sheet date 2 was to be recovered over the reporting period and previous periods (2013: nil). The current tax liability of 4,143 (2013: 742) represents the income tax to be paid over current and prior years after deduction of payments.

13. Discontinued operations

In 2013, TMG decided, as a result of a strategic review to discontinue, to sell or held for sale non print related online activities. Herewith the segment online is discontinued. At year-end 2014, only Relatieplanet.nl is still held for sale (see 21.).

In thousands of euros

 

2014

2013

 

 

 

 

Intangible assets

 

-

4,798

Property, plant and Equipment

 

-

262

Trade and other Receivables

 

-

1,776

Cash and cash equivalents

 

-

332

Accounts payables and other current liabilities

 

-

-1,862

Total assets and liabilities

 

-

5,306

Amounts to be paid

 

-

-299

Loss on disposal of discontinued operations

 

-

-5,605

 

 

 

 

Cashflow from of sold activities

 

 

 

Cash disposed of

 

-

-332

Amounts to be paid

 

-

-299

 

 

-

-631

Payable at balance date

 

-

128

Net cash outflows

 

-

-503

In thousands of euros

Notes

2014

2013

 

 

 

 

Result discontinued operations

 

 

 

Revenues

 

2,846

12,042

 

 

 

 

Wages and salaries

 

503

3,412

Social charges and pension charges

 

116

1,038

Other personnel costs

 

181

818

Restructuring costs

28.

-

294

Amortisation

14.

-

5,382

Impairment losses intangible assets

14.

-

29,126

Depreciation

15.

-

1,887

Impairment losses property, plant and equipment

15.

-

2,723

Other operational costs

 

2,066

10,507

Total operating expenses

 

2,866

55,187

 

 

 

 

Operating result on discontinued operations

 

-20

-43,145

 

 

 

 

Result associated companies

 

-

-277

Financial income and expenses

 

-

-53

Income tax

 

3

-5,213

Result on discontinued operations

 

-23

-38,262

 

 

 

 

Results realised on sale discontinued operations

 

-

-5,605

Income tax from realised on sale discontinued operations

 

-

-1,173

Result discontinued operations, net of tax

 

-23

-42,694

 

 

 

 

Average number of employees (FTE)

 

10

127

 

 

 

 

Earnings and diluted earnings on discontinued operations per share (EUR)

 

-

-1

 

 

 

 

Cash flows from discontinued operations

 

 

 

Net cash from operating activities

 

441

10,187

Net cash used in investing activities

 

-37

-26,281

Net cash used in financing activities

 

-

-

Total net cash flow discontinued operations

 

404

-16,094

14. Intangible assets

In thousands of euros

Notes

Trade names and publishing rights

Licences

Goodwill

Software

Assets under construction

Total

 

 

 

 

 

 

 

 

Cost

 

156,983

46,111

335,733

79,796

516

619,139

Cumulative amortisation

 

47,879

10,247

4,471

56,871

-

119,468

Impairment losses

 

19,741

-

104,100

11,474

-

135,315

Carrying amount at 1 January 2013

 

89,363

35,864

227,162

11,451

516

364,356

 

 

 

 

 

 

 

 

Investments

 

555

-

-

3,610

1,607

5,772

Divestments

 

-134

-

-

-

-

-134

Reclassification to assets held for sale

 

-869

-

-1,386

-912

-

-3,167

Disposal held for sale

13.

-690

-

-4,057

-51

-

-4,798

Amortisation

8, 13

-10,445

-7,633

-

-5,385

-

-23,463

Impairment losses

8, 13

-6,816

-

-22,310

-

-

-29,126

Assets under construction in use

 

-

-

-

57

-57

-

Total movements

 

-18,399

-7,633

-27,753

-2,681

1,550

-54,916

 

 

 

 

 

 

 

 

Cost

 

155,845

46,111

330,290

82,500

2,066

616,812

Cumulative amortisation

 

58,324

17,880

4,471

62,256

-

142,931

Impairment losses

 

26,557

-

126,410

11,474

-

164,441

Carrying amount at 1 January 2014

 

70,964

28,231

199,409

8,770

2,066

309,440

 

 

 

 

 

 

 

 

Investments

 

-

-

-

3,876

1,700

5,576

Divestments

 

-549

-

-

-406

-

-955

Disposal through sale of subsidiaries

 

-885

-

-3,010

-

-

-3,895

Amortisation

8, 13

-6,217

-7,663

-

-3,949

-

-17,829

Impairment losses

8, 13

-

-

-40,929

-1,977

-

-42,906

Assets under construction in use

 

-

-

-

2,451

-2,451

-

Total movements

 

-7,651

-7,663

-43,939

-5

-751

-60,009

 

 

 

 

 

 

 

 

Cost

 

107,669

46,111

250,679

52,866

1,315

458,640

Cumulative amortisation

 

42,358

25,543

4,471

42,098

-

114,470

Impairment losses

 

1,998

-

90,738

2,003

-

94,739

Carrying amount at 31 December 2014

 

63,313

20,568

155,470

8,765

1,315

249,431

Trade names and publishing rights concern acquired trade names and publishing rights of Sky Radio Group and Keesing Media Group. Given the strong alliance between brand names and publishing rights, these items are not listed separately. The amortisation period of the other trade names and publishing rights ranges from 5 to 20 years.

The licences relate to the boardcasting rights of Sky Radio Group and concern annual contributions to the Telecom Agency, which are recognised for an amount of 20,568 (2013: 28,231). On 1 September 2011 the licences extended until 1 September 2017. The amortisation period is 6 years. The related non-current liability is accounted for in 26..

Goodwill through business combinations mainly relates to Sky Radio Group (12,421) and Keesing Media Group (91.201). In addition, 12,000 relates to synergy effects of the Telegraaf Drukkerij Groep resulting from acquisitions. Goodwill is believed to be indefinite and is therefore not amortised. All intangible assets have been acquired externally.

Intangible assets under construction

This includes information systems (partly self-developed) at Telegraaf Media Nederland. The information systems will be in use in 2015.

Impairment test for cash-generating units

For the impairment test, intangible assets are allocated to cash-generating units, being the lowest level within TMG for which there are separately identifiable cash flows.

The total carrying value of intangible assets attributed to the cash-generating units as at 31 December 2014 and 2013 is as follows:

Intangible assets

In thousands of euros

2014

2013

 

 

 

TMG Landelijke Media

31,542

36,784

Holland Media Combinatie

13,498

13,818

Facilitating services

12,000

12,000

Sky Radio Group

65,131

116,965

Keesing Media Group

124,648

127,968

Headoffice

2,612

1,905

Total

249,431

309,440

Goodwill

In thousands of euros

2014

2013

 

 

 

TMG Landelijke Media

26,135

29,145

Holland Media Combinatie

12,452

12,452

Facilitating services

12,000

12,000

Sky Radio Group

12,421

53,350

Keesing Media Group

91,201

91,201

Headoffice

1,261

1,261

Total

155,470

199,409

The recoverable amount of the cash-generating units is based on the value in use calculation. The cash-generating units are based on operational segments within TMG. Cashflow projections are based on actual operating results and cash flow forecasts, the budget 2015 and the long-term plans up to and including 2016. The cashflows are based on EBITDA, which include expected investments and net working capital. The cashflows after 2017, which are extrapolated on the basis of 0% growth (2013: 0%), are based on economic lifetime. For Sky Radio Group the cashflows are extrapolated based on a 1.5% growth rate (2013: 1.5%), based on latest external information of the radio industry.

The forecast cash flows are calculated based on a pre-tax discount rate of 9.0% (2013: 9.0%). The discount rate and growth factors were determined on the basis of the risk profile for TMG as a whole. These assumptions have been applied to all cash-generating units in TMG. The values assigned to the key assumptions represent management’s assessment of future trends in the media industry and are based on both external sources and internal sources (historical data). A modification in assumptions and estimates could have consequences for the recoverable amount of an asset and the expected economic lifetime with an effect on the statement of profit and loss.

In 2014 the impairment on intangible assets amounted 40,929 relating to Sky Radio Group. The performance of Radio Veronica remained under pressure over a prolonged period of time. In 2014 the restyling of the station Radio Veronica, has proven to be unsuccessful. The assets of Sky Radio Group in its current state lead to a structural lower future cashflows. Substantial invesmtens are needed in the radio stations to regain the top position in the radio market of the Netherlands. At balance sheet date these investment plans are still under discussion in terms of size and specific nature.

With the aforementioned developments an important subsequent event needs to be mentioned, more on page 150. The subsequent events involves a ruling of the College van Beroep voor bedrijfsleven (CBb or Dutch Trade and Industry Appeals Tribunal) nvolving radio frequency lot A2 and radio frequency lot of Sky Radio. For the assessment on future cash flows from intangible assets Sky Radio Group it is important to determine the impact of this ruling.

TMG management had prolonged debates regarding the financial consequences of this ruling from the CBb. The annual fee for Radio frequency lot A2 amounts to 3,400. The payment of an annual fee is not open for discussion. The estimate of the amount is not virtually uncertain. Based on analysis, TMG substantially abated the annual contribution. TMG will periodically revalue its position.

 

 

Used

 

Growth rate

1%

1.5%

2%

Impairment

46,644

40,929

34,409

 

 

 

 

WACC

8%

9%

10%

Impairment

31,706

40,929

47,748

 

 

 

 

EBITDA 2017

-1,000

-

1,000

Impairment

52,002

40,929

29,866

 

 

 

 

FM licences to pay

10%

-1

-10%

Impairment

43,851

40,929

38,017

  • Since there is a dispute with the government regarding the height of the FM license no explanation is given based on IAS 37.92 as to costs estimated by management about future FM licenses .

In addition to the impairment on goodwill Sky Radio Group in 2014, an impairment on software has been recognised (1,977).

In 2013 the impairment losses on intangible assets amounted 29,126 and concerns discontinued online activities non print related, of among others Relatieplanet, Moviebites and Hyves. Segment is discontinued in 2013.

An increase of 1% of the WACC does not result in an impairment loss at the other segments. In 2013 this also resulted in an impairment loss of nil at all segments. With the following WACC the recoverable amount of all segments is equal to the carrying value: TMG Landelijke Media 25%, Holland Media Combinatie 62% and Keesing Media Group 12%.

15. Property, plant and equipment

In thousands of euros

Notes

Land and buildings

Machines and installations

Other tangible fixed assets

Assets under construction

Total

 

 

 

 

 

 

 

Cost

 

169,742

224,781

61,690

6,354

462,567

Cumulative depreciation

 

134,374

201,677

57,669

-

393,720

Impairment losses

 

1,903

9

55

-

1,967

Carrying amount at 1 January 2013

 

33,465

23,095

3,966

6,354

66,880

 

 

 

 

 

 

 

Investments

 

1,865

547

7,059

7,424

16,895

Divestments

 

-171

-7

-207

-

-385

Assets held for sale

 

-366

-

-

-

-366

Disposal of sold operations

13.

-86

-

-176

-

-262

Depreciation

8, 13

-3,847

-5,083

-3,569

-

-12,499

Impairment losses

 

-

-

-2,723

-

-2,723

Assets under construction in use

 

695

11,447

378

-12,520

-

Total movements

 

-1,910

6,904

762

-5,096

660

 

 

 

 

 

 

 

Cost

 

173,489

203,953

57,558

1,258

436,258

Cumulative depreciation

 

140,031

173,945

50,052

-

364,028

Impairment losses

 

1,903

9

2,778

-

4,690

Carrying amount at 1 January 2014

 

31,555

29,999

4,728

1,258

67,540

 

 

 

 

 

 

 

Investments

 

869

187

1,915

4,432

7,403

Divestments

 

-166

-190

-352

-

-708

Disposal of sold operations

13.

-

-

-42

-

-42

Depreciation

8, 13

-4,211

-4,223

-2,257

-

-10,691

Impairment losses

 

-271

-5,026

-102

-

-5,399

Assets under construction in use

 

138

2,614

29

-2,781

-

Total movements

 

-3,641

-6,638

-809

1,651

-9,437

 

 

 

 

 

 

 

Cost

 

169,025

190,743

45,297

2,909

407,974

Cumulative depreciation

 

138,937

162,347

38,498

-

339,782

Impairment losses

 

2,174

5,035

2,880

-

10,089

Carrying amount at 31 December 2014

 

27,914

23,361

3,919

2,909

58,103

Property, plant and equipment consist of land and buildings, machines and installations of the printing facility and other equipment. The carrying value is inline with the fair value.

Impairment losses

The impairment losses relates to production capacity of printing facilities. The lower demand for print, results in a review of the required capacity needed. It is determined that capacity can be reduced in 2015.

Assets under construction

The item assets under construction mainly concerns an investment in our printing facility in Amsterdam. This project will be completed in 2015.

16. Investments in associated companies

In percentages

Location

2014

2013

 

 

 

 

Participations

 

 

 

AM van Gaal Media B.V.

Amsterdam

20.0%

20.0%

Autowereld B.V

Amsterdam

35.0%

35.0%

Dutch Creative Industry Fund B.V.

Amsterdam

28.6%

40.0%

Adventure Holding B.V., at the end of 2013 in liquidation

Zeist

-

33.3%

In thousands of euros

 

2014

2013

 

 

 

 

Carrying amount

 

 

 

Autowereld B.V.

 

150

150

Other

 

9

184

Total

 

159

334

Loss making associated companies are valued at nil. All negative results of associates are recorded in the consolidated statement of profit and loss.

17. Other receivables

In thousands of euros

2014

2013

 

 

 

Prepaid operational lease

1,779

1,905

Non-current receivables

500

438

Total

2,279

2,343

18. Inventories

In thousands of euros

2014

2013

 

 

 

Raw materials

5,761

5,295

Auxiliary materials

201

260

Other inventories

689

1,533

Total

6,651

7,088

In other inventories (namely e-commerce) an impairment to fair value of 229 (2013: 676) is included. The carrying amount is equal to fair value.

19. Trade and other receivables

In thousands of euros

2014

2013

 

 

 

Trade receivables

47,616

59,724

Other receivables

3,115

6,655

Prepayments and accrued income

18,972

18,349

Total

69,703

84,728

Trade receivables are shown net of impairment losses. During the current year, such losses amounted to 2,506 for bad debts (2013: 1,747). For more information see note 31., 31..

Fair value

For current receivables, the nominal value is considered to reflect the fair value.

20. Cash and cash equivalents

In thousands of euros

2014

2013

 

 

 

Bank

41,260

25,499

Call deposits

-

15,812

Total

41,260

41,311

At balance sheet date nil (2013: 15,812) was placed in deposits. Bank balances are unrestricted and deposits are available within a week, with the exception of issued bank guarantees see 34.. The fair value is deemed equal to the nominal value.

21. Assets and liabilities held for sale

In thousands of euros

2014

2013

 

 

 

Assets

 

 

Intangible assets

3,204

3,167

Property, plant and equipment

4,227

5,183

Deferred tax assets

246

-

Trade and other receivables

33

18

Cash and cash equivalents

1,096

692

Total

8,806

9,060

 

 

 

Liabilities

 

 

Deferred tax liabilities

406

217

Accounts payables and other current liabilities

510

695

Total

916

912

Assets held for sale amounted in 2014 8,806 (2013: 9,060), involves both buildings of facilitating services and Relatieplanet.nl. An impairment loss of 650 (2013: 2,700) occured on the properties. A sales plan is prepared for these buildings and a real estate agent is hired. Early 2014 a preliminary sale agreement is signed concerning the properties. A delay in the sale of these buildings occured, however TMG stays committed in selling these properties.


22. Shareholders' equity

Issued capital

At 31 December 2014 the authorised share capital comprised 99,999,040 ordinary shares, 100,000,000 preference shares and 960 priority shares, which were issued and paid up as follows:

Number of shares

 

 

 

2014/2013

 

 

 

Authorised share capital

Issued and paid up

 

 

 

 

 

On issue as at 31 December:

 

 

 

 

Ordinary shares

 

 

99,999,040

46,350,000

Preference shares

 

 

100,000,000

-

Priority shares

 

 

960

960

All shares have been paid up and have a nominal value of € 0.25. No preference shares have been issued.

The holders of ordinary shares and priority shares receive a maximum primary dividend of five percent of the nominal amount of the shares. The remaining profit is at the disposal of the meeting of shareholders.

The holders of ordinary shares and priority shares are entitled to cast one vote per share during the meeting. Each TMG shareholder has access to the meeting of shareholders and the right to cast a vote. A summary of the legal and statutory provisions relating to the appropriation of the profit and the other statutory rights associated with the ordinary shares, priority shares and preference shares is included under #INTRA110682#Other Information#INTRA110682#..

The right to issue TMG preference shares is granted by Stichting Beheer van Prioriteitsaandelen Telegraaf Media Groep N.V. to Stichting Preferente aandelen Telegraaf Media Groep N.V. TMG has an option to issue preference shares, which will then be managed by Stichting Preferente aandelen Telegraaf Media Groep N.V. At present, no preference shares have been issued. The provisions in the articles of association governing remuneration of preference shares are in line with the market. The option to issue preference shares is valued at nil.

Repurchased shares

Ultimo 2014 and 2013 TMG had none outstanding repurchased ordinary shares.

23. Dividend

In 2014 TMG did not pay out dividend (2013: € 6.50 per share).

No profits were generated in the financial year 2014, consequently there will be no profits at the disposal of the General Meeting of Shareholders relating to the financial year 2014.


24. Earnings per share

Basic earnings per share

The calculation of the basic earnings per share as at 31 December 2014 is based on the result attributable to ordinary shareholders of -33,806 (2013: 177,597) and a weighted average number of ordinary shares which has been outstanding during 2014 of 46,350,000 (2013: 46,350,000), as shown below:

In thousands of euros

 

 

2014

2013

 

 

 

 

 

Earnings per share

 

 

 

 

Result attributable to equity holders of ordinary shares in Telegraaf Media Groep N.V.

 

 

-33,806

177,597

Weighted average number of ordinary shares

 

 

46,350,000

46,350,000

Basic earnings per share (EUR)

 

 

-0.73

3.83

Diluted earnings per share

The calculation of the diluted earnings per share at 31 December 2014 is based on the result attributable to ordinary shareholders of -33,806 (2013: 177,597) and a weighted average number of ordinary shares, after adjustment in line with all potential diluting effects on the ordinary shares, which has been outstanding during 2014, of 46,350,000 (2013: 46,350,000). No shares were diluted in 2014 and 2013.

25. Non-controlling interests

Movements in non-controlling interests is as follows:

In percentages

2014

2013

 

 

 

Sienna Holding B.V.

10%

10%

Classic FM V.o.f.

25%

25%

Groupdeal B.V.

-

40%

ZOOM.IN Nederland B.V.

-

30%

Ticketsplus B.V.

-

25%

In thousands of euros

2014

2013

 

 

 

Balance as at 1 January

-2,164

-2,417

 

 

 

Share of profit for the year

-4,281

277

Movement by other comprehensive income after tax

-48

-24

Movement by sale of subsidiaries

-598

-

Movement by acquisition of non-controlling interest

-927

-

Balance as at 31 December

-8,018

-2,164

 

 

 

Movement by purchasing interest is acquistion of remaining outstanding shares of Groupdeal B.V. from 60% to 100% in August 2014. In the first halfyear of 2014 TMG sold its share in ZOOM.IN Nederland B.V. (70%) and Ticketsplus B.V. (75%). These subsidiaries were sold in the first six months of 2014.

26. Interest-bearing loans and borrowings

This note provides information on the contractual terms of TMG’s interest-bearing loans and borrowings. For more information about TMG’s exposure to interest rate and foreign currency risk, see 31..

 

 

 

2014

In thousands of euros

Total

Current

Non-current

 

 

 

 

Interest bearing loans

11,497

-

11,497

Other financing

19,112

8,986

10,126

Total

30,609

8,986

21,623

 

 

 

 

 

 

 

 

Interest bearing loans

11,536

-

11,536

Other financing

26,187

9,192

16,995

Total

37,723

9,192

28,531

In thousands of euros

Currency

Nominal interest rate

Nominal value

Year of maturity

Carrying amount 2014

Carrying amount 2013

 

 

 

 

 

 

 

Interest-bearing loans

 

 

 

 

 

 

Shareholders loan Veronica Holding B.V. to Sienna Holding B.V.

EUR

4,1% (2013: 4,1%)

8,400

-

11,497

11,536

Bank financing – Revolving credit facility

EUR

3-mnths Euribor + 1,50%

-

-

-

-

Total

 

 

 

 

11,497

11,536

 

 

 

 

 

 

 

Other financing

 

 

 

 

 

 

Non-current liabilities licences Sky Radio Group

EUR

3% (2013: 3,0%)

-

2013-2017

15,479

23,219

Acquisition payables

EUR

 

-

-

3,489

2,731

Other non-current liabilities

EUR

 

-

-

144

237

Total

 

 

 

 

19,112

26,187

Terms and debt repayment schedule

For all loans, the effective interest is equal to the nominal interest.

Interest-bearing loans

On 1 November 2012 a bank financing agreement is closed with a consortium of three banks.The facility has a maturity up to three years and consist of an amortised fixed part and a revolving credit facility. The bank financing agreement has market-based convenants limited on 2 times NEBITDA. In addition, interest expense over the relevant period may not exceed 1/5th of NEBITDA. Both conditions are met in 2014. No collaterals have been given for these loans. The bank financing agreement is measured including additional costs. In 2013, the amortised part of the loan is completely repaid. At the end of 2014 the revolving credit facility is not used. The bank financing agreement expires in November 2015 and the extension of this convenant is currently discussed with the banks.

Other financing

The obligations of Sky Radio Group licenses relate to annual payments to the Telecom Agency, prior to 1 September 2017. The annual contributions to the Telecom Agency are cumulated, discounted and classified under other financing for 15,479 (2012: 23,219). The intangible assets are amortised on the contractual period. Interest related to the financial obligation is accounted for as financial burden, where the annual payment is deducted on the long-term obligation. The fair value of the liabilities deviates not materially. Early 2015 the College van Beroep voor het bedrijfsleven (CBb or Dutch Trade and Industry Appeals Tribunal) ruled in the case of FM license permits of Radio Veronica and Sky Radio. For more on this ruling see overige gegevens.

The acquisition payables includes liabilities concerning the acquisition of Sky Radio Group, Groupdeal and Metro. Related to the acquisition of Metro partial payments will be made untill 2017.

27. Post-employment benefit liabilites

Defined contribution plan

The pension schemes of Sky Radio Group and Keesing Media Group and a part of the Amsterdam and Alkmaar companies of TMG is executed by Stichting-Telegraafpensioenfonds 1959. The pension is a restricted indexated average salary regulation. The only obligation of the employer is the payments of premiums.

Gross commitment for defined benefit pension rights

TMG has a number of defined benefit plans under which a portion of the (former) employees in the Netherlands is entitled to an additional benefit. The arrangements concerns:

defined benefit pension plans

• Additions to pensions (guarantee arrangements).

Workers in service until the end of 2005 and at that time participant in Stichting- Telegraafpensioenfonds 1959, participate in a guarantee arrangement. New employees from January 1, 2006 were excluded of this guarantee plan, where a percentage of the final pay has been guaranteed. End of 2012, the commitment was adjusted such that the effect of future salary growth is excluded, therefore, the scheme is frozen. The scheme is administered at StichtingTelegraafpensioenfonds 1959. Keesing Media Group has a guaranteed indexation scheme. The indexation scheme relates to the annual rise of rights build up with 50% of price inflation and is financed by the employer. The scheme is executed by an insurance company. The final pay plan guaranteed to several employees of Sky Radio Group is discontinued per 2014. The employees join as at 1 January 2015 the scheme of Stichting-Telegraafpensioenfonds 1959 (defined contribution plan). The level of the allowance is depending on seniority. Furthermore there are plans for employess of keesing France to provide a benefit retirement.

• Allowances for the healthcare of pensioners, disability and early retirement supplements.

This scheme will end in the long term, because from 1 january 2006 this scheme is no longer available for new retirees.

As a consequence of termination of the final pay plan of Sky Radio Group and expiration of the early retirement scheme in 2014 settlements are recognised in personell costs at 1,400 (2014: nil).

other personnel benefit plans

• Additions to disability and jubilee benefits. In 2013, the jubilee scheme of TMG Landelijke Media harmonised with Holland Media Combinatie and resulted in a release within the arrangement of 2,189 attributable to profit and loss.

Furthermore, the pension fund 'Pensioenfonds Grafische Bedrijven'(pension scheme for employees in the printing and allied trades), whose regime also qualifies as a defined pension scheme, has informed TMG that they are not able to provide any detailsfor the calculation of (our share in) surpluses and deficits. The plan qualifies as a defined pension scheme but is processed as a defined contribution plan.

TMG is not responsible for any shortfall in an early retirement/pension plan, nor is it required to make up any shortfall. The referenced plan had a coverage ratio below the set by law of 105% at the end of 2013. The pension fund prepared a recovery plan and submitted it to DNB. The coverage ratio of the Pensioenfonds Grafische Bedrijven was at the end of 2014 104.2%, just under the minimum set by law. The possibility that the future pension contributions for the relevant schemes will be increased cannot be precluded.

The principal actuarial valuation assumptions at balance sheet date

In weighted averages

 

2014

2013

 

 

 

 

Discount rate at 31 December

 

1,10% - 2,30%

3.25%

Duration

 

5,6 - 29,3

5,4 - 14,6

Expected return on plan assets at 31 December

 

1.00%

1.00%

Expected rates of salary increase

 

1.00%

2.00%

Adjustment for inflation

 

2.00%

2.00%

Increase in social security benefits

 

1.00%

2.00%

Mortality table applied

 

AG 2014

AG 2012-2062

The expected return on plan assets is the weighted average expected return, based on the expected investment mix of shares (40%), and fixed-interest securities (60%). The actual return in 2014 amounted between 1.10% and 2.30% (2013: 3.25%) on investments at StichtingTelegraafpensioenfonds 1959.

Developments in the net provision for employment benefit liabilities

In thousands of euros

 

2014

2013

 

 

 

 

Net provision as at January 1

 

8,976

14,389

Net expense recognised in profit and loss statement

 

-137

-1,214

Net expense recognised to other comprehensive income

 

1,850

3,093

Contributions paid

 

-1,986

-7,292

Total net provision according to balance sheet

 

8,703

8,976

 

 

 

 

Whereof:

 

 

 

Pension plans

 

4,812

5,921

Other personnel benefits

 

3,891

3,055

Net provision as at December 31

 

8,703

8,976

Specification of the recognised liability for defined benefit obligations

In thousands of euros

 

2014

2013

 

 

 

 

Present value of unfunded obligations

 

3,891

7,561

Present value of funded obligations

 

12,491

13,575

Present value of obligations

 

16,382

21,136

 

 

 

 

Fair value of plan assets

 

-12,640

-20,568

Present value of net obligations

 

3,742

568

 

 

 

 

Effect on asset ceiling

 

4,961

8,408

Recognised liability for defined benefit obligations

 

8,703

8,976

The effect of the asset ceiling concerns the guarantee arrangement of defined benefit plan. The arrangement is frozen. The receivable is not in right enforceable and therefore an asset ceiling is stated.

Movements in present value obligation of defined benefit pension schemes

In thousands of euros

Notes

2014

2013

 

 

 

 

As at 1 January

 

21,136

25,795

 

 

 

 

Service costs

 

516

502

Past service costs

 

356

-1,963

Result on jubilee plans

 

87

-106

Termination settlement

 

-3,316

-

Interest expenses

 

674

567

Contributions

 

821

1,488

Actuarial losses (gains)

 

-1,815

-402

Payments

 

-2,077

-4,745

As at 31 December

 

16,382

21,136

The decrease of movements in present value obligation is caused by termination of early retirement scheme and a limited final pay scheme at Sky Radio Group.

Movements in fair value of plan assets

In thousands of euros

 

2014

2013

 

 

 

 

As at 1 January

 

20,568

19,145

 

 

 

 

Contributions

 

2,807

8,780

Interest on plan assets

 

694

509

Termination settlement

 

-1,916

-

Actuarial results

 

-7,385

-3,081

Addional costs

 

-51

-40

Payments

 

-2,077

-4,745

As at 31 December

 

12,640

20,568

Specification of plan assets

In thousands of euros

 

2014

2013

 

 

 

 

Property shares

 

280

745

Shares

 

1,649

4,094

Bonds

 

3,304

8,347

Deposits

 

162

113

Plan assets with insurance companies

 

7,245

7,269

As at 31 December

 

12,640

20,568

Effects on assets ceiling

In thousands of euros

 

2014

2013

 

 

 

 

As at 1 January

 

8,408

7,739

 

 

 

 

Interest

 

273

255

Actuarial results

 

-3,720

414

As at 31 December

 

4,961

8,408

Recognised in the statement of profit and loss

In thousands of euros

Notes

2014

2013

 

 

 

 

Service costs

 

516

502

Past service cost

 

356

-1,963

Result from jubilee arrangement

 

87

-106

Termination settlement

 

-1,400

-

Additional costs

 

51

40

Total contribution to defined benefit schemes

 

-390

-1,527

 

 

 

 

Other personnel benefit plan costs

 

609

-2,108

Defined benefit pension plan costs

7.

-999

581

Total contribution to defined benefit schemes

 

-390

-1,527

Contribution to defined contribution schemes1

7

12,986

13,469

Costs related to personnel benefit plans

 

12,596

11,942

Interest

 

253

313

Total

 

12,849

12,255

  • Stated under discontinued operations 29 (2012: 283)

TMG estimates the contributions to be paid under the defined benefit schemes during 2014 at 11,609 (2014: 14,244), as far as can be estimated reasonably.

Actuarial results recognised in other comprehensive income

In thousands of euros

Notes

2014

2013

 

 

 

 

Effect of changes in economical assumptions on the liabilities

 

1,861

74

Effect of changes in life expectancy

 

-41

-

Effect of experience adjustments on the liabilities

 

-3,635

-476

Rate of return on plan assets (excluding interest income)

 

7,385

3,081

Changes in the effects on assets ceiling (exluding interest expense)

 

-3,720

414

Total

 

1,850

3,093

Sensitivity analyses

The sensitivity analyses below have been determined based on different assumptions. An interval of 0.25% is used. The mutual dependency of the assumptions is excluded.

In thousands of euros

min 0.25%

assumed

plus 0.25%

 

 

 

 

Discount rate

0,85% - 2,05%

1,10% - 2,30%

1,35% - 2,55%

Pension liability year-end

17,016

16,382

15,789

Service costs 2014

289

283

276

 

 

 

 

Salary inflation

0.75%

1.00%

1.25%

Pension liability year-end

16,322

16,382

16,445

Service costs 2014

278

283

289

 

 

 

 

Price inflation

1.75%

2.00%

2.25%

Pension liability year-end

16,394

16,382

16,370

Service costs 2014

284

283

283

 

 

 

 

Indexation of active members

0.75%

1.00%

1.25%

Pension liability year-end

16,438

16,382

16,332

Service costs 2014

285

283

282

 

 

 

 

Indexation of inactive members pensions and of pensions in payment

0.75%

1.00%

1.25%

Pension liability year-end

15,857

16,382

16,943

Service costs 2014

283

283

284

28. Provisions

In thousands of euros

 

2014

2013

 

 

 

 

 

 

 

 

Restructuring provision

 

24,025

35,112

Onerous contracts

 

1,453

1,757

Disputes

 

3,075

4,000

 

 

28,553

40,869

 

 

 

 

Non-current

 

274

-

Current

 

28,279

40,869

Carrying value as at 31 December

 

28,553

40,869

Restructuring provision

In thousands of euros

Notes

2014

2013

 

 

 

 

Balance as at 1 January

 

35,112

32,454

 

 

 

 

Provisions made during the financial year

7.

6,129

37,517

Release

7.

-5,915

-215

Recognised in the income statement

 

214

37,302

 

 

 

 

Provisions used

 

-11,301

-34,644

Balance as at 31 December

 

24,025

35,112

In 2013 additional reduction measures were taken which will lead to a total FTE reduction of 700 at the end of 2014. During 2014 a delay in the restrucuring plan occured, mainly at Holland Media Combinatie. The FTE reduction will be effected during 2015. The termination of Rotomega printing plant in France is completed (Keesing Media Group). The reorganisation plans have the consent of the CWC on main lines, but other parts of the plans still need to be submitted by the individual Works Councils of the relevant subsidiaries. The reorganisation plans are communicated with the TMG employees in several ways, making a justified expectation by the employees that the reorganisation will take place. Different parts of the reorganisation are already set in motion after agreement of the Works Council. The restructering provision concerns the commitments related to job placement services and the discharge of employees at publishers of print products, facilitary companies and headquarters. A change in assumptions and estimates may affect the actual costs of the restructuring, including choice of outflow (buyout or job replacement services), the social plan and time. The current part amounts to 24,025 (2013: 35,112).

Onerous contracts

In thousands of euros

 

2014

2013

 

 

 

 

Balance as at 1 January

 

1,757

1,159

 

 

 

 

Provisions made during the financial year

 

2,151

1,122

Recognised in the income statement

 

2,151

1,122

 

 

 

 

Provisions used

 

-2,455

-524

Balance as at 31 December

 

1,453

1,757

The provision for onerous contracts relates mainly to rented property which is no longer in use. The future lease payments, until the end of contract date, are recognised.

The provision for litigation concerns claims made by third parties against TMG. The disputes have emerged from the ordinary activities of TMG. A further explanation cannot be given due to potential adverse effects for the entity.

29. Deferred tax assets and liabilities

The deferred tax assets and liabilities recognised can be allocated as follows at the end of the financial year:

 

 

 

2014

In thousands of euros

Assets

Liabilities

Balance

 

 

 

 

Intangible assets

-

-19,538

-19,538

Property, plant and equipment

3,046

-

3,046

Post-employment liabilities schemes

962

-

962

Provisions

5,763

-

5,763

Carry-forward loss compensation

29,337

-

29,337

 

39,108

-19,538

19,570

Reclassification assets and liabilities held for sale

246

-406

-160

Net tax asset/liability (-)

38,862

-19,132

19,730

 

 

 

2013

In thousands of euros

Assets

Liabilities

Balance

 

 

 

 

Intangible assets

-

-20,468

-20,468

Property, plant and equipment

1,495

-

1,495

Post-employment liabilities schemes

419

-

419

Provisions

6,514

-

6,514

Carry-forward loss compensation

25,978

-

25,978

Other items

101

-

101

 

34,507

-20,468

14,039

Reclassification assets and liabilities held for sale

-

-217

-217

Net tax asset/liability (-)

34,507

-20,251

14,256

Unrecognised deferred tax assets in de statement of financial position

With regard to (start-up) losses of a few subsidiaries, no deferred tax assets were recognised on the balance sheet, because the expectation is that these will not be realised in short time. The collection of the deferred tax asset is depending on future fiscal profits. At the end of 2014, unrecognised deferred tax assets amounted to 2,792 (2013: 2,184).

Movements in temporary differences during the year

In thousands of euros

Balance 1 January 2014

Recognised in income statement

Other comprehensive income

Other movements

(De-) Consolidated

Balance 31 December 2014

 

 

 

 

 

 

 

Intangible assets

-20,468

1,780

-

-

-850

-19,538

Property, plant and equipment

1,495

1,551

-

-

-

3,046

Post-employment liabilities schemes

419

80

463

-

-

962

Provisions

6,514

-751

-

-

-

5,763

Carry-forward loss compensation

25,978

3,359

-

-

-

29,337

Other items

101

-101

-

-

-

-

Net tax asset/liability (-)

14,039

5,918

463

-

-850

19,570

In thousands of euros

Balance 1 January 2013

Recognised in income statement

Other comprehensive income

Other movements

(De-) Consolidated

Balance 31 December 2013

 

 

 

 

 

 

 

Intangible assets

-24,627

4,286

-

-127

-

-20,468

Property, plant and equipment

608

887

-

-

-

1,495

Post-employment liabilities schemes

610

-964

773

-

-

419

Provisions

6,345

169

-

-

-

6,514

Carry-forward loss compensation

14,315

11,633

-

30

-

25,978

Other items

-164

164

-

101

-

101

Net tax asset/liability (-)

-2,913

16,175

773

4

-

14,039

30. Accounts payable and other current liabilities

In thousands of euros

2014

2013

 

 

 

Subscriptions paid in advance

39,227

41,158

Other amounts paid in advance

4,460

4,961

Trade payables to suppliers

20,013

25,328

Employee benefits payable (holidays/-allowance)

21,691

24,333

Other taxes and social security premiums

14,726

17,566

Other liabilities and deferred income

32,382

36,910

Total

132,499

150,256

The drop in trade payables to suppliers is mainly the effect of the cost reduction programme and shorter terms of payments. Other liabilities and deferred income consist of (estimates for) editorial, distribution expenses, other general expenses, returned products and commissions to be paid. The fair value of the liabilities does not differ from the nominal value recognised here.

31. Financial risk management

TMG recognises the market, credit, currency and interest rate risk involved in regular business operations. The current economic situation strengthened the pressure on advertisement revenues, of which TMG is depending on for a significant part. TMG has developed different scenarios to absorb fluctuations in advertising revenues. Part of these scenarios is a cost reduction programme of € 120 million.This program is delayed during the second half of 2014. The planned reorganisation will be realised in the first six months of 2015. The trends in the price of paper can also have a substantial effect on the business result.

The Executive Board has overall responsibility for the establishment and oversight of TMG’s Risk control framework. The Executive Board makes an annual assessment of the strategic risks at both the central and decentralised level and evaluates the developments and monitoring of the strategic risks quarterly.

TMG’s risk management policies are established to identify and analyse the risks faced by TMG, 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 TMG’s activities. TMG, 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. Group Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Executive Board and Audit Committee.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and share prices will affect TMG’s income or the value of its investment of financial instruments in a negative way. The objective of market risk management is to manage and control market risk exposures within acceptable ranges.

Due to the constant pressure on the subscription and advertising revenues of TMG Landelijke Media and Holland Media Combinatie have resulted in an increased cost reduction program in 2013.

TMG has a bank financing facility (see enclosure on interest-bearing loans ans borrowings) which expires at the end of 2015. At composing the annual report 2014 the company is in a advanced stadium to renew the financing agreement. Except for the interest rate swaps, TMG has a policy of not using any forward and swapcontracts and not hedging future contracts.

Credit risks

Credit risk arises principally from TMG’s receivables if major customer fails to meet its contractual obligation. The (industry-wide) terms of payment applied, the relatively limited dependence on individual customers and the historical payment behaviour of our customers make it unnecessary to use financial instruments to limit this risk. The majority of the circulation revenues are paid in advance. The credit risk is principally concentrated in The Netherlands. The credit risk improved compared to 2013. 

Impairment losses

Customers are required to pay within pre-set time limits. Exceeding the deadline results in service deliveries being halted. Customers are primarily media outlets, companies and subscribers. The aging of trade receivables at balance sheet date was:

In thousands of euros

Total

Not past due

Past due 30 - 60 days

Past due 60 - 90 days

Past due 90 - 180 days

Past due 180 - 360 days

More than 360 days

 

 

 

 

 

 

 

 

Balance as at 31 December 2014

52,435

38,898

7,092

1,611

1,539

1,138

2,157

Balance as at 31 December 2013

67,398

51,783

7,281

1,804

2,484

2,293

1,752

The aging improved in 2014. TMG has established an impairment risk provision for estimated losses on trade receivables. The impairment is based on payment arrears and the stipulated payment conditions. Changes in the impairment provision for trade receivables during the year were as follows:

In thousands of euros

2014

2013

 

 

 

Balance as at 1 January

7,674

8,124

Discontinued operations

-

-72

Additions

2,506

1,747

Use

-5,361

-2,125

Balance as at 31 December

4,819

7,674

Currency risk

TMG incurs currency risks to a very limited extent due to activities outside the euro zone, namely Denmark, Sweden and Poland. The net cash in and outflows of entities and their timing is such that no significant currency positions are created as a result. Sensitivity of TMG to foreign exchange rates is therefore very small. At the end of 2014 TMG had no forward contracts. TMG has the policy of responding to significant currency exposures by concluding forward contracts to cover the risks over a period of one year. For an individual entity within TMG, a currency exposure is deemed to be significant if the size of revenue in any calendar month exceeds 500, and the cash flow has a probability of more than 50%.

Interest-rate risk

The most relevant interest-rate risk for TMG involves a mismatch between interest payments and the cash flows from financed assets. End of 2014 TMG is a recipient of interest since the net debt position is more than compensated by the interest bearing cash and cash equivelants position. Given the limited size of the debt position, TMG is hardly sensitive to interest rate fluctuations and therefore nor do they have any significant influence on TMG’s financial position

Other market-price risk

Of the commodities traded on the global market, TMG only purchases paper, but to the extent that fluctuations in its price can have a substantial impact on the operating result. TMG has decided not to hedge the risk of increasing paper prices because TMG already has long-term contracts with paper suppliers and large manufacturers of paper have taken up positions on the futures market making it insufficiently liquid to hedge significant volumes in a manner that would be attractive to TMG.

Liquidity risk

TMG has hardly any liquidity risk given the limited financial liabilities and the liquidity position. Liquidity risk is the risk that TMG will not be able to meet its financial obligations as they fall due. The aim of liquidity risk management is to maintain sufficient liquidity in order, as far as possible, to cover existing and future financial liabilities under normal and difficult circumstances and without incurring unacceptable losses or damaging the reputation of TMG. At balance-sheet date an unsecured 75,000 lending facility is available without expiry date. Interest rate is a three months Euribor with a 1.50% margin. On balance sheet date nil is used. The financing agreement expires in november 2015, momentarily TMG discusses with the banks to renew the financing agreement.

Fair value of financial liabilities

The fair value of financial liabilities are categorised into different levels of the fair value hierarchy:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;

• Level 3 inputs are unobservable inputs (unobservable market activity) for the asset or liability.

The carrying amount of the financial liabilities corresponds to its fair value. The interest-bearing loans and borrowings, trade and other payables are categorised and measured under level 3 (entity-specific measurement). In 2014 and 2013 no transfers occurred between the three levels.

 

Maturity profile of TMG’s financial liabilities:

In thousands of euros

Total

 

6 months or less

7-12 months

1-2 years

2-5 years

More than 5 years

2014

 

 

 

 

 

 

 

Interest-bearing loans and borrowings1

30,959

 

-

9,336

9,502

624

11,497

Trade and other payables

132,499

 

122,539

9,960

-

-

-

Total

163,458

 

122,539

19,296

9,502

624

11,497

 

 

 

 

 

 

 

 

Interest-bearing loans and borrowings1

38,218

 

1,299

8,388

8,794

8,201

11,536

Trade and other payables

152,013

 

139,621

12,392

-

-

-

Total

190,231

 

140,920

20,780

8,794

8,201

11,536

  • Including interest

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 business. The Executive Board monitors the return of capital, which TMG defines as the net operating income divided by total shareholders’ equity, excluding non-controlling interests. The Executive Board also monitors the level of dividends to ordinary shareholders. From time to time TMG purchases its own shares on the market. Buy and sell decisions are made on a specific transaction basis by the Executive Board within limits set by the Supervisory Board and the annual meeting of shareholders; TMG does not have a defined share-buy-back plan. At the moment there is no share-buy-back plan valid.

32. Off balance sheet assets and liabilities

Non-cancellable off balance sheet operational leases expire as follows:

In thousands of euros

2014

2013

 

 

 

< 1 year

23,595

25,741

1-5 years

29,095

45,349

> 5 years

787

895

Total

53,477

71,985

The operational lease agreements consist of long term obligations related to rent of buildings, lease cars, ICT services and other services. At the end of 2014 TMG has ended the contract with Atos and during 2015 TMG will transition to a new workplace management system provider.

In financial year 2014, an expense of 10,473 was included in the statement of profit and loss for operational leasing (2013: 8,615)

Other off balance sheet liabilities

Telegraaf Drukkerij Groep B.V. has agreements with paper suppliers for which the liabilities within 1 year amount to 12,900 (2013: 16,150) and within 1 and 5 years amount to nil (2013: 12,500). Furthermore an amount of 940 (2013: nil) concerning short term arrangements for ink and print sheets.

TMG has a long term agreement for printing puzzle magazines and newspapers with a third party. The maximum purchase obligation between one and three years is 17,000 (2013: 17,000).

A liability to a supplier, of 3.275 relating to the conversion of the printing facility.

Litigation

A number of TMG group companies face legal proceedings. These cases primarily concern employment relations, disputes and rectifications of publications. We have every faith in a positive outcome in the case of all these proceedings and do not expect them to have a significant effect on TMG’s consolidated financial position.

Off balance sheet assets

Sky Radio Group

On 8 January 2015, the Trade and Industry Appeals Tribunal (CBb) issued a ruling in the legal proceedings instituted by the Sky Radio Group against the State. The lawsuit pertained to the € 20.4-million fee that the Sky Radio Group is required to pay for the FM licensing permit over the period 2011-2017 for the qualified A2 Lot (‘Radio Veronica’). The CBb ruled in favour of the Sky Radio Group. The ruling is not open to any appeal or objection. In its ruling the CBb declared Sky Radio Group’s appeal to be founded. In addition, the CBb has nullified the regulations attached to the license. Apart from that the permit was upheld.

To determine its position, TMG consulted with various advisors concerning an assessment of the subsequent negotiations and discussions with the State. These consultations also considered the substantive deliberations of the CBb. These considerations do not appear to preclude that the Minister, acting on his own initiative (in his official capacity) may attempt to impose a new financial payment obligation for the use of the A2 Lot. In addition, the CBb furthermore has not ruled whether the A2 Lot should be considered to have a value that is less than or equal to zero. Nor did the ruling specify that the Minister therefore should have set the payment amount to zero.

TMG has furthermore concluded that it is not possible to rule out that the ruling, in an indirect way, could have negative implications for Sky Radio Group. This is related to the consideration that the Minister can decide whether the current radio permits at the end of their current term will once again be extended or whether there will be an entirely new division. The latter could entail an auction. The uncertainty this entails is whether Sky Radio Group will continue to be able to broadcast on the A2 Lot, as well as the lack of clarity concerning the related financial conditions.

On the basis of its analyses, acquired advice and deliberations, TMG concludes that the consequences of the CBb ruling are uncertain. It is impossible to produce a reliable estimate of the direct consequences. In the balance sheet as at 31 December 2014, the licenses in relation to the obligations arising from Lot A2 are recorded under Intangible assets, Note 4, for an amount of 9,050 (2013: 12,422), while the related liability is explained in Note 26. Should any new facts come to light in 2015, these items can change.

For a further analysis of the potential consequences of the CBb ruling see the explanation of the impairment in 14..

TMG Landelijke Media

TMG Landelijke Media has an off balance sheet asset of 366 for the purchase of video views.

33. Investment commitments

In the financial year 2013 and 2014, TMG did not enter into significant agreements for development of software or other investments, other than the mentioned commitments in 32..

34. Contingent liabilities

At the end of 2014 bank guarantees of 8.687 (2013: 9.008) were issued to cover FM license obligations and rental agreements.

35. Related parties

Identity of related parties

TMG has a related party relationship with its subsidiaries, associates (see section 16 of the notes), joint arrangements (see section 35 of the notes), Stichting-Telegraafpensioenfonds 1959 and Stichting Preferente Aandelen Telegraaf Media Groep N.V. A list of Telegraaf Media Groep N.V. participations has been published at the Chamber of Commerce in Amsterdam.

The following shareholders have, at 31 December 2014, following the AFM register, an interest of more than 20% in TMG's capital:

• Stichting Administratiekantoor van aandelen Telegraaf Media Groep N.V.

• VP Exploitatie N.V.

• Dasym Investment Strategies B.V.

Transactions with Executive Board and Supervisory Board

For a specification of the remunerations per manager please refer to the company financial statements (Note 8). The note on related parties refers to TMG senior management, namely the Executive and Supervisory Boards. The total remuneration is included in personnel costs (see section 7 of the Notes to the consolidated financial statements).

Other related party transactions

Transactions with related parties relate to associated companies (revenue 2014: nil; revenue 2013: nil). Receivables with related parties were 188 (2013: nil) as at 31 December for which a provision is made of 188 (2013: nil). In 2014 TMG paid 11,095 (2013: 12,282) premium to Stichting-Telegraafpensioenfonds 1959. Including employees contributions the premium amounted to 16,409 (2013: 18,265). All outstanding balances with these related parties are priced on an arm’s length basis and are settled in cash within six months of the reporting date. None of the balances is secured.

36. Subsequent events

Reference is made to Overige gegevens for an explanation on the subsequent events.

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