The Annual Accounts were prepared in accordance with the legal requirements for the Annual Accounts of banks contained in Section 14 Title 9 Book 2 of The Netherlands Civil Code. The Annual Accounts relate to the thirty-first financial year of Triodos Bank NV.
The financial data for Triodos Bank NV and group companies have been fully consolidated. The financial data for joint ventures have been consolidated pro rata to the participating interest held, if consolidation is necessary in order to provide a transparent overview of the assets and result of Triodos Bank NV.
In accordance with Section 2:402 of The Netherlands Civil Code, the company profit and loss account just contains a breakdown of the net result into the Result on participating interests and the Other result.
Statement of equity participations in accordance with Sections 2:379 and 2:414 of The Netherlands Civil Code:
- Kantoor Buitenzorg BV in Zeist, participating interest 100%, group company, fully consolidated;
- Kantoor Nieuweroord BV in Zeist, participating interest 100%, group company, fully consolidated;
- Stichting Triodos Beleggersgiro in Zeist, participating interest 100%, group company, fully consolidated;
- Triodos Assurantiën BV in Zeist, participating interest 100%, group company, fully consolidated;
- Triodos Cultuurbank BV in Zeist, participating interest 100%, group company, fully consolidated;
- Triodos Custody BV in Zeist, participating interest 100%, group company, fully consolidated;
- Triodos Finanz GmbH in Frankfurt am Main, participating interest 100%, group company, fully consolidated;
- Triodos Investment Management BV in Zeist, participating interest 100%, group company, fully consolidated;
- Triodos MeesPierson Sustainable Investment Management BV in Zeist, participating interest 50%, joint venture with joint control, consolidated pro rata to the participating interest held;
- Triodos Nieuwbouw BV in Zeist, participating interest 100%, group company, fully consolidated.
Unless stated otherwise, assets are stated at cost, whereby in the case of receivables a provision for doubtful debt is recognised.
Transactions in foreign currencies
Assets and liabilities related to transactions denominated in foreign currencies are converted at the spot rate on the balance sheet date. Transactions and the resulting income and charges in foreign currencies are converted at the rate applicable on the transaction date. The resulting exchange rate differences are accounted for in the profit and loss account under ‘Result on financial transactions’.
Business operations abroad
Assets and liabilities relating to activities in business units abroad located outside the Eurozone are converted at the spot rate as at the balance sheet date. Income and expenses for activities in foreign business units outside the Eurozone will be converted at the exchange rate as at the transaction date. Any exchange rate differences arising from this will be charged or credited directly to the equity.
Banks and loans
Receivables on banks and the loans are valued at amortised cost, after deduction of a provision for doubtful debts. The value adjustment for doubtful debts is determined per item, with the value of the collateral provided being taken into account.
Government paper and interest-bearing securities
All government paper and interest-bearing securities are held in the investment portfolio. They are stated at redemption value after deduction of provisions for doubtful debts. Differences between the acquisition price and the redemption value are amortised over the remaining life of the securities. Realised changes in the value are recognised in the profit and loss account.
Shares are not held in the trading portfolio and are valued at cost.
Participating interests where significant influence can be exercised will be valued at net asset value.
Participating interests where no significant influence can be exercised will be carried at fair value. In the case of a participating interest that is listed on an active stock exchange, the fair value will be deemed to be equal to the most recently published stock exchange price. In the case of a participating interest not listed on an active stock exchange or where there is no regular price quotation, the fair value will be determined to the best of one’s ability using all available data, including an annual report audited by an external auditor, interim financial information from the institution and any other relevant data provided to Triodos Bank. Unrealised changes in the value of participating interests where no significant influence can be exercised are recognised in equity via the revaluation reserve, with the exception of changes in value below the acquisition price, which will be recognised directly in the profit and loss account.
Realised changes in the value will be recognised in the profit and loss account.
Exchange rate differences resulting from the conversion of foreign currencies will be charged or credited directly to the equity.
Intangible fixed assets
Intangible fixed assets are stated at acquisition price or cost of manufacture minus amortisation. The amortisation will be determined in line with the estimated useful life.
Goodwill paid by Triodos Bank for the establishment of the branch in Spain will be amortised over a period of ten years. The remaining amortisation period is three years. Goodwill paid by Triodos Fonds Management for the acquisition of management and research activities will be amortised over five years. The remaining amortisation period is one month. No impairment for goodwill was recognised.
The development costs for the banking system will be written off over the estimated useful life from the moment the system is used. The current end-of-life date is December 2016. No impairment was recognised.
Management contracts paid by Triodos Bank when acquiring the participating interest in Triodos Investment Management BV will be written off over a period of 20 years. The remaining depreciation period is fifteen years. No impairment was recognised.
Computer software that has been purchased will be written off over its useful life. This period will not exceed five years.
Property and equipment
Property under development is valued at the lower of the expenditure and the expected replacement cost upon completion. The expenditure consists of payments made to third parties.
Property for own use is stated at the current cost, which is derived from the replacement cost. A valuation is carried out at least every five years by an external appraiser. The buildings for own use are depreciated according to the straight-line method on the basis of an estimated useful economic life of 40 years. Land for own use is not depreciated.
Equipment is stated at acquisition price less straight-line depreciation on the basis of estimated useful economic life. The depreciation periods vary from three to ten years.
The provisions mainly consist of a provision for major building maintenance.
Purchases of depository receipts for own shares
The purchasing and reissuing of depository receipts for own shares is charged or credited respectively to the Other reserves. Any balance remaining after the re-issuing of all own depository receipts purchased shall be placed at the disposal of the Annual General Meeting.
Own depository receipts for shares may be purchased up to 2% of the issued and paid-up share capital.
A decision to purchase own depository receipts may be made if the supply of existing depository receipts exceeds the demand for new depository receipts. For this, authority has been given to management by the Annual General Meeting.
Triodos Bank arranges risk cover for clients by means of derivatives. Valuation and determination of results for derivative financial instruments used to cover risks, i.e. hedging, is carried out using the same principles used for the underlying securities. Income and expenses arising from the financial instruments are charged or credited to the profit and loss account during the term of the contract.
Income and expenses
Income and expenses are attributed to the period to which they relate or to the period in which the service was provided.
Interest income and commissions from lending are not accounted for in the profit and loss account if the collection of the interest and commission is doubtful.
Taxation on operating result
Taxes are calculated on the pre-tax result on the basis of the applicable profit tax rates. Exempted profit items, deductible items, additions and differences between the balance sheet value and the fiscal value of particular assets and liabilities are taken into account.
Deferred tax items arising from differences between the balance sheet value and the fiscal value are valued at nominal value.
Earnings per share
Earnings per share is calculated on the basis of the weighted average number of shares outstanding. In calculating the weighted average number of shares outstanding:
- Own shares held by Triodos Bank are deducted from the total number of shares in issue;
- The computation is based on monthly averages.
Cash flow statement
The cashflow statement sets out the movement in Triodos Bank’s funds, broken down into operating activities, investment activities and financing activities. The funds consist of cash and the on demand deposits with banks. The cashflow statement is produced using the indirect method.
The use of estimates and assumptions in the preparation of the financial statements
The preparation of the consolidated financial statements requires Triodos Bank to make estimates and assumptions that affect the reported amounts of assets and liabilities and the contingent assets and liabilities at the balance sheet date, and the reported income and expenses for the financial year. It mainly concerns the methods for determining the provisions for doubtful debts, determining the fair value of assets and liabilities and determining impairments. This involves assessing the situations on the basis of available financial data and information. Although these estimates with respect to current events and actions are made to the best of management’s knowledge, actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised or in the period of revision and future periods if the revision impacts both the reporting period and future periods.
For further details about these accounting principles, please refer to the corresponding notes to the financial statements.