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Annual Report 2010/2011Baarsma Wine Group Holding B.V.

Winning strategies in wine

baarsma wine group holding

Winning strategies in wine


Annual report 2010/2011

Baarsma Wine Group Holding B.V.

Annual report 2010/2011 Baarsma Wine Group Holding B.V.

3

Table of contents

Management of the Group 4Key figures of the Group 5Mission, vision and strategic goals 6

Annual Report

Report of the Board of Directors 10

Financial Statements

Consolidated balance sheet as of 31 March 2011 20Consolidated profit and loss statement 2010/2011 22Consolidated cash flow statement 2010/2011 23Statement of changes in equity of the legal entity over 2010/2011 24

Notes 25

Notes to the consolidated balance sheet 32Notes to the consolidated profit and loss account 38Company balance sheet as of 31 March 2011 40Company profit and loss account 2010/2011 42Notes to the company balance sheet and profit & loss account 43

Other Information

Auditor’s report 50Result appropriation 51Appropriation of result for the financial year 2009/2010 51Proposed appropriation of result for the financial year 2010/2011 51Subsequent events 51

List of participations 52

Contact information 54

This Annual Report concerns the 2010/2011 financial year of Baarsma Wine Group Holding B.V. Unless otherwise stated, all of the

information contained in this report concerns Baarsma Wine Group Holding B.V. and its 2010/2011 financial year. This document is

a translation of the official Annual Report published in the Dutch language. In the event of conflict or in matters of interpretation,

reference will solely be made to the official document.


4

Management of the Group

Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tjeerd van der Hoek Executive Director

Cees de Rade Executive Director

Supervisory Board Members (through Veenwijk Holding B.V.)

Frans Barel Chairman

Paul Hugenholtz

Frank Trijbels

Corporate Management Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ronald van den Berg Finance

Ian Ronald Operations

Management of the most important group companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Baarsma Wine Group Business to Consumer B.V. Rene Tulner

Ian Ronald

Baarsma Wines B.V. Martijn Brander

Baarsma South Africa Pty. Ltd. Chris Rabie

Paul Swart

Cellarmaster Wines Europe B.V. Lia Hos

Canei S.R.L. Gianluca Guercilena

Hasselt Millesime B.V.B.A. Michel Fryns

John Armit Wines Ltd. Mike Laing

Leon Colaris B.V. Ruud Heuvelmans

Oud Reuchlin & Boelen B.V. Christiaan Hintzen

Rutishauser Weinkellerei AG Reto Grubenmann

Wine Excel B.V. Marcel Campen

Wijnvoordeel International B.V. Jacco Oosterhof

Winetracks International B.V. Johan van der Westhuyzen


5

Key figures of the Group

Financial year(Eur x 1.000)

2010/2011 2009/2010 (*)

2008/2009 2007/2008 2006/2007

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net group turnover 284,586 284,867 259,239 205,322 171,442

EBITDA 1) 14,256 15,845 11,127 10,855 7,514EBITDA margin 5.0% 5.6% 4.3% 5.3% 4.4%

EBITDA adjusted for non-recurring costs and acquisition effects 2)

17,779 17,775 17,729 11,282 7,661

EBITDA margin 6.2% 6.2% 6.8% 5.5% 4.5%

EBITA 3) 11,688 13,485 9,246 9,242 6,460EBITA margin 4.1% 4.7% 3.6% 4.5% 3.8%

EBIT 4) 5,395 7,739 4,097 5,984 4,961EBIT margin 1.9% 2.7% 1.6% 2.9% 2.9%

Net group result -2,490 -882 -3,548 990 1,815

Cashflow 5) 6,370 7,624 3,481 5,861 4,368

Capital base 35,988 32,237 31,879 7,821 8,266

Balance sheet total 161,211 149,372 150,721 104,770 60,136

Solvency percentage 22.3% 21.6% 21.1% 7.5% 13.7%

Net interest-bearing debt 6) 52,088 62,721 72,214 45,306 24,072

(*) The comparative figures for 2009/2010 have been adjusted for the change in accounting policy implemented in 2010/2011 with regard to the presentation of the payment discounts. Please refer to page 25 for more details.

1) EBITDA is calculated as the operating result increased by the amortisation of intangible and depreciation of tangible fixed assets.

2) The correction for non-recurring costs and acquisition effects relates to acquisition and transaction costs, reorganisation costs and other one-off special costs, and the full year effect of the aquisitions that were carried out.

3) EBITA is calculated as the operating result increased by the amortisation of intangible fixed assets.

4) EBIT is equal to the operating result.

5) Cash flow is calculated as the net group result increased by the amortisation of intangible and depreciation of tangible fixed assets.

6) The net interest-bearing debt is calculated as the total sum of the loans, redemption obligations and debts to credit institutions, decreased by the cash at bank.


6

Mission, vision and strategic goals

Structure of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 march 2011

Profile of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Baarsma Wine Group Holding (BWGH) is a worldwide wine distributor of quality wines with a fast growing distribution network in all sectors of the wine market in North-West Europe. Established some 30 years ago in the Netherlands, BWGH has evolved into one of the main players in the European wine market.

The Group is the leading distributor of wines in the Netherlands realised by several specialised business units operating in each channel of the Dutch wine market. Typical for the organisation is the independent status of every business unit. By combining the forces of the total Group a unique wine strategy and market approach is realised.

By means of autonomous growth and acquisition, the Group will expand its position even further over the coming years. The basis of growth is a ratio of profitability that is sufficient to guarantee the continuity of the company.

Mission of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The corporate objective is to become the first choice provider of basic and premium wines in North-West Europe, to strengthen our market position in this region by selling qualitative wines via dedicated people and by expanding our distribution network.

In doing so, our ambition is to achieve a sustainable growth in both turnover and in profit to maximise shareholders’ value.

Wijnvoordeel International B.V.

WijnkoperijWielinga B.V.Winetracks

International B.V.

De WijnbeursB.V.

Baarsma Wines B.V.

Oud Reuchlin & Boelen B.V.

Hasselt MillesimeB.V.B.A.

94Wines B.V.

Canei S.R.L.

Baarsma South Africa(Pty.) Ltd.

WijnhandelLéon Colaris B.V.

John Armit Wines Ltd.

Rutishauser Weinkellerei AG

Wine Excel B.V.



7

Core ideologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- Focus on consumers and brands- To turn every customer into a friend- Excellence in reputation, work with passion- Focus on execution, walk while you talk- Be in partnership with employees- Honesty, integrity and ethics in all aspects of business

Group Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- Expanding our distribution network in North-West Europe- Maintaining and reinforcing the Group’s competitive position- Strengthening our position as a partner and preferred supplier for important clients- Positioning the Group as an ideal partner for brand owners- Responding quickly to developments in the international market- Reducing our dependence on certain markets and product groups

Annual Report


10

Report of the Board of Directors

The Report of the Board of Directors, as stated in the statutory accounts on pages 10 up to and including 17, can be read at the office of the company.

- 17

Financial Statements

2020

Annual report 2010/2011 Baarsma Wine Group Holding B.V. Annual report 2010/2011 Baarsma Wine Group Holding B.V.

Consolidated balance sheet as of 31 March 2011(before appropriation of result)

A s s e t s ref. 2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FIXED ASSETS

Intangible fixed assets 1

Goodwill 39,596 32,189

Intellectual property rights 16,574 16,821

56,170 49,010

Tangible fixed assets 2

Land and buildings 200 212

Equipment, fixtures and fittings 5,081 4,862

Other fixed assets 3,347 4,094

8,628 9,168

Financial fixed assets 3

Non-consolidated participations 5,177 186

Loans to non-consolidated participations

493 366

Deferred tax asset 1,021 2,939

Other receivables 0 26

6,691 3,517

CURRENT ASSETS

Inventories

Finished goods and goods for resale 41,125 39,858

Receivables

Trade receivables 33,826 31,164

Receivables on associated group companies

1,467 0

Corporate income tax 4 358 420

Other receivables 2,828 4,260

Prepayments and accrued income 1,813 2,002

40,292 37,846

Cash 5 8,305 9,973

161,211 149,372

2121


Consolidated balance sheet as of 31 March 2011(before appropriation of result)

E q u i t y a n d L i a b i l i t i e s ref. 2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Group equity 6

Legal entity share in group equity 19,748 1,319

Third-party share in group equity 7,140 4,368

26,888* 5,687 *

Provisions 7

VUT, pension and anniversary provisions

222 308

Deferred tax liabilities 2,453 5,275

Provision for warranties 69 110

Reorganisation 131 667

Other 336 190

3,211 6,550

Long-term liabilties

Subordinated bank loan 8 0 * 150 *

Loans from shareholders 9 9,100 * 25,800 *

Amounts owed to banks 10 28,476 30,701

Other long-term debts 11 0 91

37,576 56,742

Current liabilities

Amounts owed to banks 12 19,241 13,343

Current portion of long-term liabilities 3,576** 2,700 **

Trade creditors 39,057 39,223

Taxes and social security charges 13,320 12,576

Debts to non-consolidated participations

5,564 0

Debts to participants 13 2,907 3,511

Pension liabilities 0 286

Other liabilities and accruals 9,871 8,754

93,536 80,393

161,211 149,372

*/**) Capital base to the banks 14 35,988 32,237

**) € 150 of the current portion of long-term liabilities is related to subordinated bank loans (last year: € 600)

2222


Consolidated profit and loss account 2010/2011

ref. 2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net turnover 15 284.586 284.867

Cost of sales 226,300 228,025

Wages and salaries 16 21,668 19,428

Social security charges 17 3,146 3,258

Depreciation and amortisation of intangible and tangible fixed assets

188,660 8,356

Special value adjustments in respect of intangible and tangible fixed assets

18200 150

Other operating expenses 19 19,217 18,311

Total operating expenses 279,191 277,528

Operating result 5,395 7,339

Financial income and expenses 20 -5,142 -6,979

Result on ordinary activities before taxation

253 360

Taxation on result of ordinary activities

21-1,012 -513

Result from participations -1,005 0

Consolidated result after taxation-1,764 -153

Third-party share -726 -729

Result of the legal entity -2,490 -882

2323


Consolidated cash flow statement 2010/2011 (indirect method)

2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flow from operating activitiesOperating result 5,395 7,339Depreciation and other changes in value 8,860 8,506Changes in provisions -3,339 -597

5,521 7,909Changes in working capitalMovements inventories -1,267 2,666Accounts receivable -2,447 2,940Current liabilities 7,247 659

3,533 6,265Cash flow from business activities 14,449 21,513

Interest received 553 448Corporate income tax -1,012 -513

-459 -65

Cash flow from operating activities 13,990 21,448

Cash flow from investment activities Investments in intangible fixed assets -12,768 -4,064Disposals of intangible fixed assets 12 0Investments in tangible fixed assets -1,694 -1,942Disposals of tangible fixed assets 20 864Investments in financial fixed assets -1,132 -223Disposals of financial fixed assets 1,969 699New in consolidation -5,008 0Cash flow from investment activities -18,601 -4,666

Cash flow from financing activities Movements in third-party share capital 2,045 0Capital contribution shareholders 20,000 0Withdrawal / redemption of short-term amounts owed to banks

5,898 -2,164

Redemption long-term debts -19,166 -205Interest expenses and exchange rate results -5,695 -7,427Cash flow from financial activities 3,082 -9,796

Exchange rate differences on movements in cash

-139 47

Net cash flow(= change in net cash position)

-1,668 7,033

Net cash position at the start of the financial year

9,973 2,940

Net cash position at the end of the financial year

8,305 9,973

Net cash movement -1,668 7,033

2424


Statement of changes in equity of the legal entity over 2010/2011

2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Consolidated net result after taxation accruing to the legal entity

-2,490 -882

Translation differences foreign associated companies 919 1,111Total amount of the direct equity movements of the legal entity as part of the group equity

919 1,111

Total result of the legal entity -1,571 229


25


Notes to the consolidated financial statements

General

Baarsma Wine Group Holding B.V. (‘the company’), having its Registered Office at Badweg 48 in Gorredijk, was established on 7 September 2005. The company is a holding company; its operating companies are active in the field of wine trade, and North-West Europe is its intended market.

The company is a 100% subsidiary of Veenwijk Holding B.V., based in Oudeschoot; this company is also the head of the Group. The financial details of the company have been included in the Group’s consolidated figures.

The figures in the financial statements have been represented in round sums x € 1000, unless otherwise indicated. The company’s financial year runs from 1 April up to and including 31 March.

General accounting principles for the preparation of the consolidated financial statements

The consolidated financial statements have been drawn up in accordance with the provisions set out in Title 9, Book II, of the Dutch Civil Code.

The valuation of the assets and liabilities and the determination of the result takes place under the historical cost convention. Unless presented otherwise for the relevant item, the assets and liabilities are presented at face value.

Income and expenses will be allocated to the year in which they occur. Profits are only included to the extent that they have been realised on the balance sheet date. Losses and risks that predate the end of the year under review, will be taken into consideration if they were known prior to drawing up the financial statements.

For the group companies that are part of the consolidation, please refer to the Appendix included in the notes.

Changes in Accounting Policies

Presentation of payment discounts

Certain individual supplier and buyer contracts contain terms that include arrangements with regard to payment discounts linked to the term of payment. As a result, these discounts are in the nature of a financial expense. As of the financial year 2010/2011, these discounts are no longer accounted for as part of the turnover or the cost of sales, but as part of the financial income and expenditure. The comparative figures that have been included for the financial year 2009/2010 have been adjusted for this presentation. Financial expenditure has been increased by € 697 and the cost of sales has been decreased by € 697. The net effect on the group equity as per 31 March 2010 and the consolidated result after taxation is nil.


26


Basis of the Consolidation

The consolidated financial statements include the financial information of Baarsma Wine Group Holding B.V. and its group companies. Group companies are understood to mean a participating interest in which the company has a majority interest or is able to determine its policy in some other manner. Any financial instruments that contain potential voting rights that can be exercised directly, will also be taken into account when determining the extent to which this policy can be influenced.

The financial information of Baarsma Wine Group Holding B.V. has been included in the consolidated financial statements, which means that, in accordance with Article 2:402 of the Netherlands Civil Code, it is sufficient for the company to include an abbreviated profit & loss account in the company financial statements.

In the consolidated financial statements, the intercompany debts, receivables and transactions have been eliminated, along with the profits that were made within the Group. The group companies have been consolidated integrally, and the minority interest held by third parties has been listed separately. Group companies whose interests are equally divided over the shareholders, will be proportionally included in the consolidation.

The results of the newly acquired group companies and other legal entities and companies that have been included in the consolidation, will be consolidated as of the date of acquisition. On that date, the assets, provisions and debts will be valued at their fair values. The paid goodwill will be capitalised and amortised during its economic life. The results of the divested participations will be included in the consolidation up to the date that the group ties are severed.

Change in the scope of consolidation

During the financial year 2011/2011, it was decided to wind up a number of companies and this procedure has in some cases already been completed. It was decided not to include these companies any longer in the consolidation with effect from the financial year 2010/2011, as the results of these companies show a distorted picture of the normal business operations. The interests in these companies are included on the consolidated balance sheet under ‘non-consolidated participations’ and their results are included in the profit & loss account under ‘results from non-consolidated participations’. This concerns the companies Lovian BV, Kaapkelder BV, SARL Les Crus Prévendus, Cellarmaster Wines GmbH i.l., SARL Overseas Wine Company and SAS Baarsma.


27


Financial Instruments

Financial instruments are understood to mean both primary financial instruments, such as receivables and debts, and financial derivatives. Please refer to the individual explanation of each balance sheet item for the basis of the primary financial instruments.

When first processed, financial derivatives are valued at cost price. The profit or loss from the revaluation of the fair value on the balance sheet date is immediately processed in the profit & loss account. However, if the financial derivatives are eligible for hedge accounting and hedge accounting is applied, then the processing of this profit or loss depends on the nature of the coverage. The company uses cost price hedge accounting and documents for each individual hedge relationship.

The company hedges part of its interest risk and currency positions by using futures, interest swaps and options. The effective component of the financial derivatives that have been allocated to cost price hedge accounting, are valued at cost price and the ineffective component is valued at its fair value. The reductions of the ineffective component’s fair value are immediately taken up in the profit & loss account.

The components of both the hedged balance sheet items and the financial derivatives that act as a hedge instrument for the underlying balance sheet item, will be converted at the exchange rate on the balance sheet date. Financial derivatives that act as hedge instrument to cover future transactions, will be valued at cost price as long as the hedged position has not been incorporated in the balance sheet.

Basis of the foreign currency translation

Transactions in foreign currency have been translated in the functional currency of the group companies at the exchange rate applicable on the transaction date. Assets and liabilities in foreign currency have been translated at the exchange rate applicable on the balance sheet date. Non-monetary assets and liabilities in foreign currency that are incorporated against historic cost have been translated into euros at the exchange rates which applied at the time of the transaction. The differences in exchange rate that occur during this conversion will be reported under the net turnover and/or the cost of goods sold when it concerns trading activities. For the treasury activities, these differences are reported under the financial income and expenses.

The assets and liabilities of activities in foreign countries have been translated into euros at the rate applicable at the date under review. The income and expenses of foreign activities are translated into euros at the exchange rate at the date of transaction. Any conversion differences that occur, will be credited or debited directly to the group equity.


28


Principles of Valuation of Assets and Liabilities

Intangible Fixed Assets

Goodwill is valued as the positive difference between the acquisition price of the participations and the net asset value at the time of acquisition, minus the cumulative straight-line amortisation and any impairments in value. Intellectual property rights will be valued at their acquisition price and on the basis of the allocated value at the time of the acquisitions of the enterprises in question. This relates, amongst other things, to the sole selling rights of products, distribution rights, customer bases and software.

The capitalised amount of the goodwill and the intellectual property rights will be amortised according the straight-line method during their economic useful life. If applicable, the carrying value will be reduced with an amount for impairments in value.

Tangible Fixed Assets

The tangible fixed assets will be valued at their acquisition price, minus the straight-line depreciation and, if applicable, minus impairments in value. The depreciation is based on the expected economic useful life span and is calculated on the basis of a fixed percentage of the acquisition price, whilst also allowing for a possible residual value. The amortisation starts when the assets are put into use. There will be no depreciation for land.

Financial Fixed Assets

Non-consolidated participations over whom the Group has significant control, will be valued according to their share in the net asset value, determined in accordance with the accounting principles of Baarsma Wine Group Holding B.V. set out in these financial statements. Participations for which the company does not exercise significant influence on their business or financial policy, will be valued at their acquisition price and, if applicable, after deduction of any impairments in value.

The amounts owed by non-consolidated participations and the other receivables will be included at their fair value when first processed, and will subsequently be valued at the amortised cost price, which equals the nominal value, after the deduction of provisions that are deemed necessary.

The deferred tax assets have been included under the financial fixed assets, if and insofar as it is likely that the realisation of the tax claim will take place in due course. These deferred tax assets are valued at their nominal value and are predominantly of a long-term nature.

Inventories

The inventories of finished goods and goods for resale are valued at their cost price on the basis of ‘first in, first out’, to be increased with a surcharge for freight and deposit charges, or they are valued at a lower market value. The production inventories are valued at the costs which are directly related to production. If necessary, downward revaluation because of unmarketability is taken into consideration.


29


Trade Receivables

The trade receivables are stated at their face value, allowing – if necessary – for possible irrecoverability.

Minority interest held by third parties

The minority interest of third parties will be valued at the proportion of the net asset value held by these third parties, to be determined in accordance with the company’s valuation basis.

Provisions

The VUT [Early Retirement Scheme] provisions relate to the VUT obligations and will be included at the provisions discounted value. The interest rate that has been used, amounts to 4.0%. The VUT liabilities will be included on the basis of actuarial principles.

Baarsma Wine Group has various pension schemes. The schemes are financed by means of contributions to pension providers, in particular insurance companies and industry-wide pension funds. The foreign pension schemes, including England and Switzerland, are similar in set up to those of the Dutch pension systems.

The pension liabilities will be valued according to the ‘valuation to pensionfund’ approach. In this approach, the premium to be paid to the pension provider will be accounted for as an expense in the profit & loss account. Based on the implementation agreement, liabilities in existence on the balance sheet date will be assessed, and defined, as will the payment of the annual premium owed to the pension provider. These additional liabilities, which include possible liabilities resulting from any recovery plans of the pension provider, are expenses for the company and will be included on the balance sheet as a provision.

At the end of 2010/2011 (and 2009/2010), the Group did not have any outstanding pension claims or liabilities apart from the payment of the annual premium which is due to the pension provider.

For the defined contribution schemes, the company pays agreed contributions (premiums) to the pension insurance companies and funds. The company is not required to pay additional contributions in the event of a deficit on the part of the insurance company or fund. The agreed contributions will be included as expenses when they become actually due.

For participations with a negative value, a provision will be made for the amount of the expected payments that are charged to the company on behalf of the participations.


30


Provision for deferred tax liabilities

With regard to the tax payable amounts to be paid in the future as a result of differences between commercial and fiscal balance sheet valuation, a provision will be made that amounts to the amount of these differences, multiplied by the applicable tax rate.

Provision for warranties

The provision for warranties is included for the estimated costs expected to be incurred for warranties which exist on the balance sheet date on goods and services that have been provided. Costs which result from the honouring of warranties will be deducted from this provision.

Provision for reorganisation

The reorganisation provision concerns personnel redundancies.

Other provisions

The other provisions concern the premature termination of a rental obligation, a provision for the vacancy of leased property, and the simplification of the Group’s legal structure. Given the nature of these items, the management made the best possible estimate of the total costs to be incurred. All the other provisions, including the reorganisation provision, will be included on the balance sheet at their nominal value.

Other assets and liabilities

Unless indicated otherwise, the other balance sheet items will be included at their face value.

Principles for the Determination of the Result

Net turnover is the revenue from the delivery of goods and the provision of services to third parties, minus discounts and sales tax.

Revenue will be accounted for in the year in which the economic benefits of the goods have been transferred and/or the services rendered. Losses will be taken into consideration in the year in which they are foreseeable. The cost price of these goods and services will be allocated to the same period. The costs are determined in accordance with the above-mentioned valuation principles and will be allocated to the year under review to which they relate. The amortisation takes place on a time-proportionate basis in accordance with the expected economic life. Purchases in the year under review will be amortised on a time-proportionate basis.


31


Taxation

The corporate income tax will be calculated at the relevant rate for the result of the financial year, allowing for the permanent differences between the profit calculation according to the financial statements and the profit calculation for tax purposes. In doing so, the deferred tax assets (if applicable) will only be valued if their realisation is likely.

Share in the result of non-consolidated companies

For participations where the company does not exercise significant influence on their business or financial policy, the dividend will be classified as income and will be presented as part of the financial income and expenditure.

Principles for preparation of the Consolidated Cash Flow Statement

The cash flow statement has been drawn up according to the indirect method. The financial resources in the cash flow statement consist of the cash at bank that was present on the balance sheet date. Cash flows in foreign currency will be converted at an estimated average rate. Exchange differences in regard to monetary means are shown separately in the cash flow statement.

Profit taxes, and received interest and dividends, will be included in the cash flow from operational activities. Interest charges and paid dividends will be included in the cash flow resulting from financing activities. The acquisition price for acquired group companies will be included in the cash flow resulting from investment activities, if the payment was made with monetary means. In doing so, the funds which are present in these group companies will be deducted from the purchase price.

Mergers and acquisitions

Business to Consumer Acquisitions

In November 2010, a number of interrelated share transactions were carried out. For example, the interest in Wijnvoordeel B.V. was expanded from 50% to 100% and the interest in Wijnvoordeel International B.V. was expanded from 80% to 100%. At the same time, a 10% interest in Baarsma Wine Group Business to Consumer B.V. was sold. The differences between the acquisition price and the equity of the company, based on the Group’s accounting principles, have been accounted for as goodwill.

Sale of SAS Baarsma assets

In September 2010, SAS Baarsma’s assets in Roncq, France were sold. It was then decided to wind up the company, which no longer contained any assets.

Liquidations

During the financial year 2010/2011, a number of divisions were wound up, or a decision was made to that end. This involves the following companies: Lovian BV, Kaapkelder BV, SARL Les Crus Prévendus, Cellarmaster Wines GmbH i.l., SARL Overseas Wine Company and SAS Baarsma. As indicated on page 26, the financial data of these entities are no longer included in the consolidation for 2010/2011.

3232


Notes to the consolidated balance sheet

2011 / EUR x 1.000 2010 / EUR x 1.000Intangible Fixed Assets (ref. 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill 39,596 32,189Intellectual Property Rights 16,574 16,821

The goodwill on the balance sheet has developed as follows:

56,170 49,010

Book value as at 1 April 32,189 33,625Add: Investments 10,462 1,632Exchange differences 591 660New in consolidation 28 0

43,270 35,917Minus:Amortisation 3,474 3,241Impairments 200 150Reclassification 0 337Book value as at 31 March 39,596 32,189

Accumulated amortisation on 31 March 13,797 10,323Amortisation percentages 5%-20% 5%-20%

The goodwill for the recent extensive and strategic aquisitions will be amortised based on the average useful life of the various elements of this goodwill and amounts to a maximum of 20 years. There will be a straight-line amortisation of the goodwill relating to the subsidiaries involved in the management buy-out over a period of 20 years. These subsidiaries have a great strategic importance to the Group as a whole, creating clearly synergetic effects. Goodwill paid for smaller, independent take-overs will be amortised in no more than 5 years, as these effects present themselves to a lesser extent here. The reclassification relates to distribution rights, and licences that have been reclassified from intellectual property rights in 2009/2010.

The intellectual property rights on the balance sheet have developed as follows:

Book value as at 1 April 16,821 16,071

Investments 2,306 2,432

Exchange differences 22 0

Reclassification 0 1,073

New in consolidation 55 0

19,204 19,576

Amortisation 2,618 2,755

Disinvestments 12 0

Book value as at 31 March 16,574 16,821

Accumulated amortisation as at 31 March 8,969 6,351

Amortisation percentages 10%-50% 10%-50%

The book value of the intellectual property rights consists of customer bases (€ 10.2 million), trademark rights (€ 2.9 million), software (€ 3.2 million) and other intellectual property rights (€ 0.3 million). The intellectual property rights include trademark rights, distribution rights and customer bases, for which there will be a straight-line amortisation over a 10-year period on the basis of their estimated economic life span. The reclassification relates to distribution rights, licences and software that have been reclassified from goodwill and other fixed assets in 2009/2010. € 405 of the intellectual property rights’ book value consists of capitalised development costs for internal hours. A statutory reserve has been created in the group equity for this purpose.

3333



2011 / EUR x 1.000 2010 / EUR x 1.000

Tangible fixed assets (ref. 2), , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Land and buildings 200 212Equipment, fixtures and fittings 5,081 4,862Other fixed assets 3,347 4,094

8,628 9,168

The movement is as follows:Land and buildings

Equipment, fixtures and

fittings

Other fixed assets

Total

Book value as at April 1 212 4,862 4,094 9,168Investments 32 1,293 369 1,694Exchange differences 2 313 129 444

246 6,468 4,592 11,306Depreciations 46 1,379 1,143 2,568Deconsolidated 0 0 90 90Desinvestments 0 8 12 20Book value as at March 31 200 5,081 3,347 8,628

Accumulated depreciation 323 6,422 4,333 11,078Depreciation percentages 0-20% 14-20% 10-33%

The remaining book value of the land and buildings relates largely to lessee investments, which means that the company is not the legal owner.

2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial fixed assets (ref. 3)Non-consolidated participations 5,177 186Receivables on non-consolidated participations 493 366Deferred tax assets 1,021 2,939Other receivables 0 26

6,691 3,517

The breakdown of non-consolidated participations is as follows:

Book value at 1 April 186 862New deconsolidations 5,015 0Result of the financial year -25 0Disinvestments 0 -699Exchange Differences 1 23Book Value as at 31 March 5,177 186

The deferred tax liabilities have developed as follows

Book value as at 1 April 2,939 2,593

Minus: realisation of losses 1,918 346

Book value as at 31 March 1,021 2,939

The deferred tax liability relates to tax losses to be offset in the future for group companies which fall outside the fiscal unity of Veenwijk Holding B.V., which also includes Baarsma Wine Group Holding B.V.

3434


Explanation to the consolidated balance sheet

Accounts receivable (ref. 4)The corporate income tax receivable relates mainly to the termination of the activities of foreign group companies.

Cash (ref. 5)The cash is at the Group’s free disposal.

Group Equity (ref. 6, 14)Share of the Legal Entity in Group Equity

The movement in the share of the legal entity in group equity is as follows:

2011 / EUR x 1.000 2010 / EUR x 1.000, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Balance as at 1 April 1,319 1,090Exchange differences 919 1,111Conversion loan into premium 20,000 0Result accruing to the legal entity -2,490 -882Balance as at 31 March 19,748 1,319

Third-party share in the Group Equity Balance as at 1 April 4,368 3,639Exchange differences 297 293Distributions of dividend -157 -368Capital contributions 1,906 75Third-party share in the result 726 729Balance as at 31 March 7,140 4,368

For a specification of the equity, please refer to the Baarsma Wine Group Holding B.V.’s company balance sheet as per 31 March 2011. The group equity amounted to € 26.888 on 31 March 2011 (31 March 2010: € 5.687). Together with the third-party share in the group equity and the subordinated loans, the guaranteed capital from the banks on 31 March 2011 amounted to € 35.988 (31 March 2010: € 32.237).

Provisions (ref. 7)The specification of the provisions is as follows:

Pension – back-service liabilities 0 20VUT liabilities 147 238Jubilee provisions 75 50Deferred tax liabilities 2,453 5,275Warranties 69 110Reorganisation costs 131 667Other 336 190

3,211 6,550

It is expected that € 0.5 million of these provisions will be settled within one year. The amount with an expected duration of more than 5 years is € 2.5 million. The back-service and pension liabilities have been assigned to insurance companies. The VUT liabilities will be selfinsured. The decrease in VUT liabilities is the result of the payment of VUT-schemes that have taken effect. The provision created for awarded jubilee payments is based on the level of expected continued employment and a discount rate of 4%. The coverage ratio of the industry-wide pension fund was 108.1% on the balance sheet date (last year: 109.3%) and thus exceeds the minimum required capital ratio.

3535



The deferred tax liabilities were created by differences between the commercial profit calculation and the profit calculation for tax purposes. These differences are of a temporary nature. The deferred taxes relate, in particular, to the revaluation of assets (such as machines, installations and inventories) based on purchase price allocation. The warranty provision relates to the warranties that have been granted with regard to the quality of the wines. The provision for reorganisation costs relates to the financial consequences of making employees redundant. The other provisions relate to the closing down of business accommodations.

The movement in the provisions is as follows during the financial year:

Situation as at

1 April 2010

Add: allocation

at the expense of

the result

Minus: Release

credited to the

result

Minus: paid Minus:

deconsolidation

Situation as at

31 March 2011

Pension – back-service liabilities

20 0 0 20 0 0

VUT liabilities 238 0 0 91 0 147

Jubilee provisions 50 28 0 3 0 75

Deferred tax liabilities 5,275 409 3,231 0 0 2,453

Warranty 110 0 41 0 0 69

Reorganisation costs 667 43 0 379 200 131

Other 190 409 0 246 17 336

Total 6,550 889 3,272 739 217 3,211

Long-term Liabilities

Subordinated loan banks (ref. 8)The repayment of the subordinated loan from the banks (€ 150) has been subordinated to the claim from the othercreditors. As per March 31 2011, the loan bears an interest of EURIBOR + 3% (last year: Euribor + 3%). However, the interest risk has been fully covered by means of an interest swap. The repayment obligation amounts to € 150 for the next year, and has been accounted for as a short-term debt.

Loans from shareholders (ref. 9)The loan from the shareholders is a bank-subordinated loan and has been included at € 9,100. This was done toreinforce the bank-guaranteed capital. During the financial year, an amount of € 20,000 was converted into share premium and an extra amount of € 3,300 was withdrawn to reinforce the guarantee capital of one of the subsidiaries. The loan has an interest rate of 8%. The repayment and the payment of interest take place in consultation with the shareholders.

Amounts owed to banks (ref. 10, 12)The following overview shows the remaining duration of the long-term liabilities. The repayment obligations for the coming financial year are included under the current liabilities and therefore excluded from this overview. This statement and the short-term repayment obligation are based on the current credit agreement with the credit institutions.

2011 / EUR x 1,000 2010 / EUR x 1,000, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

- duration longer than 1 year, but shorter than 5 years

28,476 30,701

- duration equal to, or longer than 5 years 0 0Total 28,476 30,701

3636



As collateral for these debts and for the credit facilities included under the current liabilities, some trademarks, domain names, tangible fixed assets, inventories and the trade receivables have been furnished as security. The credit institutions have drawn up covenants that apply to the entire Group. These covenants are based on the ratio between interest-bearing debts in relation to EBITDA and the operational and investment cash flows compared to repayments of loans and interest payments.

Other longterm debts (ref. 11)The specification of the other long-term debts is as follows:

2011 / EUR x 1.000 2010 / EUR x 1.000

Loan from suppliers 0 910 91

Current liabilities

Amounts owed to banks (ref. 12)On 31 March 2011, the credit maximum with the banks amounted to € 42,700, to be increased with € 3,500 for bank guarantees. The same security specified for the long-term debts to the credit institutions, applies here.In addition to the € 3,500 bank guarantee facility from the credit institution, the Group also has a guarantee facility of € 3,050 from another guarantor.

Debts to participants (ref .13)The debts to participants also include a debt to Veenwijk Holding B.V., the head of the tax entity. This debt relates to corporation tax amounting to € 357 that has been included on the balance sheet as per 31 March 2011.

Contingent liabilities

For the benefit of third parties (bank) guarantees have been provided to an amount of € 3.5 million.

The lease and rental obligations on the balance sheet date can be classified as follows:

- due within one year 4,184 4,294

- due between one and five years 12,248 12,950

- due after more than 5 years 3,238 3,704

19,670 20,948

The payments of operational lease obligations, and the rental obligations, are included under the other operatingcharges.

Ref. 20 includes a list of Dutch group companies that are part of Veenwijk Holding B.V.’s fiscal unity. This fiscal unity covers both the corporate income tax and value added tax. These group companies are jointly and severally liable for the corporate income tax and value added tax debts incurred by the fiscal unity as a whole.

3737



The Group has arranged its credit facilities with a banking syndicate. The agreement will be in force until 31 March 2014. All the participations in which the Group holds a majority interest, are part of the joint credit facility. Additionally, Armit Holding Ltd, John Armit Wines Ltd, Baarsma Wine Group Switzerland AG and Rutishauser Weinkellerei AG are part of this credit facility. This means that these entities are jointly and severally liable for debts to these credit institutions.

Financial Instruments

Please refer to the individual notes of each balance sheet item for an explanation of the primary financial instruments. The Group’s financial derivatives and the corresponding risks are explained below.

Currency RisksThe currency policy aims to protect the operational margin and forward exchange contracts and option contracts have been concluded in an effort to control the currency risks. On the balance sheet date, the total of derivatives relating to currency risks amounted to € 3.3 million (last year: € 1.2 million). The fair value of the contracts as per 31 March is virtually nil.

Interest-rate RiskInterest instruments, including interest swaps and interest options, are used to obtain the required risk profile in fixed and variable interest positions. The interest on debts to the credit institutions is mainly in 1-month and 3-month EURIBOR. As per the balance sheet date, the interest of approximately € 31.9 million of debts to credit institutions (both long-term and short-term debts) has been converted into fixed interest rates or has been maximised by means of interest options.

The table below specifies the position of the debts whose interest-rate risk has been covered, and the value of the derivatives:

Average position Fair value

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Less than 1 year 20,452 -399

Remaining duration of the loan agreement 11,413 -431

-830

3838


Notes to the consolidated profit and loss account

2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Geographic division of the group turnover is as follows (ref. 15):(Amount x € mln)

The Netherlands 175.6 184.6Belgium and Luxembourg 19.4 17.5Switzerland 29.1 26.7United Kingdom 36.1 29.5France 1.4 3.8Germany 3.5 3.4Rest of Europe 5.7 6.4Rest of the world 13.8 13.0

284.6 284.9

Wages and salaries (ref. 16)The average number of employees during the financial year was 371 (last year: 387), geographically divided as follows:

The Netherlands 209 222Belgium and Luxembourg 18 14Switzerland 77 77United Kingdom 44 40France 2 6Germany 10 8Rest of the world 11 20

371 387

The remuneration of the Board of Directors of Baarsma Wine Group Holding B.V., including pension contributions and expense allowances, amounted to € 1,198 (last year: € 1,107).The wages and salaries include an amount of € 43 (last year: € 430) due to an addition to the reorganisation provision.

Social security charges (ref. 17)Social security costs 2,011 2,244Pension costs 1,135 1,014

3,146 3,258

The Dutch group companies participate in the industry-wide pension fund and also have a surplus scheme. These pension schemes provide for pension accrual on the basis of a conditionally indexed average salary scheme. The Swiss and English scheme is similar to the one in the Netherlands.

Impairment, amortisation/depreciation of intangible and tangible fixed assets (ref. 18)

Amortisation of intangible fixed assets 6,092 5,996Depreciation of tangible fixed assets 2,568 2,360Total depreciation 8,660 8,356Impairment on intangible fixed assets 200 150Total amortisation, depreciation and other reductions in value 8,860 8,506

The amounts that were impaired, related to an impairment adjustment in the value of the goodwill, that has been paid for the acquisition of one of the group companies.

3939


Notes to the consolidated profit and loss account

2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other operating expenses (ref. 18)

The other operating expenses include an amount of € 409 (last year: € 71) because of an addition to the reorganisation provision.

Financial income and expenses (ref. 19)

Interest income 553 448Interest expenses -5,355 -6,212Exchange Results -340 -1,215Financial Income and Expenses -5,142 -6,979

Taxation on result of ordinary activities (ref. 20)The following entities have been included in the fiscal unity:

- Veenwijk Holding B.V., Oudeschoot - Winetracks International B.V., Gorredijk- Baarsma Wine Group Holding B.V., Gorredijk - Oud Reuchlin & Boelen B.V., Zoetermeer- Baarsma Wines B.V., Gorredijk - Wijnkoperij Wielinga B.V., Leeuwarden- Wine Excel B.V., Zaandam

Corporate income taxation has been included in each of the companies for the proportionate part that the company in question would have to pay had it been an independent tax subject, allowing for the particular tax concessions that apply to the company.The effective tax burden differs strongly from the nominal burden. This difference is due to, in particular, the non-deductible amortisation of goodwill. The effective tax burden can be specified as follows:

Result on ordinary activities before taxation 253Non-tax deductible amortisation of goodwill 3,471Taxable result 3,724Nominal tax rate 25,4%Nominal tax burden 946Dividend tax Baarsma South-Africa 21Application of local rates 45Effective tax burden 1,012

The capitalisation of the deferred taxation of compensated losses from the past relates to losses that were incurred by group companies that were started in recent years. These activities have become profitable in the meantime. The Group has € 0.1 million of compensable losses that have not been capitalised. These losses relate to activities that were initiated during the financial year and for which there is not enough certainty yet as to the extent in which the start-up costs can be compensated.

Related partiesThe parent company charges an annual management fee, which is part of the directors’ remuneration and has been disclosed separately. The Group has concluded a number of leases, where the management of the contractual partner is conducted by part of the Group’s management board. The rental costs are ‘at arm’s length’.

Auditors feePlease refer to the financial statements of the parent company Veenwijk Holding B.V. for the fees of the auditors.

4040


Company balance sheet as of 31 March 2011(before appropriation of result)

A s s e t s ref. 2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FIXED ASSETS

Intangible fixed assets 1

Goodwill 6,635 7,202

Intellectual property rights 12,536 519

19,171 7,721

Tangible fixed assets

Other fixed assets 2 976 831

Financial fixed assets

Participations in group companies 3 65,597 45,421

Other participations 103 101

Receivables on group companies 3,722 19,939

69,422 65,461

CURRENT ASSETS

Receivables

Taxes and social charges 405 449

Amounts owed by group undertakings 1,240 0

Other receivables and accrued income 1,136 1,386

2,780 1,835

92,349 75,848

4141


Company balance sheet as of 31 March 2011(before appropriation of result)

E q u i t y a n d L i a b i l i t i e s Ref. 2011 / EUR x 1.000 2010 / EURx 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shareholders’ Equity 4

Issued and fully paid capital 2,000 2,000Share premium reserve 20,000 0Legal reserves 618 565Reserve exchange differences participations

804 -115

Other reserves -1,184 -249Result for the year -2,490 -882

19,748* 1,319 *

Provisions 5

Share in the negative value of subsidiaries

207 300

Reorganisation provision 131 237Other provisions 336 125

674 662

Long-term Liabilities Subordinated bank loan 0 * 150 *Loans from shareholders 5,800 * 25,800*Amount owed to banks 6 16,862 18,061

22,662 44,011

Current liabilitiesCreditors 774 1,036Amount owed to banks 42,631 23,709Current portion of long-term liabilities 1,612** 1,600 **Debts to group companies 3,998 2,810Taxes and social securities 67 73Other liabilities 183 628

49,265 28,856

92,349 75,848

*/**) Capital base to bank 25,698 27,869

**) € 150 of the current portion of long-term liabilities is related to subordinated bank loans (last year: € 600)

4242


Company profit and loss account 2010/2011

2010-2011 / EUR x 1.000 2009-2010 / EUR x 1.000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other income and expense after taxation -6,333 -5,486

Share in result of participations after taxation

3,843 4,604

Result after taxation -2,490 -882


43


Notes to the company balance sheet and the profit & loss account

General Accounting Principles for the preparation of the financial statementsThe company financial statements have been prepared in accordance with the provisions set out in Title 9, Book 2 of the Dutch Civil Code. For the general accounting principles for preparing the financial statements, the accounting principles for the valuation of assets and liabilities, the determination of the result, the notes of the specific assets and liabilities and the results, please refer to the explanation of the consolidated financial statements, unless specified otherwise below.

Comparative FiguresIn the comparative figures, the presentation of the participations with a negative net asset value has been adjusted. In these financial statements, these participations have been deducted from the receivables on the group companies, or they have been presented as part of the provisions. In the past, these participations were offset against the participation with a positive net asset value.

Financial Fixed AssetsParticipations in group companies where the Group exercises significant influence on the business and financial policy, are valued at the net asset value, although this amount cannot be less than zero. This net asset value is calculated on the basis of the accounting principles of Baarsma Wine Group Holding B.V.

Participations with a negative net asset value are valued at zero. Where the company acts (partially) as the guarantor for the debts of the participation in question, a provision will be set up that is primarily at the expense of the amounts owed by this participation and otherwise under the provisions that equal the balance of the losses incurred by the participation, or for the payments that the company is expected to owe on behalf of this participation.

Results of the participationsThe share in the result of participations in which the Group holds a participation includes the company’s share in the results of these participations. Results on transactions where there was a transfer between assets and liabilities between the company and its participations and between the participations themselves have not been included if these transactions have not yet been finalised.

4444



2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Intangible fixed assets (ref. 1)

The movement is as follows:

Book value as at April 1 7,202 8,203

Add:

Investments 309 145

7,511 8,348

Minus:

Reclassification 0 362

Amortisations 676 634

Impairments 200 150

Book value as at March 31 6,635 7,202

Accumulated amortisation as at March 31 4,379 3,703

Amortisation percentage 5%-20% 5%-20%

The movement of intellectual property rights is as follows:

Book value as at April 1 519 0

Add:

Investments 12,200 378

Reclassification 0 362

12,719 740

Minus:

Amortisations 183 221

Book value as at March 31 12,536 519

Accumulated amortisation as at March 31 517 334

Amortisation percentage 10%-33% 10%-33%

The reclassification relates to licences and trademark rights that were formerly classified as goodwill.

4545



2011 / EUR x 1.000 2010 / EUR x 1.000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tangible fixed assets (ref. 2)

The movement of the other fixed assets is as follows:

Book value as at 1 April 831 873Add:Investments 334 78

1,165 951Minus: Depreciations 189 120Book value as at 31 March 976 831

Accumulated depreciations as at March 31 462 300Depreciation percentage 10%-33% 10%-33%

Financial fixed assets (ref. 3)

Participations in group companies 65,597 45,421Other participations 103 101Receivables from group companies 3,722 19,939

69,422 65,461

The movement of these balance sheet items can be represented as follows:

Participations in group comp.

Other participations

Receivablesfrom groupcompanies

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance as at 1 April 45,421 101 19,939 65,461

New participations and/or expansions 4,520 0 0 4,520

Exchange rate differences 917 2 0 919

Conversion loan into share capital 18,387 0 -18,387 0

Repayments 0 0 -1,488 -1,488

Result of the participations 3,843 0 0 3,843

Payment of dividend participations -3,833 0 0 -3,833

Reclassification negative participation value to the credit of the receivables

-3,658 0 3,658 0

Reclassification according the provision’s share in the negative participation value

0 0 0 0

Book value as at 31 March 65,597 103 3,722 69,422

List of participations See the appendix that is part of these notes (page 52 and 53)

Annual report 2010/2011 Baarsma Wine Group Holding B.V. Annual report 2010/2011 Baarsma Wine Group Holding B.V.Annual report 2010/2011 Baarsma Wine Group Holding B.V.

46


2011 / EUR x 1.000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issued

capital

Share premium

reserve

Legal

reserves

Reserve

exchange

differences

Other

reserves

Result of the

financial year

Total

Shareholders equity (ref. 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance as at 1 April 2010 2,000 0 565 -115 -249 -882 1,139

Conversion differences 0 0 0 919 0 0 919

Loan conversion 0 20,000 0 0 0 0 20,000

Additions to the legal reserve 0 0 53 0 -53 0 0

Result allocation previous financial year

0 0 0 0 -882 882 0

Non-distributed result financial year 0 0 0 0 0 -2,490 -2,490

Balance as at 31 March 2011 2,000 20,000 618 804 -1,184 -2,490 19,748

Authorised capitalThe authorised capital amounts to € 10,000 and consists of 10,000,000 shares of € 1 each.2,000,000 shares, i.e. € 2000,- have been issued and fully paid.

Legal reservesThe legal reserves have been created through the other reserves. These reserves relate to the capitalised development costs and the legal reserves that must be maintained for some of the participations.

Reserve exchange differencesExchange differences in group companies and participations in which foreign currencies have been invested, are incorporated in the translation differences reserve. The extent of these exchange differences consists of the difference between the converted equivalent in euros, at the moment of investment, and the equivalent in euros, on the balance sheet date. This reserve is considered to be a legal reserve, which means that this reserve cannot be paid out in the form of a dividend.

Result of the financial yearThese financial statements, in accordance with the guidelines to that effect, are prepared before for appropriation of the result. A decision will be taken about the appropriation of the result during the General Shareholders Meeting.

Bank-guaranteed capitalAlong with the subordinated loans from the shareholders and the bankers, jointly amounting to € 5.9 million,the capital base to banks as at 31 March 2011, amounted to € 25.7 million (31 March 2010: € 28.2 million).

4747



2011 / EUR x 1.000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions (ref. 5)

A provision has been created for participations with a negative asset value where the company acts as the guarantor for the participation, but where the negative asset value cannot be (entirely) offset against a receivable on the participation.The provision for reorganisation costs relates to the financial consequences of making employees redundant.The other provisions relate to the closing down of business premises.

The development of the provisions during the financial year can be represented as follows:

Balance as at

1 April 2010

Add:

allocation

at the expense

of the result

Minus:

reclassification

from

particpating

interests

Deduct:

Paid

Balance

as at

31 March 2011

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share in the negative participation value

300 0 93 0 207

Reorganisation provision 237 43 0 149 131

Other provisions 125 408 0 197 336

Total 662 451 93 346 674

Amount owed to banks (ref. 6)

The following composition represents the remaining duration of the long-term debts. The repayment obligations for the next financial year have been included under the short-term debts and are consequently excluded from this overview. This overview and the short-term repayment obligation are based on the current credit agreement with the credit institutions.

2011 / EUR x 1.000 2010 / EUR x 1.000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duration longer than 1 year but shorter than 5 years

16,862 18,061

Duration equal to, or longer than, 5 years

0 0

Total 16,862 18,061


48

Explanation to the company balance sheet and the profit & loss account.

Other balance sheet itemsFor the other balance sheet items, please refer to the explanation of the consolidated balance sheet.

Contingent liabilities The company is part of the fiscal unity Veenwijk Holding B.V. The company is jointly and severally liable for the fiscal unity’s corporation and turnover tax.

Signing of the annual accounts.

Hilversum, 29 June 2011

The Board of DirectorsOn behalf of Hoeksterpoort Holding B.V. On behalf of Alta Beheer B.V.Tjeerd van der Hoek Cees de Rade

Managing Director Managing Director

The Management BoardRonald van den BergManaging Director (appointed per 27 June 2010)

49

Other information


50

Other information

Independent auditor’s reportTo: The General Meeting of Shareholders of Baarsma Wine Group Holding B.V.

Report on the financial statementsWe have audited the accompanying financial statements 2010/2011 of Baarsma Wine Group Holding B.V., Gorredijk, which comprise the consolidated and company balance sheet as at 31 March 2011, the consolidated and company profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management’s responsibilityManagement is responsible for the preparation and fair presentation of these financial statements and for the preparation of the report of the board of directors, both in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the financial statementsIn our opinion, the financial statements give a true and fair view of the financial position of Baarsma Wine Group Holding B.V. as at 31 March 2011 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirementsPursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the report of the board of directors, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the report of the board of directors, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code.

Breda, 29 June 2011

Deloitte Accountants B.V.

Already signed: M.R. van Leeuwen


51

Other information

RESULT APPROPRIATION

Statutory rules concerning appropriation of resultArticle 18 of the Articles of Association reads as follows:1. The profit is at the disposal of the General Shareholders Meeting, subject to the provisions below.2. Deducted from the profit are the non-redeemed losses from the previous years as well as the taxes, which are

levied or will be levied against the profit - if necessary - to be determined by estimation.3. The company may only make distributions to the shareholders and other parties entitled to the allowable profit,

to the extent that the shareholders’ equity exceeds the paid and called-up part of the capital, increased by the statutory reserves. Payment of profit takes place after the adoption of the financial statements from which it appears that such a payment is justifiable. Profits of the company are not paid out as dividends on shares kept by the company itself. The shares which the company holds in its own capital are not included for the calculation of the profit appropriation, unless these shares are encumbered with a usufruct or certificates of such shares have been issued with the co-operation of the company. The company may only make interim payments, if the requirement, as stated in the first sentence of this paragraph, has been met.

Appropriation of result for the financial year 2009/2010The financial statements for 2009/2010 have been adopted by the General Meeting of Shareholders on 28thOctober 2010. The General Meeting of Shareholders adopted the allocation of the result in accordance with the proposal made to that end.

Proposed Appropriation of result for the financial year 2010/2011A resolution will be adopted for the allocation of the result at the next shareholders’ meeting. Pending the final allocation, the result has been classified under the shareholders equity as result for the year.

SUBSEQUENT EVENTSIn April 2011, the remaining interest in Oud Reuchlin & Boelen BV was acquired. The interest of 1.5% required an investment of approx. € 0.1 million.

The company received a letter from the Tax Authorities on 23 June 2011 (after the balance sheet date) which showed that the Tax Authorities have disputed the legitimacy of the deduction of the interest at the end of March 2011 on the shareholder’s loan amounting to € 16.2 mln. The discussions about this had not been concluded when these annual accounts were drawn and it is not known what effect this will have on the Group’s tax position. The total offsettable interest charges that were credit to the taxable profit amount to € 5.3 mln. A possible additional tax assessment for the financial year 2010/2011 will not result in a payment, given the extent of the tax-offsettable losses.


52

Other information

LIST OF PARTICIPATIONS

Indirect interest

Inclusion in consolidation

Netherlands

Baarsma Wines B.V., Gorredijk 100% Group company Yes

Winetracks International B.V., Gorredijk 100% Group company Yes

Wine Excel B.V., Zaandam 100% Group company Yes

Oud Reuchlin & Boelen B.V., Zoetermeer 98,5% Group company Yes

Stevens Wijnimport B.V., IJmuiden 98,5% Group company Yes

Centraal Drankenhuis Nederland B.V., Zoeterwoude 49% Participation No 1)

Baarsma Wine Group Business to Consumer B.V., Oudeschoot 90% Group company Yes

Wijnvoordeel International B.V., Oudeschoot 90% Group company Yes

Wijnvoordeel B.V., Ruinerwold 90% Group company Yes, as of 1-11-2011

Wijnhandel Léon Colaris B.V., Weert 84% Group company Yes

Wijnkoperij Wielinga B.V., Leeuwarden 100% Group company Yes

Cellarmaster Wines Europe B.V., Weesp 90% Group company Yes

Bourse du Vin International B.V., Weesp 90% Group company Yes

Grand Cru Expertise De Nederlandse Wijnbeurs B.V., Weesp 90% Group company Yes

94 Wines B.V., Hilversum 68% Group company Yes

Beau B.V., Hilversum 100% Group company Yes

Belgium

Baarsma Wine Group België N.V., Hasselt 100% Group company Yes

Hasselt Millesime B.V.B.A., Hasselt 80% Group company Yes

Grand Cru Expertise De Belgische Wijnbeurs B.V.B.A., Leuven 90% Group company Yes

Wijnvoordeel België B.V.B.A., Kortenberg 90% Group company Yes

France

S.A.S. Baarsma, Roncq 100% Group company No

Chineur du Vin S.A.R.L., Bordeaux 90% Group company Yes

Les Crus Prevendus, Bordeaux 90% Group company No

Switzerland

Baarsma S.A., Baar 100% Group company Yes

Cellarmaster Wines S.A., Basel 100% Group company Yes

Baarsma Wine Group Switzerland AG, Scherzingen 78% Group company Yes

Rutishauser Weinkellerei A.G., Scherzingen 78% Group company Yes

Dinkel A.G., Scherzingen 78% Group company Yes

Barossa Weinhandels A.G., Scherzingen 78% Group company Yes

Barisi & Cie AG, Scherzingen 78% Group company Yes

Alain Parisod SA, Scherzingen 63% Group company Yes

1) Share in result: nil. Share in net asset value: € 9 (x 1.000)


53

Other information

LIST OF PARTICIPATIONS

Indirect interest

Inclusion in consolidation

United Kingdom

Armit Holding Ltd, London 75% Group company Yes

John Armit Wines Ltd, London 75% Group company Yes

Now Wines Ltd, London 75% Group company Yes

Wine deal Ltd, London 90% Group company Yes

Germany

Weinvorteil W.I.E. G.M.B.H., Lohmar 60% Group company Yes

Cellarmaster Wines G.M.B.H. i.l, Bingen 90% Group company No

Danmark

Vinfordel Aps, Hellerup 100% Group company Yes

Italy

Canei Holding S.R.L., Milan 100% Group company Yes

Canei S.R.L., Milan 100% Group company Yes

South Africa

Baarsma South Africa (Pty.) Ltd., Stellenbosch 78% Group company Yes

Lyngrove Guest House (Pty.) Ltd., Stellenbosch 15% Group company No 2)

Hong Kong

Armit Hong Kong Ltd, Hong Kong 75% Group company Yes

2) Share in result: nil. Share in net asset value: € 3 (x 1.000)


54

Contact information

Baarsma Wine Group Holding

Oude Enghweg 81217 JC HilversumThe Netherlands

tel +31 (0) 35 626 1270

fax +31 (0) 35 626 1271

e-mail [email protected]

website www.baarsmawinegroup.com

Colophon

Design Miazo www.miazo.com

Baarsma Wine Group Holding © 2011. All rights reserved.

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