Notes to the company balance sheet and profit and loss account

• General

  The registered office of Beter Bed Holding N.V. is Linie 27, Uden, the Netherlands. The financial statements have been compiled on the basis of Title 9, Book 2 of the Dutch Civil Code in accordance with International Financial Reporting Standards (IFRS), as adopted for use in the European Union and applied to the consolidated financial statements. The participating interests in group companies are valued at the net asset value calculated in accordance with Beter Bed Holding N.V.’s policies. When a participating interest has a negative equity the sequence is as follows: first, the valuation of the participating interest is reduced, after which a write-down is applied to the amounts owed by this participating interest insofar as these are an increase of the net investment in the participating interest, and then a provision is formed.

  Beter Bed Holding N.V. had an average number of 7 employees (FTE) in 2017 (2016: 7).

  The company financial statements are presented in euros and all amounts are rounded to thousands (€ 000) unless stated otherwise.

  The note on executive remuneration is included in the notes to the consolidated balance sheet and profit and loss account.

  The fees charged for the audit of the financial statements and other non-audit services by the auditor PwC Accountants are also disclosed in the notes to the consolidated balance sheet and profit and loss account.

• 1 Financial assets

  This item includes the participating interests in the group companies and the amounts owed by the group companies.

  The loans to participating interests item recognises a loan in accordance with market conditions to Beter Beheer B.V. of € 87,240 (2016: € 87,240). The loan to Beter Beheer B.V. is a fixed-interest loan at an interest rate of 7% (2016: 7%). The remaining term to maturity of the loan to Beter Beheer B.V. is one year. No securities with regard to this loan have been provided. The fair value of the loan is equal to its nominal value.

  Movements in this item were as follows:

  	Participating interests in group companies	Loans	Total
  Balance at 1 January 2016	78,396	87,240	165,636
  Profit from participating interests in 2016	14,588	-	14,588
  Dividend paid	(665)	-	(665)
  Acquisitions	3,298	-	3,298
  Granted loans to group companies	-	874	874
  Exchange gain	(179)	(5)	(184)
  Change to provisions for subsidiaries	1,377	(450)	927
  Balance at 31 December 2016	96,815	87,659	184,474
  Balance at 1 January 2017	96,815	87,659	184,474
  Profit from participating interests in 2017	4,614	-	4,614
  Dividend paid	(9,000)	-	(9,000)
  Capital contribution	11,212	-	11,212
  Repayment of loans to group companies	-	(419)	(419)
  Exchange gain	(240)	-	(240)
  Change to provisions for subsidiaries	(4,858)	-	(4,858)
  Balance at 31 December 2017	98,543	87,240	185,783

• 2 Receivables

  		2017	2016
  Group companies		2,871	2,253
  Taxes and social security contributions		72	32
  Other receivables		2,397	2,681
  Total		5,340	4,966

  All receivables fall due within one year.

  Beter Bed Holding uses a cash pool structure as a result of which there are minimal and very short-lived current account intra-group balances.

• 3 Cash and cash equivalents

  This item relates to the balance of cash in hand and at the bank. The cash and cash equivalents are at the full disposal of the company.

• 4 Equity

  The company’s authorised capital amounts to € 2,000, divided into 100 million ordinary shares with a nominal value of € 0.02 each. At the end of 2017 21,955,562 shares had been issued and paid up (2016: 21,955,562).

  There are no shares that have been repurchased and not yet cancelled. Repurchased shares are no longer included in the earnings per share calculation.

  The movement in the equity items is explained in the consolidated statement of changes in equity . The revaluation reserve is the statutory revaluation reserve and relates to company land. The reserve for currency translation differences is also a statutory reserve. Neither reserve is freely distributable.

• 5 Provisions

  At year-end 2017 and 2016 the provisions consisted in full of the provision for participating interests. The participating interests' provision is a provision for participating interests that have negative net asset value after setting off loans provided by the company.
  

  The movements in the provisions in 2017 and 2016 are as follows:

  		2017	2016
  Balance at 1 January		14,770	13,843
  Profit from participating interests		(4,858)	927
  Balance at 31 December		9,912	14,770

• 6 Current liabilities

  The breakdown of this balance sheet item is as follows:

  		2017	2016
  Credit institutions		109,033	96,176
  Taxes and social security contributions		1,494	1,127
  Other liabilities, accruals and deferred income		653	627
  Total		111,180	97,930

  Beter Bed Holding uses a cash pool structure as a result of which there are minimal and very short-lived current account intra-group balances.

• 7 Commitments not included in the balance sheet

  Together with the other Dutch operating companies, the company is part of a tax entity for corporation tax purposes. Each of the operating companies is jointly and severally liable for the tax payable of all operating companies included in the tax entity. The company settles the corporation tax with the operating companies concerned on the basis of the profit or loss before income tax of the operating company concerned.

  Beter Bed Holding N.V. has issued declarations of joint and several liability for all Dutch group companies for the obligations arising from all legal transactions entered into by these group companies.

• 8 Post-balance sheet events

  On 16 January 2018, it was announced that the Supervisory Board intends to appoint John Kruijssen as Chief Executive Officer (CEO) and Statutory Director. The proposed appointment will be placed on the agenda of the Annual General Meeting on 26 April 2018 in accordance with the articles of association and legal and statutory requirements. No other events that are required to be disclosed occurred in the period between the end of the year under review and the preparation of these financial statements.

• 9 Appropriation of profit

  Appropriation of profit pursuant to the articles of association

  Article 34 of the Articles of Association states the most important provisions pertaining to the appropriation of profit:

  Paragraph 1

  Every year the Management Board, subject to approval from the Supervisory Board, determines the proportion of the company’s profit – the positive balance of the profit and loss account – to be added to the company’s reserves.

  Paragraph 2

  The profit remaining after the reservation pursuant to the previous paragraph shall be placed at the disposal of the Annual General Meeting.

  
  ­Appropriation of profit 
  

  2017
  Profit for the year			9,525
  Interim dividends paid			(7,465)
  Addition to reserves1			(1,401)
  Available for payment			659

  1. ¹ On the basis of the balance of outstanding and repurchased shares as at 31 December 2017.

  The proposal for the appropriation of profit has not been taken into the balance sheet.

  
  
  

  Uden, The Netherlands, 1 March 2018

  Management Board	Supervisory Board
  B.F. Koops, CFO	D.R. Goeminne, Chairman
  	A.J.L. Slippens, Vice Chairman
  	E.A. de Groot
  	W.T.C. van der Vis