Download Annual Report - APEN

ANNUAL REPORT 2011 

APEN 

Private Equity

FACTS AND FIGURES 

Company Profile 

APEN Ltd. is a Swiss investment company with the 

objective of achieving long-term capital growth for 

shareholders. APEN Ltd. holds a mature portfolio 

of private equity funds and privately held oper ating 

companies. APEN Ltd. is currently not making new 

fund commitments or direct investments but will 

continue to fund outstanding commitments in 

existing portfolio funds. APEN Ltd. has over twelve 

years of operating history and is managed by an 

experienced team. APEN Ltd. is listed on the SIX 

Swiss Exchange under the ticker symbol “APEN”. 

Valuation as of 31 December 2011 

Closing price per share CHF 17.40 

Net asset value per share 

(applying fair values) 

CHF 58.95 

Exchange rate USD/CHF 0.9351 

Exchange rate EUR/CHF 1.2139 

Number of shares outstanding 3 929 185 

Market capitalization CHF 68.4 million 

Swiss Security Number 

915.331 

ISIN: CH0009153310 

Ticker: APEN 

Trading Information 

Reuters: APEZn.S 

Bloomberg: APEN 

Telekurs: APEN 

www.apen.com

Contents 

Chairman’s Statement 2 

Management Report 

– Review 2011 and Outlook 4 

– Overview of 20 Largest Investments 8 

Financial Report – APEN Group 20 

– Consolidated Financial Statements 2011 

Corporate Governance 56 

Financial Report – APEN Ltd. 66 

– Financial Statements 2011

CHAIRMAN’S STATEMENT 

2 

Dear Shareholders 

After achieving stabilization in 2010, our company consolidated 

its activity during 2011. The portfolio matured further and 

generated substantial cash flows during the first part of the 

year. The operational set up is unchanged, and there was 

continuity at the board and management level throughout the 

reporting period. 

The recovery in the private equity markets which occurred 

in 2010 and continued well into summer 2011 enabled the 

industry to register substantial investment and exit activity. 

After the summer, deal activity experienced a strong decline, 

notably in North America and even more so in Western 

Europe. These markets traditionally use substantial amounts 

of leverage and therefore were more impacted by increasingly 

restrictive bank lending. The market developments were 

reflected in our investment portfolio with reduced exits during 

the fourth quarter of the year, although exit activity was 

good due to transactions structured or launched before the 

summer break.

EDUARDO LEEMANN DR. CHRISTIAN WENGER DAVID PINKERTON 

Chairman of the Board Vice Chairman Member 

Overall APEN’s portfolio generated cash flows of CHF 101 million, 

nearly half of which represented investment income. 

Investment activity slowed in comparison to the previous year 

and represented slightly over half of distributions. As a result 

positive net cash flows were generated at portfolio level for 

the year and the liquidity situation further stabilized. Under - 

lying portfolio companies are generally in good health and 

have further reduced their leverage. The level of write-downs 

has remained stable. 

The financing structure of the company continues to affect 

the Company’s bottom line. The strength of the Swiss franc 

against the US dollar and the Euro is an additional negative 

factor that impacted the consolidated result. Generally, investments 

made in previous years with a weaker Swiss Franc 

were exited during 2011, resulting in a currency loss. 

The current outlook for the private equity market is uncertain, 

and activity in mature markets (where APEN has the vast 

majority of its investment exposure) remains at low levels 

during the initial months of 2012. Moreover, the majority of 

the underlying portfolio funds are expected to be in a har - 

vesting period during 2012. As a result we expect investment 

activity to decrease further during 2012. At the same time, 

exit activity in mature markets is at a low level for the time 

being and it is unclear when the exit window will reopen. 

Investment activity cash flows during 2012 are thus expected 

to be lower than in 2011. 

CHAIRMAN’S STATEMENT 

The current members of the Board of Directors will stand for 

re-election at the 2012 shareholders meeting. The board and 

the management continue to focus on improving the performance 

of the company and in particular on evaluating possible 

options to reduce its overall financial burden. A reduction in 

financial expenses would put the company in a position to 

benefit increasingly from the upside potential of the CHF 430 

million portfolio in the medium term. 

Eduardo Leemann 

Chairman of the Board 

3

MANAGEMENT REPORT 

4 

2011 was a year of two halves: the first six months were solid, followed by a 

slowdown in the second six months due to the sovereign debt crisis in Europe. 

Investment performance for APEN Ltd. (the “Company”) in 2011 was satisfactory, 

with investment income increasing by nearly 50%. Despite high interest expense, 

the Company managed to realize a net profit for the period of CHF 1.6 million. 

Due to the decline of unrealized gains on the investment portfolio a comprehensive 

loss for the period of CHF 13.0 million resulted (gain of CHF 4.7 million in 2010). 

Review 2011 and Outlook 

The Company’s liquidity remains comfortable. The net asset 

value (“NAV”) per share decreased 4.9% from CHF 61.99 

to CHF 58.95 The main investment currencies (EUR –2.9%; 

USD +0.3%) moved only marginally year over year. However, 

the volatility of these exchange rates during the year was considerable. 

The Company’s share price increased 5.5% and 

ended the year at CHF 17.40. 

The private equity markets were quite active through the summer 

but were later affected by the European sovereign debt 

crisis. Banks became more restrictive in financing private 

equity deals as their lending capacity declined due to potential 

losses from European sovereign debt positions and due to new 

capital requirements. Due to the uncertainty in the market, the 

IPO market virtually shut down and investors became risk 

averse. Investment income in the second semester was still 

approximately 40% of the annual total. A large part of this 

income was the result of previously negotiated deals that were 

closed in the latter part of the year. 

Investment Performance 

Investment income (realized gains, interest and dividends) was 

CHF 56.1 million, reflecting the improved market conditions in 

the first half of 2011 (2010 CHF 37.7 million). This represented 

12.4% of the portfolio investments at the beginning of the 

year. Nine exits resulted in realized gains between CHF 1 mil- 

lion and CHF 2 million and four exits resulted in capital gains 

in excess of CHF 2 million (Body Central, Acosta, Big Point and 

Jimmy Choo). Of these 13 exits, eight were booked in the first 

semester and none in November and December. 

Portfolio fund valuations remained strong until mid-year. 

Valuations at the end of the third quarter remained broadly 

flat compared to mid-year valuations. For the calculation of 

year-end valuations, in most cases the Group used reports as 

of 30 September 2011 and added/subtracted cash flows 

through year-end 2011 to determine year-end fair values. In 

general, we are pleased with the quality of the portfolio funds. 

The net asset value of the ten largest funds made up 44% of 

the portfolio. Six funds (Cognetas I, Highstar I, PineBridge 

Latin America Partners I, CapVest I and Blackstone III) remain 

in the portfolio with one investment or no investments remain - 

ing in their portfolios. These funds will be liquidated after 

the remaining investments are sold and escrow payments are 

received. 

Performance of the direct investment portfolio and loans 

(6.9% of total investments; 2010: 9.2%) was mixed. Three companies 

(Body Central, Hertz and NXP Semiconductors) are 

publicly listed and had varying share price movements (Body 

Central +75%, Hertz –19% and NXP –27%). In 2011, Acosta 

was sold at a multiple in excess of two times cost, yielding 

proceeds of about CHF 7 million. On a less positive note, 

Xanodyne encountered a challenging market environment and 

needed to raise additional capital. The Group decided not to 

participate in the capital increase and subsequently wrote off 

its participation.

CONRADIN SCHNEIDER 

The portfolio saw a number of companies list shares during 

2011. Some of the more notable listings include Kinder 

Morgan, Nielsen, Thermon Group, Freescale Semiconductors, 

GNC Holdings and Bank United. Proceeds from the listing and 

subsequent secondary share sales by the fund managers increased, 

with Kinder Morgan (USD 2.5 million), Body Central 

(USD 2.5 million) and Thermon (USD 1.0 million) being 

the largest contributors. In some instances the proceeds from 

the listing were used to reduce debt (Freescale Semiconductors). 

Proceeds from listed investments are generally spread 

out over a lengthy period of time, since there are restrictions 

on when shares can be sold. Additionally, market capacity 

dictates the pace at which a fund can sell shares. The fair value 

of all listed investments amounted to CHF 48.9 million or 

11.3% of invested assets. 

Year over year the US dollar (+0.3%) and the Euro (–2.9%) 

moved only marginally against the Swiss franc. However, 

the movements during the year were the most pronounced 

in the Group’s history (USD trading range 0.73 to 0.98; EUR 

trading range 1.32 to 1.03). The portfolio investments are 

mainly denominated in USD (approximately 75%) and EUR 

(approximately 25%). Considering the USD liabilities (Borrow - 

ings and Class B Units) the group has only a small net USD 

currency exposure. The Euro exposure is more significant; 

however, with the Swiss National Bank keeping the exchange 

rate at or above CHF/EUR 1.20, the Group does not hedge Euro 

exposure against the Swiss franc. 

DAVID SALIM 


The composition of the portfolio has changed only marginally 

during 2011. The North American Funds Portfolio continued 

to have the largest share (59.6%), with the Western European 

Funds Portfolio (26.8%), the Other Regions Fund Portfolio 

(6.7%) and Direct Investments/Loans (6.9%) making up the 

balance. The maturity of the portfolio increased, as no new 

funds were added to the portfolio. Investments with a ma turity 

of less than three years amounted to 24.4% (2010: 31.6%) of 

invested assets, investments made three to five years ago 

53.4% (2010: 57.0%) and more than five years ago 22.2% 

(2010: 11.4%). The portfolio continued to be exposed mainly 

to buyout transactions. 

Write-downs on non-current assets remained stable during 

2011 at about 3% of invested assets at the beginning of the 

year and amounted to CHF 14.4 million (2010 CHF 15.8 million). 

Write-downs are booked when the fair value of a fund 

or a direct investment is below cost for more than twelve 

months or if the fair value of an investment is more than 30% 

below cost. The Group expects write-downs on non-current 

assets to remain at low levels for 2012. 

Operating expenses amounted to CHF 4.5 million (2010: 

CHF 6.5 million) or about 1% of total assets. It is important to 

note that neither a management fee nor a performance fee is 

being charged to the Group; the only charge is for costs 

effectively incurred. 

5


6 

Liabilities 

The main liabilities, the Borrowings and the Class B Units, 

remained in place during 2011. The utilized amounts under the 

Fortress Credit Facility (Borrowings) remained at USD 100 million 

(out of the USD 200 million facility). Not having to further 

utilize the facility was a key target for management, as it would 

have increased both the financing costs and the minority 

interest from the current 10% to a maximum of 25%, which in 

turn would have resulted in a further reduction of NAV per 

share. 

The Borrowings carry a 8% p.a. cash interest rate and 12% 

payment in kind interest. As of year-end the amount outstand - 

ing in relation to the Borrowings was USD 113.4 million 

(CHF 106.0 million): the principal of USD 100 million plus the 

accrued interest of USD 13.4 million. 

On the balance sheet the same Borrowings were recorded at 

CHF 81.8 million as of 31 December 2011. In accordance with 

IFRS guidelines the Group recognized the Borrowings at fair 

value and subsequently calculated them at amortized cost 

using the effective interest method. The effective interest was 

calculated at 30.08%. 

The Class B Units represent the USD 150 million provided by 

AIG to the Group in 2008 at a simple interest rate of 5.25%. 

The principal amount outstanding vis-à-vis AIG as of year-end 

2011 remained unchanged at USD 150 million, while accrued 

interest amounted to USD 31.6 million. The total outstanding 

amount in relation to Class B Units was USD 181.6 million 

(CHF 169.9 million). 

As of 31 December 2011 the Class B Units were recorded in 

the balance sheet at CHF 124.4 million. For accounting pur - 

poses, the Group recognized the Class B Units at fair value, 

and they are subsequently measured at amortized cost using 

the effective interest method. The effective interest was calculated 

to be 7.01%. 

The book value of both the Borrowings and the Class B 

Units in the balance sheet as of year-end 2011 amounted to 

CHF 206.3 million. The amounts due to the two lenders (issue 

amount of the loan plus accrued interest) as of year-end 2011 

amounted to CHF 275.9. 

In line with accounting guidelines the two loans are booked in 

the balance sheet at an amount about CHF 69.6 million lower 

than the originally granted loan amounts plus accrued interest. 

By applying the effective interest methodology, the Group will 

close this gap over time as the amortization part in creases 

until the loans reach maturity. 

Considering that the Company has 3 929 185 shares outstand - 

ing, the accounting treatment of the loans overstates the NAV 

as of year-end 2011 by approximately CHF 17.7 per share. 

The derivative liability within the non-current assets represents 

the value of the additional part of the minority interest that 

Fortress is entitled to in case the Group does not further draw 

down funds under the Fortress credit facility until 31 March 

2012. In that case the minority interest will increase from the 

current 10% to 12.5%. 

Top 20 Investments 

The Group’s Top 20 investments portfolio remained fairly 

stable during 2011. Five new investments made it to the 

Top 20 in the course of the year. These were portfolio investments 

that have been held by the Group for at least one year 

and moved up into the portfolio of Top 20 investments due 

to strong performance or add-on investments. The Top 20 

investments portfolio accounted for 23.0% of total invested 

assets (2010: 23.6%). Four of the Top 20 investments were 

listed as of year-end 2011. Three of these (Nielsen, Kinder 

Morgan and Thermon) were taken public in 2011, while Body 

Central was listed in 2010. Overall the performance of the 

Top 20 investments is satisfactory. See page 8 for detailed 

information on the Top 20 investments portfolio. 

Liquidity 

Unfunded commitments reduced further to CHF 103 million 

(2010: CHF 139 million): a reasonable level compared to the 

Company’s NAV. Distributions from portfolio investments 

exceeded drawdowns. Some of the proceeds were used to 

repay accrued interest on the Borrowings. The credit agreement 

with Fortress states that cash in excess of 30% of 

unfunded commitments needs to be used to repay the Borrow - 

ings. Cash interest paid on the Borrowings as well as commitments 

fees amounted to CHF 10.1 in 2011. Liquidity continues

to be closely monitored to ensure that the repayment of the 

outstanding loans in the long term is executed in such a way 

as to maximize shareholder value. 

Cash on hand as of year-end 2011 stood at CHF 38.1 million 

and available credit facilities amounted to CHF 116.9 million 

(represented by the Fortress credit facility and the revolving 

credit facility with Falcon Private Bank), for a combined 

amount of CHF 155.0 million. Based on past experience, it is 

likely that the bulk of the remaining unfunded commitments 

will be drawn over the next three to four years. 

Outlook 

Currently, we believe that the operating environment for many 

private equity backed companies is better in the US than 

Europe. This will probably also hold up for valuations, as we 

expect earnings growth of US companies to be more solid than 

for European companies. We do not anticipate that year-end 

valuations will differ substantially from the September 2011 

figures. This is supported by fairly stable earnings multiples 

on comparable listed companies. 

Exits have slowed down in the latter part of 2011 and in early 

2012, and we expect exit activity to remain at a slower pace 

than at the same time in 2011. The Group has recorded some 

cash-flow-negative months from a net investment perspective. 

We do not anticipate a quick recovery of distributions. Debt 

remains difficult to obtain for private equity deals, and equity 

markets are not receptive for listings. A good market environment 

overall is required for funds to exit portfolio investments 

– especially to exit larger companies with an enterprise value 

in excess of CHF 3 billion. The timing of the exit market re - 

covery is still unclear. In the meantime, the Group continues to 

evaluate opportunities to reduce leverage and financing costs 

in order to improve overall profitability. 


1. Diversification by Investment Focus as of 31 December 2011 

Expressed as % of invested assets applying fair values 

2. Diversification by Vintage Year as of 31 December 2011 


in % 

35 

30 

25 

20 

15 

10 

5 

0 

7.1% 

Venture 3.6% 

Development Capital 

8.6% 

Mezzanine 0.4% 

10.0% 

7.3% 

20.2% 

0–1 year 1–2 years 2–3 years 3–4 years 

33.2% 

4–5 years 

13.5% 

5–6 years 

3. Diversification by Region as of 31 December 2011 


North America 62.4% 

Europe 30.7% 

Buyout 87.4% 

8.7% 

> 6 years 

Other regions 6.9% 

7

TOP 20 INVESTMENTS 

8 

As of 31 December 2011, the total fair market value of the Group’s twenty largest 

holdings was CHF 99.3 million. This represents 23.0% of total assets (2010: 23.2%). 

The Top 20 investment portfolio was fairly stable, with five new investments 

added. Of the five companies that left the Top 20, two were exited completely 

(Acosta, Jimmy Choo), two are listed (Hertz, Zhuhai Zhongfu) and saw their share 

price decline, and one (United Coffee), was replaced despite good performance. 

Top 20 Investments 

The maturity of the Top 20 investments has increased further 

to 47 months (2010: 42 months). The minimum fair value for 

inclusion in the Top 20 investment portfolio was approxi mately 

CHF 3.2 million (2010: 3.1 million), and the average totaled 

about CHF 5.0 million. 

The highlights within the Top 20 investment portfolio were the 

sales of Acosta and Jimmy Choo. Acosta, a direct investment, 

was sold to another private equity sponsor for nearly CHF 7 

million. The Company received in excess of two times cost over 

a period of five years. Jimmy Choo was sold after a holding 

period of four years, resulting in proceeds of about CHF 5 million. 

During its ownership, Towerbrook expended the distri - 

bution network of Jimmy Choo resulting in solid growth of 

revenues and EBITDA. Jimmy Choo was sold to luxury goods 

group Labelux. 

All of the Top 20 investments are buyouts. The investments are 

well diversified across various industries. The Top 20 com - 

panies generate significant revenues and EBITDA and are 

market leaders either in their markets or globally. Four of the 

Top 20 investments (Kinder Morgan, Nielsen, Thermon Group 

and Body Central) were listed on a stock exchange in or prior 

to 2011. 

New Companies to the Top 20 Portfolio 

Managed Health Care Associates, Inc. (MHA) is a leading 

health care service company that offers a growing portfolio of 

services and solutions to support the diverse and complex 

needs of the alternate site health care provider. They are 

recognized leaders in: Group Purchasing, Managed Care and 

Payer Contracting, Reimbursement Management, Specialty 

Pharmacy Solutions, Pharmaceutical Data Analytics, Clinical 

Pharmacy Software, Legislative Advocacy, and Clinical Services. 

H.C. Starck (HCS) is a world leader in the production of 

specialty metals and advanced ceramics. Its specialty metals 

portfolio comprises molybdenum, tungsten, tantalum, niobium 

and rhenium. The company offers these products along 

the value chain from chemicals and powders (about 70% of 

revenues) to sophisticated fabricated products, meaning 

powders that have been pressed, sintered, rolled or machined 

(approximately 30% of revenues). The company’s products 

are supplied to a wide range of end markets, including 

electronics, chemicals, aerospace and defense, automotive, 

energy and medical equipment. Headquartered in Goslar, 

Germany, HCS operates 12 production sites across Europe, 

North America and the Far East and is represented in over 

30 countries worldwide. 

Through its global network, Thermon provides highly engine 

ered thermal solutions, known as heat tracing, for process 

industries, including energy, chemical processing and power 

generation. Thermon’s products provide an external heat 

source to pipes, vessels and instruments for purposes of freeze

protection, temperature maintenance, environmental moni - 

toring and surface snow and ice melting. 

Hilton is a leading global hospitality firm that owns franchises 

and manages hotels, resorts and timeshare properties. Hilton 

has a brands portfolio that includes Hilton, Hampton Inn, 

Hilton Garden Inn, Doubletree, Conrad, Waldorf Astoria Hotels 

and Resorts and Home2Suites. The system as a whole includes 

over 3 700 properties and 600 000 rooms in 82 countries. 

Czerwona Torebka has been a portfolio company since the first 

quarter of 2009. Czerwona Torebka provides roll-out services 

to retail chain operators. The company selects locations that 

meet clients’ specifications and provides comprehensive services 

leading to the final delivery of a retail store. This process 

involves a full range of services from obtaining the land, 

obtaining the necessary permits, and supervising the actual 

construction of the retail store to outfitting the store to meet 

the retailer’s specifications/design. 

Outlook 

The volume of proceeds to come from the Top 20 investments 

is difficult to forecast. Most of them are sizeable companies 

that make it difficult to sell to financial sponsors as debt for 

large transactions is not readily available at this time. As a 

result of the sovereign debt crisis, the listing of companies on 

an exchange came to a halt. We do expect to see some distributions 

from the Top 20 investments that were already listed 

as the fund managers place shares in the secondary market. 

In spite of the maturity of the investments we do not expect 

numerous full exits from the Top 20 investments. 

Overall we are pleased with the operational performance 

of the Top 20 investments. Most investments are tracking the 

investment plans. Not many are confronted with raw material 

inflation or are in a more challenging place in their economic 

cycles. 

Distribution of value in Top 20 2011 vs. 2010 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Top 3 Top 5 Top 10 Top 11–20 

Comparison Top 20 by Maturity 2011 vs. 2010 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Comparison Top 20 2011 vs. 2010 by Industry 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

1 year 2 years 3 years 4 years 5 years 

Services 

Medical & 

Health 

Industrial 

Products 

2011 2010 adjusted for currency differences 

Consumer 

Media 


6 years 

Leisure 

9


10 

TOP 20 INVESTMENTS * 

Fair Value Percentage of 

Investment Date Portfolio Company (CHF million) invested assets Sector 1 Type Geography 

1 May 2007 Kinder Morgan 12.0 2.8% Services Buyout North America 

2 Nov. 2007 Ports America 8.9 2.1% Services Buyout North America 

3 June 2006 Gospel Music Channel 7.9 1.8% Leisure Buyout North America 

4 June 2006 The Nielsen Company 6.9 1.6% Media Buyout North America 

5 Jan. 2007 Knowledge Universe Education 6.5 1.5% Services Buyout North America 

6 April 2007 Hygenic 6.2 1.4% Medical & Health Buyout North America 

7 Dec. 2009 Vision 7 4.7 1.1% Services Buyout North America 

8 Sept. 2008 Findus Group 4.5 1.0% Consumer Buyout Europe 

9 Dec. 2007 Mater Private Healthcare 3.9 0.9% Medical & Health Buyout Europe 

10 Sept. 2006 Body Central 3.9 0.9% Consumer Buyout North America 

11 Sept. 2009 180 Medical 3.7 0.8% Medical & Health Buyout North America 

12 Mar. 2009 Czerwona Torebka 3.6 0.8% Services Buyout Other Regions 

13 Oct. 2007 Hilton 3.5 0.8% Leisure Buyout North America 

14 July 2007 Hema 3.5 0.8% Consumer Buyout Europe 

15 May 2010 Thermon Group 3.4 0.8% Industrial Buyout North America 

16 May 2007 Oystar Group 3.3 0.8% Industrial Buyout Europe 

17 Mar. 2008 EB Brands 3.3 0.8% Consumer Buyout North America 

18 Jan. 2007 Starck Co. 3.2 0.7% Industrial Buyout Europe 

19 Aug. 2011 RenoNorden 3.2 0.7% Services Buyout Europe 

20 July 2007 Managed Healthcare Associates 3.2 0.7% Medical & Health Buyout North America 

Total Fair Value Top 20 Holdings 99.3 23.0% 

1 EVCA Definition 

* Presented on a look-through basis

1 

www.kindermorgan.com 

Kinder Morgan (KM) is a leading pipeline transportation and 

energy storage company in North America with approximately 

37 000 miles of pipelines and 180 terminals. KM transports, 

stores and handles energy products like natural gas, refined 

petroleum products, crude oil, ethanol, coal and carbon dioxide 

(CO 2 ). In most of its businesses, KM operates like a giant 

toll road, receiving a fee for its services and providing connectivity 

for its customers. Almost all of KM’s assets are owned 

at Kinder Morgan Energy Partners, L.P. (NYSE: KMP), one of 

the largest publicly traded pipeline master limited partnerships 

in America. The general partner of KMP is owned by Kinder 

Morgan, Inc., which completed its initial public offering (NYSE: 

KMI) in February 2011. Combined, the Kinder Morgan com - 

panies have an enterprise value of over USD 50 billion. 

3 

www.watchgmctv.com 

gmc is a 24-hour advertiser supported commercial cable and 

satellite TV network devoted to delivering the highest quality 

uplifting music and entertainment programming for the entire 

family. The network programs a mix of inspirational music, 

family dramas, original and acquired movies, and comedies. 

gmc is America’s favorite network for uplifting music and 

family entertainment. It’s the television destination where 

viewers go to be entertained, inspired, and to feel good about 

the faith-friendly family values they cherish. Over 50 million 

U.S. homes subscribe to gmc. 

2 

www.portsamerica.com 


Ports America provides independent marine terminal oper - 

ations and stevedoring services to container shipping lines, 

roll-on/roll-off carriers, cruise lines and general cargo shippers 

in more than 80 locations at 42 ports along the East, Gulf and 

West Coasts including key terminals in New York, New Jersey, 

Los Angeles, Long Beach, Baltimore, and Oakland, among 

others. 

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12 

4 

7 

www.nielsen.com 

Nielsen Holdings N.V. (NYSE: NLSN) is a global information 

and measurement company with leading market positions in 

marketing and consumer information, television and other 

media measurement, online intelligence, mobile measurement, 

trade shows and related properties. Nielsen has a presence in 

approximately 100 countries, with headquarters in New York, 

USA and Diemen, the Netherlands. 

www.vision7international.com 

Vision7 International is among the top 25 international marketing 

communications companies in the world, with over 

1 400 employees in Canada, the United Kingdom, and the 

United States. Vision7 International has two operating divi - 

sions: Cossette, a fully integrated agency which occupies a 

leadership position in Canada, and EdC, a group of disciplinespecific 

marketing agencies. Cossette has offices in Quebec 

City, Montreal, Toronto, Vancouver, and Halifax. EdC is a global 

network of discipline specific agencies, including awardwinning 

international agency brands Dare Digital, MCBD, Elvis, 

PainePR, Optimum, Band & Brown, RocketXL and Jungle Media. 

In addition to its offices in New York, Los Angeles and London, 

EdC also has Canadian operations. 

5 

6 

www.kueducation.com 

Knowledge Universe is a global education company with a network 

of more than 3 700 education locations globally employing 

over 40000 teachers and professional staff, as well as large 

online schools, colleges and school management systems 

which touch over five million students daily. Providing worldclass 

educational resources and infrastructure, with wellrecognized 

brand names, Knowledge Universe offers services 

in three key segments – early childhood education, primary 

and secondary education as well as higher education. 

www.hygenic.com 

Hygenic is a leading designer, manufacturer, and marketer of 

branded, consumable products sold to therapy, rehabilitation, 

and wellness professionals under the well known Thera-Band ® 

and Bio-Freeze ® brand names and to retailers under the 

Perform ® brand. The company’s core products include re - 

sistance bands and tubing, topical analgesics, and a broad 

range of therapy and exercise products used by physical 

therapists, chiropractors, podiatrists, physical trainers and 

massage therapists to promote strength and flexibility, and to 

provide pain relief for their patients.

8 

10 

www.findusgroup.com 

The Findus Group is a multinational food business headquartered 

in the UK and with operations around Europe. It is the 

parent Group of Young’s, Findus and The Seafood Company. 

In the UK, Young’s is the leading branded producer and distributor 

of seafood, with a 200 year old heritage of selling a wide 

range of high quality seafood products – both chilled and 

frozen. Findus is the leading branded frozen food manu - 

facturer in Scandinavia, with market leadership in Sweden, 

Norway, Finland and France. The company is a leader in the 

frozen ready meals, fish and vegetables segments across these 

markets. The Seafood Company is a leader in the production of 

chilled, private-label seafood products in the UK. It is Europe’s 

biggest processor of farmed Atlantic salmon. 

www.bodyc.com 

Body Central is a growing, multi-channel, specialty retailer 

offering on-trend, quality apparel and accessories at value 

prices. Body Central operates specialty apparel stores under 

the Body Central and Body Shop banners, as well as a direct 

business comprised of the Body Central catalog and e-commerce 

website. Body Central targets women in their late teens 

and twenties from diverse cultural backgrounds who seek 

the latest fashions and a flattering fit. Body Central had 221 

stores located in fashion retail venues across 24 states in the 

South, Mid-Atlantic and Midwest. Body Central went public on 

the NYSE (BODY: US) in October 2010. 

9 

www.materprivate.ie 


Mater is Ireland’s leading specialist private hospital, located 

in Dublin. It has over 200 in-patient and day-patient beds, 

7 oper ating theatres, over 180 specialist consultants and over 

700 staff. Mater provides a vast range of medical specialty 

services. The ‘Heart Centre’ and ‘Cancer Centre’ are con - 

sidered as centres of excellence for cardiac and cancer related 

procedures, with services being delivered by national and 

internationally renowned doctors. 

13


14 

11 

14 

www.180medical.com 

180 Medical is a leading distributor of disposable, single-use 

(intermittent) urologic catheters to customers in the home 

setting. 180 Medical tailors its service and product offering 

to meet the individual needs of its diverse customer base, including 

those with spinal cord injuries, spina bifida, multiple 

sclerosis and other conditions causing incontinence. 

www.hema.nl 

HEMA is a general merchandise retailer active primarily in 

the Benelux region. Operating through a network of stores in 

the Netherlands (479 stores; no. 1 in non-food retail), Belgium 

(84 stores), Luxembourg (4 stores), Germany (10 stores) and 

France (7 stores), HEMA is known for its extensive offering, 

ranging from baby clothes (one out of three Dutch boys wear 

HEMA underwear) to smoked sausage (10 million sold per 

annum), for its creative and modern design and for its value 

pricing. HEMA’s products are positioned at the low-to-middle 

range of the retail price spectrum, en abling them to attract a 

broad customer demographic. 

12 

www.czerwonatorebka.pl 

Czerwona Torebka is a leading Polish retail chain developer 

and operator with established track record. The Company 

developed and is dynamically expanding a chain of strip 

malls in Poland. This format is a new type of convenient retail 

space on the Polish market. Each strip mall consists of 10 to 

12 standardized units and on average has a total surface of 

700–1000m 2 . The Company is expanding through its local 

structures on nationwide scale and sees the potential to 

expand the chain up to 4 500 stores in Poland. 

13 

www.hilton.com 

Hilton is a leading global hospitality firm that owns fran - 

chises and manages hotels, resorts and timeshare properties. 

Hilton disposes over a portfolio of brands that includes 

Hilton, Hampton Inn, Hilton Garden Inn, Doubletree, Conrad, 

Waldorf Astoria Hotels and Resorts and Hoe2Suites. The total 

system includes over 3 700 properties and 600 000 rooms in 

82 countries.

15 

www.thermon.com 

Through its global network, Thermon provides highly en - 

gineered thermal solutions, known as heat tracing, for process 

industries, including energy, chemical processing and power 

generation. Thermon’s products provide an external heat 

source to pipes, vessels and instruments for the purposes of 

freeze protection, temperature maintenance, environmental 

monitoring and surface snow and ice melting. Thermon is 

headquartered in San Marcos, Texas. Thermon is listed on the 

NYSE (ticker symbol: THR). 

17 

www.ebbrands.com 

EB Brands is a leading designer and marketer of high-margin, 

niche consumer products sold into the home exercise, per - 

sonal fitness monitoring, travel accessory, and gift markets. 

The company’s products are marketed under owned brands 

(such as Sportline ® and Valeo ® ), licensed brands (including 

Everlast ® , Bally’s ® , Men’s Health ® , Women’s Health ® and 

Runner’s World ® ), and various customer private labels. 

16 

www.oystar-group.com 


Oystar is a global integrated solution provider in the field of 

packaging technology which offers an extensive range of 

customer-specific solutions from systems in the processing 

sector through primary, secondary and tertiary packing, to 

complete packaging lines. Oystar Group is a supplier to the 

following market segments: pharmaceuticals/cosmetics, dairies 

and food industry. 

15


16 

18 

www.starckgroup.com 

H.C. Starck GmbH (HCS) is a world leading producer of specialty 

metals and advanced ceramics. Its specialty metals portfolio 

comprises molybdenum, tungsten, tantalum, niobium and 

rhenium. HCS offers these products along the value chain from 

chemicals and powders (about 70% of revenues) to sophisticated 

fabricated products, such powders that have been 

pressed, sintered, rolled or machined (approximately 30% of 

revenues). HCS’s products are supplied to a wide range of 

end markets, including electronics, chemicals, aerospace and 

defense, automotive, energy and medical equipment. Headquartered 

in Goslar, Germany, HCS operates 12 production 

sites across Europe, North America and the Far East and has 

presences in more than 30 countries worldwide. 

20 

www.mhainc.com 

Managed Health Care Associates, Inc. (MHA) is a leading 

health care service company that offers a growing portfolio of 

services and solutions to support the diverse and complex 

needs of the alternate site health care provider. MHA provides 

expertise in Group Purchasing, Managed Care and Payer Contracting, 

Reimbursement Management, Specialty Pharmacy 

Solutions, Pharmaceutical Data Analytics, Clinical Pharmacy 

Software and Legislative Advocacy. Through the delivery of 

innovative and targeted health care services and solutions, 

MHA helps members increase operational efficiency, maximize 

business growth and provide optimum care for patients. 

19 

www.renonorden.no 

RenoNorden is the largest pure-play domestic waste collector 

in Scandinavia (no. 1 in Norway, Denmark and Sweden). By 

law, municipalities are responsible for the removal of household 

waste on behalf of local residents. While the municipalities 

retain legal ownership of domestic waste material, they 

outsource the collection and transportation logistics to private 

companies like RenoNorden. RenoNorden competes for contracts 

put out to tender under legislation which are typically 

5–7 years and benefit from inflationary indexation.

FINANCIAL REPORT 2011 – APEN GROUP

APEN GROUP – CONSOLIDATED FINANCIAL STATEMENTS 2011 

20 

CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2011 AND 31 DECEMBER 2010 

in TCHF 

Note 2011 2010 

Assets 

Current assets 

– Cash and cash equivalents 4 38 144 22 656 

– Receivables and prepayments 6 376 210 

Total current assets 38 520 22 866 

Non-current assets 

– Loans 

– Investments held as available-for-sale 

3 1 695 1 668 

Direct Investments 3 28 207 40 145 

Funds 3 402 553 410877 Total non-current assets 432 455 452 690 

Total Assets 470 975 475 556 

Liabilities and Shareholders’ Equity 

Current Liabilities 

– Payables and accrued charges 7 3 759 3 416 

– Borrowings 9 – 3 728 

Total current liabilities 3759 7144 

Non-Current Liabilities 

– Borrowings 9 81 823 79 555 

– Class B Units 9 124 436 115906 – Derivative liabilities 10 5 909 4 992 

– Post-employment benefits 8 303 257 

Total non-current liabilities 212 471 200 710 

Total liabilities 216 230 207 854 

Shareholders’ Equity 

– Share capital 11 41 250 412 500 

– Share capital premium 406 924 35 674 

– Treasury stock (at cost) (30 691) (30 691) 

– Revaluation Reserve Investments AFS 119791 137675 – Currency Translation Adjustment (CTA) (69 105) (73 901) 

– Accumulated deficit/Retained earnings (237 731) (215387) – Net profit/(loss) for the period 1 180 (22 292) 

Total Equity Attributable to the Owners of the Parent 231 618 243 578 

Equity attributable to non-controlling interest 12 23 127 24 124 

Total Shareholders’ Equity 254 745 267 702 

Total Liabilities and Shareholders’ Equity 470 975 475 556 

Net asset value per share 

Number of shares outstanding at year-end 11 3 929 185 3 929 185 

Net asset value per share (in CHF) attributable to the owners of the parent 58.95 61.99 

The accompanying notes on pages 24 to 52 form an integral part of these consolidated financial statements.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 

1 JANUARY TO 31 DECEMBER 2011 AND 1 JANUARY TO 31 DECEMBER 2010 

in TCHF 

Note 

Income 

2011 2010 

Interest income from non-current assets 15 2 045 1 121 

Dividend income from non-current assets 15 5 370 4 035 

Net realized gain on investments 15 48 644 32 523 

Interest income from current assets 46 2 

Other income 19 97 

Total Income 56 124 37 778 

Expenses 

Service fees (145) (85) 

Write-down of non-current assets 14 (14 379) (15 815) 

Other operating expenses 16 (4 536) (6 462) 

Interest expense from Borrowings and Class B Units (33 079) (25 765) 

Net loss on derivative instruments (842) (2 043) 

Net loss on foreign currency exchange (1 028) (11 857) 

Total Expenses (54 009) (62 027) 

Tax expenses 17 (515) (324) 

Net Profit/(Loss) for the Period 1 600 (24 573) 

Profit/(Loss) Attributable to: 

Owners of the parent 1 180 (22 292) 

Non-controlling interest 12 420 (2 281) 

Other Comprehensive Income 

Changes in revaluation reserves on Investments AFS (19 622) 57 305 

Changes in currency translation adjustment CTA 5 117 (27 912) 

Actuarial gains/(losses) on pension fund (52) (106) 

Other Comprehensive Income (Loss) Income for the Period (14557) 29 287 

Total Comprehensive Profit/(Loss) for the Period (12 957) 4 714 

Profit/(Loss) Attributable to: 

Owners of the parent (11960) 3 731 

Non-controlling interest 12 (997) 983 

Earnings per Share 

Weighted average number of shares outstanding during the period 13 3 929 185 3 929 185 

Net profit/(loss) per share (in CHF) – basic 13 0.30 (5.67) 

Net profit/(loss) per share (in CHF) – diluted 13 0.30 (5.67) 

The accompanying notes on pages 24 to 52 form an integral part of these consolidated financial statements. 

21


22 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD 

1 JANUARY TO 31 DECEMBER 2011 AND 1 JANUARY TO 31 DECEMBER 2010 

in TCHF 

Note 2011 2010 

Cash Flows from Operating Activities 

Purchase of non-current assets 3 (53 008) (65 424) 

Proceeds from return of invested capital in non-current assets 44 668 71 807 

Interest income received from current assets 46 2 

Net interest income from non-current assets 15 2 045 1 121 

Dividends received from non-current assets 15 5 370 4 035 

Net realized gains on investments 15 48 643 32 363 

Operating costs (4 914) (5 847) 

Net Cash from/used in Operating Activities 42 850 38 057 

Cash Flows from Financing Activities 

Proceeds from borrowings – 95 305 

Repayment of borrowings (18 385) (107901) Interest paid on borrowings (8 695) (8 755) 

Borrowing costs (1 382) (1 178) 

Net Cash from/used in Financing Activities (28 462) (22 529) 

Foreign Exchange Effect 1 100 (79) 

Increase (decrease) in Cash and Cash Equivalents 15 488 15 449 

Cash and Cash Equivalents as of 1 January 22 656 7 207 

Cash and Cash Equivalents as of 31 December 38 144 22 656 

The accompanying notes on pages 24 to 52 form an integral part of these consolidated financial statements.


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY AS OF 31 DECEMBER 2011 

AND 31 DECEMBER 2010 

in TCHF 

Attributable to Owners of the Parent 

Share Share Less Revaluation Currency Retained Total Non- Total 

Capital Capital Treasury Reserves Translation Earnings/ controlling Equity 

Premium Stock Investments Adjustment Accumulated Interests 

(at Cost) AFS CTA (Deficit) 


Balance 1 January 2010 412500 149 090 (30 691) 85 580 (47 935) (328 697) 239 847 23 141 262 988 

Net loss 

Change of revaluation reserve 

– – – – – (22 292) (22 292) (2 281) (24 573) 

on investments AFS 

Change of currency translation 

– – – 52 095 – – 52 095 5 210 57 305 

adjustment CTA – – – – (25 966) – (25 966) (1 946) (27 912) 

Actuarial loss on pension fund – – – – – (106) (106) – (106) 

Total comprehensive income 

Set-off share capital premium 

– – – 52 095 (25 966) (22 398) 3 731 983 4 714 

against accumulated deficit – (113 416) – – – 113 416 – – – 

Total Equity as at 31 December 2010 412 500 35 674 (30 691) 137 675 (73 901) (237 679) 243 578 24 124 267 702 

Balance 1 January 2011 412 500 35 674 (30 691) 137 675 (73 901) (237 679) 243 578 24 124 267 702 

Net profit 

Change of revaluation reserve 

– – – – – 1 180 1 180 420 1 600 

on investments AFS 

Change of currency translation 

– – – (17 884) – – (17 884) (1 738) (19 622) 

adjustment CTA – – – – 4 796 – 4 796 321 5 117 

Actuarial loss on pension fund – – – – – (52) (52) – (52) 

Total comprehensive loss – – – (17 884) 4 796 1 128 (11 960) (997) (12 957) 

Capital decrease* (371 250) 371 250 – – – – – – – 

Total Equity as at 31 December 2011 41 250 406 924 (30 691) 119 791 (69 105) (236 551) 231 618 23 127 254 745 

* Refer to Note 11 

The accompanying notes on pages 24 to 52 form an integral part of these consolidated financial statements. 

23


24 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

1. CORPORATE INFORMATION 

APEN Ltd., Zug (“the Company”) is a Swiss stock corporation 

established under the relevant provisions of the Swiss Code of 

Obligations and domiciled in Zug. The Company’s shares are 

listed on the SIX Swiss Exchange. The address of the registered 

office of the Company is Industriestrasse 13c, 6304 Zug, 

Switzerland. 

The Company, together with APEN Services GmbH, APEN 

Holdings LLC, APEN Bermuda Ltd., APEN Holdings (Bermuda) 

Ltd. and APEN Faith Media Holdings LLC and APEN FMH LLC 

(“the Subsidiaries”) comprise the APEN Group (“the Group”). 

The group structure is displayed on page 25 for illustrative 

purposes. 

The Company’s investment objective is to achieve long term 

capital growth for shareholders by managing its current portfolio 

of private equity funds and direct investments. Although 

the Company may invest directly in fund investments or companies, 

it is anticipated that investments will generally be 

made through the Subsidiaries. 

The Company’s Board of Directors is responsible for the policies 

and management of the Company as well as valuations. 

As of 31 December 2011 the Group employed four employees 

(2010: four). 

The consolidated financial statements were authorized for 

issue on 22 March 2012 by the Board of Directors. Final 

acceptance of the consolidated financial statements will be 

voted on at the annual general meeting on 8 May 2012. 

2. ACCOUNTING POLICIES 

2.1. Basis of Preparation 

The accompanying consolidated financial statements of the 

Group for the year ended 31 December 2011 have been prepared 

in accordance with International Financial Reporting 

Standards (IFRS) issued by the International Accounting Standards 

Board (IASB), and comply with Swiss Law and the 

accounting provisions for investment companies of the SIX 

Swiss Exchange. 

The consolidated financial statements are prepared under the 

historical cost convention, with the exception of available-forsale 

investments and derivative financial instruments which are 

stated at their fair values as disclosed in the accounting policies 

hereafter. The consolidated financial statements are presented 

in Swiss francs and all values are rounded to the 

nearest thousand except when otherwise indicated. 

Basis of consolidation 

The consolidated financial statements of the Group consist of 

APEN Ltd. and the companies that it controls. This control is 

normally evidenced when the Group owns, either directly or 

indirectly, more than 50% of the voting rights of a company’s 

share capital or it is able to govern the financial and operating 

policies of an entity so as to benefit from its activities. Con - 

solidated financial statements are prepared using uniform 

accounting policies for like transactions and other events in 

similar circumstances. Subsidiaries are consolidated from the 

date on which control is effectively transferred to the Group 

and are no longer consolidated from the date that control 

ceases. The consolidation is performed using the acquisition 

method. All intercompany transactions and balances are eliminated. 

All Group companies have a 31 December year end. 

The scope of consolidation currently includes: 

– APEN Services GmbH 

– APEN Faith Media Holdings LLC 

– APEN Holdings LLC 

– APEN Bermuda Ltd. 

– APEN Holdings (Bermuda) Ltd. 

– APEN FMH LLC 

APEN Holdings LLC is fully consolidated as APEN Ltd. controls 

day to day operating decisions.

Organisational Structure 

BOARD OF DIRECTORS 

100 % 

APEN SERVICES GMBH 

ZURICH 

SHAREHOLDERS 

APEN LTD. 

ZUG 

(COMPANY) 

100 % 

APEN FAITH MEDIA 

HOLDINGS, LLC 

100 % 

The Group’s investment portfolio is held solely for the purpose 

of realizing capital gains upon future sales. 

As of 31 December 2011 the Group holds an ownership interest 

of 20% or more in PineBridge Horizon Partners, L.P. (36.57%; 

20.50% including side-by-side vehicle; 2009: 36.57%; 20.50% 

including side-by-side vehicle). According to the limited partnership 

agreement of this fund, the Group does not have the 

power to participate in the financial and operating policy of 

the fund and as such does not have significant influence. 

There fore, this investment is excluded from equity accounting. 

2.2. Significant Accounting Judgments and Estimates 

The preparation of financial statements requires management 

to make estimates and assumptions that affect the reported 

amounts of assets and liabilities and disclosure of contingent 

assets and liabilities at the date of the financial statements and 

the reported amounts of revenues and expenses during the 

reporting period. Actual results could differ from those 

estimates. 

The areas involving a higher degree of judgment or complex - 

ity, or areas where assumptions and estimates are significant 

to the financial statements are the following: 

1% 

APEN FMH, LLC 

C SHARES 


APEN HOLDINGS, LLC 

DELAWARE 

99 % 

APEN BERMUDA LTD. 

100 % 

C SHARES 

APEN HOLDINGS 

(BERMUDA) LTD. 

A SHARES 

B SHARES 

FORTRESS ENTITIES 

MIP PE HOLDINGS, LLC 

DIRECT INVESTMENTS PORTFOLIO 

INTERNATIONAL FUNDS PORTFOLIO 

NORTH AMERICA FUNDS PORTFOLIO 

Fair value of financial instruments 

The fair value measurements of financial instruments that 

are not traded in an active market are determined by using 

valuation techniques (see also note 2.4.5 “financial instruments 

– determination of fair value”). The Group uses 

its judgment to select a variety of methods and make 

assumptions that are not always supported by observable 

market prices or rates. The use of valuation techniques 

requires management to make estimates. Changes in 

assumptions could affect the reported fair value of these 

investments. The carrying amounts of investments for which 

fair values were determined using valuation techniques 

amounted to CHF 428.6 million (2010: CHF 447.6 million). 

Impairment of financial assets 

Management performs a quarterly impairment assessment 

to assess significant or prolonged declines in fair value of 

financial assets classified as available for sale. Management 

uses its judgement to determine which investments are 

considered to be impaired. Changes in assumptions used 

could affect the amount of impairments reported. 

Debt instruments 

The amortized cost calculations are based on inputs regard - 

25


26 

ing the timing of the repayment of loan instruments. Currently, 

the assumption is that the repayment will occur at 

the contractual mat urity date. A change in assumptions 

regarding timing of repayment of the loans could have a 

significant impact on the Balance Sheet and Statement of 

Comprehensive Income. 

2.3. Change in Accounting Policies 

The IASB has published interpretations, new standards and 

amendments to existing standards that are effective for the 

2011 financial statements. Apart from the changes described 

below, the accounting policies remain the same as in the previous 

year. As at 1 January 2011, the Group adopted the follow - 

ing new and revised IFRS standards and IFRS interpretations: 

IAS 32 Classification of Rights Issues 

IFRIC 19 Extinguishing financial liabilities with equity 

instruments 

IAS 24 Related Party Disclosures 

IFRIC 14 Prepayments of a Minimum Funding Requirement 

(Amendment) 

Improvements to IFRSs (May 2010) 

The new standards and amendments as at 1 January 2011 do not 

have a significant impact on the Group’s financial statements. 

No other interpretations, new standards or amendments are 

relevant to the Group’s operations. 

2.4. Summary of Significant Accounting Policies 

2.4.1. Foreign currency transactions 

– Functional and presentation currency 

The Group’s investments and proceeds from these investments 

are held in currencies other than the presentation currency. 

Investments are held by APEN Bermuda Ltd., APEN Holdings 

(Bermuda) Ltd. and APEN FMH LLC which engage primarily in 

USD transactions. Further, performance management and cash 

flow projections are based on investment currency (primarily 

USD and EUR). Accordingly, the Board of Directors considers 

the USD as the currency that most faithfully represents the 

economic effects of the underlying transactions, events and 

conditions, and the USD is considered to be the functional currency 

of these subsidiaries. The functional currency of APEN 

AG and APEN Services GmbH is the CHF as these entities are 

primarily exposed to the CHF. The presentation currency of the 

financial statements of the Group is CHF since the parent company 

is domiciled in Switzerland, has a solid investor base 

in Switzerland and its shares are traded on the SIX Swiss 

Exchange. 

– Transactions and balances 

Foreign currency transactions are translated into the functional 

currency using the exchange rates prevailing at the dates of 

the transactions. Foreign exchange gains and losses resulting 

from the settlement of such transactions and from the translation 

at year-end exchange rates of monetary assets and liabilities 

denominated in foreign currencies are recognized in 

the statement of comprehensive income (“net gain or loss on 

foreign currency exchange”). Translation differences on mon - 

etary items, such as derivatives held at fair value through profit 

or loss, are reported as part of the gain or loss on derivative 

instruments. Translation differences on non-monetary items, 

such as available-for-sale financial assets, are recog nized in 

other comprehensive income. 

– Translation to presentation currency 

The results and financial positions of Group companies are 

translated from the functional currency into the presentation 

currency as follows: 

assets and liabilities for each balance sheet presented are 

translated at the closing rate at the date of that balance 

sheet; 

income and expenses for each statement of comprehensive 

income are translated at rates applicable on the trans action 

date; 

all resulting exchange differences are recognized in other 

comprehensive income. 

2.4.2. Cash and cash equivalents 

Cash includes cash on hand and cash with banks. Cash equivalents 

are short-term, highly liquid investments that are 

read ily convertible to known amounts of cash, with original 

maturities of three months or less, and that are subject to an 

insignificant risk of change of value. Cash and cash equivalents 

are recorded at nominal value. 

In order to mitigate concentration risk, cash is held at two 

banks. 

2.4.3. Financial instruments – initial recognition 

and subsequent measurement 

a) Financial assets – Initial recognition 

Financial assets are classified as financial assets at fair value 

through profit or loss, loans and receivables, held-tomaturity 

investments or available for sale assets. The Group 

determines the classification of its financial assets at initial 

recognition.

Financial assets are recognized initially at fair value plus, in 

the case of investments not at fair value through profit or loss, 

directly attributable transaction costs. 

Purchases or sales of financial assets that require delivery of 

assets within a time frame established by regulation or convention 

in the marketplace (regular way purchases) are recognized 

on the settlement date, i.e., the date a financial asset 

is delivered to or by the Group. The Group’s financial assets 

include cash and short-term deposits, trade and other receivables, 

loan and other receivables, quoted and unquoted 

financial instruments, and derivative financial instruments. 

b) Financial assets – Subsequent measurement 

The subsequent measurement of financial assets depends on 

their classification as follows: 

b1) Loans and receivables 

All loans and receivables are subsequently measured at amortized 

cost using the effective interest method. Gains and losses 

are recognized in the statement of comprehensive income 

when the loans and receivables are derecognized or impaired, 

as well as through the amortization process. 

b2) Available-for-sale financial assets 

Available-for-sale financial assets are subsequently measured 

at fair value with unrealized gains or losses recognized in other 

comprehensive income until the investment is derecognized 

or determined to be impaired, at which time the cumulative 

gain or loss recorded in other comprehensive income is 

recognized in the statement of comprehensive income under 

“net realized gain/loss on investments” or “write-downs of 

non-current assets”, respectively. 

– Direct Investments and Fund Investments 

The Group has designated all its investments and securities as 

available-for-sale. This category was chosen as the most 

appropriate for an investment company as the Group manages 

net asset value. An investment is recognized where the Group 

deems it probable that future economic benefits associated 

with an investment will flow to the entity and it has a cost or 

value that can be measured reliably. The future economic benefit 

of an investment is its potential to contribute, directly or 

indirectly, to the flow of cash and cash equivalents to the 

entity. All purchases and sales of investments are recognized 

when the capital is called or a distribution is received. Purchase 

cost includes directly attributable transaction costs. 

Dividend income is recognized in profit or loss when the right 

to receive payment is established. 


b3) Financial assets at fair value through profit or loss 

Financial assets at fair value through profit or loss include 

financial assets held for trading and financial assets designated 

upon initial recognition as at fair value through profit or loss. 

Financial assets are classified as held for trading if they are 

acquired for the purpose of selling in the near term. This 

category includes derivative financial instruments entered into 

by the Group. Financial assets at fair value through profit and 

loss are carried in the balance sheet at fair value. Changes in the 

fair value of financial instruments at fair value through profit 

or loss are recorded in the statement of comprehensive income. 

b4) Derivative Financial Instruments 

The Company may enter into foreign exchange forwards or 

option contracts to partially macro-hedge its net exposure in 

private equity investments denominated in foreign currencies. 

c) Financial liabilities – Initial recognition 

Financial liabilities within the scope of IAS 39 are classified as 

financial liabilities at fair value through profit or loss or as 

loans and borrowings, or as derivatives designated as hedging 

instruments in an effective hedge, as appropriate. The Group 

determines the classification of its financial liabilities at initial 

recognition. Financial liabilities are recognized initially at fair 

value less in the case of loans and borrowings, directly attributable 

transaction costs. 

The Group’s financial liabilities include payables and accrued 

charges, Borrowings, Class B Units, post-employment benefits 

and derivative liabilities. 

d) Financial liabilities – Subsequent measurement 

The measurement of financial liabilities depends on their 

classification as follows: 

– Financial liabilities as at fair value through profit or loss 

Financial liabilities as at fair value through profit or loss 

include financial liabilities held for trading and financial liabilities 

designated upon initial recognition as at fair value 

through profit or loss. This category includes derivative financial 

instruments entered into by the Group. Gains or losses on 

liabilities held for trading are recognized in the statement of 

comprehensive income. 

– Loans and borrowings 

After initial recognition, interest bearing loans and borrowings 

are subsequently measured at amortized cost using the effective 

interest method. Gains and losses are recognized in the 

statement of comprehensive income when the liabilities are 

27


28 

derecognized as well as through the amortization process. 

Borrowings and Class B Units, which are mandatorily redeem - 

able on a specific date, are classified as loans and borrowings 

carried at amortised cost using the effective interest rate 

method. 

2.4.4. Financial instruments – derecognition 

A financial asset is derecognized if, and only if, the Group 

either transfers the contractual rights to receive the cash flows 

of the financial asset, or it retains the contractual rights to 

receive the cash flows of the financial asset, but assumes a 

contractual obligation to pay the cash flows to one or more 

recipients, and in doing so transfers substantially all of the 

risks and rewards of the asset. 

A financial liability is derecognized when the obligation under 

the liability is discharged, is cancelled or has expired. When 

an existing financial liability is replaced by another from the 

same lender on substantially different terms, or the terms of 

an existing liability are substantially modified, such an exchange 

or modification is treated as a derecognition of the 

original liability and the recognition of a new liability, and the 

difference in the respective carrying amounts is recognized in 

the statement of comprehensive income. 

2.4.5. Financial instruments – determination of 

fair value 

The Group’s investments are primarily non-current financial 

assets and market quotations are not readily available, therefore 

these investments are measured at their fair value using 

the most appropriate valuation techniques as described in 

detail below. The responsibility for determining the fair values 

lies with the Board of Directors. Although general partners of 

funds in which the Group invests and the service manager of 

the Group’s direct investments provide valuations of these 

investments, no independent external valuation of these 

investments was conducted. All fair valuations may differ 

significantly from values that would have been used had ready 

markets existed. Such differences could be material. 

– Direct Investments 

In 2010 APEN Bermuda Ltd. entered into an investment 

management agreement with PineBridge Investments LLC 

(“Service Manager”). The Service Manager reviews the direct 

investment valuations at each reporting date. The Service 

Manager uses information provided by the lead fund manager 

of the respective direct investment. Financial and market performance 

is compared with budget information, data obtained 

from competitors and subsequent rounds of financing. The 

Group reviews and discusses the valuations with the Service 

Manager and may independently apply adjustments to determine 

the valuation. In determining the fair value of an unquoted 

direct investment, all appropriate and applicable 

factors relevant to their value, including but not limited to the 

following are considered: 

Venture capital investments: 

A new financing round that is material in size for the company 

and having new, sophisticated institutional investors 

making up a significant piece of the financing round. An 

inside round of financing does not qualify. 

Buy-out/later stage investments for which subsequent 

rounds of finance are not anticipated: 

Once an investment has been held for one year, an analysis 

of the fair market value of the investments will be performed. 

This analysis will typically be based on one of the 

following methods (depending on what is appropriate for 

that particular company/industry): 

– Result of multiple analysis; 

– Result of discounted cash flow analysis; 

– Reference to transaction prices (including subsequent 

financing rounds); 

– Reference to the valuation of other investors; 

– Reference to comparable companies. 

Based on a composite assessment of all appropriate and 

applicable indicators of fair value, the Group determines 

the fair values as of the valuation date. 

– Fund Investments 

Investment valuations are generally based on 30 September 

capital accounts with capital drawdowns and capital distri - 

bution activity of the fourth quarter 2011 being added to and 

subtracted from the valuation. In a few instances where more 

recent reporting is not available valuations are based on 

30 June 2011 capital accounts provided by portfolio funds, with 

capital drawdowns and capital distribution activity of the 

second half of 2011 being added to and subtracted from the 

valuation. The Group reviews the valuations of these funds and 

discusses portfolio company performance with the relevant 

portfolio fund manager. The portfolio fund managers determine 

fair values of the underlying investments by using the 

same valuation techniques as noted above as for direct 

investments. Investments in securities and in other financial 

instruments traded on recognized exchanges (including bonds, 

equities, futures contracts, options, and funds), are valued at

the last reported bid price on the reporting date. Investments 

in securities and in other financial instruments traded in the 

over-the counter market and listed securities for which no 

trade is reported on the valuation date are valued at the last 

reported bid and ask price for long and short positions, 

respectively. 

– Derivative Financial Instruments 

Fair values for derivative financial instruments are obtained 

from quoted market prices, discounted cash flow models, or 

option pricing models as appropriate. 

2.4.6. Financial instruments – impairment of 

financial assets 

Financial instruments are reviewed for impairment at each 

reporting date. For available-for-sale investments, the cumulative 

gain or loss previously recognized in other comprehensive 

income is included in net profit or loss for the period 

when there is objective evidence that the asset is impaired. 

An impairment is recorded when there is a significant (> 30%) 

or prolonged (> 1 year) decrease in the instrument’s fair value 

below cost. Impairments are reflected in total revaluation 

deficit/surplus (equity) and in the write-down of non-current 

assets (statement of comprehensive income). 

Available-for-sale investments are categorized into two distinct 

categories. The application of the impairment policy to the 

individual category of investments is applied as follows: 

– Direct Investments 

Direct investment valuations are reviewed at each reporting 

date by the Service Manager (see note 2.4.5). The Group then 

reviews the valuation and where necessary, discusses these 

with the Service Manager. If a direct investment has had a fair 

market value below cost for at least a year or in excess of 30%, 

it will be deemed to be impaired and the cumulative loss previously 

recognized in other comprehensive income will be 

transferred to the statement of comprehensive income. 

– Fund Investments 

Funds where the Group is a direct limited partner will be 

reviewed at each reporting date. If a fund investment has had 

a fair market value below cost for at least a year or in excess 

of 30%, it will be deemed to be impaired and the cumulative 

loss previously recognized in other comprehensive income will 

be transferred to the statement of comprehensive income. 


2.4.7. Net asset value per share and earnings 

per share 

The net asset value per share is calculated by dividing the net 

assets attributable to the owners of the parent included in the 

balance sheet by the number of shares outstand ing at the 

reporting date. Basic earnings per share are calculated by 

dividing the net profit attributable to the owners of the Company 

by the weighted average number of ordinary shares outstanding 

during the period. Diluted earnings per share are 

calculated by adjusting the weighted average number of ordinary 

shares outstanding assuming conversion of all dilutive 

potential ordinary shares. 

2.4.8. Post-employment benefits 

APEN Group operates a defined benefit pension scheme in 

Switzerland, which requires contributions to be made to a 

separately administered fund. The cost of providing benefits 

under the defined benefit plan is determined using the projected 

unit credit method. Actuarial gains and losses are 

recognised in full in other comprehensive income in the period 

in which they occur. Such actuarial gains and losses are also 

immediately recognised in retained earnings and are not 

reclassified to profit or loss in subsequent periods. 

Past service costs are recognized immediately for benefits that 

have already vested. 

2.4.9. Taxes 

Tax provisions are based on reported income. Taxes are calculated 

in accordance with the tax regulations enacted in each 

country where the Group has investments. 

– Switzerland 

The company is taxed as a holding company in the Canton of 

Zug. Income, including dividend income and capital gains 

deriving from its participations are exempt from taxation at the 

Zug cantonal/communal level. However, capital taxes are 

levied on Zug cantonal/communal level. 

For Swiss federal tax purposes, income tax at an effective tax 

rate of approximately 7.8% is levied. 

The requirements for the application of the participation relief 

have changed as of 1 January 2011. A company may now claim 

the relief: 

For dividends received from a corporation of which the 

company owns at least 10% of the shares; 

For dividends received from a corporation of which the 

company owns shares with a market value of at least 

CHF 1 million; 

29


30 

For dividends received from a corporation in which the 

company has a share of at least 10% of the profits and the 

reserves; 

For capital gains deriving from a disposal of a participation 

that was owned by the company for a period of at least 1 

year and the shares sold constitute at least 10% of the 

share capital or entitle to at least 10% of the profits and 

revenues of the underlying subsidiary. 

The legal provisions regarding so-called “Altbeteiligungen“ 

relate only to capital gains realized until 31 December 2006. 

In cases where the participation exemption is not applicable, a 

deferred tax liability will be calculated for Swiss federal tax 

purposes. 

Provisions for taxes payable on profits earned in the Group 

companies are calculated and recorded based on the appli - 

cable tax rate in Switzerland. 

–US 

APEN Holdings LLC is a partnership and hence financially 

transparent and not subject to income and capital gains tax in 

the US. APEN FMH LLC and APEN Faith Media Holdings LLC 

are corporations for US federal income tax purposes and are 

subject to income and capital gains taxes in the US. 

Tax expenses shown in the statement of comprehensive 

income represent withholding taxes paid in various juris - 

dictions that the Group can not reclaim and may include direct 

taxes paid in Switzerland or the US. Capital taxes charged to 

the Company are included in operating expenses on the statement 

of comprehensive income. 

2.4.10. Shareholders’ equity 

Ordinary shares are classified as equity. Class B Units are 

classi fied as liabilities (see note 2.4.3d). The transaction costs 

of an equity transaction are accounted for as a deduction from 

equity. Transaction costs for equity are comprised of only those 

incremental external costs directly attributable to the equity 

transaction, which would otherwise have been avoided. Equity 

is comprised of the following: 

Share capital and Share capital premium 

Refer to Note 11 for a description and further details on 

the share capital and share capital premium. 

Treasury stock 

Treasury shares are presented in the balance sheet as a 

deduction from equity and are measured at cost. The 

acquisition of treasury shares is presented as a change in 

equity. No gain or loss is recognized in the statement of 

comprehensive income on the sale, issuance, or cancel - 

lation of treasury shares. The consideration received is presented 

in the financial statements as a change in equity. 

Revaluation deficit/surplus 

The revaluation deficit/surplus includes the cumulative net 

change in fair value of available-for-sale investments until 

the investment is disposed of or is determined to be 

impaired. This includes FX differences on the translation 

from local to functional currency. 

Currency translation adjustment 

The currency translation adjustment includes differences 

due to the currency translation of the Subsidiaries between 

functional and presentation currencies. 

2.4.11. Capital management 

The investment objective of the Group is to achieve long-term 

capital growth for shareholders by investing in a diversified 

portfolio of private equity funds and privately held companies. 

Refer to Note 11 for further details. 

2.4.12. Segment reporting 

IFRS 8 requires companies to define operating segments and 

segment performance in the financial statements. The sole 

operating segment of the Group is investing in private equity. 

Therefore, the results published in this report reflect the 

required operating segment information provided to the Chief 

Operating Decision Makers which are equivalent with the 

members of the Management Board. Additional disclosures 

required by IFRS 8 are presented in Note 22. 

2.4.13. Contingencies 

Contingent liabilities are not recognized in the balance sheet. 

They are disclosed unless the possibility of an outflow of 

resources embodying economic benefits is remote. 

A contingent asset is not recognized in the financial statements 

but disclosed when an inflow of economic benefits is pro bable. 

Refer to note 21 for further details. 

2.4.14. Share-based compensation plans 

– Share appreciation rights (SARs) 

The Group operates a cash settled, share-based compensation 

plan. The corresponding liability is re-measured at each 

balance sheet date to fair value, with changes recognized 

immediately in the statement of comprehensive income. Refer 

to Note 20 for further details.

2.5. Standards Issued but Not Yet Effective 

The following standards, amendments and interpretations to 

existing standards have been published but are not yet effective. 

The group has yet to adopt those standards and plans to 

do so for the reporting period beginning after the effective 

date stated in the respective standard: 

The Group is currently evaluating the impact of these changes. 

Based on Managements preliminary assessment, the Company 

expects the following implications for the above. 

1) The changes arising from this new pronouncement are not 

expected to have any impact on the Group’s consolidated 

financial statements. 

2) The changes arising from this new pronouncement are not 

expected to have a significant impact on either the financial 

position or financial performance of the Group, however, the 

changes will give rise to additional or amended disclosures. 

3) The Company is currently assessing the impact of adopting 

the new or amended pronouncements. Based on the assessment, 

the Company might determine that the amendment has 

an impact on the statement of financial position or financial 

performance of the Group. For example: 

IFRS 10, 11 and 12 addresses, as a package, the accounting 

for consolidations, joint arrangements and respective dis - 

closures. Based on the Company’s group structure once 

the standards are effective, implications on consolidated 

financial statements might apply. 


New IFRS Expected to be applied Potential 

pronouncement Title first in financial year impact 

IFRS 7 Financial Instruments: Disclosures – Enhanced derecognition disclosure requirements 2012 2) 

IAS 12 Recovery of Underlying Assets 2012 1) 

IAS 1 Presentation of Items of Other Comprehensive Income 2012 2) 

IFRS 9 Financial Instruments: Classification and Measurement: Financial Assets 2015 3) 

IFRS 9 Financial Instruments: Classification and Measurement – Financial Liabilities 2015 3) 

IFRS 10 Consolidation 2013 3) 

IFRS 11 Joint Arrangements 2013 3) 

IFRS 12 Disclosures in other entities 2013 3) 

IFRS 13 Fair Value Measurements 2013 3) 

IAS 27 Separate Financial Statements 2013 1) 

IAS 28 Investements in associates 2013 1) 

IAS 19 Amendment to IAS 19 Employee Benefits 2013 3) 

IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities 2013 1) 

IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) 2014 1) 

IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures 

(Amendments to IFRS 9 (2009), IFRS 9 (2010) and IFRS 7) 2015 4) 

Alternatively, IFRS 9 fundamentally changes the way to 

classify financial assets based on the business model of the 

Group and cash flows obtained from these investments. 

IFRS 9 will eventually also fundamentally change the 

requirements for impairment of financial assets and hedge 

accounting. However, IFRS 9 does not fundamentally 

change the classification and measurement requirements 

for financial liabilities. As of today and due to the timing of 

the standard coming into effect, the implications of these 

changes have not yet been determined. 

IFRS 13 Fair Value Measurement does not change the 

requirements when fair value has to be applied by but provides 

for a comprehensive set of guidance how to calculate 

fair value across different financial reporting subjects. 

The Company is currently evaluating the potential implications 

of IFRS 13 on its investments carried at fair value. 

IAS 19 has been revised to require full recognition of 

actuarial gains or losses in other comprehensive income 

(i.e., removing the corridor approach) and to put forth a 

number of other, smaller amendments. As the Company 

already recognizes actuarial gains or losses in full in the 

period in which they occur, the impact of IAS 19 revised is 

expected to be insignificant, however, not yet fully assessed. 

4) This amendment only changed the mandatory effective date 

for IFRS 9. IFRS 9 is only effective for annual periods beginning 

on 1 January 2015. The Group does not plan to early 

adopt IFRS 9. 

31


32 

Note 3. Financial Assets Available for Sale 

Western European Funds Portfolio 

Astorg III 

Astorg IV 

CapVest Equity Partners, L.P. 

CapVest Equity Partners II, L.P. 

Carlyle Europe Partners II, L.P. 

Cognetas, L.P. 

EQT V, L.P. 

GMT Communications Partners III, L.P. 

Lexington Captial Partners IV, L.P. 

Lexington Captial Partners VI, L.P. 

Lion Capital Fund II, L.P. 

Odewald Private Equity Partners III, L.P. 

Palamon European Equity Fund, L.P. 

Portobello Capital II, L.P. 

The Fourth Cinven Fund 

Ventizz IV 

Subtotal Western European Funds 

Other Regions Funds Portfolio 

CVC Capital Partners Asia Pacific II, L.P. 

PineBridge Global Emerging Markets Fund II, L.P. 

PineBridge Latin America Partners I, L.P. 

PineBridge Latin America Partners II, L.P. 

PineBridge New Europe Partners II, L.P. 

PineBridge Sports & Entertainment Partners L.P. 

Unison Capital Partners II 

Unison Standby Facility 

Subtotal Other Regions Funds 

North American Funds 

Altaris Health Partners II, L.P. 

Apollo IV, L.P. 

Apollo VI, L.P. 

Ares Corporate Fund II, L.P. 

Blackstone Capital Partners III, L.P. 

Blackstone Capital Partners V, L.P. 

CHS Private Equity V, L.P. 

Cortec Group Fund IV, L.P. 

Diamond Castle IV, LP 

HealthCare Ventures VIII, L.P. 

Highstar Capital, L.P. 

Highstar Capital III Prism Fund, L.P. 

J.C. Flowers Fund II, L.P. 

Madison Dearborn V, L.P. 

Mill Road Capital Partners, L.P. 

New Mountain Investments III, L.L.C 

PineBridge Horizon Partners L.P. 

PineBridge Private Equity Portfolio I, L.P. 

Platinum Equity Capital Partners II 

Polaris Venture V, LP 

SFW Capital Partners Fund, L.P. 

Technology Crossover Ventures IV, L.P. 

Thompson Street Capital Partners II, L.P. 

TowerBrook Capital Partners II, LP 

VSS Communications Partners IV, LP 

Wellspring Capital Partners IV, L.P. 

WestView Capital Partners, L.P. 

Subtotal North American Funds 

Opening 

Balance at Cost 

in TCHF 

– 

3 492 

2 069 

13 041 

14 446 

3047 

5 600 

6 999 

– 

20 465 

10 129 

5 143 

4250 

13 211 

1861 

3 084 

106 837 

9 282 

6 094 

889 

2 033 

7837 

454 

1850 

302 

28 741 

5 930 

182 

11 051 

6 953 

1 049 

27 584 

6784 

14 313 

9269 

4306 

430 

23 688 

6 722 

15 437 

10 489 

1 873 

10 226 

17 548 

4 800 

6 692 

2 620 

1 338 

8951 

15 138 

10 384 

5 809 

4 579 

234 145 

Opening 

Balance at 

Fair Market Value 

in TCHF 

3401 

7501 

605 

12 035 

18 881 

2 043 

7 376 

6919 

3269 

19 777 

10 793 

6 912 

4 727 

13 996 

4 520 

3006 

125 761 

8150 

6 225 

2489 

2 805 

8 076 

562 

3010 

525 

31 842 

5451 

1008 

25 107 

7 230 

1304 

28 634 

8 473 

17 044 

10 605 

4 273 

336 

21 234 

6 926 

13 304 

12 327 

1 680 

9556 

14 887 

5 525 

6997 

2 344 

1437 

11 781 

14 243 

8760 

5 699 

7 110 

253 275 

Cumulative 

Gain/Loss 

31.12.10 

in TCHF 

3401 

4009 

(1 464) 

(1 006) 

4 435 

(1 004) 

1 776 

(80) 

3269 

(688) 

664 

1769 

477 

785 

2659 

(78) 

18 924 

(1 132) 

131 

1 600 

772 

239 

108 

1160 

223 

3 101 

(479) 

826 

14 056 

277 

255 

1050 

1 689 

2731 

1 336 

(33) 

(94) 

(2 454) 

204 

(2 133) 

1 838 

(193) 

(670) 

(2 661) 

725 

305 

(276) 

99 

2 830 

(895) 

(1 624) 

(110) 

2531 

19 130 

Paid in Capital 

in TCHF 

– 

1 085 

– 

4 203 

309 

195 

1259 

5 933 

– 

1 426 

(743) 

2 639 

29 

196 

462 

2 172 

19 165 

47 

63 

7 

85 

286 

– 

26 

5 

519 

3440 

– 

937 

113 

1 

2 536 

881 

2294 

297 

446 

– 

2388 

350 

499 

1488 

937 

105 

280 

2 089 

1 116 

7298 

– 

1369 

538 

271 

615 

188 

30 476 

Returned Capital 

in TCHF 

– 

(1 134) 

– 

(145) 

(5 756) 

(338) 

(1 800) 

(3 532) 

– 

(2 167) 

(395) 

(902) 

(1 612) 

– 

(477) 

(583) 

(18 841) 

(382) 

(1 341) 

(130) 

– 

– 

– 

(11) 

(13) 

(1 877) 

(2 277) 

(170) 

(494) 

(1 179) 

(1 030) 

(1 205) 

(859) 

(234) 

(132) 

(309) 

– 

(4 120) 

(197) 

(84) 

– 

(141) 

(218) 

(3 962) 

(847) 

– 

(3 710) 

(96) 

(1 204) 

(3 811) 

(219) 

(122) 

(1 158) 

(27 778)

Total 

Write-downs 

in TCHF 

– 

– 

(10) 

– 

– 

(2 904) 

– 

(3 184) 

– 

– 

– 

97 

(151) 

– 

– 

(1 278) 

(7 430) 

(1 545) 

– 

– 

– 

– 

– 

– 

– 

(1 545) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(121) 

– 

(446) 

– 

– 

– 

– 

(2 527) 

– 

– 

– 

(728) 

– 

– 

– 

– 

– 

(3 822) 

Cost 

31.12.11 

in TCHF 

– 

3 443 

2059 

17 099 

8 999 

– 

5059 

6216 

– 

19 724 

8991 

6 977 

2516 

13 407 

1846 

3 395 

99 731 

7 402 

4816 

766 

2 118 

8 123 

454 

1 865 

294 

25 838 

7 093 

12 

11 494 

5887 

20 

28 915 

6 806 

16 373 

9 434 

4 443 

309 

21 956 

6 429 

15 852 

11 977 

2 669 

10 113 

11 339 

6 042 

7 808 

6208 

514 

9 116 

11 865 

10 436 

6 302 

3 609 

233 021 

Fair Value 

31.12.11 

in TCHF 

1 528 

6 686 

918 

15 608 

11 846 

– 

6 984 

8 099 

2 293 

19 845 

8 928 

7 342 

2 565 

15 040 

4556 

3768 

116 006 

5 973 

7 712 

688 

2170 

7714 

708 

3 333 

491 

28 789 

7268 

233 

21 154 

7697 

38 

29 372 

8618 

19 145 

10 697 

3 955 

173 

26 387 

5 630 

15 089 

16 225 

2 599 

7 970 

9 660 

6910 

8 876 

6 443 

196 

12 299 

9 925 

9 238 

6 475 

5486 

257 758 

Unrealized Gain 

31.12.11 

in TCHF 

1 528 

3 243 

– 

– 

2847 

– 

1 925 

1 883 

2 293 

121 

– 

365 

49 

1 633 

2710 

373 

18 970 

– 

2 896 

– 

52 

– 

254 

1468 

197 

4867 

175 

221 

9 660 

1810 

18 

457 

1 812 

2 772 

1 263 

– 

– 

4431 

– 

– 

4 248 

– 

– 

– 

868 

1 068 

235 

– 

3 183 

– 

– 

173 

1 877 

34 271 

Unrealized Loss 

31.12.11 

in TCHF 

– 

– 

(1 141) 

(1 491) 

– 

– 

– 

– 

– 

– 

(63) 

– 

– 

– 

– 

– 

(2 695) 

(1 429) 

– 

(78) 

– 

(409) 

– 

– 

– 

(1 916) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(488) 

(136) 

– 

(799) 

(763) 

– 

(70) 

(2 143) 

(1 679) 

– 

– 

– 

(318) 

– 

(1 940) 

(1 198) 

– 

– 

(9 534) 

Realized Gain 

1.1.11–31.12.11 

in TCHF 

1256 

1 412 

– 

– 

4291 

2 448 

1 686 

5356 

1 509 

1 644 

39 

– 

1071 

– 

659 

695 

22 066 

– 

– 

679 

– 

– 

– 

6 

– 

685 

950 

744 

286 

825 

1161 

561 

941 

65 

– 

618 

– 

1346 

272 

– 

195 

– 

568 

2211 

603 

– 

– 

1 223 

1 330 

2807 

– 

4 

2780 

19 490 


Realized Loss 

1.1.11–31.12.11 

in TCHF 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(765) 

– 

– 

– 

– 

– 

– 

(765) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Outstanding 

Commitments 

in TCHF 

787 

1361 

258 

6614 

1 806 

260 

863 

6 063 

354 

483 

2187 

3450 

14 

1786 

1480 

1194 

28 960 

849 

484 

545 

467 

11 702 

79 

729 

472 

15 327 

9466 

9 

2469 

1451 

184 

3 549 

1 295 

2251 

1651 

2 293 

284 

2 072 

529 

2 982 

2 855 

1 773 

16 

1 003 

1 883 

1 724 

10 154 

112 

2146 

5 077 

520 

96 

919 

58 763 

Original 

Currency 

EUR 

EUR 

EUR 

EUR 

EUR 

EUR 

EUR 

EUR 

USD 

USD 

EUR 

EUR 

EUR 

EUR 

EUR 

EUR 

EUR 

USD 

USD 

USD 

EUR 

USD 

JPY 

JPY 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

Vintage 

Year 

2003 

2007 

1999 

2007 

2003 

2001 

2006 

2006 

2000 

2006 

2007 

2007 

1999 

2006 

2007 

2007 

2005 

2005 

2000 

2007 

2007 

2000 

2005 

2007 

2007 

1998 

2006 

2006 

1997 

2006 

2005 

2006 

2006 

2005 

2000 

2007 

2006 

2006 

2007 

2007 

1999 

2000 

2008 

2006 

2007 

2000 

2006 

2006 

2006 

2006 

2005 

33


34 

3. Financial Assets Available for Sale (continued) 

Direct Investments Portfolio 

Acosta 

Advanstar Communications 

AMF Bowling Worldwide 

Bell-Riddell Holdings 

Body Central 

Falcon Farms LLC 

Flash Global Logistics 

Hertz 

Knowledge Universe Education 

National Bedding Company 

NXP Semiconductors 

SunGard Data Systems 

Thomas Nelson Publishing 

United Surgical Partners International 

Xanodyne 

Subtotal Direct Investments 

Loans 

Flint Group (fka. Xsys/Aster) 

Subtotal Loans 

Total of all Investments 

Opening 

Balance at Cost 

in TCHF 

4371 

133 

– 

1146 

1 094 

717 

– 

1 282 

9656 

474 

187 

1 236 

9582 

1 422 

475 

31 775 

1 544 

1 544 

403 042 

Opening 

Balance at 

Fair Market Value 

in TCHF 

6 928 

103 

1 313 

886 

5 111 

1 378 

– 

3138 

7198 

844 

2 249 

1001 

7 823 

1 670 

502 

40 144 

1 668 

1 668 

452 690 

Cumulative 

Gain/Loss 

31.12.10 

in TCHF 

2557 

(30) 

1 313 

(260) 

4017 

661 

– 

1856 

(2 458) 

370 

2 062 

(235) 

(1 759) 

248 

27 

8 369 

124 

124 

49 648 

Paid in Capital 

in TCHF 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

50 160 

Returned Capital 

in TCHF 

(4 371) 

– 

– 

– 

(1 068) 

– 

– 

(266) 

– 

– 

(160) 

– 

– 

– 

– 

(5 865) 

– 

– 

(54 361)

Total 

Write-downs 

in TCHF 

– 

– 

– 

– 

– 

– 

– 

– 

(1 107) 

– 

– 

– 

– 

– 

(475) 

(1 582) 

– 

– 

(14 379) 

Cost 

31.12.11 

in TCHF 

– 

133 

– 

1146 

26 

717 

– 

1016 

8 549 

474 

27 

1 236 

9 582 

1 422 

– 

24 328 

1 544 

1 544 

384 462 

Fair Value 

31.12.11 

in TCHF 

– 

103 

922 

893 

3 903 

1 022 

– 

1 940 

6 463 

847 

1 362 

1004 

7851 

1897 

– 

28 207 

1 695 

1 695 

432 455 

Unrealized Gain 

31.12.11 

in TCHF 

– 

– 

922 

– 

3 877 

305 

– 

924 

– 

373 

1 335 

– 

– 

475 

– 

8211 

151 

151 

66 470 

Unrealized Loss 

31.12.11 

in TCHF 

– 

(30) 

– 

(253) 

– 

– 

– 

– 

(2 086) 

– 

– 

(232) 

(1 731) 

– 

– 

(4 332) 

– 

– 

(18 477) 

Realized Gain 

1.1.11–31.12.11 

in TCHF 

3 793 

– 

– 

– 

2466 

– 

– 

557 

– 

– 

351 

– 

– 

– 

– 

7167 


– 

– 

49 408 

Realized Loss 

1.1.11–31.12.11 

in TCHF 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(765) 

Outstanding 

Commitments 

in TCHF 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

103 050 

Original 

Currency 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

USD 

EUR 

USD 

USD 

USD 

USD 

EUR 

Vintage 

Year 

2006 

2007 

2004 

2006 

2006 

2007 

2007 

2005 

2007 

2005 

2006 

2005 

2005 

2007 

2005 

2004 

35


36 

Note 4: Cash and Cash Equivalents 

in TCHF 

2011 2010 

Cash at banks 38 144 22 656 

Total 38 144 22 656 

Cash and cash equivalents comprise all cash, short-term deposits and other money market instruments, net of short-term overdrafts, 

with an original maturity of three months or less. Cash and cash equivalents are at the full disposal of the Company. 

The carrying amounts of cash and cash equivalents approximate fair value. 

Note 5: Foreign Exchange Rates 

The following exchange rates have been applied to translate the foreign currencies of significance for the group: 

2011 2010 

Year-end rates: Unit CHF CHF 

US dollar 1 USD 0.9351 0.9321 

Euro 1 EUR 1.2139 1.2505 

Yen 100 Yen 1.2156 1.1493 

Average annual rates: 

US dollar 1 USD 0.8868 1.0428 

Euro 1 EUR 1.2329 1.3818 

Yen 100 Yen 1.1128 1.1883 

Note 6: Receivables and Prepayments 

in TCHF 

2011 2010 

From third parties 376 210 

Total 376 210 

The carrying amounts of the accounts receivable and prepayments approximate fair value. The carrying amount of receivables 

reflects its maximum exposure to credit risk. 

There were no related party transactions to be reported for 2011 (2010: nil). 

Note 7: Payables and Accrued Charges 

in TCHF 

2011 2010 

Interest and commitment fee payable Borrowings 2 258 2 360 

Other payables and accrued charges 1 501 1 056 

Total 3 759 3 416 

The carrying amounts of accounts payable and accrued charges approximate fair value.


Note 8: Post-employment Benefits 

In accordance with Swiss pension fund law, employees of APEN Services LLC participate in a funded pension scheme that qualifies 

as a defined benefit plan under IFRS. The scheme provides for retirement benefits as well as benefits in case of disability and 

death. The scheme is funded by contributions from APEN Services LLC and the plan participants. 

The following tables summarize the components of net benefit expense recognized in the statement of comprehensive income 

and the funded status and amounts recognized in the statement of financial position for the respective plans as calculated by an 

independent actuary: 

2011 2010 

Pension liability as at 31 December TCHF TCHF 

Defined benefit obligation 808 618 

Fair value of plan assets (505) (361) 

Pension liability recognized in the balance sheet 303 257 

Changes in the present value of the defined benefit obligation are as follows: 

2011 2010 

TCHF TCHF 

Defined benefit obligation at 1 January 618 – 

Interest cost 18 14 

Current service cost 65 28 

Contributions by plan participants 31 35 

Benefits paid/amounts transferred in – 273 

Past service cost – 192 

Actuarial losses/(gains) on obligation 76 76 

Exchange differences – – 

Defined benefit obligation at 31 December 808 618 

Changes in the fair value of plan assets are as follows: 

2011 2010 

TCHF TCHF 

Fair value of plan assets at 1 January 361 – 

Expected return 11 9 

Contributions by employer 77 75 

Contributions by plan participants 32 35 

Benefits paid/amounts transferred in – 272 

Actuarial gains/(losses) on plan assets 24 (30) 

Exchange differences – – 

Fair value of plan assets at 31 December 505 361 

2011 2010 

Net benefit expense recognized in other operating expenses TCHF TCHF 

Current service cost 65 28 

Interest cost on benefit obligation 18 14 

Expected return on plan assets (11) (8) 

Past service cost – 192 

Net benefit expense 72 226 

Actual (loss)/return on plan assets 35 (21) 

APEN Services LLC expects to contribute TCHF 82 to its defined benefit pension plan in 2012. 

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38 

The major categories of plan assets as a percentage of the fair value of the total plan assets are as follows: 

2011 2010 

Equity 24.9% 28.1% 

Bonds 30.7% 33.6% 

Real estate 14.6% 14.0% 

Other 29.8% 24.3% 

2011 2010 

Discount rate 2.50% 2.75% 

Expected return on plan assets 2.50% 2.75% 

Expected salary increases 2.00% 2.00% 

Pension increase rate 0.50% 0.50% 

The cumulative amount of actuarial losses recognised since 1 January 2011 in other comprehensive income is TCHF 52. 

2011 2010 

TCHF TCHF 

Defined benefit obligation 808 618 

Fair value of plan assets (505) (361) 

Deficit in the plan 303 257 

Experience adjustments: 

Gains/(losses) on benefit obligation (76) (76) 

Gains/(losses) on plan assets 24 (30) 

Note 9: 

9.1. Borrowings 

in TCHF 

2011 2010 

Fortress Credit Corp. 81 823 79 555 

Falcon Private Bank Ltd. – 3 728 

Total Borrowings 81823 83 283 

On 26 October 2009 (the “refinancing date”), the Group entered into an unsecured long term credit facility of USD 200 million 

with Fortress Credit Corp. (“FCC”) and a revolving credit facility of USD 25 million with Falcon Private Bank (“FPB”). At year-end 

USD 100 million was drawn down on the FCC facility (2010: USD 100 million) and there were no drawings under the FPB facility 

(2010: USD 4 million). 

– Fortress Credit Corp. (“FCC”) 

The FCC facility has a five year commitment period (until 26 October 2014) and matures seven years after closing (26 October 

2016). The loan carries a 8% cash pay interest rate (payable quarterly) and a 12% payment in kind interest rate. A commitment 

fee of 1.0% of the unused credit facility per annum is due on a quarterly basis. The Group also has an obligation to deliver up 

to 15% additional equity interest in APEN Holdings (the current FCC interest is 10%), depending on the extent the FCC loan 

facility is utilized per 31 March 2012. If the outstanding amount remains at USD 100 million per 31 March 2012 then the percentage 

will increase from 10% to 12.5%. This is accounted for by the derivative liability. The Group is additionally required to ensure 

FCC a return of 175% (200% if the loan is repaid on or prior to 31 March 2012). Refer also to note 2.2 on page 25f.


The FCC facility was initially recognized at its estimated fair value less directly attributable transaction costs at the refinancing date 

and subsequently measured at amortized cost using the effective interest method. The effective interest rate has been calculated 

as 30.08%. The amortized cost calculation assumes that the FCC facility will be repaid in full at the contractual maturity date. 

Interest expense from borrowings in the statement of comprehensive income includes CHF 0.4 million of accretion expense on 

the FCC facility. Refer also to note 2.2 on page 25f. 

On 3 October 2011, the Group made a repayment in the amount of USD 16 million to FCC. The Group is required to use any cash 

balance in excess of 30% of unfunded commitments to repay the FCC facility (including accrued interest). This requirement 

resulted in the repayment previously noted. The repayment represents a change in the timing of estimated cash flows and has 

resulted in a catch-up adjustment in the Borrowings balance in 2011. No change has been made to the effective interest rate. The 

impact of the adjustment is TCHF 3 741 and is reflected in the statement of comprehensive income within interest expense. The 

Group continues to believe that the Borrowings and Class B Units will be repaid at the contractual maturity date due to the 

uncertainty of the timing of cash flows. Further, distributions from portfolio investments have slowed down considerably in the 

fourth quarter 2011 and early 2012. 

– Falcon Private Bank (“FPB”) 

On 26 October 2009, the Group also entered into a revolving credit facility of USD 25 million with Falcon Private Bank (“FPB”). 

At year-end there were no drawings under the FPB facility. 

The FPB facility matures on 30 April 2013. A commitment fee of 2.0% per annum based on the unused credit facility is due on a 

quarterly basis. The Group has pledged its shares in APEN Holdings (Bermuda) Ltd. as collateral on the FPB facility. APEN Hold - 

ings (Bermuda) Ltd. holds twelve fund interests with a fair value of CHF 106.9 million at 31 December 2011 (2010: TCHF 119.7). 

– Restatement: 

In preparation of the interim financial statements for the period ended 30 June, 2011, an error in the application of the effective 

interest rate method in relation to Borrowings (Fortress loan) was detected. The error only affected the statement of comprehensive 

income in the fourth quarter 2010 and the balance sheet as of 31 December, 2010. 

The carrying amount of ‘Borrowings’ within ‘Non-current liabilities’ was overstated by CHF14.0 million. Further, ‘Interest expense 

from Borrowings and Class B Units’ was overstated by the same amount. 

39


40 

The effects of the correction as of 31 December 2010 are set forth in the table below: 

in TCHF 

Original Data Adjustment Restated Data 

Consolidated Balance Sheet 31.12.2010 31.12.2010 31.12.2010 

– Borrowings 93 596 (14 041) 79 555 

Total non-current liabilities 214 751 (14 041) 200 710 

Total Liabilities 221 895 (14 041) 207 854 

– Net loss for the period (34 929) 12 637 (22 292) 

Total Equity Attributable to the Owners of the Parent 230 941 12 637 243 578 

– Equity attributable to minority interest 22 720 1 404 24 124 

Total Shareholders’ Equity 253 661 14 041 267 702 

Net Asset per Share 

Net asset per share (in CHF) before minority interest 58.78 3.21 61.99 

Original Data Adjustment Restated Data 

Consolidated Statement of Comprehensive Income 31.12.2010 31.12.2010 31.12.2010 

Expenses 

– Interest expense from Borrowings and Class B Units (39 806) 14 041 (25 765) 

Total Expenses (76 068) 14 041 (62 027) 

Net Loss for the Period (38 614) 14 041 (24 573) 

Loss Attributable to: 

Owners of the parent (34 929) 12 637 (22 292) 

Non-controlling interest (3 685) 1 404 (2 281) 

Total Comprehensive Profit/(Loss) for the Period (9 221) 14 041 4 714 

Loss Attributable to: 

Owners of the parent (8 800) 12 637 3 731 

Non-controlling interest (421) 1 404 983 

Earnings per Share 

Weighted average number of shares outstanding during the period 3 929 185 – 3 929 185 

Net (loss) per share (in CHF) – basic (8.89) 3.22 (5.67) 

Net (loss) per share (in CHF) – diluted (8.89) 3.22 (5.67) 

Following these adjustments, the Company’s net asset value per share per 31 December 2010 was CHF 61.99 per share (prior to 

correction: CHF 58.78). The Company’s net loss per share (basic and diluted) per 31 December 2010 was CHF –5.67 (prior to 

correction: CHF –8.89). 

The adjustment of the Borrowings resulted in lower ‘Interest expense from Borrowings and Class B Units’, reducing the reported 

net loss for the period accordingly and increasing shareholders’ equity by the same amount. As the 2010 opening balances were 

not impacted, these have not been presented on the Consolidated Balance Sheet, and related disclosures.


9.2. Class B Units 

in TCHF 

2011 2010 

MIP PE Holdings, LLC * 124 436 115906 * formerly held by AIG Global Asset Management Holdings Corp. Both companies are AIG Inc.; group companies 

The Class B Units are classified as debt as the Group has a contractual obligation to deliver cash in settlement by a specified maturity 

date. The Class B Units were recognized at their estimated fair value at the date of issuance (USD 114.75 million) and are subsequently 

measured at amortized cost using the effective interest method. The Class B Units are entitled to receive an amount equal to 

(i) the principal value USD 150 million, plus (ii) an additional amount of USD 14.2 million, plus (iii) simple interest of 5.25% on the 

principal amount from the date of issuance (24 October 2009) through the date of payment. Payments made to the holder of the Class 

B Units are allocated first to repayment of the additional amount under (ii) above, second to accrued interest under (iii) above, and 

third to reduction of the principal amount. Once the principal amount has been repaid in its entirety, the Class B Units will be 

extinguished. The Class B Units are required to be redeemed on 26 October 2021 if not repaid and extinguished earlier. 

The effective interest rate has been calculated as 7.01%. The amortized cost calculation assumes that the Class B Units will be repaid 

in full at the contractual maturity date. Interest expense from the Class B Units in the statement of comprehensive income includes 

TCHF 841 of accretion expense on the Class B Units. 

Note 10. Derivative Liability 

A derivative liability has been recognized on the FCC facility. If the Fortress credit is not repaid in its entirety before April 2012, 

the Fortress entities that hold Class A Units in APEN Holdings LLC will have their interest in APEN Holdings LLC increased from 

10% to 12.5%. This potential increase in equity ownership at APEN Holdings LLC is being treated as an embedded derivative. Its 

value is derived by discounting 2.5% of APEN Holdings LLC’s NAV (USD 258.6 million; weighted average cost of capital 9.55%; 

three months discount period). Changes in the value of the derivative are booked to the statement of comprehensive income as 

net loss on derivatives. If the FCC facility is further utilized, the interest of the Class A Units will increase to a maximum of 25%. 

Management does not believe that this event is likely. 

Note 11: Share Capital 

Shareholders’ equity/net assets of TCHF 254 745 (2010: TCHF 267 702) represent the capital available to the Group to implement 

and achieve its investment goals. Shareholders’ equity includes a revaluation deficit/surplus, which represents unrealized value 

increases/decreases on investments held as available-for-sale. Shareholders’ equity also includes currency translation adjustments 

representing differences due to the currency translation from functional to presentation currency. 

The share capital of the Company as of 31 December 2011 amounts to CHF 41 250 000 (31 December 2010: CHF 412 500 000) consisting 

of 4 125 000 registered shares (31 December 2010: 4 125 000) with a par value of CHF 10 (2010: CHF 100) each. In June 

2011 shareholders approved the reduction of the par value of each share from CHF 100 to CHF 10. The entire aggregate capital 

reduction amount of CHF 371 250 000 has been allocated to the newly created reserves from capital contributions (statutory 

reserves). All issued shares are fully paid. 

As of 31 December 2011 the Company has CHF 20.625 million (2010: CHF 206.25 million) authorized share capital outstanding. 

This authorized share capital will expire per 14 June 2013. As of 31 December 2011 the Company has CHF 20.625 million (2010: 

CHF 206.25 million) conditional share capital outstanding. The Company did not raise any new capital in 2011. 

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42 

Share capital is broken down as follows: 

Number of Shares 

At 1 January 2010 3 929 185 

– Treasury shares sold – 

– Treasury shares purchased – 

At 31 December 2010 3 929 185 

At 1 January 2011 3 929 185 

– Treasury shares sold – 

– Treasury shares purchased – 

At 31 December 2011 3 929 185 

The Company can trade in treasury shares in accordance with the relevant guidelines (Company’s articles of association, Swiss company 

law, listing rules of the SIX Swiss Exchange). Treasury shares are treated as a deduction from the consolidated shareholder’s equity 

(2011: TCHF 30 691: 2010: TCHF 30 691). During 2011 the Company sold nil (2010: nil) shares, and purchased nil shares (2010: nil). 

Currently, the Group does not intend to pay any dividends to shareholders. 

The following major shareholders held shares and voting rights of 3% and more as of 31 December 2011: 

Number of Shares Participation in % Number of Shares Participation in % 

2011 2011 2010 2010 

MetLife Inc. 515 286 12.5% 515 286 12.5% 

Ernst Göhner Stiftung 267 000 6.5% 267 000 6.5% 

AIG Group* 920 081 22.3% 920 081 22.3% 

APEN Ltd.*** 195 815 4.8% 195 815 4.8% 

SUVA, Schweiz. Unfallversicherungsanstalt** 127 500 3.1% 127 500 3.1% 

AXA Life 167 000 4.1% 167 000 4.1% 

Wellington Management Company, LLP 154 297 3.7% n/a n/a 

Levin Capital Strategies, L.P. n/a n/a 206 210 5.0% 

* The shares are held by three group entities, namely American International Group, Inc., Chartis, Inc. and AIG Global Asset Management Holdings Corp. 

** 7 February 2012, SUVA announced that its shareholdings in the Company has decreased below 3%. 

*** Represents treasury shares held by the Company. 

During 2011, the Company received a number of notifications from shareholders disclosing that they had fallen below or exceeded one 

of the thresholds that trigger a reporting requirement. The reports were subsequently published by the Company and are avail able 

under the following web link: www.six-exchange-regulation.com/obligations/disclosure/major_shareholders_en.html. 

Note 12. Non-controlling Interest 

APEN Holdings LLC has issued three classes of units: Class A Units, which were issued to entities managed by affiliates of Fortress Investment 

Group LLC (the “Fortress Entities“), the Class B Units issued to MIP PE Holdings LLC (formerly: AIG GAMH), and the Class 

C Units issued to APEN Ltd. and APEN Faith Media Holdings LLC. Following the repayment of the Fortress credit facility, APEN Bermuda 

Ltd. will distribute available cash as defined in the Limited Liability Company Agreement of APEN Holdings LLC to APEN Holdings LLC, 

which will then make payments to its members pursuant to the following waterfall: first (i) 10% to the Class A Units, (ii) 76.5% to the 

Class B Units, and (iii) 13.5% to the Class C Units until the Class B Units have been redeemed and extinguished (as described in Note 

9.2); and second, following extinguishment of the Class B Units (i) 10% to the Class A Units and (ii) 90% to the Class C Units. 

The group has an obligation to deliver up to 15% additional equity interest in APEN Holdings (from the current 10%), depending on 

the extent the FCC loan is utilized per 31 March 2012. If the outstanding amount remains at USD 100 million per 31 March 2012, then 

the percentage will increase per 1 April 2012 to 12.5% (Class B 74.375%; Class C 13.125%).

Note 13. Earnings per Share Attributable to Equity Holders 


Earnings per Share 2011 2010 

Net profit/(loss) per share outstanding (in CHF) – basic 0.30 (5.67) 

Net profit/(loss) per share outstanding (in CHF) – fully diluted 0.30 (5.67) 

Net profit/(loss) for the period (in TCHF) 1 180 (22 292) 

Weighted average of total number of shares outstanding (in 1 000) – basic 3 929 185 3 929 185 

Weighted average of total number of shares outstanding (in 1 000) – diluted 3 929 185 3 929 185 

Note 14: Write-downs of Non-Current Assets 

For the year ended 31 December impairments of non-current assets were recognized as follows: 

in TCHF 2011 2010 

Direct investments 1582 647 

Funds 12 797 15 168 

Total 14 379 15 815 

For details please see the investment table in note 3. 

Note 15: Interest Income and Dividends from Non-Current Assets and Net Realized Gains on Investments 

Interest income, net interest income and dividends from non-current assets, and net realized gains were generated by the three 

portfolios as follows: 

in TCHF 2011 2010 

Interest income from non-current assets: 

Third Party Funds 1949 1031 

Direct Investments 96 90 

Total interest income from non-current assets 2 045 1 121 

Dividend income from non-current assets: 

Third Party Funds 5 370 4 035 

Direct Investments – – 

Total dividend income from non-current assets 5 370 4 035 

Realized gains from non-current assets: 

Third Party Funds 42 242 33 589 

Direct Investments 7166 763 

Total realized gains from non-current assets 49 408 34 352 

Realized losses from non-current assets: 

Third Party Funds 765 1 829 

Direct Investments – – 

Total realized losses from non-current assets 765 1 829 

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44 

Note 16: Other Operating Expenses 

in TCHF 

Operating expenses 2011 2010 

Personnel expenses 1714 1316 

Board of Directors 303 265 

Accounting 737 737 

Fees regarding sale of portfolio funds – 1 993 

Others 1782 2151 

Total operating expenses 4 536 6 462 

Note 17: Taxes 

in TCHF 

2011 2010 

Current income tax 515 324 

Reconciliation of income tax calculated with the applicable tax rate: 

Gain/loss before tax expense 2 115 (24 249) 

Applicable tax rate 8.5% 8.5% 

Income tax 180 (2 061) 

Effect from: 

– income tax payable from current and prior periods – (11) 

– non-taxable profits (143) (2 679) 

– increase of valuation allowance on net operating loss (37) 629 

– non-refundable withholding tax paid, income tax expense 515 324 

Total income tax expenses 515 324 

In 2011, the Group paid TCHF 467 (2010: TCHF 324) non-refundable withholding taxes.

Note 18: Related Party Transactions 

Related Parties are individuals and companies where the individual 

or company has the ability, directly or indirectly, to control 

the other party or to exercise significant influence over the 

other party in making financial and operating decisions. 

In 2011 related parties include: 

Board of Directors and Management Board of APEN Ltd. 

American International Group, Inc. 

Material transactions 

Total compensation of the Board of Directors in the reporting 

period was TCHF 253 (2010: TCHF 287) and of the Management 

Board TCHF 748 (2010: TCHF 900). Please also refer to 

note 6 of the statutory accounts (page 69f) for more detailed 

information. 

A member of the Management Board is an observer of the 

board of directors of MV Leveraged Finance Ltd. APEN 

Bermuda Ltd. made an equity investment (EUR 10 million) and 

a loan investment (EUR 20 million) in this entity in the fourth 

quarter 2006. Both investments were written-off per year-end 

2009. 

Note 19: Financial Risk Management 

19.1 Strategy in using financial instruments 

The objective of the Group is to achieve long-term capital 

growth for shareholders by investing in a diversified portfolio 

of private equity funds and privately held operating companies 

(direct investments). 

The Group’s activities expose it to a variety of financial risks, 

namely market risk (including interest rate risk, currency risk 

and other price risks), liquidity risk and credit risk. Management 

observes and manages these risks. These risks could 

result in a reduction of the Group’s net assets. 

The Group seeks to minimize these risks and adverse effects by 

considering potential impacts from the financial markets. The 

Group manages these risks, where necessary, via collaboration 

with service partners that are market leaders in their respective 

area of expertise. Additionally, the Group has internal guide - 

lines and policies in place to ensure that transactions are 

effected in a consistent and diligent manner. 


19.2. Market risk 

a.) Interest rate risk 

The Group is subject to cash flow interest rate risk due to fluctuations 

in the prevailing levels of market interest rates. This 

risk arises primarily from loan assets (higher/lower LIBOR rate 

at refinancing date; see schedule below). These loans have a 

variable interest rate corresponding to the LIBOR rate plus a 

margin. The Borrowings and Class B Units, both non-current 

liabilities, carry a fixed rate and are therefore not exposed to 

interest rate fluctuations. The majority of the Group’s assets 

are non interest bearing. The Group has not applied an interest 

rate hedge due to the short term maturity profile of the loans 

and because the Group has no long term visibility of its cash 

flows due to its business activity. 

The table below summarizes the Group’s exposure to interest 

rate risks. It includes the Group’s assets and liabilities cate - 

gorized by the earlier of contractual re-pricing or maturity 

dates. 

At 31 December 2011, should interest rates change by 28 basis 

points (2010: 5 basis points) with all other vari ables ceteris 

paribus, the increase/decrease in profit and loss for the year 

would be approximately TCHF 96 (2010: TCHF –8). 

The Group’s management monitors interest rates on a regular 

basis and informs the Board of Directors accordingly at its 

quarterly meetings. 

45


46 

At 31.12.11 in TCHF < 1 month 1–3 months 3 months–1 year >1 year Non-interest bearing Total 

Assets 

Financial assets available for sale – – – – 430 761 430 761 

Loans – 1 695 – – – 1 695 

Other receivables 376 – – – – 376 

Cash at bank 38 144 – – – – 38 144 

Liabilities 

Borrowings – – – 81 823 – 81 823 

Class B units – – – 124 436 – 124 436 

Payables and accrued charges 3 759 – – – – 3 759 

Derivative liability – – – – 5 909 5 909 

Pension liability – – – – 303 303 

At 31.12.10 in TCHF < 1 month 1–3 months 3 months–1 year >1 year Non-interest bearing Total 

Assets 

Financial assets available for sale – – – – 451 022 451 022 

Loans – 1 668 – – – 1 668 

Receivables and prepayments 210 – – – – 210 

Cash at bank 22 656 – – – – 22 656 

Liabilities 

Borrowings 3 728 – – 79 555 – 83 283 

Class B units – – – 115 906 – 115 906 

Payables and accrued charges 3 416 – – – – 3 416 



b.) Currency risk 

The USD is the functional currency of the entities holding the 

investments (see note 2.4.1). The net asset value per share is 

calculated in CHF, the presentation currency of the Group. 

However, as the Group’s investments are largely denominated 

in USD and Euro, the Group will be exposed to a certain 

degree of currency risk, which can adversely affect performance. 

Fluctuations in foreign currency exchange rates affect 

the net asset value of the investments and therefore the 

Group. The Group can enter into currency contracts to mitigate 

these currency risks. Additionally, the Group regards loans 

in the same currencies as its assets as a measure to mitigate 

the impact of currencies on the net asset value. 

The company has assessed currency risk against the Swiss 

franc as follows: if the USD were to change 3.7% (average 

monthly fluctuation), with all other variables held constant, it 

would result in a change in shareholders equity of CHF 5.1 million 

(2010: CHF 4.6 million). 

If the EUR were to change 2.3% (average monthly fluctuation), 

with all other variables held constant, it would result in a 

change in shareholders equity of CHF 2.6 million (2010: 

CHF 3.9 million). 

The Group’s currency position is monitored on a regular basis 

and the FX exposure is reviewed by the Board of Directors at 

the quarterly meetings.


At 31.12.11 (in 1 000) USD EUR JPY CHF Total 

Assets 

Cash and cash equivalents 29 824 8 134 62 124 38 144 

Other current assets 285 – – 91 376 

Loans receivable – 1 695 – – 1 695 

Investments (available for sale) 325 356 101 581 3 823 – 430 760 

Total Assets 355 465 111 410 3 885 215 470 975 

Payables and accrued charges 2 457 – – 1 302 3 759 

Loans payable 81 823 – – – 81 823 

Class B units 124 436 – – – 124 436 

Derivative liability 5 909 – – – 5 909 

Pension liability – – – 303 303 

Total Liabilities 214 625 – – 1 605 216 230 

Total Equity – – – 254 745 254 745 

Total Liabilities and Equity 214 625 – – 256 350 470 975 

At 31.12.10 (in 1 000) USD EUR JPY CHF Total 

Assets 

Cash and cash equivalents 5 239 17 172 – 245 22 656 

Other current assets 188 – – 22 210 

Loans receivable – 1 668 – – 1 668 

Investments (available for sale) 334 447 113 040 3 535 – 451 022 

Total Assets 339 874 131 880 3 535 267 475 556 

Payables and accrued charges 2 522 254 – 640 3 416 

Borrowings 83 283 – – – 83 283 

Class B units 115 906 – – – 115 906 

Derivative liability 4 992 – – – 4 992 

Pension liability – – – 257 257 

Total Liabilities 206 703 254 – 897 207 854 

Total Equity – – – 267 702 267 702 

Total Liabilities and Equity 206 703 254 – 268 599 475 556 

c) Other price risks 

Other price risks (i.e. changes in market prices other than from 

interest rate risks or currency risk) may affect the value of the 

investments held as available-for-sale by the Group. Other 

price risks arise mainly from the uncertainty about future 

valuations of the investments held as available-for-sale by 

the Group. Investments held available-for sale amounted to 

TCHF 430 760 (2010: TCHF 451 022). For these investments the 

Group calculates the corresponding fair value on a monthly 

basis. Please see the “Accounting Policies” for more information 

on the fair value process as well as Note 3. 

The Group’s former investment advisor has performed extensive 

due diligence prior to recommending any fund or direct 

investment, including an analysis of the potential risks of the 

investment. The Group monitors investments by analyzing 

regular reports and through direct contact with general partners 

and company management. Investment recommendations 

were approved by the Board of Directors prior to commitment. 

Investment performance is reviewed regularly by the Board of 

Directors. Valuations are updated on a monthly basis by taking 

new currency rates, stock price at the end of the month for 

listed portfolio companies and new reports from portfolio 

funds available to the Group into account. Furthermore the 

Group discusses fund performance with the fund managers 

47


48 

and may take part in the annual meetings of significant portfolio 

funds. Detailed valuations are established at year-end 

by speaking either in person or via telephone with fund 

managers. The Board of Directors reviews and subsequently 

approves the valuations via the sign-off of the financial statements. 

If the value of the investments (based on year-end values) had 

increased or decreased by 1.58% with all other variables held 

constant, the impact on the shareholders’ equity would have 

been CHF 6.8 million (2010: 38.08%, CHF 171.7 million). 

An increase/decrease of 1.58% would impact the statement 

of comprehensive income by CHF 0.3 million/CHF –0.5 million. 

The Company is exposed to a variety of market risk 

factors which may change significantly over time. As a result, 

measurement of such exposure at any given point in time may 

be difficult given the complexity and limited transparency of 

the underlying investments. Therefore, a sensitivity analysis is 

deemed to be of limited explanatory value. 

19.3. Liquidity risk 

Due to the specific nature of private equity funds of the type in 

which the Group invests, immediate and full investment of 

assets is not always possible. Commitments made by a private 

equity investor in a private equity fund typically result in actual 

investments being made over a period of up to six years. Outstanding 

commitments amounted to CHF 103.4 million at yearend 

2011 (2010: CHF 138.9 million). Even though these commitments 

could be drawn down at any point in time, the Group 

expects the majority of the remaining outstanding commitments 

to be drawn over a three year period. 

The Group had unused credit facilities of USD 125 million at 

year-end 2011. Furthermore, the Group will not make any new 

commitments in private equity funds or direct investments in 

operating companies. The credit facilities and the cash at hand 

are in excess of 100% of all unfunded commitments. Management 

does not anticipate to further drawdown on the facility 

provided by Fortress Credit Corp. Management monitors cash 

flows on a weekly basis by updating its cash flow report and 

reports at least on a quarterly basis to the board of directors. 

> 3 years/no 

At 31.12.11 (in TCHF) < 1 month 1–3 months < 1 year 1–3 years stated maturity Total 

Payables and accrued charges 2 633 1 126 – – – 3 759 

Borrowings 2 036 – 6 612 21 637 159 831 190 116 

Class B units – – – – 242 040 242 040 

Derivative liability – – 5 909 – – 5 909 


Total Liabilities 4 669 1 126 12 521 21 637 402 174 442 127 

Unfunded commitments 103 050 – – – – 103 050 

> 3 years/no 

At 31.12.10 (in TCHF) < 1 month 1–3 months < 1 year 1–3 years stated maturity Total 

Payables and accrued charges 2 971 445 – – – 3 416 

Borrowings 5 854 – 6 571 21 236 187 121 220 782 

Class B units – – – – 241 264 241 264 



Total Liabilities 8 825 445 6 571 21 236 433 634 470 711 

Unfunded commitments 138 894 – – – – 138 894 

The table assumes that the Class B Units and the Borrowings are repaid at their respective maturity date.

19.4. Credit risk 

The Group has credit exposure only to established, creditworthy 

third parties, so that no collateralization is required. 

Receivables are monitored continuously. 

Management monitors credit risk on a regular basis. 

The Group holds cash with Falcon Private Bank and HSBC Bank 

of Bermuda. The Group monitors the standing of these institutions 

on a regular basis. The Group holds loans in one 

invest ment (see Note 3, Flint Group). Management of the 

19.5 Fair value estimation 

IFRS 7, in addition to the fair value approach highlighted in 

note 2.4.3, requires the Group to disclose fair value measurements 

by level of the following fair value measurement 

hierarchy: 

Level I – inputs to the valuation methodology are quoted 

prices available in active markets for identical investments as 

of the reporting date. The type of investments included in 

Level I include unrestricted securities listed in active markets. 

Level II – inputs to the valuation methodology are other than 

quoted prices in active markets, which are either directly or 

indirectly observable as of the reporting date. Investments 

which are included in this category include restricted securities 

listed in active markets, securities traded in other than 

active markets, derivatives, corporate bonds and loans. 


Group monitors this loan on a regular basis by ensuring 

interest is paid and by reviewing monthly and quarterly reporting. 

The Flint Group loan is current on interest payments. 

The Group attempts to minimize investment risk through 

effective due diligence in advance of investments, conservative 

underwriting, reviews of investment partners, and contractual 

provisions that limit the Group’s downside risk (see 

also other price risk). On a quarterly basis, the Group reviews 

all investments for potential impairment losses. 

Neither past due Past due but Individually Less allowance 2011 

At 31.12.11 in TCHF nor impaired not impaired impaired for impairment Total carrying amount 

Cash and cash equivalents 38 144 – – – 38 144 

Derivative instruments – – – – – 

Other current assets 197 179 – – 376 

Loans – – – – – 

Total financial assets (excl. investments) 38 341 179 – – 38 520 

2010 

At 31.12.10 in TCHF Total carrying amount 

Cash and cash equivalents 22 656 – – – 22 656 

Derivative instruments – – – – – 

Other current assets 210 – – – 210 

Loans – – – – – 

Total financial assets (excl. investments) 22 866 – – – 22 866 

Level III – inputs to the valuation methodology are unobserv - 

able and significant to overall fair value measurement. The inputs 

into the determination of fair value require significant 

management judgment or estimation. Investments that are 

included in this category include investments in privately held 

entities. 

In certain cases, the inputs used to measure fair value may fall 

into different levels of the fair value hierarchy. In such cases, 

an investment’s level within the fair value hierarchy is based 

on the lowest level of input that is significant to the fair value 

measurement. Management’s assessment of the significance 

of a particular input to the fair value measurement in its 

entirety requires judgment, and considers factors specific to 

the investment. 

49


50 

The following table summarizes the Group’s investments measured at fair value on a recurring basis by the above fair value 

hierarchy levels: 

At 31.12.11 in TCHF Level 1 Level 2 Level 3 Total 

Fund investments held as available for sale – – 428 552 428 552 

Direct investments/loans held as available for sale 3 903 – – 3 903 

Total assets measured at fair value 3 903 – 428 552 432 455 

Derivative liabilities – – 5 909 5 909 

Total liabilities measured at fair value – – 5 909 5 909 

At 31.12.10 in TCHF Level 1 Level 2 Level 3 Total 

Fund investments held as available for sale – – 447 579 447 579 

Direct investments/loans held as available for sale 5 111 – – 5 111 

Total assets measured at fair value 5 111 – 447 579 452 690 

Derivative liabilities – – 4 992 4 992 

Total liabilities measured at fair value – – 4 992 4 992 

Due to the nature of the business the Group is engaged in, there are no significant transfers between level 1 and level 2 assets. 

The following table discloses the changes to the fair value of level III assets during the year: 

in TCHF 2011 2010 

Level III assets fair value at 1 January 447 579 476 548 

Purchases of level III assets 50 161 65 405 

Sales proceeds (distributions, sales) from level III assets (53 294) (85 508) 

Write-downs of level III assets (14 379) (15 815) 

Unrealized gains/losses of level III assets (1 515) 6 949 

Level III assets fair value at 31 December 428 552 447 579 

For year-end 2011 the Group used 30 September 2011, quarterly reports (in few cases 30 June) as well as one 31 December 2011 

report. In cases where 30 June 2011 or 30 September 2011 reports were used, the Company calculated the year-end fair value 

of a specific fund by adding (cash paid to the fund) and subtracting (cash received from a fund) second half 2011 or fourth 

quarter activity to the Company’s 30 June 2011 or 30 September 2011 capital account balance of the fund. Expressed in % of net 

asset value, 1.6% represent year-end reports and the balance unaudited quarterly reports per 30 June/30 September 2011.

Note 20: Share-Based Compensation Plan 

Share Appreciation Rights (SARs) 

In 2011, 50 000 SARs were issued. Outstanding SARs as at 

31 December 2011 are as follows: 

Sub- 

Number Year of scription Strike 

of SARs grant Vesting date Expiry ratio price 

16 666 2011 13.1.2012 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2013 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2014 12.1.2016 1:1 CHF 16.76 

The SARs were granted free of charge. Each SAR entitles the 

holder to receive in cash the difference between the strike 

price and the market price of one share of the Company at the 

exercise date. A third of the SARs are each exercisable after a 

vesting period of one, two and three years. The SARs mature 

after five years. In case of a termination of the working contract 

during the vesting period, the SARs are cancelled. 

Movements in the number of stock appreciation rights and 

their related exercise prices are as follows: 

2011 2010 

Average exercise Average exercise 

price per share SARs price per share SARs 

At 1 January 160.00 11 950 160.00 35 950 

Granted 16.76 50 000 – – 

Exercised – – – – 

Matured – 11 950 – 24 000 

At 31 December 16.76 50 000 160.00 11 950 

Of the 50 000 SARs (2010: 11950), 0 SARs (2010: 7967) were 

exercisable per 31 December 2011. In 2011, 11950 SARs 

matured without being exercised. No SARs were exercised in 

2011 (2010: nil). 

In the current year, TCHF 150 (2010: 0) was charged as an 

expense relating to SARs. The carrying amount at the end of 

the period amounted to TCHF 150 (2010: nil). The carrying 

amount was valued at TCHF 150. 


The following table lists the inputs in the models used for the 

plan for the year ended 31 December 2011: 

2011 SARs 

Dividend yield (%) 0% 

Expected volatility (%) 36.7% 

Risk-free interest rate (%) 0.0519 

Expected life of option/SARs (years) 5 years 

Weighted average share price – 

Model used Hull-White 

Since market implied volatilities for APEN Ltd. are not avail - 

able, the average of the historical volatility of a peer group was 

determined (40.67%). Additionally, a historical volatility estimate 

of the Company, using a time window of observation 

equal to 2 years was calculated (32.73%). For calculation 

purposes the average of the two values was taken. 

Note 21: Commitments, Contingencies and 

Other Off-balance-sheet Transactions 

In addition to those commitments disclosed in the Investment 

Schedule (see note 3) the Company has nil off-balance-sheet 

transactions open as of 31 December 2011 (2010: nil offbalance-sheet 

transactions). The operations of the Company 

may be affected by legislative, fiscal and regulatory developments 

for which provisions are made where deemed necessary. 

Please refer to Note 19.3 (liquidity risk) for additional inform - 

ation on commitments. 

Note 22: Segment Reporting 

The Group operates in the sole operating segment of private 

equity investments. The geographical analysis of total assets 

is determined by specifying in which region the investment 

was made: 

in TCHF 2011 2010 

North America 312 549 297 080 

Europe 129 393 142 994 

Rest of the World 29 033 35 482 

Total 470 975 475 556 

51


52 

The geographical analysis of total income is determined 

by specifying from which region the investment profits are 

generated: 

in TCHF 2011 2010 

North America 30 523 18 851 

Europe 25 159 1 779 

Rest of the World 442 17 148 

Total 56 124 37 778 

Note 23: Subsequent Events 

Between 1 January 2012 and 29 February 2012, the following 

aggregate investment related cash flows have been recorded 

(by the partnerships under the commitments existing as of 

31 December 2011 and direct investments): 

Capital Calls (in 1 000) Amount 

USD 2 250 

EUR 1 485 

JPY 846 

DKK 232 

Distributions (in 1 000) Amount 

USD 4 152 

EUR 4 312 

JPY 265 

Under the current plan, 50 000 stock appreciation rights (SARs) 

were issued to members of the board of directors and employees 

of the Company in January 2012. The SARs were granted free of 

charge. Each SAR entitles the holder to receive in cash the dif - 

ference between the strike price and the market price of one 

share of the Company at the exercise date. A third of the SARs 

are each exercisable after a vesting period of one, two and three 

years. The SARs mature after five years. In case of a termination 

of the working contract during the vesting period, the SARs are 

cancelled. 

Since the balance sheet date of 31 December 2011, there have 

been no further material events that could impair the integrity 

of the information presented in the financial statements.

REPORT OF THE STATUTORY AUDITOR 

ON THE CONSOLIDATED FINANCIAL STATEMENTS 

As statutory auditor, we have audited the consolidated financial 

statements of APEN Ltd., which comprise the balance sheet, statement 

of comprehensive income, statement of changes in shareholders’ 

equity, statement of cash flows, and notes (pages 20 to 

52), for the year ended 31 December 2011. 

Board of Directors’ Responsibility 

The Board of Directors is responsible for the preparation and fair 

presentation of the consolidated financial statements in accordance 

with the International Financial Reporting Standards (IFRS), 

Article 14 of the Directive on Financial Reporting (DFR) of the SIX 

Swiss Exchange and the requirements of Swiss law. This respon - 

sibility includes designing, implementing and maintaining an 

internal control system relevant to the preparation and fair presentation 

of consolidated financial statements that are free from 

material misstatement, whether due to fraud or error. The Board of 

Directors is further responsible for selecting and applying appropriate 

accounting policies and making accounting estimates that 

are reasonable in the circumstances. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on these consolidated 

financial statements based on our audit. We conducted our audit 

in accordance with Swiss law and Swiss Auditing Standards as well 

as the International Standards on Auditing. Those standards 

require that we plan and perform the audit to obtain reasonable 

assurance whether the consolidated financial statements are free 

from material misstatement. 

An audit involves performing procedures to obtain audit evidence 

about the amounts and disclosures in the consolidated financial 

statements. The procedures selected depend on the auditor’s 

judgment, including the assessment of the risks of material misstatement 

of the consolidated financial statements, whether due 

to fraud or error. In making those risk assessments, the auditor 

considers the internal control system relevant to the entity’s preparation 

and fair presentation of the consolidated 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 system. 

An audit also includes evaluating the appropriateness of the 

accounting policies used and the reasonableness of accounting 

estimates made, as well as evaluating the overall presentation of 

the consolidated financial statements. We believe that the audit 

evidence we have obtained is sufficient and appropriate to provide 

a basis for our audit opinion. 


Opinion 

In our opinion, the consolidated financial statements for the year 

ended 31 December 2011 give a true and fair view of the financial 

position, the results of operations and the cash flows in accordance 

with the International Financial Reporting Standards (IFRS) and 

comply with Article 14 of the Directive on Financial Reporting 

(DFR) of the SIX Swiss Exchange as well as Swiss law. 

Emphasis of Matter 

In accordance with Article 16 of the Directive on Financial Report - 

ing (DFR) of the SIX Swiss Exchange we draw attention to notes 

2.2, 2.4.5, 3 and 19.5 of the consolidated financial statements. As 

indicated in note 19.5, the financial statements include unquoted 

investments stated at their fair value of CHF 428.6 million. Because 

of the inherent uncertainty associated with the valuation of such 

investments and the absence of a liquid market, these fair values 

may differ from their realisable values, and the difference could 

be material. The determination of the fair values of these investments 

is the responsibility of the Board of Directors. The valuation 

procedures used are disclosed in notes 2.4.5 and 19.5 of the consolidated 

financial statements. We have reviewed the procedures 

applied by the Board of Directors in valuing such investments and 

have viewed the underlying documentation. While in the circumstances 

the procedures appear to be reasonable and the documentation 

appropriate, the determination of fair values involves 

subjective judgment which cannot be independently verified. Our 

opinion is not qualified in respect of this matter. 

Report on Other Legal Requirements 

We confirm that we meet the legal requirements on licensing 

according to the Auditor Oversight Act (AOA) and independence 

(article 728 CO and article 11 AOA) and that there are no circumstances 

incompatible with our independence. 

In accordance with article 728a paragraph 1 item 3 CO and Swiss 

Auditing Standard 890, we confirm that an internal control system 

exists which has been designed for the preparation of consoli dated 

financial statements according to the instructions of the Board of 

Directors. 

We recommend that the consolidated financial statements submitted 

to you be approved. 

PricewaterhouseCoopers AG 

Thomas Huber Anuschka Buob 

Audit expert 

Auditor in charge 

Zürich, 22 March 2012 

53

CORPORATE GOVERNANCE

APEN GROUP – CORPORATE GOVERNANCE 

56 

CORPORATE GOVERNANCE AT APEN LTD. 

1. GROUP STRUCTURE AND SHAREHOLDERS 

APEN Ltd. (the Company) is a holding company according to 

Swiss law and has its registered office at Industriestrasse 13c, 

6300 Zug, Switzerland. 

The Company owns shares in the following companies: 

– APEN Services GmbH, Zurich, Switzerland, company 

capital CHF 20 000 (100%); 

– APEN Faith Media Holdings LLC, Delaware, USA, (100%); 

– APEN Holdings LLC; Delaware, USA; APEN Holdings LLC 

was created in the restructuring in October 2009. The 

company has issued three categories of membership 

interests: Class A, Class B and Class C Shares. In accordance 

with the limited liability company agreement of 

Organisational Structure 

BOARD OF DIRECTORS 

100 % 

APEN SERVICES GMBH 

ZURICH 

SHAREHOLDERS 

APEN LTD. 

ZUG 

(COMPANY) 

100 % 

APEN FAITH MEDIA 

HOLDINGS, LLC 

100 % 

1% 

APEN FMH, LLC 

C SHARES 

APEN Holdings LLC dated 25 October 2009, the holders 

of these shares are entitled to receive distributions from 

available cash flows depending on their ownership per 

centage and the class of shares. 

APEN Faith Media Holding LLC owns shares in the following 

companies: 

– APEN Bermuda Ltd., Bermuda (1%). 

APEN Holdings LLC owns shares in the following companies: 

– APEN Bermuda Ltd. (99%). 

APEN Bermuda Ltd. owns shares in the following companies: 

– APEN FMH LLC (100%); 

– APEN Holdings (Bermuda) Ltd. (100%). 

APEN HOLDINGS, LLC 

DELAWARE 

99 % 

C SHARES 

APEN BERMUDA LTD. 

100 % 

APEN HOLDINGS 

(BERMUDA) LTD. 

A SHARES 

B SHARES 

FORTRESS ENTITIES 

MIP PE HOLDINGS, LLC 

DIRECT INVESTMENTS PORTFOLIO 

INTERNATIONAL FUNDS PORTFOLIO 

NORTH AMERICA FUNDS PORTFOLIO 

BOARD OF DIRECTORS MANAGEMENT BOARD AUDITORS 

Eduardo Leemann, Chairman David Salim PricewaterhouseCoopers Ltd. 

Dr. Christian Wenger, Vice Chairman Conradin Schneider Birchstrasse 160 

David Pinkerton CH-8050 Zürich

APEN Bermuda Ltd. and APEN Holdings (Bermuda) Ltd. hold 

the vast majority of the investments. 

APEN Services GmbH provides administrative services to 

APEN Ltd. 

See also organizational structure on page 56. 

Both Fund Investments and Direct Investments are investments 

in private equity which forms the only investment category of 

the Company. For presentation purposes, the investments are 

divided in the following portfolios: 

– Western European Funds Portfolio 

– Other Regions Portfolio 

– North America Funds Portfolio 

– Direct Investments/Loans 

For further information please also refer to the principles 

of consolidation section within the consolidated financial 

statements. 

See also note 3 (page 32ff) of the consolidated financial statements 

(participations). 

Significant shareholders 

There are several shareholders with a reported participation 

exceeding the 3% threshold of the Company’s share capital. 

The number of shares and voting rights of the major shareholders 

are disclosed in note 11 (page 42) of the consoli dated 

financial statements. 

Disclosure notices relating to persons or groups with significant 

shareholdings (more than three percent of voting rights) 

can be found at http://www.six-exchange-regulation.com/ 

obligations/disclosure/major_ shareholders_en.html. 

Cross shareholdings 

There are no cross-shareholdings with other companies. 

Organisational structure 

In 2009 APEN Bermuda Ltd. entered into a services agreement 

and a management agreement with Codan Services Ltd. in 

respect to administrative services to be provided in Bermuda. 

On 20 September 2010 APEN Bermuda Ltd. entered into an 

investment management agreement with PineBridge Investments 

LLC in respect to services provided for the direct 

investments portfolio. 

2. CAPITAL STRUCTURE 


Capital 

As of 31 December 2011 the issued share capital of the Company 

was CHF 41 250 000, divided into 4 125 000 fully paid 

registered shares with a nominal amount of CHF 10 each. 

As per the same date 3 929 185 shares were outstanding 

and the Company held 195 815 shares as treasury shares. 

CHF 371250000.– was allocated to the newly created reserves 

from capital contributions (statutory reserves). The market 

capitalization of the Company per year-end amounted to 

CHF 68.4 million. 

The shares are listed on the SIX Swiss Exchange (ISIN: 

CH0009153310) 

Changes of capital 

In June 2011 shareholders approved the reduction of the par 

value of each share from CHF 100 to CHF 10. The entire aggre - 

gate capital reduction amount of CHF 371 250 000 has been 

allocated to the newly created reserves from capital contri - 

butions (statutory reserves). There were no further share 

capital increases or other changes to the share capital during 

the last three reporting years. 

Shares and participation certificates 

There are no preferential rights or similar rights. Each share is 

entitled to one vote and has full dividend rights. Voting rights 

may be exercised only after a shareholder has been registered 

in the Company’s share register. No shares and/or share certificates 

will be physically issued to shareholders. Two Global 

Share Certificates (Globalurkunde auf Dauer) are deposited 

with SIX SIS Ltd. under Swiss Security number 915.331, ISIN 

CHF0009153310. Transfers of shares are effected through a 

book-entry system maintained by SIX SIS Ltd. 

There are neither participation certificates nor profit sharing 

certificates. 

Authorized and conditional capital 

The Board of Directors is entitled to an increase in authorized 

capital up to a maximum amount of CHF 20625000 by issuing 

no more than 2 062 500 shares with a nominal of CHF 10. The 

duration of the authorization period expires 14 June 2013. 

Shares for which subscription rights were granted but not executed 

are at the Board of Director’s disposal. The pre-emptive 

rights of the shareholders can be excluded in case of acquisitions 

of other companies or additional listings to foreign stock 

exchanges. 

57


58 

The share capital may be increased from conditional capital in 

connection with the exercise of conversion or option rights, 

which are granted in connection with bonds or similar debt 

instruments up to a maximum amount of CHF 20 625 000 

by issuing no more than 2062500 shares with a nominal of 

CHF 10.–. In connection therewith, the shareholders’ pre-emptive 

rights are excluded. Whenever options or conversion rights 

are issued, the Board of Directors shall be entitled to withdraw 

the preferential subscription rights of shareholders for valid 

reasons. 

For further details see also Article 4b and 4c of the articles of 

association (available at www.apen.com). 

Limitations of transferability and nominee 

registrations 

The Company’s shares are freely transferable, without any 

limitations, provided that the buyers declare they are the 

beneficial owners of the shares. 

Nominees who act as fiduciaries of shareholders are entered 

without further inquiry in the Company’s share register as 

share holders with voting rights up to a maximum of 3% of the 

outstanding capital available at the time. 

See also Article 4 of the articles of association (available at 

www.apen.com). 

Convertible bonds and warrants 

There are no convertible bonds and warrants issued by the 

Company or by its subsidiaries on shares of the Company outstanding. 

3. BOARD OF DIRECTORS 

Responsibilities 

The Board of Directors consists of one or more members. The 

Board of Directors is ultimately responsible for the policies 

and management of the Company. The Board of Directors 

establishes the strategic, accounting, organizational and 

financing policies to be followed by the Company. The Board 

of Directors further appoints the executive officers and the 

authorized signatories of the Company and supervises the 

Management Board of the Company. More over, the Board of 

Directors is entrusted with preparing meet ings of the shareholders 

and carrying out shareholders resolutions. The Board 

of Directors may, pursuant to its regulations, delegate the conduct 

of day-to-day business opera tions to the Management 

Board under its control. The Board of Directors approves all 

compensation upon proposal of the Chairman of the Board. 

Meeting schedule 

The Board of Directors usually meets four times per year in 

person (minimum twice). The regular meetings are typically 

held in February, May, August and November. Additional meet - 

ings are called on short notice if and when required. In the 

year under review, four board meetings took place. Each of 

the board meetings has a special focus which is basically connected 

to the Company’s reporting rhythm. Such focuses are 

the financial statements, interim results, the medium-term 

plan, investments, foreign exchange exposure, the annual 

general meeting and corporate governance. The members of 

the Management Board are invited to attend the board meet - 

ings and have attended all four board meetings. The Board of 

Directors resolves by majority vote with the presence of a 

majority of members. The average duration of a board meet ing 

is ninety minutes. 

Principles of the election procedure 

The members of the Board of Directors are elected by the 

annual general meeting according to Article 11 of the articles 

of association (available at www.apen.com). The members of 

the Board of Directors have been elected for a term of office 

of one year, with the possibility of repeated re-election.

Members of the Board of Directors 

Eduardo Leemann, born 1956, Swiss citizen, Chairman, nonexecutive 

member, term of office expires in 2012. 

Eduardo Leemann joined AIG Investments in 1997 as Chief 

Executive Officer of AIG Private Bank (now Falcon Private 

Bank) in Zurich serving later as Chairman of the Board for AIG 

Private Bank. He returned to the Executive Board of AIG Private 

Bank in September 2008 and is now appointed Chief Executive 

Officer of Falcon Private Bank Ltd. He previously worked at 

Goldman, Sachs & Co Bank as Member of the Management 

Committee and Head of Private Banking. Prior to that, Mr. 

Leemann was Deputy to the Head of Private Banking worldwide 

at Bank Julius Baer with direct responsibilities for the 

Western Hemisphere, Switzerland as well as the overall marketing 

effort in Private Banking. Prior to that, he was responsible 

for building the private banking business of Bank Julius 

Baer in their New York branch. Eduardo Leemann is a graduate 

of the Swiss School of Economics and Business Administration 

(SEBA) and the Advanced Executive Program of the J.L. Kellogg 

Graduate School of Management at Northwestern University in 

Chicago, USA. 

Mr. Leemann became Chairman of the Company’s Board of 

Directors in September 1999. 

Mr. Leemann also serves as a member of the board of directors 

of SIX Group. 

David Pinkerton, born 1961, US citizen, non-executive member, 

term of office expires in 2012. 

David B. Pinkerton joined Falcon Private Bank in October 2010 

as Chief Investment Officer. Previously, he was a Managing 

Director in the Alternative Investments Group at AIG Investments 

in New York. Mr. Pinkerton also set up a successful 

external asset management business in New York to provide 

consulting services and manage family investments. He has 

over 24 years of far-reaching experience and expertise in 

private equity and hedge funds. David B. Pinkerton holds a 

Bachelor’s Degree in Finance and Economics from the University 

of Delaware and is admitted to New York and New Jersey 

State Bar. 

Mr. Pinkerton joined the Company’s Board of Directors in June 

2010. 


Dr. Christian C. Wenger, born 1964, Swiss citizen, non-executive 

member, term of office expires in 2012. 

Dr. Christian Wenger, LL.M. is a Partner and Member of the Executive 

Board at Wenger & Vieli Ltd., Attorneys-at-law in Zurich 

since 1996. Dr. Wenger’s preferred areas of practice are mergers 

& acquisitions, IT law, intellectual property law, private 

equity and venture law. In 2005, Dr. Wenger practiced at a law 

firm in Madrid. Between 1991 and 1992 he was at Lenz & 

Staehelin, Attorneys-at-law, Zurich. Dr. Wenger was admitted to 

the Bar in 1993 and holds a Ph.D. magna cum laude from the 

University of Zurich and Master of Laws (LL.M.) degree from 

the Duke University, North Carolina, USA, School of Law. 

Mr. Wenger joined the Company’s Board of Directors in May 

2006. 

Mr. Wenger also serves as a non-executive member of the 

board of directors of Looser Holding Ltd. and Falcon Private 

Bank Ltd. 

None of the above mentioned non-executive members of the 

Board of Directors (i) was in the three financial years pre ceding 

the period under review (i.e. the financial year 2011) a member 

of the management of the Company or one of the Company’s 

subsidiaries, and (ii) has significant business connections with 

the Company or one of the Company’s subsidiaries. 

Internal organisation and definition of areas of 

responsibility 

The principal responsibilities of the Board of Directors encompass: 

– Establishment of strategic, organizational, reporting and 

financial policies 

– Appointment of executive officers 

– Preparation and execution of Annual General Meeting 

They are summarized in Article 13 of the articles of association 

(available at www.apen.com). 

In view of the relatively small Board of Directors and the complexity 

of the tasks, the Board of Directors did not constitute 

any committees. 

Due to its relatively small business environment and staff, the 

Company does not have dedicated internal audit personnel. 

Risks are managed via a variety of measures. These include 

various regulations that are reviewed on a regular basis by 

frequent interaction between the Board of Directors and the 

Management Board. 

59


60 

The Company is exposed to a variety of risks such as: 

– Liquidity risk (financing of unfunded commitments, loan 

servicing etc.) 

– Currency risk 

– Investment related risks 

– Financial reporting 

The Board of Directors discusses these risks on a quarterly 

basis at the board meetings with the members of the Management 

Board and develops measures where required. 

The Company has set up its own internal control system, which 

is updated and reviewed on an annual basis. 

The Board of Directors has delegated to the Management Board 

the coordination of the day-to-day business operations of the 

Company. See also Article 3 of the Internal Regulations of the 

Board of Directors (available at www.apen.com). The Board of 

Directors has not concluded any contracts with third parties 

(not being part of the APEN group) to manage the business. 

The Company concluded a service agreement with its subsidiary, 

APEN Services GmbH relating to certain managerial services 

to be provided by the latter. David Salim and Conradin 

Schneider, each a member of the Company’s Management 

Board, are employed by APEN Services GmbH. 

For the tasks and responsibilities of the Board of Directors 

please refer to the internal regulations of the Board of Directors 


Information and control instruments vis-à-vis 

the Management Board 

In order to allow fulfilment of its supervising duties, the Board 

of Directors is provided with the following information (man - 

agement information system): 

– Discussions with the members of the Management Board 

during the Board of Directors meetings, telephone conferences, 

etc. 

– Quarterly, semi-annual and annual reports 

– Auditors report on the annual audit of the financial statements 

Members of the Management Board participate at every meet - 

ing of the Board of Directors. Additionally, the members of the 

Management Board exchange views and discuss topics on a 

frequent basis with the chairman and other members of the 

Board of Directors. 

4. MANAGEMENT BOARD 

Members of the Management Board 

David Salim, born 1965, Swiss citizen. 

David Salim joined APEN Group as Chief Executive Officer in 

August 2010. He has over 20 years of professional experience 

in investment banking and investment management with international 

financial groups and as an independent advisor. 

Since 1999, he has been active in alternative investments and 

in particular deeply involved in managing private equity funds 

and direct investments, first as founder and CEO of Swiss Life 

Private Equity Partners and from 2004 as independent advisor 

to family offices and institutional investors. David Salim holds 

a Master of Arts degree from the School of Economics of the 

University of St. Gall (M.A. HSG). 

Conradin Schneider, born 1962, Swiss citizen. 

Mr. Schneider joined the AIG Companies in 1999. He was involved 

in establishing and listing the Company, a Swiss listed 

private equity investment company, on the SIX Swiss Exchange. 

With the Company Mr. Schneider is responsible for operations. 

Prior to joining APEN Group, Mr. Schneider was with Aventic 

Ltd., the private equity vehicle of UBS for small and medium 

sized companies in Switzerland. Prior to his assignment with 

UBS Aventic, he worked 8 years as a corporate banker with 

UBS with a focus on Swiss multinationals. Mr. Schneider holds 

a Master of Arts degree from the School of Economics of the 

University of St. Gall (M.A. HSG). 

Mr. Schneider is also an observer of the board of directors of 

MV Leverage Finance Limited and MezzVest Partners II.

5. COMPENSATION, SHAREHOLDINGS AND LOANS 

Content and method of determining the compensations 

The compensation of the Board of Directors lies in the responsibility 

of the Chairman of the Board. The Board of Directors 

determines the level of compensation at its own dis cretion, 

taking into consideration the likely time involvement of each 

member and board compensation paid to members of other 

listed investment companies. In addition to a base compen - 

sation which is paid in cash, a variable compensation in stock 

appreciation rights (SARs) may be granted at the discretion of 

the Board of Directors. 

The Board of Directors approves compensation (including 

SARs) for the Management Board upon proposal of the Chair- 

The compensation disclosures for the Board of Directors above 

have been presented according to the cash paid in the relevant 

year as the Board of Directors consider this to be more 

precise than presenting the accrual amounts 

Highest total compensation 

The highest compensation paid to a member of the Management 

Board was TCHF 418 to David Salim, CEO (see above table). 

The highest compensation in the previous year of TCHF 501 

was paid to Andrew Fletcher. 


man. The compensation plan is designed to be market-oriented. 

It is made up of fixed remuneration and a performance related 

bonus. The bonus plan is based on the achievement of per sonal 

performance targets and can reach up to 100 percent of the 

fixed remuneration. 

As indicated above, the Company maintains a share based 

compensation plan. Under the current plan, members of the 

Board of Directors, members of the Management Board as well 

as the employees are eligible to participate in the plan. The 

plan is designed to ensure that the Company maintains a competitive 

bonus program in order to recruit, retain and motivate 

employees on all levels and board members in the overall 

interest of shareholders. 

2011 Base Variable Pension Other Total Share- 

All figures in TCHF Compensation Compensation Contributions Benefits 2011 holdings SARs 

Board of Directors 

Eduardo Leemann (Chairman) 100 4 – 7 111 200 4 000 

Dr. Ernst Mäder (Member) 13 1 – 1 15 – – 

David Pinkerton (Member) 38 2 – 3 43 – 4 000 

Dr. Christian Wenger (Vice-Chairman) 75 4 – 5 84 – 4 000 

Total Board of Directors 253 200 12 000 

Management Board 

David Salim (CEO) 248 100 34 36 418 – 24 000 

For remuneration, see also note 6 compensations, sharehold ings 

and loans to the financial statements of APEN AG (page 69f). 

Credits or loans 

No credits or loans were granted to any members of executive 

bodies nor are any credits or loans outstanding. 

Share-based compensation plans 

In 2011 the members of the Board of Directors, the Management 

Board and employees of the Company were allocated 

50000 stock appreciation rights (SARs) of the Company (2010: 

nil). Outstanding SARs as at 31 December 2011 are as follows: 

Number Year Subscription 

of options of grant Vesting date Expiry Date ratio Strike Price 

16 666 2011 13.1.2012 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2013 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2014 12.1.2016 1:1 CHF 16.76 

61


62 

6. SHAREHOLDER’S PARTICIPATION RIGHTS 

Voting-rights restrictions and representations 

Each registered share in the Company is entitled to one vote. 

See also Article 7 section 1 in the articles of association (avail - 

able at www.apen.com). Voting rights may be exercised only 

after a shareholder has been registered as shareholder with 

voting rights in the Company’s share register. 

Rules on participating in the general meeting 

if different from law 

No restrictions. See Article 7 section 2 in the articles of association 


Statutory quora 

The statutory quora comply with the applicable legal regula - 

tions. See Article 8 in the articles of association (available at 

www.apen.com). 

Convocation of the Shareholders’ Meeting and 

proposal for agenda items 

The convocation of the Shareholders’ Meeting complies with 

the applicable legal regulations. The convocation may also 

be requested by one or several shareholders representing together 

at least ten percent of the share capital. In accordance 

with the applicable legal regulations, one or several share - 

holders holding at least ten percent of the share capital or 

shares with an aggregate nominal value of CHF 1 000 000 are 

entitled to propose items for the agenda of the Shareholders’ 

Meeting. See also Articles 5 and 6 in the articles of association 


Registration in the share register 

There is no statutory rule on the deadline for registering share - 

holders in connection with the attendance of the Annual Gen - 

eral Meeting. In 2012, the Annual General Meeting is scheduled 

to be held on 8 May 2012; correspondingly, the qualifying date 

would be 13 April 2012. 

7. CHANGES OF CONTROL AND DEFENCE MEASURES 

Duty to make an offer 

The shareholders are not subject to the duty to make an offer 

(opting-out; see also Article 23 in the articles of association 

(available at www.apen.com)) pursuant to Article 32 of the 

Federal Stock Exchange Act (SESTA). 

8. AUDITORS 

Date of assumption of the existing auditing mandate 

PricewaterhouseCoopers (PwC) was re-elected for another 3 

years at the general meeting on 15 June 2011. 

Responsible Partner: Thomas Huber (since 2011). 

Senior Manager: Anuschka Buob (since 2009) 

Total of auditing fees paid in 2011 

TCHF 137. 

Additional fees paid in 2011 

Tax consulting TCHF 5 

Supervisory and control instruments vis-à-vis 

the auditors, control instruments 

Since there is no Audit Committee and no separate internal 

audit function, the Auditors’ report is presented to the whole 

Board of Directors as a part of the annual report. 

In addition to that, the responsible Auditor participates in the 

Annual General Meeting and is standing by for questions and 

detailed audit information. 

9. INFORMATION POLICY 

The Company aims to offer the shareholders a high degree of 

transparency. In this respect the Company publishes an annual 

report, a semi-annual report and three quarterly reports. 

In between the quarterly report publications relevant information 

(including information subject to Ad-hoc publicity accord - 

ing to section 53 of the SIX Listing Rules) is published in the 

form of press releases and available at www.apen.com.

FINANCIAL REPORT 2011 – APEN LTD.

APEN LTD. – FINANCIAL STATEMENTS 2011 

66 

BALANCE SHEET AS OF 31 DECEMBER 2011 AND 31 DECEMBER 2010 

in TCHF 

Note 2011 2010 

Assets 

Current Assets 

– Cash and cash equivalents 822 478 

– Receivables 9 11 

– Receivables from subsidiary – 1 

– Prepayments 2 – 

– Own shares 4 3407 3231 

4240 3721 

Long-term Assets 

– Participations 1 223 278 229 223 

– Loan to subsidiary 10549 3 940 

233 827 233 163 

Total Assets 238 067 236 884 

Liabilities and Shareholders’ Equity 

Current Liabilities 

– Payables and accrued charges 775 603 

– Payables to subsidiary 739 163 

1514 766 


– Share capital 2, 5 41 250 412500 – Reserve from capital contributions (non-disposable) 371250 – 

– Reserve for own shares 30 691 30 691 

– Accumulated surplus brought forward (207 073) (201 834) 

– Net profit/loss (–) for the year 435 (5 239) 

Total Shareholders’ Equity 236 553 236 118 

Total Liabilities and Shareholders’ Equity 238 067 236 884


INCOME STATEMENT FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2011 AND 1 JANUARY TO 31 DECEMBER 2010 

in TCHF 

2011 2010 

Income 

Net realized gains on investments – 1 696 

Interest income from current assets 113 145 

Gain on participation 3662 – 

Value adjustment own shares 176 294 

Total Income 3951 2135 

Expenses 

Service fees 1950 1419 

Other operating expenses 1 472 1 436 

Interest expenses 1 1 

Loss on participation – 3789 

Loss on foreign currency exchange 73 709 

Tax expenses 20 20 

Total Expenses 3516 7374 

Net Profit/(Loss) for the Year 435 (5 239) 

67


68 

NOTES TO THE FINANCIAL STATEMENTS 

in TCHF 

1. Participation 

APEN Ltd., Zug (“the Company”) is a Swiss stock corporation established under the relevant provisions of the Swiss 

Code of Obligations and domiciled in Zug. The Company was established by AIG Private Bank Ltd. on 17 September 1999 for an 

indefinite period of time and was registered in the commercial register of the Canton of Zug on 20 September 1999. The Company, 

together with APEN Services GmbH, APEN Hold ings LLC, APEN Bermuda Ltd., APEN Holdings (Bermuda) Ltd., APEN FMH 

LLC and APEN Faith Media Holdings LLC (“the Subsidiaries”), comprises the APEN Group (“the Group”). The Company’s shares 

are listed on the SIX Swiss Exchange since 12 October 1999. 

Participations 

Company Domicile Function % held Currency Share Capital 

APEN Services GmbH Zurich, CH S 100 CHF 20 

APEN Holdings LLC Wilmington, USA H 90 USD – 

S: service company 

H: holding company 

APEN Holdings LLC has four members: APEN Ltd., APEN Faith Media Holdings LLC, Fortress Credit Corp. and MIP PE Holdings LLC. 

The Company’s objective is to achieve long-term capital growth for shareholders by managing an existing portfolio of private 

equity funds and direct investments. The investments are held by APEN Bermuda Ltd., APEN Holdings (Bermuda) Ltd. and APEN 

FMH LLC. 

2. Authorized and Conditional Share Capital 

As per 31 December 2011 the Company has CHF 20.625 million (2010: CHF 206.25 million) authorized share capital outstanding. 

This authorized share capital will expire per 14 June 2013. 

As of 31 December 2011 the Company has CHF 20.625 million (2010: CHF 206.25 million) conditional share capital outstand ing. 

The Company did not raise any new capital in 2011. 

3. Balances and Transactions with Own Shares 

There were no transactions in own shares in 2011. 

4. Reserve for Own Shares 

At the end of 2011 the Reserve for Own Shares amounts to CHF 30 691 162.

5. Shareholders’ Equity 

The following major shareholders held shares and voting rights of 3% and more as of 31 December 2011: 


Number of Shares Participation in % Number of Shares Participation in % 

2011 2011 2010 2010 

MetLife Inc. 515 286 12.5% 515 286 12.5% 

Ernst Göhner Stiftung 267 000 6.5% 267 000 6.5% 

AIG Group* 920 081 22.3% 920 081 22.3% 

APEN Ltd.*** 195 815 4.8% 195 815 4.8% 

SUVA, Schweiz. Unfallversicherungsanstalt** 127 500 3.1% 127 500 3.1% 

AXA Life 167 000 4.1% 167 000 4.1% 

Wellington Management Company, LLP 154 297 3.7% n/a n/a 

Levin Capital Strategies, L.P. n/a n/a 206 210 5.0% 

* The shares are held by three group entities, namely American International Group, Inc., Chartis, Inc. and AIG Global Asset Management Holdings Corp. 

** On 7 February 2012, SUVA announced that its shareholdings in the Company has decreased below 3%. 

*** Represents treasury shares held by the Company. 

6. Compensation, Shareholdings and Loans 

The Chairman of the Board of Directors has the responsibility to approve the compensation for the Board of Directors. The Board 

of Directors approves compensation for the Management Board upon proposal of the Chairman. The compensation disclosures 

for the Board of Directors have been presented according to the cash paid in the relevant year as the Board of Directors con sider 

this to be more precise than presenting the accrued amounts. 

Base Variable Pension Other 

Participations 

Sharein 

TCHF Compensation Compensation Contributions Benefits Total holdings SARs 


2011 

To four members 226 11 – 16 253 200 12 000 

2010 

To five members 243 28 – 16 287 200 – 


2011 

To two members 445 175 62 66 748 3 000 32 000 

2010 

To three members 444 325 55 76 900 3 000 8 500 




Eduardo Leemann (Chairman) 100 4 – 7 111 200 4 000 


David Pinkerton (Member) 38 2 – 3 43 – 4 000 

Dr. Christian Wenger (Vice-Chairman) 75 4 – 5 84 – 4 000 

Total Board of Directors 253 200 12 000 

The highest remuneration paid to a member of the Management Board was TCHF 418 to David Salim, CEO. 


David Salim (CEO) 248 100 34 36 418 – 24 000 

69


70 




Eduardo Leemann (Chairman) 100 13 – 7 120 200 – 


David Pinkerton (Member) – – – – – – – 

Dr. Roger Schmid (Member) 13 2 – 1 16 – – 

Dr. Christian Wenger (Vice-Chairman) 100 12 – 7 119 – – 

Total Board of Directors 289 200 – 

The highest remuneration paid to a member of the Management Board was TCHF 501 to Andrew Fletcher, CEO. 


Andrew Fletcher (CEO) 184 250 21 46 501 – – 

Share-based compensation plans 

In January 2011 the members of the Board of Director and Management Board of the Company were issued stock appreciation 

rights of the Company. None of these stock appreciation rights were exercisable per 31 December 2011. 

Outstanding SARs per 31 December 2011 are as follows: 

Number Year Subscription 

of options of grant Vesting date Expiry Date ratio Strike Price 

16 666 2011 13.1.2012 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2013 12.1.2016 1:1 CHF 16.76 

16 667 2011 13.1.2014 12.1.2016 1:1 CHF 16.76 

Credits or loans 

No credits or loans were granted to any members of executive bodies nor are any credits or loans outstanding. 

7. Other Long-Term Financial Obligations from Rental and Lease Agreements 

As of the balance sheet date, the Group had no significant financial obligation from rental or lease agreements. 

8. Risk Assessment 

The risk management system of APEN Group comprises financial and operating risks. By definition a risk is a possible impact of 

a negative event that could harm the company’s goals. The risk management system is a part of the internal control system. 

There are mitigating controls in place at various levels to address the identified risks. These are monitored by the Management 

Board, who report any significant issues to the Board of Directors. 

9. Subsequent Events 

In January 2012 the Board of Directors granted further 50 000 stock appreciation rights under the new share based compensation 

plan. The strike price for this issuance was CHF 17.24. 

Since the balance sheet date of 31 December 2011, there have been no material events that could impair the integrity of the 

information presented in the financial statements.

REPORT OF THE STATUTORY AUDITOR 

ON THE FINANCIAL STATEMENTS 

As statutory auditor, we have audited the accompanying 

financial statements of APEN Ltd., which comprise the balance 

sheet, income statement and notes (pages 66 to 70), for the 

year ended 31 December 2011. 

Board of Directors’ Responsibility 

The Board of Directors is responsible for the preparation of 

the financial statements in accordance with the requirements 

of Swiss law and the company’s articles of incorporation. This 

responsibility includes designing, implementing and main - 

taining an internal control system relevant to the preparation 

of financial statements that are free from material misstatement, 

whether due to fraud or error. The Board of Directors 

is further responsible for selecting and applying appropriate 

accounting policies and making accounting estimates that are 

reasonable in the circumstances. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on these financial 

statements based on our audit. We conducted our audit in 

accordance with Swiss law and Swiss Auditing Standards. Those 

standards require that we plan and perform the audit to obtain 

reasonable assurance 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 con - 

siders the internal control system relevant to the entity’s preparation 

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 system. An audit also includes 

evaluating the appropriateness of the accounting policies used 

and the reasonableness of accounting estimates made, 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 

In our opinion, the financial statements for the year ended 

31 December 2011 comply with Swiss law and the company’s 

articles of incorporation. 

Report on Other Legal Requirements 

We confirm that we meet the legal requirements on licensing 

according to the Auditor Oversight Act (AOA) and independence 

(article 728 CO and article 11 AOA) and that there are 

no circumstances incompatible with our independence. 

In accordance with article 728a paragraph 1 item 3 CO and 

Swiss Auditing Standard 890, we confirm that an internal control 

system exists which has been designed for the preparation 

of financial statements according to the instructions of the 

Board of Directors. 

We recommend that the financial statements submitted to you 

be approved. 

PricewaterhouseCoopers AG 

Thomas Huber Anuschka Buob 

Audit expert 

Auditor in charge 

Zürich, 22 March 2012 

71

ADDRESSES AND CONTACTS 

Registered Office 


Industriestrasse 13c 

CH-6304 Zug 

Phone +41 (41) 710 70 60 

Fax +41 (41) 710 70 64 

E-mail info@apen.com 

Group Companies 

APEN Services LLC 

Löwenstrasse 29 

CH-8001 Zurich 

APEN Holdings LLC 

Corporation Trust Center 

1209 Orange Street 

Wilmington, New Castle County 

Delaware 19808 

USA 

APEN Bermuda Ltd. 

Clarendon House 

2, Church Street 

Hamilton, HM 11 

Bermuda 

APEN Holdings (Bermuda) Ltd. 

Clarendon House 

2, Church Street 

Hamilton, HM 11 

Bermuda 

APEN Faith Media Holdings, LLC 

2711 Centerville Road, Suite 400 



USA 

APEN FMH LLC 

Corporation Trust Center 

1209 Orange Street 



USA 

Investor Relations 

Conradin Schneider 

APEN Services LLC 

Löwenstrasse 29 

CH-8001 Zurich 

Phone +41 (44) 578 50 50 

www.apen.com 

www.apen.com

APEN 

Private Equity 


Industriestrasse 13c 

CH-6304 Zug 

Switzerland 

Phone +41 (41) 710 70 60 

Fax +41 (41) 710 70 64 

Email info@apen.com 

www.apen.com

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