Annual Report 2006 – Financial Section - Quilvest

Notes to the Consolidated Financial Statements (continued)
34.2) Geographical segments
Private equity activities are located in Europe, as well as in America and in Asia.
The geographical segments are well segregated and no intersegment eliminations apply.
for the year 2006 in $ '000 Europe America Asia & Other and Consolidation
Middle East eliminaton
External revenue 103,365 39,143 8,794 - 151,302
Segment assets 699,158 319,389 63,432 (182,656) 899,323
Capital expenditures (2,017) - - - (2,017)
for the year 2005 in $ '000 Europe America Asia & Other and Consolidation
Middle East eliminaton
External revenue 104,229 40,581 7,728 (3,458) 149,080
Segment assets 442,166 267,879 53,367 - 763,412
Capital expenditures 1,969 284 - - 2,253
35) Risk management
The Board of Directors instituted an Audit Committee in 2002, which assesses risks and risk management of the Group.
Quilvest recruited a Group Controller in 2004. He reports functionally to the Audit Committee and is in charge of optimizing
overall control functions within the Group.
The Group Controller engaged a Group Auditor in early 2007 in order to perform periodic audits in the subsidiaries of
Quilvest.
35.1) Private Equity activities
Credit risk
A strong diversification policy, which allows for regular divestment opportunities, and a strong shareholder commitment
mitigate overall liquidity risk.
In addition, in-house due diligence, an independent committee decision team and close post acquisition monitoring of
each lead investment by experienced professionals result in a lower risk.
Foreign currency risk
Currency risk is derived from multi-currency investments, whereas Group financial accounts are presented in United
States Dollars. In addition to the United States Dollar, the major financial investments are in Euros, Sterling Pounds and
Swiss Francs. Since 2003, Quilvest has put in place currency macro-hedging initiatives to limit currency driven performance
volatility.
Liquidity risk
Cash positions and cash forecasts are prepared and reviewed by management on a weekly basis. Potential temporary short
cash positions would be covered by signed back up line with Dexia.
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