ANNUAL REPORT 2007 | 2008 - Gimv

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35. DIRECTORS’ REPORT ON THE STATUTORY CONSOLIDATION FIGURES Comments on the fi nancial statements Income statement The net profi t of Gimv (group’s share) for the 2007-2008 fi nancial year amounts to EUR 168.0 million compared with a net profi t of EUR 241.3 million for the 2006-2007 fi nancial year (15 months). The profi t refl ects both the divestments made at above the latest carrying value and the favourable development of the value of the Gimv portfolio. Under IFRS, Gimv’s profi t is largely based on the movement in the value of the portfolio, including both realized and unrealized value movements. Added to this is the profi t of the companies included in the statutory consolidation, after deconsolidating any divestments. In the 2007-2008 fi nancial year, realized and unrealized value movements of EUR 162.7 million were recorded. The difference with the EUR 165.4 million in the limited consolidation can be explained mainly by the elimination of the unrealized value movements of the companies included in the statutory consolidation. The other operating result* amounts to EUR 30.9 million. This fi gure conceals, however, major differences in its composition compared with the - EUR 9.4 operating result shown in the limited consolidation. The fact is that by including in the statutory consolidation the companies listed in item 5.1., page 112, Gimv is suddenly confronted with considerably higher fi gures for turnover, personnel costs, depreciation of tangible assets and other operating costs compared with the fi gures recorded in the limited consolidation. Together with the fi nancial result of EUR -0.1 million, and after deduction of taxes (EUR 8.1 million) and minority interests (EUR 17.4 million), Gimv realised a net profi t (group’s share) of EUR 168.0 million in the 2007-2008 fi nancial year. Balance sheet Assets Non-current assets Non-current assets in the statutory consolidation rose to EUR 1 119.0 million, compared with EUR 955.3 million at 31 March 2007. Goodwill and other intangible assets almost doubled to EUR 308.1 million (+ EUR 138.5 million) following the acquisitions of Numac, TerStal and Lintor-Verbinnen and the add-on acquisitions at HVEG Investments (ex LowLand Fashion). On top of this come the inclusion in the consolidation of the purchasing holdings and the deconsolidation of Bever Zwerfsport, Geveke and Hebu, which have since been sold. This increases property, plant and equipment from EUR 53.2 million to EUR 90.5 million. Financial assets at fair value through profi t and loss and loans to companies in the investment portfolio fell by EUR 28.2 million to EUR 719.2 million, mainly because divestments well outweighed investments during the past fi - nancial year. The difference of EUR 129.0 million between the fi nancial assets in the statutory and the limited consolidations corresponds to the fair value of the shareholdings that are consolidated in the statutory consolidation. * Dividends, interest, management fees, turnover and other operating income, after deducting services and other goods, personnel costs, amortisation of intangible assets, depreciation of property, plant and equipment and other operating costs. 148 | Gimv Annual Report 2007-2008 | Statutory consolidation Current assets In the 2007-2008 fi nancial year, current assets rose sharply by EUR 119.2 million to EUR 718.1 million. The EUR 50.3 million of inventories shown in the balance sheet come entirely from the buy-outs consolidated in the statutory consolidation. This amount is somewhat higher than at 31 March 2007. Trade receivables almost doubled to EUR 116.7 million. These derive primarily from the buy-out shareholdings included in the statutory consolidation. This explains the considerable difference with the amount of the trade receivables in the limited consolidation (EUR 17.2 million). There was also a decrease in loans to investee companies (EUR 4.8 million vs. EUR 46.5 million) and a sharp increase in cash and cash equivalents from EUR 452.5 million at 31 March 2007 to EUR 538.4 million at 31 March 2008. The latter is the net effect of divestments, investments, loan repayments and dividend payments. Equity and liabilities Equity Equity increased from EUR 1 285.5 million to EUR 1 366.3 million. This amount includes the equity of the limited consolidation, which rises with the profi t for the fi nancial year (EUR 185.4 million) after payment of dividends of EUR 112.4 million (the fi nal dividend in respect of the 2007-2007 fi nancial year that was paid in July 2007 and the interim dividend in respect of the 2007-2008 fi nancial year that was paid in December 2007). This consolidated equity fi gures also includes the reserves shown in the accounts of De Groot International Investments, Interbrush, HVEG Investments (formerly LowLand Fashion), Operator Groep Delft, Grandeco Wallfashion Group, Verlihold, Numac Investments and TerStal Investments, after eliminating any revaluations of these shareholdings in the Gimv group limited consolidation. Minority interests rose from EUR 26.0 million to EUR 51.2 million, mainly from the consolidation of a number of new investments. Liabilities Total liabilities rose from EUR 268.8 million to EUR 470.9 million. Non-current liabilities rose in the 2007-2008 fi nancial year to EUR 309.9 million (EUR 159.7 million at 31 March 2007). This is the composite result of increased provisions (+ EUR 8.1 million), a very sharp rise in fi nancial liabilities (+ EUR 141.4 million) and a slight reduction in deferred taxation (- EUR 0.8 million). The fi nancial liabilities fi gure stands in sharp contrast to the total absence of long-term fi nancial liabilities in the limited consolidation. This refl ects the presence of buy-out debts in the purchasing holdings included in the statutory consolidation. These are not, however, direct liabilities of Gimv. Gimv’s risk is limited to its investment in the various shareholdings.
Current liabilities rose by almost half to EUR 161.0 million, mainly due to a EUR 17.0 million increase in short-term fi nancial liabilities and a EUR 29.8 million rise in trade and other payables. Here too, short-term fi nancial liabilities stand in sharp contrast to the total absence of current fi nancial liabilities in the limited consolidation, for the same reasons as given above. Principal risks and uncertainties Credit risk The fi nancial assets consist mainly of unguaranteed investments in unlisted companies. The Board of Directors views the maximum credit risk as being the total value of the portfolio. The diversity of the portfolio allows the investment manager to control the credit risk by taking into account the specifi c features of the underlying assets. Liquidity risk Given its balance sheet structure the Gimv group, excluding the buy-outs included in the consolidation, has a very positive net cash position. There are therefore no risks related to fi nancings. The buy-outs included in the consolidation do have debts, for which the Gimv group has not given any joint and liable guarantee. Gimv does keep watch, however, to ensure that these buy-out companies build in suffi cient margin and do not incur any liabilities which could exceed their expected repayment capacities in normal circumstances. Given this situation, the Board of Directors views the liquidity risk as limited. Price risk The valuation of the unlisted investments depends on a number of market-related elements and the results of the enterprises in question. Gimv does not hedge the market risk inherent in the portfolio, but manages the risks specifi c to each investment. Interest risk Interest on outstanding mezzanine instruments is almost always fi xed for the entire life of the loan. The market interest rate can, though, have a signifi cant impact on the valuation of the buyout portfolio, given that these are mostly leveraged buy-outs. This risk is part of the business risk, along with the results of the shareholdings themselves and the available fi nancing possibilities. Market risk Given that the Gimv group reports its fi nancial assets at market value, there is no difference between the reported carrying value and market value. Signifi cant events after balance sheet closing date In mid-May, Gimv sold its shareholding in Westerlund Group, a Belgian logistics company that specializes in wood products, to international investment and consulting fi rm Babcock & Brown. This sale adds EUR 9.2 million (EUR 0.40 per share) to the value of Gimv’s equity at 31 March 2008. Gimv has also made a USD 7 million follow-up investment in CoreOptics, a German-US company in the optical networks sector. Finally, EUR 3 million has been invested in Openbravo, a Spanish company that develops open-source ERP software. Outlook The earnings of Gimv as an investment company are dependent on the evolution of the value of the companies in which Gimv participates. Given that this value is dependent on various factors, like the evolution of fi nancial markets, it is impossible to make any realistic statement as to the prospects of the group. Research and development Gimv and its consolidated subsidiaries did not undertake any research and development activities during the past year. Financial risks and the use of fi nancial instruments Currency hedging Without the buy-outs the Gimv group had on 31 March 2008 a currency risk of EUR 111 064 (USD 138 899, GBP 12 978 and CHF 10 793). Gimv is aiming to hedge the currency risk on the USD in full in an appropriate way in the longer term. With this intention, Gimv carried out between 2005 and 2008 various hedging operations covering the period 2006 to 2010. On 31 March 2008, USD 65 300 (47 percent of the USD risk) was covered by a combination of various instruments. These hedges produced a positive result of EUR 4 741. In the buy-outs, foreign exchange contracts are concluded to cover purchasing and sales transactions. Interest rate risks on loans are hedged. Financial instruments are used by Gimv to cover risks that are not part of Gimv’s core activities. On behalf of the Board of Directors, 20 May 2008 Herman Daems and Leo Victor, director. | 149
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ANNUAL REPORT 2007 | 2008
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KEY FIGURES LIMITED CONSOLIDATION 3
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GIMV AT A GLANCE AN ACTIVE INVESTOR
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Strong performance and expansion in
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In 2007-2008 Gimv realised 10 new i
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Structure | 08 Strategy | 09 Market
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STRATEGY Gimv is an independent, li
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Fundraising Provisional fi gures fr
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35000 30000 25000 20000 15000 10000
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(EUR 6.6 million), Gimv realised in
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Business units Regions Corporate In
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When, in the case of a potential sa
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Gimv takes 86 percent holding WALL
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Gimv accompanies growth through buy
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GIMV OFFERS CREDIBILITY ALFACAM GRO
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Joint venture of network and experi
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Gimv majority shareholder in TerSta
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HVEG - (LowLand Fashion) www.lowlan
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Corporate Investment Germany (Halde
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Gimv invests in world leader VAG DE
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Corporate Investment’s ten larges
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Overview of major shareholdings in
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Oree develops revolutionary lightin
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Liquavista www.liquavista.com Dutch
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DIVESTMENTS Business Architects www
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Overview of the Gimv ICT portfolio
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Gimv continues to support sharehold
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GIMV IS A REFERENCE IN THE BIOTECH
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PamGene www.pamgene.com PamGene, a
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Cleantech Last year Gimv took its f
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INVESTMENTS Electrawinds www.electr
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Human resources | 60 Responsible co
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Policy-wise, Gimv is paying ever gr
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RESPONSIBLE CORPORATE BEHAVIOUR You
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Management | 66 Corporate Governanc
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Zeger Collier has had a varied care
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Eric Spiessens is a member of the e
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Paul De Ridder has been a member of
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1.2 - Evolution of capital The capi
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“Prior to the Board of Directors
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Finally the audit committee analyse
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This includes: - joint fi xed remun
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- Rights and duties of shareholders
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10.4 - Threshold for calling a shar
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Volume 16 000 000 14 000 000 12 000
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6 - Dividend policy The Board of Di
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9 - Financial calendar 22 May 2008
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DURING THE 2007-2008 FINANCIAL YEAR
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INTRODUCTION 1. GENERAL INFORMATION
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2. CONSOLIDATED BALANCE SHEET (IN E
Page 101 and 102: Issued capital Sharepremium account
Page 103 and 104: 6. DIVIDENDS, INTEREST, MANAGEMENT
Page 105 and 106: Other operating income and expenses
Page 107 and 108: The distribution of cash and cash e
Page 109 and 110: STATUTORY CONSOLIDATION 1. CONSOLID
Page 111 and 112: 2. CONSOLIDATED BALANCE SHEET (IN E
Page 113 and 114: Attributable to shareholders of the
Page 115 and 116: 4. CONSOLIDATED CASH FLOW STATEMENT
Page 117 and 118: 5.9 Property, plant and equipment P
Page 119 and 120: more appropriate or whether there i
Page 121 and 122: 6. IMPACT OF NEW OR AMENDED STANDAR
Page 123 and 124: 8. SUBSIDIARIES - CONTINUED Informa
Page 125 and 126: Assets NON-CURRENT ASSETS 31/03/08
Page 127 and 128: Buy-outs Infrastructure Overhead St
Page 129 and 130: Buy-outs Infrastructure Overhead St
Page 131 and 132: Unrealised gains and losses by acti
Page 133 and 134: 14. TAXES (IN EUR 000) 2007-2008 20
Page 135 and 136: 16. PAID AND PROPOSED DIVIDENDS The
Page 137 and 138: 17. GOODWILL EN ANDERE IMMATERIËLE
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Page 141 and 142: 22. INVENTORIES (IN EUR 000) Gimv a
Page 143 and 144: 26. PENSION LIABILITIES (IN EUR 000
Page 145 and 146: Restructuring provision Environment
Page 147 and 148: 29. RELATED PARTIES (IN EUR 000) Ye
Page 149 and 150: 30. FINANCIAL RISK MANAGEMENT See D
Page 151: 34. OFF-BALANCE SHEET OBLIGATIONS A
Page 155 and 156: 37. CONNECTION BETWEEN LIMITED AND
Page 157 and 158: 1. BALANCE SHEET AFTER DISTRIBUTION
Page 159 and 160: GLOSSARY Blue chip: a company that
Page 161 and 162: Concept & design Concerto Photograp
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ANNUAL REPORT 2007 | 2008 - Gimv

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