ANNUAL REPORT 2007 | 2008 - Gimv

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VALUATION AT GIMV Methods used and link with the development of fi nancial markets Gimv values its investment portfolio on a quarterly basis. This is done on the basis of the International Private Equity and Venture Capital Valuation Guidelines (IPEV). These valuation rules have been subscribed by around 35 international organizations and are used worldwide in the private equity sector. These recommendations allow the general and theoretical IFRS accounting rules to be adapted to the specifi c worlds of private equity and venture capital. These accounting rules start from the principle that the portfolio value should represent the fair value. This is the value at which the investment could be sold, at the particular point in time, in a voluntary sale. Forced sale or liquidation prices cannot be used as a basis for valuation. This means that the portfolio valuation can vary from one quarter to the next in line with market circumstances. Determining the fair value of a listed company in the portfolio is in principle a simple matter. This value is the listed price of the enterprise at the reporting date, multiplied by the number of shares owned by Gimv. This stock market value has to be used for valuation purposes, even if Gimv would be unwilling to sell at that price. In the past fi nancial year, 17 percent of the portfolio consisted of listed companies. In this way fl uctuations in the stock market and in the price on reporting date immediately impact the valuation of the Gimv portfolio. The majority of the portfolio consists of unlisted shareholdings. As these enterprises lack listed prices, an alternative valuation method is called for. It is here that the IPEV guidelines are of great importance. For investments less than one year old, the original investment cost is retained as the most relevant valuation, except if clear indications exist of revaluation during this fi rst year. At the end of March 2007, 7 percent of the Gimv portfolio was valued at original investment cost. 18 | Gimv Annual Report 2007-2008 | Operating and fi nancial report In the case of buy-outs and growth capital investments, Gimv generally looks for a group of comparable listed companies as a reference. An average of the valuation multiples of this group is then used to estimate the value of the unlisted shareholding. In many cases this valuation is further corrected with a discount to refl ect the more limited liquidity of unlisted shareholdings. In this way a market-related valuation is obtained, and a link created between value development on capital markets and the valuation of the unlisted shareholdings. This explains why unlisted shareholdings, even if they are doing well, can be the subject of negative valuation corrections on falling markets. At the end of March 2008, Gimv valued 31 percent of its portfolio in this way. Given that this valuation is totally independent of the original investment costs and fl uctuates with capital markets, it is possible that, on sale, a capital loss is obtained against the most recent carrying value, and at the same time an attractive capital gain in comparison with the original investment costs. Many companies that are fi nanced with venture capital are still at the starting phase and develop unique products. For this reason it is impossible in most cases to put together a reference group of listed companies. The most objective way of valuing such technology starters is therefore to use the value of the latest fi nancing round for the shareholding in question. At Gimv, 17 percent of the portfolio is valued in this way.
When, in the case of a potential sale of a shareholding, indications exist as to the price at which this shareholding will be sold, then this indication is used for estimating the value of the shareholding. At the end of March 2008, 13 percent of the Gimv portfolio was valued in this way. This extraordinary high percentage was due to the ongoing negotiations on the sale of Westerlund. Portfolio loans are valued at nominal value (in certain cases including capitalized interest), providing that the interest rate is in line with the market interest rate for similar investments. The graph below gives the various methods used by Gimv for valuing its portfolio. It shows that Gimv values its portfolio in a balanced and professional manner. Other (a.o. exit valuation) 13% Loans 15% Value latest fi nancing round 17% Portfolio according to valuation method (31/3/2008) - fund investments excluded Investment cost 7% Multiple 31% Listed 17% | 19
Page 1 and 2: ANNUAL REPORT 2007 | 2008
Page 3 and 4: KEY FIGURES LIMITED CONSOLIDATION 3
Page 5 and 6: GIMV AT A GLANCE AN ACTIVE INVESTOR
Page 7 and 8: Strong performance and expansion in
Page 9 and 10: In 2007-2008 Gimv realised 10 new i
Page 11 and 12: Structure | 08 Strategy | 09 Market
Page 13 and 14: STRATEGY Gimv is an independent, li
Page 15 and 16: Fundraising Provisional fi gures fr
Page 17 and 18: 35000 30000 25000 20000 15000 10000
Page 19 and 20: (EUR 6.6 million), Gimv realised in
Page 21: Business units Regions Corporate In
Page 25 and 26: Gimv takes 86 percent holding WALL
Page 27 and 28: Gimv accompanies growth through buy
Page 29 and 30: GIMV OFFERS CREDIBILITY ALFACAM GRO
Page 31 and 32: Joint venture of network and experi
Page 33 and 34: Gimv majority shareholder in TerSta
Page 35 and 36: HVEG - (LowLand Fashion) www.lowlan
Page 37 and 38: Corporate Investment Germany (Halde
Page 39 and 40: Gimv invests in world leader VAG DE
Page 41 and 42: Corporate Investment’s ten larges
Page 43 and 44: Overview of major shareholdings in
Page 45 and 46: Oree develops revolutionary lightin
Page 47 and 48: Liquavista www.liquavista.com Dutch
Page 49 and 50: DIVESTMENTS Business Architects www
Page 51 and 52: Overview of the Gimv ICT portfolio
Page 53 and 54: Gimv continues to support sharehold
Page 55 and 56: GIMV IS A REFERENCE IN THE BIOTECH
Page 57 and 58: PamGene www.pamgene.com PamGene, a
Page 59 and 60: Cleantech Last year Gimv took its f
Page 61 and 62: INVESTMENTS Electrawinds www.electr
Page 63 and 64: Human resources | 60 Responsible co
Page 65 and 66: Policy-wise, Gimv is paying ever gr
Page 67 and 68: RESPONSIBLE CORPORATE BEHAVIOUR You
Page 69 and 70: Management | 66 Corporate Governanc
Page 71 and 72: 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
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Issued capital Sharepremium account
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6. DIVIDENDS, INTEREST, MANAGEMENT
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Other operating income and expenses
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The distribution of cash and cash e
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STATUTORY CONSOLIDATION 1. CONSOLID
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2. CONSOLIDATED BALANCE SHEET (IN E
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Attributable to shareholders of the
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4. CONSOLIDATED CASH FLOW STATEMENT
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5.9 Property, plant and equipment P
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more appropriate or whether there i
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6. IMPACT OF NEW OR AMENDED STANDAR
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8. SUBSIDIARIES - CONTINUED Informa
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Assets NON-CURRENT ASSETS 31/03/08
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Buy-outs Infrastructure Overhead St
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Buy-outs Infrastructure Overhead St
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Unrealised gains and losses by acti
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14. TAXES (IN EUR 000) 2007-2008 20
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16. PAID AND PROPOSED DIVIDENDS The
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17. GOODWILL EN ANDERE IMMATERIËLE
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19. GOODWILL IMPAIRMENT The goodwil
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22. INVENTORIES (IN EUR 000) Gimv a
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26. PENSION LIABILITIES (IN EUR 000
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Restructuring provision Environment
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29. RELATED PARTIES (IN EUR 000) Ye
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30. FINANCIAL RISK MANAGEMENT See D
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34. OFF-BALANCE SHEET OBLIGATIONS A
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Current liabilities rose by almost
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37. CONNECTION BETWEEN LIMITED AND
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1. BALANCE SHEET AFTER DISTRIBUTION
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GLOSSARY Blue chip: a company that
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Concept & design Concerto Photograp
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ANNUAL REPORT 2007 | 2008 - Gimv

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