Notes to the company balance sheet

The company annual accounts of FMO should be read in conjunction with the consolidated annual accounts including the risk management, segment information and the notes to the consolidated accounts. The FMO company annual accounts is, due to the limited investments activities of our consolidated subsidiaries almost the same as the consolidated annual accounts. Therefore, for notes of specific items of the balance sheet and the profit & loss accounts, we refer to the consolidated annual accounts to the extent these are not specifically disclosed hereafter.

For information related to the maturity of the assets and liabilities recorded in the balance sheet of the company annual accounts, we refer to the table with the categorization of principal cash flow per maturity bucket in the section Liquidity risk of the Risk Management Chapter.

A. Banks

The cash on bank accounts can be freely disposed of.

B. Other Receivables

C. Equity investments

D. Subsidiaries

The investments in subsidiaries consist of the following interests in the share capital of:

1. Asia Participations B.V.: 100%;

2. FMO Investment Management B.V.: 100%;

3. FMO Medu II Investment Trust Ltd.: 100%;

4. Nuevo Banco Comercial Holding B.V.: 100%;

5. Equis DFI Feeder L.P.: 63%

6. NedLinx B.V.: 100%.

The following table summarizes the carrying amount of the subsidiaries.

E. Shareholders’ equity

Share capital

The authorized capital amounts to €45,380k, consisting of A shares of €22.69 each, which are held by the Dutch Government, and B shares of €22.69 each as well, which are for held by commercial banks and private investors. The Dutch Government holds 51% of the total shares of FMO, while commercial banks and private investors hold the remaining 49%. The voting rights for A shares and B shares are equal. 

In addition, the shareholders' equity of the company comprises of three reserves, which result from the Agreement State-FMO of November 16, 1998. These are the share premium reserve, the development fund and the contractual reserve. As long as the company continues its activities, these reserves are not available to the shareholders. Upon liquidation of FMO these reserves fall to the Dutch Government, after settlement of the contractual return to the shareholders.

Share premium reserve

Share premium reserve is sole contributed by Shareholders of A shares on the transfer to the company of investments administrated on behalf of the State at the time of the financial restructuring and amounts to €29,272k (2019: €29,272k).

Statutory reserves

Development fund

This special purpose reserve contains the annual budgetary allocations made by the Dutch Government to finance the portfolio of loans and equity investments. 

Other contractual reserve

The addition relates to that part of the net result, which FMO is obliged to reserve under the Agreement State-FMO of November 16, 1998 (see section ‘Additional information’). 

Legal reserves

Legal reserves include the fair value-, other revaluation, and translation reserves.

Fair value reserve

The fair value reserve is the part of the revaluation reserve and includes gains and losses of equity investment measured at FVOCI. Gains and losses on such equity investments are never reclassified to profit or loss. Cumulative gains and losses recognized in this reserve are transferred to other reserves on disposal of the investment.

Other revaluation reserve

The Other revaluation reserve¹⁾ (as a part of the total contractual reserve) include unrealized gains related to financial assets measured at FVPL. The revaluation reserve in the Company annual accounts follows from differences in presentation requirements between IFRS and Part 9 of the Dutch Civil Code. This revaluation reserve has been created against the other reserves. At the same time, a same amount is added to the Other reserves and compensated by the contractual reserve.

The Other revaluation reserve includes the unrealized fair value gains of our equity investments, loans to private sector at FVPL and derivatives for which the valuations are not determined based on quoted market prices. 

• 1 The other revaluation reserve was not presented in the Company annual accounts at December 31, 2020. Refer to Prior year error - Shareholders' equity section in the Accounting Policies chapter.

Translation reserve

The assets, liabilities, income and expenses of foreign subsidiaries and associates are translated using the closing and weighted average exchange rates. Differences resulting from the translation are recognized in the translation reserve.

At December 31, 2020 the translation reserve (as a part of the legal reserve) has a negative balance of €17 million (2019: €2.7 million).

Other reserves

Pursuant to Dutch reporting requirements in Part 9 of Book 2 the Dutch Civil Code, the table reflects the other reserves included in the total Shareholders' equity. According to the Support Agreement with the Dutch Government, FMO allocates the net results after dividend pay - out to the contractual reserve. The contractual reserve is a statutory reserve, against which no legal reserves can be created. The Other revaluation reserve is recorded through Other reserves. At the same time Other reserves are compensated via the contractual reserve.

Changes in Shareholders' equity

The table below presents changes in Shareholders' equity for line items which are only relevant for Company - only. Remaining line items are reflected in the FMO's consolidated annual accounts.

• 1 This item refers to line item Actuarial result pension in the consolidated statement of changes in Shareholders' equity

Proposal for appropriation of the net result

In 2020, the General Meeting of Shareholders approved the non-binding  proposal by the Management Board and Supervisory Board to not pay out the  distributable part of the profit of €2.7 million related to financial results of 2019. The General Meeting of Shareholders agreed to allocate this amount to the contractual reserve. The Management Board and Supervisory Board propose to allocate this amount to the other reserves, based on more insights. This proposal to add the amount to other reserves is more in line with the Agreement State-FMO of November 16, 1998 and aligned with the approach applied during years when the pay-out ratio that was applied to the distributable part of the profit was variable.

A company net loss of €205 million is recorded in 2020. Considering this loss, the Management Board and Supervisory Board proposes to the Shareholders not to pay out dividends related to 2020. Based on the Agreement State-FMO of November 16, 1998, the proposal is made to allocate €6.1 million of the loss (3% of the loss) to other reserves and the remaining loss to the other contractual reserve. This approach aligns with the pay-out factor as applied in the allocation of dividend in previous years. The amount which should be allocated to the contractual reserve has already been recorded in the balance sheet.