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, predominantly the same as the consolidated annual accounts. Therefore, for the notes to the specific items of the balance sheet and the profit & loss accounts we refer to the consolidated annual accounts to the extend these are not specifically disclosed hereafter.

With respect to the information about 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

 

2017

2016

Banks

53,775

37,827

Balance at December 31

53,775

37,827

The cash on bank accounts can be freely disposed of.

B. Equity investments

 

2017

2016

Balance at January 1

1,687,162

1,446,145

Purchases and contributions

186,905

276,299

Reclassification from loans

7,875

3,841

Sales

-180,722

-118,777

Value adjustments

-46,919

-42,846

Changes in fair value

-169,015

122,500

Balance at December 31

1,485,286

1,687,162

C. Subsidiaries

 

2017

2016

Balance at January 1

33,566

33,211

Purchases and contributions

450

964

Share in other comprehensive income

618

776

Share in net results

454

-1,190

Dividend declared and received

-

-195

Balance at December 31

35,088

33,566

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 value of the subsidiaries.

Nedlinx B.V. was incorporated in October 2017. Main activities of Nedlinx are financing Dutch companies with activities in developing countries.

 

2017

2016

Asia Participations B.V.

8,000

8,632

FMO Investment Management B.V.

4,204

4,549

FMO Medu II Investment Trust Ltd.

2,937

2,961

Nuevo Banco Comercial Holding B.V.

12,934

14,347

Equis DFI Feeder L.P

7,013

3,077

Nedlinx B.V.

-

-

Balance at December 31

35,088

33,566

D. Other Receivables

 

2017

2016

Debtors related to equity investments

86,873

3,634

Taxes and social premiums

877

600

To be declared on State guaranteed loans

266

1,961

Accrued management fees State funds

-

5,301

Amortized fee receivables

15,516

10,239

Intercompany receivables from subsidiaries

11,971

9,530

Balance at December 31

115,503

31,265

E. Shareholders’ equity

Share capital

The authorized capital amounts to €45,380, consisting of 51% A shares of €22.69 each, which are held only by the State, and 49% B shares, also of €22.69 each, which are held by private investors. The voting rights for A shares and B shares are equal.

The equity of the company comprises 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 the company continues its activities, these reserves are not available to the shareholders. Upon liquidation of FMO, these reserves fall to the State, after settlement of the contractual return to the shareholders.

Authorized share capital

2017

2016

1,020,000 A shares x €22.69

23,144

23,144

980,000 B shares x €22.69

22,236

22,236

Balance at December 31

45,380

45,380

Issued and paid-up share capital

2017

2016

204,000 A shares x €22.69

4,629

4,629

196,000 B shares x €22.69

4,447

4,447

Balance at December 31

9,076

9,076

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 €29,272 (2016: €29,272).

Contractual reserve  

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

Development fund

This special purpose reserve contains the annual budgetary allocations made by the State to finance the portfolio of loans and equity investments. In 2005, FMO received the final contribution to the development fund under the Agreement State-FMO of November 16, 1998.

Available for sale reserve (AFS reserve)

The available for sale reserve includes net revaluations of financial instruments classified as available for sale that have not been reported through the profit and loss account.

The following table shows the components of the available for sale reserve at reporting date.

 

2017

2016

   

Gross gains and losses in the AFS reserve

  

Equity investments at fair value

396,787

564,195

Interest-bearing securities at fair value

3,570

11,623

Subtotal gains and losses in the AFS reserve

400,357

575,817

Deferred taxes on gains and losses

  

Equity investments at fair value

-8,785

-10,776

Interest-bearing securities at fair value

-901

-2,916

Subtotal deferred taxes on gains and losses

-9,686

-13,692

Net gains and losses in the AFS reserve

  

Equity investments at fair value

388,002

553,419

Interest-bearing securities at fair value

2,669

8,707

Total available for sale reserve

390,671

562,126

The statement of changes in the shareholders’ equity details the movements in the available for sale reserve during 2017. The statement is included in the consolidated annual accounts.

Other reserves

 

Retained earnings

Actuarial gains/losses on defined benefit plans

Share in other comprehensive income of subsidiaries

Total

Balance at January 1, 2016

31,971

7,236

8,175

47,382

Gains/losses during the period

-

-29,813

774

-29,039

Balance at December 31, 2016

31,971

-22,577

8,949

18,343

Gains/losses during the period

-

1,208

1,067

2,275

Balance at December 31, 2017

31,971

-21,369

10,016

20,618

Legal reserves

Pursuant to Dutch reporting requirements in Part 9 of Book 2 of the Dutch Civil Code the table below reflects the legal reserves included in the total Shareholders’s equity of €2,822,882. The legal reserves is not freely distributable to shareholders. The legal reserve includes the fair value increases contained in the AFS reserve, the Translation reserve and derivatives that are not in a hedging relationship.

 

2017

2016

AFS reserve

411,938

599,641

Translation reserve

-

9,221

Derivatives not hedged

207,372

113,674

Balance at December 31

619,310

722,536

The AFS reserve consist of the positive fair value movements of our equity instruments and interest bearing securities financial assets net of tax effect.

The translation reserve reflects the translation differences between closing and average weighted exchange rates of assets, liabilities, income and expenses from foreign subsidiaries and associates. As of year end 2017 the translation reserve has a negative balance of €16,696 driven by the declined USD exchange rate. Due to the negative balance the translation reserve is not taken into account for the legal reserve.

The derivatives not hedged reflect the fair value gains of our derivate portfolio (not used for hedge accounting purposes) designated at fair value through P&L for which the fair value determination is not based on frequent quoted information.

Proposal for appropriation of profit

A company net profit of €254,117 was recorded in 2017. Under the Agreement State-FMO of November 16, 1998, FMO is required to add €248,561 to the contractual reserve. Therefore the 2017 profit is not completely distributable. The distributable element of the net profit amounts to €5,556 (2016: €6,682). The Management Board and the Supervisory Board propose distributing a sum of €5,556 (2016: €6,682) as cash dividend equaling €13.89 per A and B share (2016: €16.71 per A and B share). This proposal for dividend distribution can be withdrawn if FMO's economical and financial conditions deteriorate significantly in the period up to the moment of distribution of the dividend. This reservation is the result of the recommendation of the European Central Bank on December 28, 2017, and adopted by the Dutch Central Bank.