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
2018 | 2017 | |
Banks | 35,811 | 53,775 |
Balance at December 31 | 35,811 | 53,775 |
The cash on bank accounts can be freely disposed of.
B. Equity investments
Equity measured at FVOCI | Equity measured at FVPL | IFRS 9 | IAS 39 | |
Balance at January 1 | 77,798 | 1,407,918 | 1,485,716 | 1,687,162 |
Purchases and contributions | - | 295,238 | 295,238 | 186,905 |
Reclassification from loans | - | 4,814 | 4,814 | 7,875 |
Sales | - | -166,662 | -166,662 | -180,722 |
Impairments | - | - | - | -46,919 |
Write-offs | - | -4,268 | -4,268 | - |
Changes in fair value | -245 | -49,123 | -49,368 | -169,015 |
Balance at December 31 | 77,553 | 1,487,917 | 1,565,470 | 1,485,286 |
C. Subsidiaries
2018 | 2017 | |
Balance at January 1 | 35,088 | 33,566 |
Purchases and contributions | - | 450 |
Share in other comprehensive income | - | 618 |
Share in net results | 2,369 | 454 |
Dividend declared and received | - | - |
Balance at December 31 | 37,457 | 35,088 |
The investments in subsidiaries consist of the following interests in the share capital of:
Asia Participations B.V.: 100%;
FMO Investment Management B.V.: 100%;
FMO Medu II Investment Trust Ltd.: 100%;
Nuevo Banco Comercial Holding B.V.: 100%;
Equis DFI Feeder L.P.: 63%
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.
2018 | 2017 | |
Asia Participations B.V. | 9,051 | 8,000 |
FMO Investment Management B.V. | 4,226 | 4,204 |
FMO Medu II Investment Trust Ltd. | 2,867 | 2,937 |
Nuevo Banco Comercial Holding B.V. | 13,770 | 12,934 |
Equis DFI Feeder L.P | 7,543 | 7,013 |
Nedlinx B.V. | - | - |
Balance at December 31 | 37,457 | 35,088 |
D. Other Receivables
2018 | 2017 | |
Debtors related to equity investments | 6,224 | 86,873 |
Taxes and social premiums | 1,007 | 877 |
To be declared on State guaranteed loans | 894 | 266 |
Accrued management fees State funds | - | - |
Amortized fee receivables | 12,167 | 12,020 |
Intercompany receivables from subsidiaries | 7,136 | 11,971 |
Balance at December 31 | 27,428 | 112,007 |
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 | 2018 | 2017 |
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 | 2018 | 2017 |
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 (2017: €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 section ‘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 AFS 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.
IFRS 9 | IAS 39 | |
Gross gains and losses in the AFS reserve | ||
Equity investments at fair value | - | 396,787 |
Interest-bearing securities at fair value | - | 3,570 |
Subtotal gains and losses in the AFS reserve | - | 400,357 |
Deferred taxes on gains and losses | ||
Equity investments at fair value | - | -8,785 |
Interest-bearing securities at fair value | - | -901 |
Subtotal deferred taxes on gains and losses | - | -9,686 |
Net gains and losses in the AFS reserve | ||
Equity investments at fair value | - | 388,002 |
Interest-bearing securities at fair value | - | 2,669 |
Total AFS reserve | - | 390,671 |
The statement of changes in the shareholders’ equity details the movements in the available for sale reserve during 2018. The statement is included in the consolidated annual accounts.
Other reserves
Retained earnings | Share in other comprehensive income of subsidiaries | Total | |
IAS 39 Balance at January 1, 2017 | 31,971 | 8,949 | 40,920 |
Gains/losses during the period | - | 1,067 | 1,067 |
IAS 39 Balance at December 31, 2017 | 31,971 | 10,016 | 41,987 |
Adjustment from adoption of IFRS 9 (net of tax) | 191 | -10,016 | -9,825 |
IFRS 9 Restated balance at January 1, 2018 | 32,162 | - | 32,162 |
Gains/losses during the period | - | - | - |
IFRS 9 Balance at December 31, 2018 | 32,162 | - | 32,162 |
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 €2,983,647. The legal reserves is not freely distributable to shareholders. The legal
reserve includes the unrealized fair value increases of our equity investments, loans to the private sector FVPL and derivatives for which the valuation is not determined based on quoted market prices.
IFRS 9 | IAS 39 | |
AFS reserve | - | 411,938 |
Fair value reserve | 17,773 | - |
Translation reserve | - | - |
Equity investments FVPL | 361,807 | - |
Loans to the private sector FVPL | 4,238 | - |
Derivatives not hedged | 172,768 | 222,015 |
Balance at December 31 | 556,586 | 633,953 |
The AFS reserve and fair value reserve presented are 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 2018 the translation reserve has a negative balance of €6,758. 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 FVPL for which the fair value determination is not based on frequent quoted information.
Proposal for appropriation of profit
A company net profit of €150,821 was recorded in 2018. Under the Agreement State-FMO of November 16, 1998, FMO is required to add €147,251 to the contractual reserve. Therefore the 2018 profit is not completely distributable. The distributable element of the net profit amounts to €3,570 (2017: €5,556). The Management Board and the Supervisory Board propose distributing a sum of €3,570 (2017: €5,556) as cash dividend equaling €8.92 per A and B share (2017: €13.89 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 January 10, 2019 and adopted by the Dutch Central Bank.