ATP PE Annual Report 2012

Transcription

1 x ATP PE Annual Report 2012 ATP Private Equity K/S CVR-no Annual Report for the period: 1 January December 2012 (7 th financial year) This annual report has been presented and reviewed by the companies general assembly Copenhagen, / 2013 Chairman ATP PE Annual Report

2 Company Details ATP Private Equity K/S Sjæleboderne 2, 1 st floor DK-1122 Copenhagen K Telephone: Fax: Website: info@atp-pep.com CVR-no.: Date of establishment: 7 April 2006 Registered office: Copenhagen Financial year: 1 January 31 December 7 th financial year Board of Directors Henrik Gade Jepsen (Chairman of the Board) Lars Damgaard Sørensen Auditors Deloitte Statsautoriseret Partnerselskab Weidekampsgade 6 DK-2300 Copenhagen S Ownership Arbejdsmarkedets Tillægspension (ATP) is majority shareholder. Annual general meeting The annual general meeting takes place on 30 January ATP PE Annual Report

3 Contents CONTENTS 3 MANAGEMENT S STATEMENT 4 AUDITORS REPORTS 5 FINANCIAL HIGHLIGHTS 7 MANAGEMENT S REVIEW 9 ACCOUNTING POLICIES 16 INCOME STATEMENT 18 BALANCE SHEET AS OF 31 DECEMBER 19 STATEMENT OF CHANGES IN EQUITY 20 CASH FLOW STATEMENT 21 NOTES 22 PORTFOLIO 24 ATP PE Annual Report

4 Management s Statement Statement by Management on the annual report The Board of Directors and the Management have today considered and approved the annual report for the financial year 1 January to 31 December The annual report is presented in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the Company s financial position at 31 December 2012 and of its financial performance for the financial year 1 January to 31 December We believe that the management commentary contains a fair review of the affairs and conditions referred to therein. We recommend the annual report for adoption at the Annual General Meeting. Copenhagen, 22 January 2013 Private Equity Advisors ApS: Torben Vangstrup Klaus Rühne Board of Directors: Henrik Gade Jepsen Chairman of the Board Lars Damgaard Sørensen ATP PE Annual Report

5 Auditors Reports Internal Auditors Report To the investor of ATP Private Equity K/S We have audited the financial statements for ATP Private Equity K/S for the financial year The financial statements have been prepared in accordance with the Danish Financial Statements Act. Basis of opinion We conducted our audit in accordance with the Danish Financial Supervisory Authority's Executive Order on Auditing of the Danish Labour Market Supplementary Pension Scheme (ATP), the Labour Market Occupational Diseases Fund (AES) and the Employee's Capital Pension Fund (LD) and in accordance with the international Auditing Standards. Those standards require that we plan and perform our audit to obtain reasonable assurance that the financial statements are free from material misstatement. The audit was performed in accordance with the division of responsibilities agreed with the external auditors and included an assessment of procedures and internal controls established, including the risk management organized by Management relevant to the reporting processes and material business risks. Based on materiality and risk we examined, on a test basis, the basis of amounts and other disclosures in the financial statements. Furthermore, the audit included evaluating the appropriateness of the accounting policies applied by Management and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements. We participated in the audit of risk and other material areas, and we believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit did not resulted in any qualification. Opinion In our opinion, the procedures and internal controls established, including the risk management organized by Management relevant to the reporting processes and material business risks, are working satisfactorily. Furthermore, in our opinion, the financial statements give a true and fair view of the company's assets, liabilities and financial position at 31 December 2011 and of its financial performance and cash flows for the financial year 2011 in accordance with the Danish Financial Statements Act. Statement on the management s review Pursuant to Executive Order on Financial Reporting by the Danish Labour Market Supplementary Pension Scheme and the Supplementary Labour Market Pension Scheme for Disability Pensioners (available in Danish only), we have read the management s review. We have not performed any further procedures in addition to the audit of the financial statements. Copenhagen, 22 January 2013 Peter Jochimsen Internal auditor ATP PE Annual Report

6 Independent Auditor's Report To the investor of ATP Private Equity K/S We have audited the financial statements of ATP Private Equity K/S for the financial year 1 January to 31 December 2012, which comprise the accounting policies, income statement, balance sheet, statement of changes in equity, cash flow statement and notes. The financial statements have been prepared in accordance with the Danish Financial Statements Act. Management's responsibility for the financial statements and the management report Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility and basis of opinion Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit has not resulted in any qualification. Opinion In our opinion, the financial statements give a true and fair view of the Company s financial position at 31 December 2012 and of the results of its operations and cash flows for the financial year 1 January - 31 December 2012 in accordance with the Danish Financial Statements Act. Statement on the management s review Pursuant to the Danish Financial Statements Act, we have read the management commentary. We have not performed any further procedures in addition to the audit of the financial statements. On this basis, it is our opinion that the information provided in the management commentary is consistent with the financial statements. Copenhagen, 22 January 2013 Deloitte Statsautoriseret Revisionspartnerselskab Anders O. Gjelstup State Authorised Public Accountant Bill Haudal Pedersen State Authorised Public Accountant ATP PE Annual Report

7 Financial Highlights Financial Highlights - ATP Private Equity K/S (ATP PE) DKK' Income statement: Profit (loss) from investment activities 300, , ,585 (308,948) (215,197) Operating profit (loss) 294, , ,280 (316,230) (222,675) Profit from financial items (87) (9) ,018 Profit (loss) for the year 279, , ,676 (316,142) (225,585) Balance sheet: Total assets 5,292,843 5,426,280 5,632,662 4,548,141 4,653,621 Equity 5,288,375 5,246,855 5,512,022 4,495,912 4,428,419 Cash flow: Operating activities 260, ,548 (311,570) (491,534) 73,915 Financing activities (238,408) (674,703) 399, ,413 (181,895) Financial ratios*: Total Value to Paid-in 1.23x 1.21x 1.18x 1.11x 1.17x Distributed to Paid-in 0.66x 0.61x 0.49x 0.50x 0.50x IRR* 7.4% 7.7% 7.7% 6.1% 11.8% For terms and definitions please refer to the accounting policies *Financial highlights for the period are adjusted according to previous annual reports, due to clarifying of the method of calculating financial ratios. ATP PE Annual Report

8 Financial ratios for - ATP Private Equity K/S (ATP PE) 1 IRR (gross since inception) 7.4% TVPI 1.23x DPI 0.66x Number of portfolio fund-of-funds 10 Number of portfolio funds 17 Number of direct investments 8 1. The multiples are net to ATP PE, i.e. net of management fee payments to portfolio funds and net of administrative expenses. IRR is calculated on the basis of realized cash flows and the value of the equity at the end of the period. Total Value to Paid-in (TVPI): Distributions to investors added to the value of the remaining portfolio divided by paid-in capital by the investors. Distributed to paid-in (DPI): Distributions to investors divided by paid-in capital by the investors. ATP PE Annual Report

9 Management s Review Highlights of the year Net profit of 2012 was DKK 280m, equivalent to a return of 5.3% The positive return is primarily due to a combination of positive growth in the underlying portfolio companies income and debt reductions as well as a positive development in quoted prices in comparable listed companies The total commitment by ATP was decreased by DKK 2,750m to a total of DKK 11,250m In 2012, a total of DKK 584m was paid in from the investor to ATP PE increasing total contributions from the investor to DKK 9,335m, representing 83% of capital committed by the investor ATP PEP I distributed DKK 823m to the investor in 2012, increasing total distributions since inception to DKK 5,948m equivalent to 64% of total invested capital Main Activity ATP PE is an evergreen fund, meaning a fund without a set expiration. The fund can make commitments of up to DKK 11,3bn. The total commitment by ATP was reduced by DKK 2,750m in The company s investment portfolio consists of investments in private equity fund-of-funds, funds and direct investments in companies. As the law governing innovation associations was lifted, ATP PE was established in 2006, by the merger of ATP PE and Innovationsforeningen ATP. ATP PE became the continuing company. Investing via a fund-of-funds such as ATP PE entails a very long term strategy. ATP PE has, as fund-of-funds, an usual investment period of 2-3 years, while the underlying portfolio companies have an additional 3-5 years to invest in companies. The funds in the portfolio generally has a life span of up to 12 years, while fund-offunds has a life span of up to years. Direct investments are usually sold after a period of 3-7 years. Overview of capital transactions Market Development The beginning of the year was characterized by a relatively high investment and exit pace in the U.S. and Europe. The markets developed very differently in the second half of 2012, which can be attributed to the fiscal policy initiatives in the U.S. The exit pace continued at a high level in the U.S., supported by increasing valuations, good earnings in the underlying portfolio companies and the financial sector s increasing desire to lend out money on pre financial crisis terms. Contrary to the U.S., the investment activity in Europe decreased significantly in the second half of This reflects the fact that a number of portfolio companies have found it difficult to achieve budgets at the same time as European banks willingness in providing loans remains at a very low level. The challenging market environment in the private equity industry is expected to continue into It will favor the GPs who are disciplined in relation to purchase price, have active participation and the ability to add value. Both in Europe and in the U.S., there is an increasing pressure on the funds to carry out distributions as the funds are maturing. Secondary sales as well as sale to industrial buyers are expected to remain dominant. The fundraising activity has reflected the overall economic activity and has been high (+20%) in the U.S., while the levels in Europe remained at the same level as capital raised in This reflects, among other things, the fact that European GPs must convince investors of their ability to deliver high rates of returns in a low or zero growth market. Moreover, a fear of the development in Southern Europe and any consequences for the EUR has resulted in a reduced interest from American investors in European funds. Upcoming regulatory changes in Europe have further negatively affected certain segments of investors (banking and insurance) interest in private equity. It is therefore expected that more and more funds will not be in a position to raise new capital. ATP PE Annual Report

10 Cash flow The chart above, illustrates the cash flow between ATP PE and the investor in Distributions exceed drawdowns in 2012, due to large distributions in some of the mature fund-of-funds in the portfolio. The larger capital deposits (positive and negative) in January, April, July, and November are attributable to differential settling of forward exchange contracts. Cash flow between ATP PE and the investor The investor in ATP PE paid in a total of DKK 584m throughout the year to finance portfolio funds investments as well as to settle differences in forward exchange contracts. At the end of 2012, called capital by ATP PE reached a total of DKK 9,335m, equivalent to 83% of total committed capital of DKK 11,250m. Throughout the year, the investor in ATP PE received distributions of DKK 823m in total. At the end of 2012, DKK 5,948m had been returned to the investor, equivalent to 64% of contributed capital. ATP PE Annual Report

11 Portfolio Composition It was decided that fund-of-funds investments should make-up the majority of the portfolio. Among others, ATP PE has capital commitments to two families of fund-of-funds, managed by Danske Private Equity A/S and Goldman Sachs as well as commitment to Dansk Vækstkapital. This part of the portfolio was accumulated since 2000 and is made up of 10 fund-of-funds. The pie chart below, illustrates the composition of the portfolio, split by segments and currency as of 31 December A detailed description of performance per segment can be found on page 12. DKKm Management fee to portfolio funds and administrative expenses (40.7) Exchange adjustment of assets (including currency hedges) (52.5) Unrealised value adjustments of funds and companies (158.5) Interest/dividends/realized gains Profit (loss) before tax Tax (14.4) Profit (loss) for the year Realized return totaled DKK 546m against DKK 718m in The pace of purchase and sale of portfolio companies in 2012 was at an expected level. The unrealized return amounted DKK -159m in 2012 against DKK -248m in The unrealized return is primarily attributable to depreciation of prior years appreciations of portfolio companies realized in 2012 and general depreciations in the venture segment. Management fee and administrative expenses amounted to DKK 41m in 2012 are lower than the costs in ATP PE held administrative expenses to ATP of DKK 6m in 2012 which is at the same level as in In 2012 ATP PE obtained an exchange loss on portfolio funds in foreign currency (primarily USD), however an equivalent exchange gain was realized on forward exchange contracts. A net exchange loss of DKK 53m for 2012 against a gain of DKK 18m in 2011 was recognized. The exchange loss is primarily attributable to increasing costs related to the hedging of currency, which is caused by a higher level of the USD interest rate than the level of the DKK interest rate. Profit (loss) for 2012 Profit for the year amounted to DKK 280m, equivalent to a return of 5.3 % against a profit of DKK 410m in In the Annual Report for 2011, expectations for 2012 were expressed as a profit at level or slightly lower than the 2011 profit. The profit for 2012 is considered in the low end of expectations. Balance sheet Total assets at 31 December 2012 amounted DKK 5,293m against DKK 5,426m in ATP PE Annual Report

12 Returns from the Portfolio Funds The 2012 return on portfolio funds totaled DKK 301m against DKK 431m in This represents a return of 5.3 % in 2012 and is illustrated per segment in the chart below. Buyout funds (a total of 5) represent 11% of committed capital. These funds have drawn 97% of capital committed by ATP PE. In 2012, the market value of buyout funds amounted DKK 171m against DKK 223m in The return for the year is -26% and the TVPI for the buyout segment is 1.53x. As shown in the chart below, there is a significant spread in the TVPI for funds in the buyout segment. It ranges from 1.00x to 1.91x. At the end of 2012, the fund of funds segment (a total of 10) represented 70% of total commitment. As of 31 December 2012, the market value is DKK 4,309m against DKK 4,382m in 2011, representing 84% of total market value of the portfolio. The fundof-funds have drawn 79% of committed capital by ATP PE. The return of the segment is 12% in 2012 and it has a TVPI of 1.25x. 3% of total commitments by ATP PE are committed to 8 direct investments. The value in these investments varies widely as the TVPI for the segment is 0.83x in 2012 but ranges from 0.11x to 10.47x. Total market value of direct investments is DKK 201m with a return of 2% in 2012 against DKK 208m in The x-axis of the chart below illustrates funds drawn capital of committed capital by ATP PE. The y-axis shows performance via TVPI, see definition at the bottom of page 8. The size of the circles illustrates the individual segments' share of ATP PE s total investment portfolio (measured against commitments by ATP PE). The chart below illustrates ATP PE s performance and realizations since inception in The definitions of the financial ratios can be found on page 8. The portfolio includes 12 venture funds, representing 17 % of commitment to funds. At the present time, 94 % of these commitments are drawn. As of 31 December 2012, market value of venture funds in the portfolio amounted DKK 448m against DKK 578m in The return on venture funds in 2012 was -20% and the TVPI for the segment is 0.71x, covering a range from 0.21x to1.59x. *Segment Enterprise Value EURm Small buyout Mid buyout Large buyout ATP PE Annual Report

13 Portfolio value By the end of 2012, total market value of the portfolio amounted DKK 5,129m against DKK 5,395m in The valuation of investments in non-listed companies is associated with special risks. The funds fair value valuations are normally used if the funds report in accordance with the International Private Equity and Venture Capital Valuation Guidelines or US GAAP. With regard to the investments made by venture funds, the valuation is based on reporting from the funds. Venture funds typically value companies in accordance with the pricing in recent funding rounds. By monitoring the change in valuations of underlying private equity funds portfolio investments, ATP PE receives current information on the fair market value of the portfolio and is able to monitor the investment activity and the reporting from portfolio funds. As mentioned above, the market value of the portfolio decreased in 2012 by a total of DKK 266m to a total value of DKK 5,129m as of 31 December The decrease in market value is primarily attributed to positive net cash flow from the portfolio. Investment risk Since ATP PE s primary commitments have been to fund-of-funds with a well-diversified portfolio and a large number of portfolio companies, the investment risk is deemed low. Currency risks Investments are made in a number of currencies and earnings, cash flows and equity are subject to currency fluctuations. It is company policy to hedge financial risks in currencies other than EUR. The currency hedging comprises forward exchange contracts. Current positions are hedged on a monthly basis, while risks on unused capital commitments to portfolio funds are not. Accordingly, for risk assessment purposes it is essential that ATP PE is able to identify the fair value of the underlying assets to be able to properly hedge currency risks. The table below shows how the value of the portfolio at 31 December 2012 would be affected by fluctuation in exchange rates, if currency hedging did not take place. Sensitivity Analysis Effect in DKK'000 of: Please notice that the sensitivity calculations in the table are merely theoretical, as they do not take the currency hedging into account. Interest rate risks Apart from trade balances with suppliers and forward contracts, ATP PE has no liabilities. Debt is often raised in the funds portfolio investments, and consequently an indirect interest rate risk exists, which could affect future investment results. Credit risks The company s credit risks partly relate to primary financial assets and partly to derivative financial instruments with a positive market value. The company is not subject to any material risks in respect of customers or business partners. Liquidity risks Remaining investments Remaining commitment a 1% increase in USD/DKK 28,440 4,719 a 1% increase in GBP/DKK 6,510 0 a 1% increase in SEK/DKK a 1% increase in NOK/DKK a 1% increase in EUR/DKK 8,813 1,392 a 1% increase in AUD/DKK The limited partner ATP is an acknowledged financial institutional investor who is under the supervision of the Danish Financial Supervisory Authority. For this reason the liquidity risk is assessed as being extremely low. ATP PE Annual Report

14 Social responsibility As part of the ATP Group, ATP PE practices business-driven social responsibility in such a way that all initiatives is to be conducive to the realization of ATP s overall vision: to ensure basic financial security for all of Denmark. As a business it is important that ATP has stable and well-trained members, a good physical and mental working environment and flexibility. More detailed information about our social responsibility can be found in the management review of the ATP Group s 2012 annual report. Social responsibility guidelines The investments of ATP PE are mainly made through private equity funds in Europe and North America. Social responsibility is often a prerequisite for lasting, sound earnings and maintaining the value of shareholdings. In order to ensure accordance between ATP s social responsibility principles and the portfolio fund s investments, a separate agreement to this effect is always made with the fund in the form of a side letter. This agreement among others requires compliance with laws and rules established by national authorities on the Company s markets or by international organizations following Denmark s accession. In addition, investments are not to be made in countries that are subject to a trade embargo enforced by the UN, the EU and acceded by Denmark. Organisation and management The Company's management was amended at the end of 2012, as Lars Rohde has resigned as Chairman of the Board and Henrik Gade Jepsen has taken over this position. Expectations for 2013 The profit for 2013 is expected to be higher than the level of 2012 profit. Events after 31 December 2012 No significant events have taken place after the year end. ATP PE Annual Report

15 ATP PE Annual Report

16 Accounting Policies The annual report for 1 January 31 December 2012 of ATP Private Equity K/S has been prepared in accordance with the provisions applying to medium-sized reporting class C enterprises under the Danish Financial Statements Act. Reclassifications of certain comparative figures are made in order to increase the transparency of the funds operations. Profit (loss) or equity has not been affected Besides above, the accounting policies used in the preparation of the financial statements are consistent with those of last year. Recognition and measurement Assets are recognised in the balance sheet when it is probable that future economic benefits will flow to the Company and the value of the asset can be reliably measured. Liabilities are recognised in the balance sheet when an outflow of economic benefits is probable and when the liability can be reliably measured. On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described below for each individual item. In recognising and measuring assets and liabilities, any gains, losses and risks occurring prior to the presentation of the annual report that evidence conditions existing at the balance sheet date are taken into account. Income is recognised in the income statement as earned, including value adjustments of financial assets and liabilities measured at fair value or amortised cost. Equally, costs incurred to generate the year's earnings are recognised, including impairment losses. For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are recognized in the income statement as capital gains and losses Income statement Capital gains and losses, other securities and investments Gains on other securities and investments comprise realised and unrealised value adjustments of investments and foreign exchange gains and losses on transactions in foreign currencies. Administrative expenses Administrative expenses comprise costs incurred during the year on the Company s investment activities. Administrative expenses comprise fee to ATP in respect of the administrative work performed by ATP on behalf of the Company. Financial Income Financial income comprises interest income on cash and cash equivalents. Foreign tax The Company is not independently taxable, as the profit/loss of the Company is taxed through the limited partner and general partner s taxable income. Tax in the income statement is dividend taxes from foreign portfolio companies. Foreign currency translation Transactions denominated in foreign currencies are translated into DKK at the exchange rates at the transaction date. Investments, receivables and payables denominated in foreign currencies are translated into DKK at the exchange rates at the balance sheet date. Realised and unrealised foreign exchanges gains and losses are recognised in the income statement. Derivative financial instruments Derivative financial instruments are initially recognized in the balance sheet at cost and subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are included in other receivables and payables, respectively, and set-off of positive and negative values is only made when the Company has the right and the intention to settle several financial instruments net. ATP PE Annual Report

17 Balance sheet Investments in other securities and investments Investments in other securities and investments comprise investments in portfolio funds and portfolio companies and are measured at fair value at the balance sheet date. Value adjustments are recognised in the income statement on a current basis. Management fees paid to portfolio companies are capitalised together with the investment in the individual portfolio company. Management fees are amortised over the period to which they relate. Investments in portfolio companies that do not have a quoted market price are measured based on the latest trading price either in the form of a capital increase or a partial sale based on the value of comparable companies and using traditional valuation methods. Financial Ratios The financial ratios stated in the survey of financial highlights have been calculated as follows: Total Value to Paid-in: Value of distributions to the investor + value of remaining portfolio / paid-in capital from the investor. Distributed to Paid-in: Value of distributions to the investor / paid-in capital from investors. IRR : Calculated between ATP PE and the investor and is based on realised cash flows plus the value of equity at year end. If the fair value cannot be determined reliably, cost is used, which comprises acquisition costs. Receivables Receivables are measured at amortised cost. Write-down is made for bad debt losses based on an individual assessment of receivables. Liabilities Liabilities are measured at net realisable value. Cash flow statement The cash flow statement shows the cash flows from operating and financing activities for the year, the year's changes in cash and cash equivalents as well as the Company's cash and cash equivalents at the beginning and end of the year. Cash flow from operating activities Cash flows from operating activities comprise administrative expenses adjusted for changes in working capital, including cash flows between the Company and funds that are invested in and direct investments. As the Company s primary activity is investment activity, investment activities are not disclosed separately. Cash flow from financing activities Cash flows from financing activities comprise paid-in capital and distributions to the limited partners and the general partner of the limited partnership. Cash and cash equivalents comprise cash and short-term marketable securities which are subject to an insignificant risk of changes in value. ATP PE Annual Report

18 Income Statement ATP PE DKK'000 Note Interest and dividends Interest, investments 9,138 30,283 Dividends and distributions 48,301 53,265 Total interest and dividends 57,439 83,548 Capital gains and losses Other securities and investments 1 243, ,195 Total capital gains and losses 243, ,195 Profit from investment activities 300, ,743 Administrative expenses 2 (6,366) (6,394) Operating profit 294, ,349 Financial items Financial income Financial expenses (126) (127) Total financial items (87) (9) Profit (loss) before tax 294, ,339 Foreign tax (14,406) (14,803) Profit (loss) for the year 279, ,536 Proposed profit (loss) allocation: Profit (loss) for the year 279, , , ,536 ATP PE Annual Report

19 Balance sheet as of 31 December ATP PE DKK'000 Note Assets Non-current assets Investments Other securities and investments 3 5,129,218 5,394,980 Total investments 5,129,218 5,394,980 Total non-current assets 5,129,218 5,394,980 Current assets Receivables Receivables from related parties 110, Other receivables Total receivables 110, Cash and cash equivalents 52,844 30,388 Total current assets 163,625 31,300 Total assets 5,292,843 5,426,280 Equity and liabilities Equity Limited partners capital Retained earnings 3,123,148 3,361,556 2,165,227 1,885,299 Total equity 5,288,375 5,246,855 Long-term debt Payables to related parties Total long-term debt Current liabilities Trade payables Payables to related parties 1, ,863 Other payables 5 2,626 22,231 Total current liabilities 4, ,300 Total liabilities 4, ,425 Total equity and liabilities 5,292,843 5,426,280 Contingent liabilities 6 Related party disclosures 7 ATP PE Annual Report

20 Statement of changes in Equity ATP PE DKK'000 Limited partners capital Share premium Retained earnings Total Balance at 1 January ,361,556-1,885,299 5,246,855 Subscribed and paid-in during the year 584, ,415 Distributed during the year (822,823) - - (822,823) Retained earnings for the period , ,929 Balance at 31 December ,123,148-2,165,227 5,288,375 Balance at 1 January ,036,259-1,475,763 5,512,022 Subscribed and paid-in during the year 720, ,518 Distributed during the year (1,395,221) - - (1,395,221) Retained earnings for the period , ,536 Balance at 31 December ,361,556-1,885,299 5,246,855 In accordance w ith the limited partnership agreement, the investor have agreed to pay up to DKK'000 11,250,000 as the capital requirements arises in the company. At 31 December 2012, investors' remaining commitment totalled DKK'000: 1,916,797 Annual cash flow s: Contributed by establishment 2,408,985 Subscribed and paid-in ,056 Shares redeemed in 2002 (545,326) Subscribed and paid-in ,000 Subscribed and paid-in ,000 Distributed in 2004 (270,914) Subscribed and paid-in ,255 Distributed in 2005 (349,381) Adjusted at merger (62,112) Subscribed and paid-in ,940,841 Distributed in 2006 (957,834) Subscribed and paid-in ,493,067 Distributed in 2007 (1,326,553) Subscribed and paid-in ,400 Distributed in 2008 (1,089,294) Subscribed and paid-in ,243 Distributed in 2009 (292,608) Subscribed and paid-in ,069 Distributed in 2010 (264,635) Subscribed and paid-in ,518 Distributed in 2011 (1,395,221) Subscribed and paid-in ,415 Distributed in 2012 (822,823) 3,123,148 ATP PE Annual Report

21 Cash flow statement ATP PE DKK' Contributions to portfolio funds (308,908) (737,621) Distributions from portfolio funds 845,147 1,333,470 Cash flow from interest and dividends 57,439 83,548 Interests, other (87) (9) Realised exchange gains and losses (260) (2,743) Administrative expenses (6,366) (6,394) Changes in w orking capital (326,099) 30,297 Cash flow from operating activities 260, ,548 Contributions from investors 584, ,518 Distributions to investors (822,823) (1,395,221) Cash flow from financing activities (238,408) (674,703) Changes in cash and cash equivalents 22,457 25,845 Cash and cash equivalents at 1 January 30,388 4,543 Cash and cash equivalents at 31 December 52,844 30,388 ATP PE Annual Report

22 Notes DKK' Capital and exchange gains and losses, other securities and investments Realised capital gains, investments 488, ,907 Unrealised capital gains, investments 507, ,213 Exchange gains, investments 600, ,283 Total capital and exchange gains 1,596,155 2,064,403 Realised capital losses, investments (185) (11,045) Unrealised capital losses, investments (699,895) (1,010,111) Exchange losses, investments (625,598) (602,571) Exchange losses, forw ard contracts (26,866) (90,738) Exchange losses, cash accounts (260) (2,743) Total capital and exchange losses (1,352,805) (1,717,208) Total capital and exchange gains and losses, other securities and investments 243, ,195 2 Administrative expenses There are no employees in the company. No remuneration has been paid to the Board of Directors. 3 Other securities and investments Cost at 1 January 7,350,249 7,359,280 Adjustments to opening balance (410) - Additions during the year 308, ,980 Disposals during the year (358,161) (746,011) Cost at 31 December 7,300,586 7,350,249 Depreciation and impairment losses at 1 January (2,220,025) (2,023,237) Appreciation of previous impairment losses 52,640 91,018 Depreciation and impairment losses during the year (290,285) (343,254) Disposals during the year - 55,448 Depreciation and impairment losses at 31 December (2,457,670) (2,220,025) Appreciations at 1 January 264, ,111 Depreciation of previous appreciations (36,693) (23,863) Disposals during the year (53) - Appreciations during the year 58,292 74,508 Appreciations at 31 December 286, ,756 Carrying amount at 31 December 5,129,218 5,394,980 ATP PE Annual Report

23 DKK' Other receivables Receivables, administration Other payables Payables, investment commitment 2,626 22,231 2,626 22,231 6 Contingent liabilities Commitments, investments 1,821,257 2,032,780 Apart from the above, there are no guarantees or pledges of the company. 7 Related party disclosures Parties exercising control Arbejdsmarkedets Tillægspension (ATP) Ow ns 100% Ow ns 100% Kongens Vænge 8 DK-3400 Hillerød The annual report is included in the consolidated financial statements of ATP. The consolidated financial statements are available at w w w.atp.dk. ATP PE GP ApS, the general partner, is 100% ow ned by ATP. Other related parties: The follow ing are considered to be related parties: Supplerende arbejdsmarkedspension for førtidspensionister, Arbejdsgivernes Elevrefusion, Bonus til Elever, Skolepraktik, Tilskud fra Staten til skolernes praktikpladsopsøgende arbejde, Løntilskud til arbejdsgivere med elever, der uforskyldt har mistet en uddannelses-aftale, Feriekonto, Arbejdsmarkedets Erhvervssygdomssikring, Barsel.dk, Lønmodtagernes Garantifond, Finansieringsbidrag, Skattenedslag for Seniorer, Udbetaling Danmark, ATP PensionsService A/S, ATP Ejendomme A/S, ATP Private Equity K/S, ATP Private Equity Partners II K/S, ATP Private Equity Partners III K/S, ATP Private Equity Partners IV K/S, Private Equity Advisors ApS, ATP PE GP ApS, ATP Invest III F.M.B.A, ATP Alpha Fondsmæglerselskab A/S, ATP Real Estate Partners I K/S, ATP Real Estate Partners II K/S, ATP Real Estate GP ApS, ATP REP GP II K/S, ATP REP II ApS, Via Venture Partners Fond I K/S, Via Venture Partners Fond II K/S, Via Venture Partners A/S, ATP Timberland Invest K/S, ATP Tim GP ApS, ATP Alternative Investment K/S, CP2 (X)(3) Investments Trust, NOW:Pensions Investment A/S Fondsmæglerselskab, ATPPFA K/S, Ejendomsselskabet Norden I K/S, Greenhills Real Estate ltd., Nordic Biotec Public Equity K/S, ATPPD Lyngby A/S, ATPPD Århus A/S, ATPPD Odense A/S, FIH Holding A/S, NOW Pension Ltd. Transactions: ATP PE has purchased services at Private Equity Advisors ApS at market terms totalling DKK'000 6,157. In addition, no transactions have been carried out w ith related parties during the course of the year. ATP PE Annual Report

24 Portfolio Fund Domicile Segment Arator A/S Denmark Direct investment Arator konvertible obligationer Denmark Direct investment Axcel II (via Axcel II Management A/S) Denmark Small buy out Axcel Industriinvestor Denmark Small buy out Carl Allers Etablissement A/S, B Denmark Direct investment Dansk Erhvervsinvestering A/S Denmark Direct investment Dansk Vækstkapital (Equity) Denmark Fund-of-funds Dansk Vækstkapital (Loan to Vækstfonden) Denmark Fund-of-funds Danske PEP I Denmark Fund-of-funds Danske PEP II EUR Denmark Fund-of-funds Danske PEP II USD Denmark Fund-of-funds Danske PEP III EUR Denmark Fund-of-funds Danske PEP III USD Denmark Fund-of-funds Den Fynske Forskerpark A/S Denmark Direct investment DKA I Komplementar Denmark Venture DKA I P/S Denmark Small buy out Falck Holding A/S Denmark Direct investment Goldman Sachs PEP 2002 USA Fund-of-funds Goldman Sachs PEP 2004 USA Fund-of-funds Goldman Sachs PEP 2005 USA Fund-of-funds Goldman Sachs PEP IX USA Fund-of-funds HealthCap IV, L.P. Sweden Venture House of Businesspartners Denmark Direct investment IT Provider IV Sweden Venture Nordic Capital IV Sweden Mid buy out Nordic Mezzanine II Finland Small buy out Nordic Venture Partners II K/S Denmark Venture Nordic Venture Partners K/S Denmark Venture Nordic Venture Partners Seed K/S Denmark Venture NOVI A/S Denmark Direct investment P-N 2001 A Denmark Small buy out P-N 2001 B Denmark Small buy out Seed Capital I Denmark Venture Seed Capital II Denmark Venture Sunstone Biomedicinsk Venture Annex I Denmark Venture Sunstone Biomedicinsk Venture Annex III Denmark Venture Sunstone Biomedicinsk Venture III Denmark Venture Symbion A/S Denmark Direct investment Symbion Capital I Denmark Venture VP Securities Denmark Direct investment For further information please visit our website ATP PE Annual Report

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