ANNUAL REPORT GENERAL REPORT 2010 QUEST FOR GROWTH

Transcription

1 ANNUAL REPORT GENERAL REPORT 2010 QUEST FOR GROWTH

2

3 CONTENT GENERAL REPORT QUEST FOR GROWTH 2010 MESSAGE TO THE SHAREHOLDERS 3 RATIOS 4 KEY FACTS 5 PORTFOLIO 6 Holdings on December 31 st Portfolio composition: By country 8 By stock market 8 By sector 8 PROFILE AIM INVESTMENT POLICY 10 STRATEGY 12 CORPORATE GOVERNANCE 14 BOARD OF DIRECTORS 20 INVESTMENT MANAGERS REPORT 32 Investments in quoted companies 32 Investments in unquoted companies 34 & venture funds COMPANY PROFILES 38 Unquoted companies 38 Venture capital funds 42 Quoted companies 46 GENERAL INFORMATION 60 KEY INFORMATION 65 FINANCIAL CALENDAR 66 GLOSSARY 67

4 Pursuant to the Royal Decree of November 14 th 2007 regarding the obligations of issuers of financial instruments admitted to trading on a Belgian regulated market Quest for Growth is required to publish its financial report on an annual basis. The annual financial report comprises the audited annual accounts the annual report and the signed report of the Statutory Auditor. The integral version of the statutory annual accounts is deposited with the National Bank of Belgium pursuant to the articles 98 and 100 of the Company Code together with the annual report of the Board of Directors and the audit report. The Auditor has approved the statutory annual accounts without qualification with explanatory paragraph. The annual report the integral versions of the statutory annual accounts as well as the audit report regarding the said annual accounts are available on the website and may be requested free of charge from the following address: Quest for Growth NV Lei 19 box 3 B-3000 Leuven Belgium Phone: +32 (0) Fax: +32 (0) quest@questforgrowth.com 2 l GENERAL REPORT 2010

5 MESSAGE TO THE SHAREHOLDERS Dr. Jos B. Peeters Chairman Dear Shareholders In 2010 Quest for Growth booked a net profit of 20.6 million euro and obtained a return of 24 % on equity since the beginning of the fiscal year. Over the last two fiscal years altogether a profit of 39 million euro was booked. The profit of 2009 and 2010 does not fully compensate for the loss of 2008: the balance sheet following appropriation of the result still shows a transferred loss on December 31 st Consequently it is legally impossible for Quest for Growth to distribute a dividend from the profit of the past fiscal year to its shareholders. However the loss carried forward has meanwhile dropped to less than 6 million euro so that it can be hoped that we will be able to announce a distribution of dividends to the shareholders after the Annual General Meeting of March Not only the absolute performance of 2010 but also the relative performance was satisfying: the obtained return of 24 % is indeed considerably higher than the return of the reference indices Benmax New Markets 50 which amounts to 13 % and the American technology index Nasdaq showing an increase of 17 %. Only the same Nasdaq expressed in euro performs slightly better than Quest for Growth with 26 % in 2010 thanks to the increase of the dollar rate. Moreover the composition of the profit is excellent: both the quoted and the unquoted portfolio and the investments in other funds have contributed substantially to the global result. The profit contribution from the private equity activity stems mainly from two investments: Movetis listed on NYSE Euronext since December 2009 was the object of a public take-over bid made by the Irish Shire Plc. Quest for Growth which had already invested in Movetis since its inception decided to accept this offer. The contribution of Movetis to the profit of the fiscal year 2010 amounts to 4.5 million euro. A second successful exit from the unquoted portfolio concerned CoreOptics. CoreOptics was taken over by Cisco which generated a profit for Quest for Growth of 2.5 million euro. In 2010 only one new company was added to the private equity portfolio. Quest for Growth invested 1.5 million euro in Anteryon the world leader in WaferOptics technology and producer of camera modules for mobile phones. Quest for Growth has also committed to invest over a period of 5 years 15 million euro in the Capricorn Health-tech Fund. This decision fits in with the announced intention to merge Quest Management NV the current managing director of Quest for Growth and Capricorn Venture Partners NV a specialist in investing in unquoted companies active in the same sectors as Quest for Growth namely Cleantech Health-tech and ICT. The proposed merger is particularly important for Quest for Growth because this concentration of forces will lead to a higher deal flow both qualitatively and quantitatively for private equity investments and thereby further improve the future results of Quest for Growth. Nevertheless the evolution of the share price was disappointing: the increase of 14 % stayed far behind the increase of the net asset value. The discount of the share price to the net asset value amounted again to approximately 41 % at the end of the year. Possibly the growing perspective of a distribution of dividends can lead to a decrease of the discount in the course of the fiscal year 2011 as has happened in the past. Dr. Jos B. Peeters Chairman GENERAL REPORT 2010 l 3

6 RATIOS 1/01/2010 1/01/2009 1/01/2008 1/01/2007 1/01/2006 Balance sheet and results (in ) 31/12/ /12/ /12/ /12/ /12/2006 Net profit ( ) Ordinary dividend Total dividend Net asset value (NAV) after profit distribution Financial Assets (shares and receivables) Cash at bank and in hand and term deposits Total Assets Numbers per ordinary share (in ) * Profit per share (411) Gross dividend per share Net dividend per share NAV per share before profit distribution NAV per share after profit distribution Stock information Share price at year end ( ) Total number of outstanding shares Number of bought-in shares Number of warrants Stock market volume in shares Stock market volume ( 1000) Return NAV ** % % (41.81 %) 1.8 % 22.4 % Net return on equity (with regard to share price at year end) 0.0 % 0.0 % 0.0 % 0.6 % 19.3 % Pay-out ratio 0.0 % 0.0 % 0.0 % 96.7 % % Discount share price at year end with regard to NAV % % % 14.9 % 19.5 % * calculated with total number of outstanding shares at year end including bought-in shares. ** NAV return after profit distribution taking into account capital increases (time weighted rate of return). 4 l ALGEMEEN VERSLAG 2010

7 KEY FACTS 1/01/2010 1/01/2009 1/01/2008 1/01/2007 1/01/ /12/ /12/ /12/ /12/ /12/2006 Net profit / loss: ( ) Net profit / loss per share: (4.11) Ordinary dividend: Dividend to A and B shares: Profit / loss carried forward: ( ) ( ) Ordinary dividend per share (before withholding taxes): Ordinary dividend per share (after withholding taxes): December December December December December 2006 Net asset value (NAV) after profit distribution: (1) NAV / share after profit distribution: Stock Price / share: Number of Shares: (1) Capital increase ( or shares at 8.50 per share on April 30 th 2007) 700 STOCK PRICE VOLUME EURO Jan/10 Feb/10 Mar/10 Apr/10 Mai/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 0 Jan/10 Feb/10 Mar/10 Apr/10 Mai/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 GENERAL REPORT 2010 l 5

8 PORTFOLIO FINANCIAL ASSETS BREAKDOWN DECEMBER 31 ST 2010 Shares quoted companies Number of Change since shares 31/12/2009 Currency Share price Valuation in in % of Net Asset Value Company Sector / Market Software & Services ECONOCOM Euronext Brussels % INIT INNOVATION Deutsche Börse % LEGUIDECOM Euronext Paris % NEMETSCHEK Deutsche Börse % PHARMAGEST INTERACTIVE Euronext Paris % TRANSICS Euronext Brussels % UNIT 4 Euronext Amsterdam % Technology Hardware EVS BROADCAST EQUIPM. Euronext Brussels % HEWLETT PACKARD NYSE $ % LEM Holding SWX Swiss Exchange CHF % Pharma & Biotech ABLYNX Euronext Brussels % ROCHE HOLDINGS SWX Swiss Exchange CHF % TEVA PHARMACEUTICAL Nasdaq $ % Healthcare Equipement & Services STRATEC BIOMEDICAL Deutsche Börse % UNITED DRUG Dublin % Electrical & Engineering ANDRITZ AG Vienna % ARCADIS Euronext Amsterdam % FAIVELEY Euronext Paris % IMTECH Euronext Amsterdam % PFEIFFER VACUUM TECHNOLOGY Deutsche Börse % PHOENIX SOLAR Deutsche Börse % Semiconductors SMA SOLAR Deutsche Börse % Materials CENTROTEC Deutsche Börse % UMICORE Euronext Brussels % Other Sectors ACCELL GROUP Euronext Amsterdam % KPN Euronext Amsterdam % % Shares unquoted companies in % of Company Sector / Market Currency Valuation in Net Asset Value ACTIVE CIRCLE Software & Services % ANTERYON Technology Hardware % CLEAR2PAY Software & Services % IDEA AG Pharma & Biotech % KIADIS PHARMA Pharma & Biotech % MAGWEL Software & Services % NANTOFEN Pharma & Biotech $ % OXAGEN Ltd. Pharma & Biotech % PROSONIX Pharma & Biotech % SPHERE MEDICAL Healthcare Equipement & Services % SYNTAXIN Pharma & Biotech % TCLAND Pharma & Biotech % % 6 l GENERAL REPORT 2010

9 FINANCIAL ASSETS BREAKDOWN DECEMBER 31 ST 2010 Investments in Venture Funds Company Currency Last Valuation Date Valuation in in % of Net Asset Value CAPRICORN CLEANTECH FUND % CAPRICORN HEALTH-TECH FUND % CARLYLE EUROPE TECHNOLOGY PARTNERS I % CARLYLE EUROPE TECHNOLOGY PARTNERS II % CETP LP CO-INVESTMENT % KIWI I VENTURA SERVICOS % LIFE SCIENCES PARTNERS III % LIFE SCIENCES PARTNERS IV % SCHRODER VENTURES LSF II $ % VENTECH CAPITAL % VERTEX III $ % % Total Financial Assets - Shares % Amounts receivable Companies Face value in currency Currency Valuation in in % of Net Asset Value Company Loan notes KIADIS PHARMA Convertible loan note % MAPPER Convertible loan note % NANTOFEN Loan note $ % PROSONIX Loan note % TCLAND Convertible loan note % % Commercial paper DEME % CODRALUX (JAN DE NUL) % % Total Financial Assets - Amounts receivable % Total Financial Assets % Cash % Other Net Assets % Quest for Growth - Ordinary shares % Total Net Asset Value % Commitments Company Commitments Currency Commitment in in % of Net Asset Value CAPRICORN CLEANTECH FUND % CAPRICORN HEALTH-TECH FUND % CARLYLE EUROPE TECHNOLOGY PARTNERS I % CARLYLE EUROPE TECHNOLOGY PARTNERS II % LIFE SCIENCES PARTNERS III % LIFE SCIENCES PARTNERS IV % SCHRODER VENTURES LSF II $ % VENTECH CAPITAL % VERTEX III $ % % Total Commitments % GENERAL REPORT 2010 l 7

10 Distribution of the invested part of the portfolio by country Portugal Malta US Ireland Austria Israel Switzerland France United Kingdom Germany Netherlands Belgium Distribution of the invested part of the portfolio by stock market Dublin Vienna Euronext Paris Nasdaq Commercial Paper SWX Swiss Exchange Euronext Brussels Venture Funds Deutsche Börse Euronext Amsterdam Unquoted Distribution of the invested part of the portfolio by sector Semiconductors Health Care Equipment & Services Materials Other sectors Technology Hardware Funds & Diversified Companies Pharma & Biotech Electrical & Engineering Software & Services 8 l GENERAL REPORT 2010

11 GENERAL REPORT 2010 l 9

12 PROFILE AIM INVESTMENT POLICY Quest for Growth focuses on European technology based growth companies covering such sectors as life sciences information technology software semiconductors telecom electronics new materials and special situations in other growth sectors. As of December 31 st 2010 funds under management amounted to 106 million. Quest for Growth has been listed on Euronext Brussels since September 23 rd The Privak created by Royal Decree of April 18 th 1997 is an investment vehicle specially tailored to provide a suitable framework for investments in private equity and in growth companies. The Privak is a closed-end fund under the regulation of the Belgian Banking Commission and subject to specific investment and dividend payout rules. Investment rules - A minimum of 50 % of the portfolio must be invested in equity; - A minimum of 70 % of the portfolio (qualified investments) must be invested in: - Unquoted companies; - Companies quoted on a growth market or - Venture Funds with an investment policy similar to the Privak. However investments in quoted companies on a growth market can never exceed 50 % of the qualified investments. The company is neither permitted to invest over 20 % of the portfolio in one company nor to invest over 6.2 million in one company over one year. On November 8 th 2005 Quest for Growth raised its capital by 32 million and on April 30 th 2007 by 20 million. In accordance with the Royal Decree of April 18 th 1997 a period of 5 years is granted to the fund to comply with the investment rules of the Privak. 10 l GENERAL REPORT 2010

13 Tax Benefits The Privak benefits from important tax advantages. These benefits apply only if amongst others: - The investment rules are adhered to companies subject to a normal tax regime; - At least 80 % of the realised benefits of the fiscal year are paid out as a dividend. (Quest for Growth states in its Articles of Association that at least 90 % of the realised benefits must be paid out). If the Privak invests its assets in accordance with these rules the taxable basis will consist only of the disallowed expenses and abnormal or gratuitous benefits received. In practice the Privak pays almost no taxes. Taxation for Belgian retail investors and for legal entities subject to tax on legal entities Dividend payments No withholding tax is due on the part of the dividend that stems from the capital gains on shares realised by the Privak. The remaining part of the dividend is subject to a withholding tax of 15 % and these taxes are considered as final taxes. necessarily be booked as financial fixed asset to benefit from the DRD. The dividends distributed by the Privak will only be eligible for DRD to the extent that they stem from dividends that give right to DRD or exempt capital gains on shares satisfying article 192 BITC. Income that stems from dividends that do not give right to DRD or interest will be fully subject to corporate income tax at the rate of %. Therefore the Privak will allocate its dividends in function of the source of the distributed income. Capital gains Capital gains realised on the shares of the Privak will normally be subject to corporate income tax at the rate of %. Capital losses are not tax deductible. However it should be noted that since the Privak distributes almost all of its benefits capital gains remain limited. Investment policy Quest for Growth invests in growth companies with the objective of converting capital gains into tax-free income through the Privak structure. The largest part of the portfolio is invested in growth companies listed on European stock exchanges (Euronext London Stock Exchange Deutsche Börse etc) and other regulated markets. Capital gains Retail investors are in principle not subject to income tax on capital gains realised upon the sale of shares of the Privak. Taxation for Belgian investors who are subject to corporate income tax Dividend payments A withholding tax of 15 % is due on the dividend that is distributed by the Privak. However no withholding tax is due on the part of the dividend that stems from capital gains realised. The balance will be invested in unquoted companies working towards an introduction to a stock exchange or trade sale within 36 months. Investments in start-ups or early stage companies are allowed but will be exceptional. Within this category of unquoted companies up to 15 % of the assets can be invested in venture or private equity funds having an investment policy compatible with that of Quest for Growth. Distributed dividends will be eligible for Dividend- Received Deduction (DRD). There is neither a minimum participation condition nor a minimum holding period in the capital of the Issuer to benefit from the DRD. Moreover the participation in the Privak must not GENERAL REPORT 2010 l 11

14 STRATEGIE STRATEGY Quest for Growth is a public Privak (private equity Bevak) which aims at investing in high-growth companies. Our goal is to achieve capital gains which can be distributed to the shareholders as dividends without withholding tax being due. Bearing this target in mind Quest for Growth screens sectors that are expected to grow faster than others. The selected sectors are regularly evaluated and - if necessary - adjusted. Most sectors first experience a period of growth before the growth decreases and are frequently followed by consolidation when the sector has established itself. At its start-up in 1998 Quest for Growth - apart from biotechnology - primarily focused on information technology and telecommunication. Currently the interest in biotechnology is still the same as small-sized strongly growing biotech companies play an increasingly important role in the development of new medicines and correlate with large pharmaceutical companies which provide an interesting exit channel. On the other hand the interest in telecom companies - and particularly in operators - has significantly decreased as telecommunication is increasingly considered "utility" and the sector has already heavily consolidated. Information technology however must be treated in a far more differentiated way. Some "internet" companies which were founded around the turn of the century feature a stable cash-flow by now. However they frequently do not gain their competitive edge by technological advantage but by deploying a specific business model or for instance highly efficient logistics. On the other hand there are still a large number of innovative young enterprises which focus on developing state-of-the-art hard- and software in the field of ICT. Over the past years particularly cleantech or environmentally compatible technology became an attractive "investment theme" in Quest for Growth's investment universe. As it crosses traditional sector allocations cleantech is more of a theme than a sector: for instance cleantech enterprises can be found in the sectors (renewable) energy and (new) materials. But numerous other kinds of companies acting in different sectors such as engineering soft- or hardware more and more frequently focus upon the cleantech aspect of their business. Today cleantech makes up for approx. 50 % of Quest for Growth's quoted portfolio. Within the retained sectors or themes and their respective segments Quest for Growth attempts to identify prospective "winners" among quoted companies as well as private companies. With unquoted companies Quest for Growth specifically seeks for opportunities within the "later stage" segment. Rather than providing seed money (i.e. starting capital) or finance start-ups Quest for Growth seeks for companies that already exhibit a certain positive development: companies which hold a marketable product or are just about to. Companies that develop a business plan which should relatively soon result in a positive cash-flow are preferred. Exceptions are biotech companies which have specific dynamics and require significant capital already in early stages but also allow for faster exits. When initially investing in an unquoted company Quest for Growth will always inquire the realistic chance of an exit within the first three years following the initial investment. Both an initial public offering (IPO) as well as an acquisition (trade sale) can provide for liquidity. However every once in a while Quest for Growth still decides to initially invest into a company which is obviously far from an exit and intends several more rounds of financing. These are companies with exceptional potential and where a first rather limited investment is most of all considered as an entrance ticket to later stage financing rounds. Quest for Growth will often repeatedly invest in the same company but will confine to capital expenditures that in total do not exceed 5 % of the entire portfolio. For initial investments Quest for Growth thus estimates the expected future capital demand and bears the respective findings in mind when it defines the initial investment amount. This approach is essential for being able to still "follow" subsequent fund raising i.e. to still hold sufficient investment opportunities to not be diluted. Also Quest for Growth tries to avoid holdings in unquoted companies below 0.5 % of its own capital. Evaluations negotiations and decisions to invest into a private company as well as the related sequels constitute a work-intensive process which bears rapidly accumulating costs for smaller transactions. 12 l GENERAL REPORT 2010

15 From a geographical point of view Quest for Growth mainly aims at European companies. Non-European enterprises must feature an explicit relation to Europe. This enables Quest Management NV the asset manager to efficiently follow the portfolio companies closely. In addition to direct investments in unlisted companies Quest for Growth also invests in other funds that use an investment strategy that closely matches the investment strategy of Quest for Growth itself. Quest for Growth selected these funds based on the quality of their managers but also looked at potential strategic value. This added value is for example the focus of the third fund in a geographic market which is interesting for Quest for Growth but which they themselves represent less well and the acquisition of co-investment rights which Quest for Growth itself directly invests in the underlying businesses. Quest for Growth has also committed to invest over a period of 5 years 15 million euro in the Capricorn Healthtech Fund. This decision fits in with the announced intention to merge Quest Management NV the current managing director of Quest for Growth and Capricorn Venture Partners NV a specialist in investing in unquoted companies active in the same sectors as Quest for Growth namely Cleantech Health-tech and ICT. The proposed merger is particularly important for Quest for Growth because this concentration of forces will lead to a higher deal flow both qualitatively and quantitatively for private equity investments and thereby further improve the future results of Quest for Growth. Apart from direct investments in unquoted companies Quest for Growth also invests in other funds that follow an investment strategy similar to its own. Quest for Growth first of all selects these funds as to their managers quality but also takes potential strategic added value into account. The respective added value may for instance be a focus onto a geographic market which is of interest for Quest for Growth but in which it is not well represented. Co-investment rights - which allow Quest for Growth to directly invest into the underlying companies of the respective fund - occasionally may also constitute attractive added value for fund investments. The investment strategy for publicly traded companies is largely similar to the one applied to unquoted enterprises. As far as the terms of sectors and geography are concerned the respective interest is nearly equal. Also the managed concentration limit exceptionally one single portfolio company may amount to more than 5 % of the net asset value - is the same. Compared to the unquoted portfolio the quoted portfolio can react quicker to potential developments in the selected sectors. The quoted portfolio can be managed much more dynamically; with unquoted companies both the investment as well as the disinvestment is a highly timeconsuming process. Besides that minority shareholders can usually not force an exit. As example the recently added focus on cleantech may serve: it is already significantly present within the quoted portfolio however it is far less present in the unquoted portfolio. On the other hand highly innovative niche players are almost exclusively found in private companies as they are still too small and risky to go public. 100 % of Quest for Growth's quoted portfolio is managed actively; benchmarks are exclusively applied with hindsight to determine the performance. Stock picking is based on a thorough analysis: important criteria are the estimated growth and the price-earnings-ratio. The majority of shares within the portfolio are small and medium-sized companies and - with respect to their dimension - match well with the unquoted portfolio. Quest for Growth is very concerned about being in regular and personal contact with those companies' managements. Apart from medium-sized companies Quest for Growth will occasionally also invest in large companies. This is particularly relevant for the portfolio's management in practice: due to their higher liquidity short-term adjustments can be made quicker by means of larger market capitalizations. Quest for Growth rarely uses derivative products. The purchase of index put options occasionally serves to reduce dependency from the general stock market atmosphere. In turn the issuance of call options for individual shares of the portfolio at times serves to possibly improve the portfolio's rate of return. Quest for Growth mainly invests in Euroland limiting its foreign exchange risks. Significant exchange risks of large holdings expressed in a currency little correlating to Euro are largely covered by forward agreements. GENERAL REPORT 2010 l 13

16 CORPORATE GOVERNANCE CORPORATE GOVERNANCE STATEMENT 2009 Corporate governance is a term for business management. Within the world of business the term is used for the manner in which the business is to be managed properly efficiently and responsibly. It mainly covers the relations with the most important stakeholders in the business such as the owners (shareholders) employees customers and society as a whole. In 2004 the Corporate Governance Commission published the first edition of the Belgian Corporate Governance Code for listed companies. On 12 March 2009 the second edition of the Belgian Corporate Governance Code was published. The revised Code was the result of work carried out by the Corporate Governance Commission chaired by Herman Daems. The 2009 Code takes into account the European and Belgian rules in relation to corporate governance developments in codes and best practices in the field of corporate governance in other EU member states and the expectations expressed by society and stakeholders against a background of widesweeping change in the wake of the financial and economic crisis. The Code sets out principles provisions and guidelines. There are nine principles constituting the pillars of good corporate governance. The provisions are recommendations that set out how the principles are applied in practice. Companies are expected to fulfill these provisions or to explain why it is that they do not do so in light of their own particular circumstances. The Code is based on the comply or explain principle. The flexibility this principle offers has been opted for rather than requiring strict compliance with a detailed list of rules in order that adequate account can be taken of the specific features of different companies such as their size their shareholder structure their business risk profile and management structure. In certain cases companies may therefore deviate from the Code s provisions provided they give a cogent explanation for doing so. Each company determines what is to be regarded as best practice in its given situation and provides explanations for its choices in its Corporate Governance Statement. Smaller companies for instance may view certain provisions are being disproportionate or of less relevance. Moreover holding companies and investment companies may have a different management structure which may affect how relevant certain provisions 14 l GENERAL REPORT 2010

17 are. Companies that give valid reasons for why they do not adhere to the Code in their Corporate Governance Statements can still be deemed to be in compliance with the Code. The provisions are supplemented with guidelines which act as guidance on how companies apply or interpret the Code s provisions. The Act of 6 April 2010 to reinforce corporate governance in listed companies requires those undertakings to indicate the code that they apply in relation to corporate governance. It also has to be stated where the code in question can be consulted. If the company does not fully comply with the corporate governance code it has to state which parts of the code it does not apply and why. Amendments to the companies legislation have made a number of corporate governance principles compulsory. These statutory provisions cannot be deviated from and the comply or explain principle is not applicable. Companies are now under an obligation to include a corporate governance statement and a remuneration report in their annual report. The report also has to include a description of the most-important features of the company s internal control and risk management systems in conjunction with the financial reporting procedure. THE COMPANY APPLIES A CLEAR GOVERNANCE STRUCTURE Quest for Growth s audit committee has approved an explanation of its implementation of internal control and risk management mechanisms as drawn up by Quest Management in execution of its duties as managing director. The most important features of its internal control and risk management systems are set out in the following: Internal Control The daily management of Quest for Growth is entrusted to Quest Management NV. The board of directors of Quest for Growth and in particular its audit committee exercise supervision of: the quality and integrity of the internal control the bookkeeping and the financial reporting process of the company; the financial reporting and other financial information that is provided to the shareholders by the company; organisation of the internal control in relation to the company s bookkeeping and financial transactions and compliance with the laws incumbent on the company. Quest for Growth complies with virtually all of the provisions set out in the 2009 Code and in some respects goes further than required by the provisions. The Corporate Governance Charter may be consulted on the Quest for Growth website at As managing director Quest Management NV has set up a number of procedures to ensure the quality and integrity of the company s financial reporting. These procedures are enshrined in the procedural books of Quest for Growth and Quest Management and are updated as and when required. Brief explanation of a number of provisions in the corporate governance code that Quest for Growth complies with in a particular manner or which Quest for Growth deviates from The most important characteristics and/or objectives of the internal control system employed by Quest Management are: the availability of accurate financial and management information; protecting the company s assets; supervision of compliance with the laws that the company is subject to; fraud prevention; enhancing the quality of reporting; identifying and rectifying incorrect data; instituting measures to prevent identified errors recurring in the future; GENERAL REPORT 2010 l 15

18 guarantees for the continuity of the reporting by means of clear contractual arrangements laying down responsibilities and documenting processes; increasing operational efficiency; internal and external transparency. Risk Management The board of directors closely monitors the principal risks that the company is exposed to. For Quest for Growth risk management is an important given. The main risks are market risk (fluctuations on the stock market and liquidity risk) and with respect to unlisted companies the risk of non-performance which implies a valuation risk. Other managed risks concern mainly foreign currency positions and operating risks. The board of directors is reported to on a monthly basis by Quest Management on the entire portfolio the cash positions and the debt positions. This reporting places the board of directors in a position to exercise effective control over the diversified portfolio and cash positions. The positions are discussed each quarter by the board of directors and adjusted where necessary. THE COMPANY HAS AN EFFECTIVE EFFICIENT BOARD OF DIRECTORS WHICH TAKES DECISIONS IN THE INTERESTS OF THE COMPANY The agenda of each board meeting is made available to each of the members prior to the meeting together with the underlying documentation and resolution proposals. The draft minutes of each meeting are sent to all the members several days later for examination and completion of any gaps. The final draft minutes are discussed and approved at the next board meeting. Mr René Avonts acts as the secretary to the board of directors in his capacity as the permanent representative of Quest Management NV the company s managing director. Directors each individually have access to the company s secretary. EACH DIRECTOR DEMONSTRATES INTEGRITY AND DEVOTION TO THE TASK Each director arranges his personal and business interests so that direct and indirect interests and conflicts with the company are ruled out. Transactions between the company and its directors require to take place at arm s length. The board of directors issues a policy for relevant transactions and other contractual links between the company including its associated undertakings and its directors that do not otherwise fall under the statutory rules on conflicts of interests. This authority is conferred by the board of directors on the audit committee. Above all the audit committee closely monitors situations or transactions carried out by the company in which any of the following parties or legal entities has a direct or indirect interest: the management company; persons having a connection to the management company; directors managers and persons responsible for the daily management of Quest for Growth or the management company. Directors managers and persons responsible for the daily management of Quest for Growth or the management company are bound under a code or ethics code. THE COMPANY HAS A RIGOROUS TRANSPARENT PROCEDURE FOR APPOINTING AND EVALUATING ITS BOARD AND ITS MEMBERS The members of the board of directors are appointed for a period of 3 years. They are re-elected following an evaluation by the board of directors led by the chairman. In this respect the chairman consults separately with each of the individual directors. The non-executive directors evaluate interaction with the managing director on an annual basis. To this end they meet at least oncea year in the absence of the managing director. Mr Marc Pauwels acts as secretary to the audit committee as a delegate of Quest Management NV. Each of the directors has individual access to the audit committee s secretary. 16 l GENERAL REPORT 2010

19 THE BOARD OF DIRECTORS SETS UP SPECIALIST COMMITTEES The Corporate Governance Code recommends that specialist committees should be set up at the level of the board of directors: an audit committee a compensation committee and an appointments committee. Under its articles of association Quest for Growth provides only for an audit committee. The board of directors has decided not to set up compensation or appointments committees. This decision is in line with the company s simplified structure and contributes to keeping the company s cost structure down. The Audit Committee The Quest for Growth audit committee meets only twice a year which is less than set down in the code; it also meets whenever a meeting appears necessary. In principle meetings of the audit committee take place before the board of directors approves the halfyearly and annual figures. Once the company requires to report under IFRS the audit committee will meet quarterly four times a year or whenever a meeting appears necessary. The board of directors of Quest for Growth carries out the responsibilities that would fall to be carried out by a compensation committee. Each listed company sets up a compensation committee within its board of directors. However listed companies that fulfil at least two of the following three criteria on a consolidated basis: - average workforce of fewer than 250 during the accounting period in question - balance sheet total of EUR or less - annual net turnover of EUR or less are not under an obligation to set up a compensation committee within their board of directors but if they do not the duties allotted to the compensation committee have to be carried out by the board of directors on condition that the company has at least one independent director and if the chairman of the board of directors is an executive member he does not chair that body when it acts in its capacity as a compensation committee. Within the board of directors there is an investment committee that decides on all direct investments in unlisted undertakings. GENERAL REPORT 2010 l 17

20 The investment committee has delegated powers to an internal investment committee of the managing director as regards coinvestment decisions of up to EUR via funds and for follow-on investments of up to 50% of already existing investments up to a cumulative value of EUR The chairman of the investment committee does nevertheless have a right of evocation and may at any time decide not to submit proposals to the investment committee. THE COMPANY SETS DOWN A CLEAR STRUCTURE FOR THE EXECUTIVE MANAGEMENT THE COMPANY REMUNERATES THE DIRECTORS AND MEMBERS OF THE EXECUTIVE MANAGEMENT IN A FAIR AND RESPONSIBLE MANNER Report by the Compensation Committee: Remuneration of non-executive directors: The non-executive directors that are independent directors receive annual fixed emoluments of seven thousand five hundred euros (EUR ). In addition for each meeting of the board of directors the audit committee and the investment committee which they attend they receive a fee of five hundred euros (EUR ). If they are independent directors the chairmen of the investment committee and the audit committee receive an emolument of seven hundred and fifty euros (EUR ) for each meeting of the audit committee and investment committee that they attend (resolution of the annual general meeting of 15 March 2007). For accounting period 2010 the following payments have been accorded to non-executive directors: Auxilium Keerbergen BVBA represented by Mr Frans Theeuwes: EUR Pamica NV represented by Mr Michel Akkermans: EUR Tacan BVBA represented by Mr Johan Tack: EUR Gengest BVBA represented by Mr Rudi Mariën: EUR Bergendal & co SPRLrepresented by Earl Diego du Monceau de Bergendal: EUR Koenraad Debackere waives all emoluments as an independent director. Remuneration of executive directors: The board of directors delegates the daily management of the company to one or more directors chosen from the directors appointed from a list of nominations put forward by the holders of the class A shares. They bear the title of managing director. Quest Management NV has been appointed as managing director by the board of directors. The board of directors fixes the remuneration paid for executing these duties. For the purposes of deliberating and resolving on the fee for carrying out the duties of managing director the company must first go through the procedure set forth in subsections 2 and 3 of section 524 of the Companies Code. Hence the resolution must first be submitted for assessment by a committee of three independent directors assisted by one or more independent experts. The board of directors acting in its capacity as the compensation committee entered into an agreement with Quest Management on 15 March 2010 for performance of the duties of managing director. The remuneration for execution of these duties for the period from 1 April 2010 to 31 March 2012 amounts to EUR per annum. The total management fee for the year 2010 amounted to EUR The managing director s emoluments can be limited on the basis of an overall cost ratio of 3.5% of the net book value. In addition to the management fee this expenditure also covers all other operating expenses such as the custodian s fee the bookkeeping costs directors fees the costs for periodic reporting audit etc. Should the upper limit be exceeded measures must be considered in joint consultation between Quest Management and the independent directors that are designed to enable the company to bring the cost ratio back below the 3.5% maximum limit. The overall cost ratio calculated for accounting period 2010 amounted to 2.24% of the equity figure at the end of the previous period before profit distributions. On the basis of the equity at the end of the current accounting period the overall cost ratio amounts to only 1.80%. 18 l GENERAL REPORT 2010

21 THE COMPANY ENGAGES IN DIALOGUE WITH ITS SHAREHOLDERS AND POTENTIAL SHAREHOLDERS BASED ON A MUTUAL UNDERSTAN- DING OF EACH PARTY S OBJECTIVES AND EXPECTATIONS A duty of notification arises whenever certain percentages of the total voting rights are exceeded or dropped below. The statutory thresholds are fixed at 5% of the voting rights 10% 15% etc. There are 5% bands in each case. Any party exceeding a threshold requires to give notice at the time the threshold is exceeded or dropped below. Up to 31 December 2010 Quest for Growth received two notifications: Name and address % Date threshold passed Dexia Insurance Belgium SA Livingstonelaan BrusselS BelgiUM Laxey Partners Limited 4 th Floor Derby House 64 Athol Street Douglas Isle of Man IM1 1JD United Kingdom % 21/06/ % 17/09/2010 The requisite percentage of shares that a shareholder or shareholders have to own in order to be able to call a general meeting may not be more than 5% of the share capital. In accordance with the company s articles of association and the Companies Code (section 532) Quest for Growth follows the rule that shareholders possessing more than 20% of the shares may call a general meeting. A maximum of 5% is regarded as less appropriate given the relatively modest scope of the business: organising extraordinary general meetings could incur significant financial expense having a negative impact on the results achieved by the fund. GENERAL REPORT 2010 l 19

22 THE BOARD OF DIRECTORS Composition appointments and expiry of term of office In accordance with the Articles of Association of Quest for Growth the management of the company is entrusted to a Board of Directors. The Board of Directors is composed of at least eight members with the maximum number of members set to fifteen. The holders of Class A and Class B shares each have the right to put forward a list of prospective directors. The General Meeting elects four directors from each list. The holders of ordinary shares have the right to put forward the names of one or more prospective directors. The General Meeting may elect a maximum of seven directors from that list. The General Meeting of Shareholders appoints Board members for a period that must not exceed three years. Directors whose terms of office have expired may be re-appointed. The members of the Board of Directors during the financial year are named below together with the expiry of their current term of office. On December 31 st 2010 the Board of Quest for Growth was composed of eleven members. Five Independent Directors sit on the Board of Quest for Growth. The criterion of independence is based on Article 526ter of the Belgian Companies Code. Date on which the term of office expires: at the end of the General Meeting that assesses the results for the financial year ending on December 31 st Proposed by shareholders of class: Chairman Jos B. Peeters 2010 A Managing Director Quest Management NV represented by René Avonts Managing Director 2010 A Vice Chairman Bergendal & CO SPRL (1) represented by Count Diego du Monceau de Bergendal 2010 B Vice Chairman Tacan BVBA (1) represented by Johan Tack 2010 A Director Euro Invest Management NV represented by Philippe Haspeslagh 2010 A Director De Meiboom NV represented by Edward Claeys 2010 B Director Auxilium Keerbergen BVBA (1) represented by Frans Theeuwes 2010 B Director Gengest BVBA (1) represented by Rudi Mariën 2010 Ordinary Director Koen Debackere (1) 2010 Ordinary Director Dirk Vanderschrick 2010 B Director Pamica NV (1) represented by Michel Akkermans 2010 Ordinary (1) Independent Director 20 l GENERAL REPORT 2010

23 The Board of Directors met 7 times this year. 25/01/ /03/ /04/ /07/ /10/ /11/ /12/2010 Jos B. Peeters P P P P P P P Quest Management NV René Avonts Euro Invest Management NV Philippe Haspeslagh Tacan BVBA Johan Tack Bergendal & Co SPRL Count Diego du Monceau de Bergendal P P P P P P P P P A A P P P P P P P P P P P A P P P P P Dirk Vanderschrick P P P P A P P Auxilium Keerbergen BVBA Frans Theeuwes De Meiboom NV Edward Claeys Gengest BVBA Rudi Mariën Pamica NV Michel Akkermans P A P P P P P P P P P P P P P P P A P A P P P P A P P A Koenraad Debackere A A A A A A A P = present A = absent The Investment Committee met 6 times this year. 26/01/2010 TcLand Expression 24/02/2010 Anteryon 31/05/2010 Anteryon 16/06/2010 Kind Consumer 14/07/2010 Syntaxin 22/07/201 Novashunt Jos B. Peeters P P P P P P Quest Management NV René Avonts Euro Invest Management NV Philippe Haspeslagh Dexia Bank Goedele Ertveldt De Meiboom NV Edward Claeys Gengest BVBA Rudi Mariën Pamica NV Michel Akkermans P P P P P P P P P P A P P P P P P P P A P P P P P P A P A A A P P A P P P = present A = absent The Audit Committee met twice this year. 25/01/ /07/2010 Tacan BVBA Johan Tack P P Bergendal & Co SPRL Graaf Diego du Monceau de Bergendal P P Auxilium Keerbergen BVBA Frans Theeuwes P P P = present A = absent The Committee of Independent Directors met once this year. 25/01/2010 Auxilium Keerbergen BVBA Frans Theeuwes P Bergendal & Co SPRL Graaf Diego du Monceau de Bergendal P Gengest BVBA Rudi Mariën P P = present A = absent GENERAL REPORT 2010 l 21

24 DR JOS B. PEETERS - CHAIRMAN BERGENDAL & CO SPRL VICE CHAIRMAN - INDEPENDENT DIRECTOR - REPRESENTED BY COUNT DIEGO DU MONCEAU DE BERGENDAL TACAN BVBA VICE CHAIRMAN INDEPENDENT DIRECTOR - REPRESENTED BY MR JOHAN TACK Jos B. Peeters is the founder and managing partner of Capricorn Venture Partners NV a Leuven based venture capital company. He was Managing Director of BeneVent Management NV for seven years a venture capital operation associated with the Kredietbank-Almanij Group. Previously he worked for the international technology-based consulting group PA Technology and the Bell Telephone Manufacturing Company which is now part of Alcatel. Dr Peeters holds a PhD in Physics from the University of Leuven. He has also been Chairman of the European Venture Capital Association (EVCA) and co-founder of EASDAQ the pan- European stock market for growth stocks. He is currently director of EASDAQ NV. Furthermore he is member of the Global Advisory Board of the London Business School Fellow of the Hogenheuvelcollege and Fellow and Chairman of Science@Leuven.be both from the KU Leuven. Count Diego du Monceau de Bergendal has a wealth of senior management experience. Following a successful career in corporate finance with Merrill Lynch and Swiss Bank International Corporation he joined the GIB Group where he rose to the position of Managing Director. He subsequently became GIB Group Chief Executive Officer and he is now Chairman of Groupe 3 Suisses International (FR) and an Independent Director of ING Belgium Continental Bakeries (Netherlands) Euroshoe Group WE International and GAM Holding (CH). He is also on the Boards of several non-profit organisations. Johan Tack holds a diploma in Economic Sciences and a special diploma in Management from the University of Ghent. Since 1976 he has been employed in various commercial and managerial posts at Generale Bank (now Fortis Bank). As a member of the bank's Executive Committee he was responsible for Marketing and Finance and Control ( ) Asset Management ( ) and the Credit Department ( ). In 1981 Mr Tack set up the Vlaamse Investeringsvennootschap now Fortis Private Equity where he was Managing Director until 1983 and a Board Member until Today he is Chief Executive Officer of Aon Belgium and Aon Luxemburg and Independent Director of Group Maes. 22 l GENERAL REPORT 2010

25 QUEST MANAGEMENT NV - MANAGING DIRECTOR - REPRESENTED BY MR RENÉ AVONTS MEMBER OF THE EXECUTIVE COMMITTEE - QUEST MANAGEMENT NV EURO INVEST MANAGEMENT NV DIRECTOR - REPRESENTED BY PROF PHILIPPE HASPESLAGH DE MEIBOOM NV - DIRECTOR - REPRESENTED BY MR EDWARD CLAEYS Quest Management NV the managing director of Quest for Growth NV carries out due diligence investigations recommends investment and divestment decisions monitors and produces valuation overviews of the portfolio. René Avonts graduated as a commercial engineer from the University of Leuven in 1970 and started his career in the IT division of Paribas Belgium. He joined the International Division in 1972 and became head of that Department in He was elected member of the Executive Committee and Director in 1995 with responsibility for Capital Markets and Corporate Banking. In 1998 he became a member of the Executive Committee of Artesia Bank and Bacob in charge of Financial Markets and Investment Banking as well as chairman of Artesia Securities the group's equity broker that was renamed Dexia Securities following the acquisition of Artesia by Dexia in He left the bank in March 2002 at the time of the legal merger between Dexia and Artesia. He was subsequently appointed Director and CFO of Elex NV: the reference shareholder of for example Melexis Xfabs and EPIQ. René Avonts joined Quest Management NV in September 2003 and he has been a Director of Quest for Growth since its IPO in Philippe Haspeslagh is the Dean of the Vlerick Leuven Gent Management School. Previously he was a professor at INSEAD where he held the Paul Desmarais Chair in Active Ownership. He earlier taught as a guest lecturer at the Harvard Business School and the Stanford Business School and was Chief of Cabinet for the Belgian Minister of Agriculture and of Small and Medium Enterprises. His research covers the areas of Mergers and Acquisitions Corporate Strategy Managing for Value and Corporate Governance. Philippe Haspeslagh is the founder of INSEAD s International Directors' Forum and also Chairman of Dujardin Foods NV Quest Management NV and Capricorn Venture Partners NV. Furthermore he is a Board member of Vandemoortele SA and of Governance for Owners LLP and a non-executive partner in Procuritas which is a management buy-out fund. Since 2003 Edward Claeys has been active in the ERP and e-commerce sector for small and medium businesses. In addition to being Managing Director of Software Developments NV (SDE) and Natch.be. He is also active within the Board of Directors of Capital@Rent the Investment Holding Cennini NV and De Meiboom NV. GENERAL REPORT 2010 l 23

26 PAMICA NV - INDEPENDENT DIRECTOR - REPRESENTED BY MR MICHEL AKKERMANS AUXILIUM KEERBERGEN BVBA - INDEPENDENT DIRECTOR - REPRESENTED BY MR FRANS THEEUWES GENGEST BVBA - INDEPENDANT DIRECTOR - REPRESENTED BY MR RUDI MARIËN Michel Akkermans is a Civil Electrotechnical Engineer and also holds a special degree in Business Economics both from the University of Leuven. Michel Akkermans is currently CEO and Chairman of Clear2Pay a software technology company specialising in payment solutions. Michel is also a member of the Advisory Board at GIMV Technology and holds Board positions at a number of companies among which Agfa-Gevaert NV and as Chairman of RealDolmen. Frans Theeuwes graduated in commerce and finance from UFSIA Antwerp. He was an accountant audit partner at KPMG and professor at the AHH (presently part of Lessius Hogeschool). He was auditor of banks insurance companies as well as commercial and high-tech companies quoted on the Belgian and French stock exchanges and the auditor of affiliated companies of US UK and Japanese multinationals. Consequently he is familiar with US GAAP IAS UK GAAP and local accounting standards. Mr Theeuwes is an Independent Director on local Boards of national and international non-profit organisations. Rudi Mariën holds a degree in Pharmaceutical Sciences from the University of Ghent and specializes in clinical biology. He was a co-founder of Innogenetics. Mr Mariën has been the founder shareholder and Managing Director of several clinical reference laboratories including Barc NV a leading international centralised clinical laboratory dedicated to pharmaceutical studies. He was also a reference shareholder and Chairman of Innogenetics. Moreover he is CEO of Gengest Bvba and Biovest ComVa. Through his management company Gengest Bvba Mr Mariën has board mandates in different quoted (Devgen NV Quest for Growth NV) and unquoted biotech companies. Finally Mr Mariën was vice-president of Cerba European Lab and is a member of the American Association for Clinical Chemistry. 24 l GENERAL REPORT 2010

27 PROF. KOEN DEBACKERE - INDEPENDENT DIRECTOR MR DIRK VANDERSCHRICK - DIRECTOR Professor Debackere holds an MSc in Electrical Engineering and a PhD in Management. He studied at the University of Ghent and at MIT (Cambridge US). He is a full-time professor in Technology and Innovation Management at the University of Leuven has been a visiting professor at Nijmegen Business School and is a faculty member at the Vlerick Leuven Ghent Management School. He has been a guest lecturer at various European business schools (Manchester Kiel Tilburg INSEAD) and he obtained Best Research Paper Awards from the American Academy of Management and the Decisions Sciences Institute. Professor Debackere is the Managing Director of the University of Leuven's Research & Development Department and Chairman of Gemma Frisius Fund the University of Leuven's venture capital fund. In November 1999 he was appointed Chairman of Leuven Innovative Networking Circle (LINC) and was appointed as the General Manager of the University of Leuven in Dirk Vanderschrick has a degree in Commercial and Financial Sciences and also obtained a Masters of Business Administration degree from the University of Leuven. Since 1987 Dirk Vanderschrick has held various financial and management positions at Arthur Anderson Chase Handelsbank BACOB Artesia and Dexia. As member of the Executive Committee of Dexia Bank he was responsible for the financial markets ( ). He subsequently became COO. Since April 2009 he has been CFO and Deputy CEO of Dexia Insurance. From 2007 until 2010 he represented the Belgian banking sector in the Board of Directors at SWIFT. He is also Director of the French Insurance company Creserfi the Luxembourg DLP and two Irish companies. GENERAL REPORT 2010 l 25

28 Operation The Board of Directors appoints a Chairman from amongst the Board members who are nominated by the holders of Class A shares. For the Board of Directors to deliberate at least half its members must be present or represented and at least two Class A directors and two Class B directors must be present or represented. If this quorum is not reached a new meeting may be convened at which the items on the agenda of the earlier meeting may be validly discussed and decided upon if at least four Directors are present or represented. Where the law permits resolutions of the Board may be passed by written agreement of the members. All decisions by the Board of Directors must be taken by a majority of the votes present. Blank or invalid votes are not counted as cast votes and the person chairing the meeting has the casting vote. The company is validly represented by the Managing Director and a Director acting jointly. The company is also validly represented by three Directors acting jointly at least two of whom must have been elected on a proposal from the holders of Class A or B shares. Within the terms of their mandates the company is validly bound by special proxies. For day-to-day management issues the company is validly represented only by the Managing Director and a director acting together. They may jointly delegate their powers for particular and specific matters to an agent regardless of whether or not that agent is a shareholder or a Director. Meetings The Board of Directors met six times during the fiscal year. Besides recurring tasks such as approving the quarterly reports the semi annual and the annual report the Board also covered other topics such as the investment policy compliance to the legal boundaries regarding investment obligations and restrictions corporate governance developments regarding IFRS the share buy-back programme possible strategic partnerships and other strategic matters. Certain Board members were unable to attend all Board meetings and were represented in such instances. Remuneration Independent Directors receive a fixed annual remuneration of seven thousand five hundred euros ( ). In addition to this they receive a remuneration of five hundred euros ( ) for every Board meeting Audit Committee or Investment Committee meeting they attend. When they are Independent Directors the chairmen of the Investment and the Audit Committee receive a remuneration of seven hundred and fifty euros ( ) for every Investment or Audit Committee meeting they attend (decision made at the AGM of March 15 th 2007). Normal and justified expenses that Directors can claim to have made in the execution of their function will be reimbursed and are taken into account under the general expenses. For this fiscal year the attendance fees amount to As an Independent Director Koenraad Debackere abstains from all fees. The four Directors nominated by the holders of Class A shares with the exception of TACAN BVBA and the two Directors representing strategic shareholders receive no fee. Day-to-day management The Board of Directors delegates the day-to-day management of the company to one or more Directors selected from the Directors proposed by the holders of class A shares. They have the title of Managing Director and the Board of Directors determines the remuneration for that position. The Board has appointed Quest Management NV as the Managing Director. The day-to-day management is organised in such a way that it is supervised by the Audit Committee on behalf of the Board of Directors. In particular the Audit Committee controls any company transaction or any situation where one of the following persons or legal entities either has a direct or indirect interest: The management company or the depository bank; Persons linked to the management company or the depository bank; Board members Directors and persons responsible for the day-to-day management of Quest for Growth the management company or the depository bank. 26 l GENERAL REPORT 2010

29 Managing Director The Board of Directors has entrusted the day-to-day management of the company to Quest Management NV. Quest Management was created in 1998 as an independent investment manager specialising in managing portfolios of emerging technology and lifesciences growth market stocks. Quest Management is represented on the Board of Directors of Quest for Growth by Mr René Avonts. At the end of the financial year the Quest Management staff consisted of the Managing Director and seven employees (5.4 FTE). GENERAL REPORT 2010 l 27

30 René Avonts Managing Director René Avonts graduated from the University of Leuven in 1970 where he studied commercial engineering and started his career in the IT division of Paribas Belgium. He joined the international division in 1972 and became head of that department in He was elected member of the executive committee and director in 1995 with responsibility over capital markets and corporate banking. In 1998 he became a member of the executive committee of Artesia Bank and Bacob in charge of financial markets and investment banking as well as chairman of Artesia Securities the group s equity broker which was renamed Dexia Securities after the acquisition of Artesia by Dexia in He left the bank in March 2002 at the time of the legal merger between Dexia and Artesia. He was subsequently appointed director and CFO of Elex NV: the reference shareholder of amongst others Melexis Xfabs and EPIQ. RENÉ AVONTS PATRICK DE BELLEFROID René has been a Director of Quest for Growth since 1998 and joined Quest Management NV in September KATRIN GEYSKENS ELS HUBLOUX Patrick de Bellefroid Managing Director (until 1 September 2010) In 1975 Patrick de Bellefroid obtained a Bachelor s degree in Applied Economics from the IAG (Institute of Administrative Management) of the Catholic University of Leuven. He started his career at the Cabinet of the Minister of Foreign Trade. After completing his military service as Administrative Officer he went to work in the financial sector of Puissant Baeyens Poswick and Co currency brokers and became a partner in this company in In 1988 the company merged with De Laet and became Puilaetco bank in He held various positions at the bank including head of the trading floor head of institutional sales and head of financial analysis before becoming Chairman in After the sale of Puilaetco to KBL he left the bank. Since then he has been holding various Board positions. YVES VANEERDEWEGH MARC PAUWELS Patrick joined Quest Management NV in December l GENERAL REPORT 2010

31 Katrin Geyskens Member of the Management Committee - Senior Investment Manager Yves Vaneerdewegh Member of the Management Committee - Senior Investment Manager After graduating as a Commercial Engineer ( Handels- en Bedrijfs-economisch Ingenieur ) at the Catholic University of Leuven K.U.Leuven (Belgium) Katrin started her career in 1993 as a financial analyst at CERA Bank (currently KBC Bank) in Belgium. In June 1997 she obtained an MBA degree from the University of Chicago Booth School of Business. During her MBA Katrin worked an internship at the Equities Division of Merrill Lynch London. Following this she worked as a Management Consultant for A.T.Kearney throughout Europe and South-Africa. In 2000 she was involved with the start-up of a Benelux Venture Services firm. Yves Vaneerdewegh is a commercial engineer and certified EFFAS financial analyst (European Federation of Financial Analysts Societies). Yves represents fifteen years of experience as a financial analyst and portfolio manager for mainly European small and mid cap companies. He previously worked for Hamburg Mannheimer NV (Munich Re Group) Brussels ( ) as a financial analyst (mainly Belgian and Dutch equity) and then joined Puilaetco Private Bankers NV as a senior portfolio manager. Yves joined Quest Management NV in February Katrin joined Quest Management mid-2001 as an Investment Manager responsible for the fund s investments in private technology companies and venture funds. Marc Pauwels Member of the Management Committee - Fund Administrator Els Hubloux Member of the Management Committee - Senior Investment Manager Els Hubloux holds a civil engineering degree and an MBA from the V.U.Brussels Belgium. She started her career at the R&D department of the pharmaceutical companies Abbott and Merck. She subsequently joined KBC Securities as a financial analyst and went on to be an investment manager at KBC Private Equity. Els joined Quest Management NV in July Marc Pauwels studied economics (with a specialisation in accountancy) in Brussels. Following this he obtained a degree at the fiscale hogeschool in Brussels. Marc worked as a tax advisor before joining the former CERA Bank in Leuven where for two years he was responsible for reporting on the Risk Weighting Capital Assets Ratio to the Belgian Banking Finance and Insurance Commission. He was then made responsible for the administration and accountancy of the investment funds promoted by the bank. Marc joined Quest Management NV in October GENERAL REPORT 2010 l 29

32 Reporting and auditing By decision of the EGM of February 2004 later altered by the EGM of March 15 th 2007 the already existing Audit Committee became a statutory body of the Board of Directors. The Audit Committee consists of a maximum of four members of the Board of Directors the majority of who are Independent Directors. The Audit Committee appoints a Chairman from among its members and the Chairman must be an Independent Director. The Audit Committee reports to the Board of Directors regularly or at least once a year. The principle task of the Audit Committee is to assist the Board of Directors in its supervisory tasks by verifying: the quality and integrity of the company s auditing accounting and financial reporting procedures; the financial reports and other financial information provided by the company to shareholders; the company s systems of internal controls regarding accounting financial transactions and compliance with the legislation to which the company is subject. The Audit Committee has unlimited and direct access to all information and personnel with information pertinent to the proper performance of its duties and can dispose of all resources necessary to perform its tasks. The company is expected to maintain free and open communication with the auditors and the management of the corporation. The Board of Directors notices all members of the Audit Committee meet the requirements of independency and expertise in the area of accounting and auditing as foreseen by the company law. In principle the Audit Committee meets twice a year and may be convened at any time deemed necessary. The Audit Committee met two times during the previous fiscal year. The meetings took place prior to the meetings of the Board of Directors on the approval of the annual report of the previous fiscal year and the semi-annual report. The following subjects were discussed: Audit Committee Charter; Corporate governance charter; Financial report and annual report for the fiscal year ending on December 31 st 2009; Semi-annual report 2010; Possible application of International Accounting Standards (IFRS); Compliance to the investment rules as set out in article 41 of the Royal Decree of April 18 th 1997; Supervision of remunerations paid to companies that are professionally linked with the Auditor; Supervision of the application of the management agreement between Quest for Growth and Quest Management and supervision of the general cost ratio; Supervision of the transaction costs for equity transactions; Supervision of internal control procedures; Monitoring of risk. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Burg. CV represented by Mr Pierre Berger has been appointed Statutory Auditor. It has been charged with examining the financial figures the annual accounts and the compliance of operations to be mentioned in the annual accounts with the provisions of the Companies Code the provisions as set out in the Royal Decree of April 18 th 1997 and the Articles of Association of the company. Pursuant to the Annual General Meeting of March 18 th 2010 the Auditors are accorded a yearly remuneration of of IBR contributions (excluding VAT). The Auditor has been appointed for a period of three years expiring at the end of the Annual General Meeting for the financial year ending December 31 st ChairmanAuxilium Keerbergen BVBA (1) represented by Frans Theeuwes Bergendal & CO SPRL (1) represented by Count Diego du Monceau de Bergendal Tacan BVBA (1) represented by Johan Tack (1) independent Director 30 l GENERAL REPORT 2010

33 GENERAL REPORT 2010 l 31

34 INVESTMENT MANAGERS REPORT Investments in quoted companies In 2010 it took quite a while before it turned out whether the year was going to be a good or a rather less positive one for the stock markets. Thanks to a particularly strong last quarter we are able to classify the respective year as standard to good. Most of the key stock exchanges recorded performances ranging between 10 and 20%. However there were significant differences for instance in Europe where the international debt crisis causes were clearly recognizable: German shares increased by 17% while all Southern European stock markets closed the year in the red. With respect to Quest for Growth s quoted portfolio most of the trends on the markets caused favourable conditions. The above-mentioned geographical tendency was beneficial due to the high valuations of German shares and the complete absence of Greek Portuguese Spanish or Italian shares in the portfolio. Additionally the undiminished good stock market performance of rather small-sized market capitalizations (small & mid caps) influenced the portfolio most positively. With respect to the sectoral range it was important to strictly avoid banking a sector which Quest for Growth generally does not invest in. Cyclical shares developed best; however the technology sector also showed excellent results. The pharma sector s success was below market average. The same applies to cleantech in particular due to the most negative trends in renewable energies. In 2010 Quest for Growth also suffered losses from investments in wind and solar power but was able to set the same off well by high performances achieved in other segments of the cleantech sector especially in energy efficiency water and environmental protection as well as new materials. On the whole Quest for Growth s quoted portfolio achieved a performance of more than 25% in 2010 (excluding the Movetis contribution). And also with respect to a 5-year period the performance is clearly positive whereas global and European stock market indices report little or no progress. With regard to individual shares two equity portfolio investments managed to double their value. The respective shares are those of Swiss LEM Holding (which had already been listed amongst the doubled shares in 2009) and Nemetschek. Additionally five other portfolio investments increased by more than 50%: Andritz Umicore Pfeiffer Vacuum and Imtech. As far as the expectations towards the stock markets and the portfolio are concerned we may be moderately optimistic. The economic recovery seems to continue and the portfolio investments valuations are not unattractive. On the other hand the financial debt problem suffered by governments and (American) consumers keeps casting a cloud on the future. In our selection of portfolio investments we still prefer high-quality small & mid caps which feature attractive valuations and strong financial positions. However the most excellent performances in this type of portfolio investments over the past two years make stock picking somewhat more difficult. In the sectors of pharma technology and telecommunications several blue chips have become particularly favorable. Therefore the portfolio focus on large-sized market capitalizations was increased from about 15% to about 30% whereas we simultaneously kept searching for small-sized barely known jewels on the stock market. The portfolio was increasingly consolidated and by the end of the year Quest for Growth held investments in 26 different listed companies compared to 28 by the end of 2009 and 50 companies five years ago. The software & services sector represents more than 25% of the quoted portfolio. In this context we consider software the most interesting segment also due to the high recurring revenues gained from service agreements. By the end of 2010 German Nemetschek and Dutch Unit4 are the two principal companies in our listed equity portfolio. Furthermore we consider the internet a continuously attractive growth segment. In this sector Wirecard achieved profits and lower rated Leguide.com was added to our portfolio. Other newly incorporated small caps include Econocom and Pharmagest Interactive. 32 l GENERAL REPORT 2010

35 S&P 500 (US) total returns in US$ source : Piper Jaffray 'Technical Research' Quoted portfolio - Top 10 holdings country sector/activity % NAV 31/12/10 Nemetschek Germany architecture-engineering-construction (AEC) software 4.5% Unit4 Netherlands business software 4.5% Arcadis Netherlands engineering consultancy 4.3% Umicore Belgium materials technology 4.0% Imtech Netherlands technical services in electrical & mechanical engineering 3.8% Andritz Austria plant engineering for hydro power pulp & paper % LEM Holding Switzerland current and voltage transducers 3.4% EVS Belgium digital image-processing systems for TV broadcasters 3.3% United Drug Ireland healthcare services 2.9% Teva Israel generic and branded pharmaceuticals 2.8% 2010 portfolio returns in local currency excluding stocks introduced/removed during 2010 The remaining IT sectors Technology Hardware and Semiconductors mutually amount to only 20% of the listed equity portfolio. LEM Holding and constant value EVS are the main respective investments. Quest for Growth has said goodbye to some successful investments: in April the Cisco bid on Tandberg expired and after an investment period of more than 5 years Dutch TKH was sold with a profit of approx. 150% (including dividends). Hewlett-Packard is an example of the above-mentioned cheap blue chips and was added to the portfolio in The combined valuation of the sectors Pharma & Biotech and Medical Services and Equipment amounts to approx. 17%. In this context we invest in both fast growing and promising Biotech & Medtech companies such as Ablynx and Stratec as well as in lower rated shares such as United Drug Teva and Roche. The sectors Electrical & Engineering (more than 25% of the quoted portfolio) and Materials (nearly 10%) mainly include several cleantech investments which cannot be allocated to any other sector. Vestas and Solar Millennium which were both divested represent two respective investments in wind and solar energy for which a loss had to be recorded. In other cleantech segments the companies remained successful and by the end of the year Arcadis Umicore Andritz and Imtech rate amongst the most important investments. Geberit also featured an excellent performance however due to rising valuations it was sold with a profit of more than 135% (in Euro). Last but not least KPN and Accell shares were bought in other sectors. Profiles and figures of all companies we have been investing in since December 31 st 2010 are listed in the chapter Company profiles % Transics Roche SMA Solar LEM Holding Nemetschek Andritz Umicore Centrotec Pfeiffer Vacuum Imtech Unit4 Init QfG quoted (e) EVS Faiveley Arcadis Benmax50 index DJ Stoxx 600 index United Drug Ablynx GENERAL REPORT 2010 l 33

36 European investments at 8.7 billion in Q (Equity value bank leverage excluded) Investments in unquoted companies and venture funds European Venture Capital Market According to EVCA Perep statistics the total amount invested into private equity remained relatively stable in Q at 8.7bn. More than 1100 European companies were financed through private equity in Q Unfortunately Venture Capital dropped by onethird to 640m driven by a 35% drop in later-stage venture investment and a 29% decrease in early stage investments. Corporate venture funds and state affiliated funds are seen to be taking again more active roles in the industry. Innovation financing seems to become as much the business of corporates public funds and business angels as it is of venture capital funds. This might change again when VCs start producing good returns and investors return to the asset class as the investment cycle picks up billion Venture Growth Buyout Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Investments by stage distribution 100% Seed 90% 80% Start-up 70% Later stage 60% Growth capital 50% 40% Rescue / Turnaround 30% Replacement 20% capital Buyout 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 EVCA Perep statistics show that at only 2.4bn commitments to European private equity funds reached a trough in Q According to the EVCA barometer historical data shows that private equity fundraising is closely linked to stock market evolution. However post crisis the rebound in fundraising tends to lag behind the rebound in public markets. After the dot.com bust the delay was about two years. If this holds true the overall outlook for 2011 could be more promising. If more asset managers can successfully raise new funds in 2011 it is expected that investments in new opportunities will rise. For most venture backed companies 2010 proved to be another challenging year. The financial crisis continues to have a significantly negative impact on young capital hungry companies. One of the biggest issues faced by the industry has been the challenging fundraising environment. General uncertainty about the future and allocation and liquidity constraints are the most important factors behind the lower fundraising levels. Due to the scarcity of capital companies with an unsupportive and/or insufficiently strong existing investor base are struggling to secure the funds needed to advance their products and technologies and to grow their business. Amount invested by sector Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services Energy and environment Financial services Life sciences Real estate Transportation Unspecified Venture divestment at cost in % 80% 60% 40% 56% 15% 21% 2% 14% 11% 01% 02% 5% 4% 6% 10% 32% 29% 2% 9% 6% 1% 3% 1% 10% 12% 2% 2% 4% Other Sale to Management (MBO) Sale to Financial Institution Secondary Q Q Q Repayment of Principal Loans Repayment of Silent Partnership Write-Off Sale of Quoted Equity 20% 32% 31% 34% IPO Trade sale 0% Q Q Q Source : EVCA/PEREP_Analytics 34 l GENERAL REPORT 2010

37 When looking at the sector split of Venture investments Life Sciences still take up the largest amount of investments with computer and consumer electronics coming in second. Preliminary data for 2010 shows that 12bn at cost was divested in the first three quarters of % more than in full If the trend continues in Q the 2010 exit market could reach a higher level than the 14bn 2008 exit market. This causes a majority of venture capitalists to be more optimistic about the 2011 exit side. The majority of Venture divestments in 2010 were still done through trade sales. Exits through secondaries to later stage investors became also more in vogue. Finally the IPO window has clearly opened up. According to Thomson Reuter s data 108 European companies went public in the first 11 months of 2010 which was a marked improvement versus the full In November companies worth 4.5bn went public up from 14 companies worth 3.5bn in October. Even though the mood is still subdued optimism is slowly coming back. We note a growing belief that European Venture Capital is coming of age driven by better entrepreneurs - more experienced and aware of what VCs are expecting of them; more capital efficient companies and the trend of software as a service internet and mobile apps making location largely irrelevant. A final touch to the optimism: tech M&A prices reached a level not seen anymore since the internet bubble explosion and the IPO window is opening up. Update on Quest for Growth s unquoted portfolio New and follow-on investments In 2010 Quest for Growth made one new investment investing 1.5 million into Anteryon a Dutch private company that is the world leader in wafer-based miniature optical module production for mobile phone cameras and laser projection. Quest for Growth joined an investment round led by Qualcomm Incorporated (Nasdaq: QCOM). BNP Paribas Private Equity as existing shareholder of Anteryon also participated again in this strategic investment. Anteryon s unique proven and patented WaferOptics technology revolutionizes the production of micro-optics for miniature camera and laser projection modules. Wafer-scale production enables extensive miniaturization and cost saving while using the same wafer format as the CMOS image sensor industry allows for a full integration of sensor and optics production which vastly simplifies the camera module supply chain. Furthermore Quest for Growth made a number of followon investments throughout 2010 in order to support its existing portfolio companies. In August 2010 Quest for Growth together with other existing investors made a follow-on investment in portfolio company TcLand Expression. Nantes based TcLand Expression is a personalized medicine company dedicated to the development of companion diagnostics in immune mediated disorders and biomarkers in solid organ transplantation. Syntaxin a UK based biopharmaceutical company closed a 18m Series C round in October Other participating investors included both existing (Abingworth LSP SROne (GSK) and JJDC) and new investors (Lundbeckfond Ventures Ipsen Seventure). Syntaxin has a strong biologics platform that delivers a pipeline of Targeted Secretion Inhibitors (TSI). The platform has the potential to generate multiple products to treat diseases where secretion is the major driver. These are large market opportunities such as the treatment of pain endocrine conditions and cancer. In December 2010 Quest for Growth together with other existing investors Solon Ventures and Entrepreneurs Fund made a follow-on investment in Oxford based portfolio company Prosonix. Prosonix is the world leader in use of ultrasonic pharmaceutical particle engineering technologies for the manufacture of high value pharmaceutical powders. Exits Trade sale IPO write-off In May 2010 Quest for Growth could announce that it had sold its in CoreOptics Inc. to Nasdaq-listed Cisco Systems Inc. ( the worldwide leader in networking for the Internet which was completely GENERAL REPORT 2010 l 35

38 acquiring CoreOptics. With the majority of its employee base in Nuremberg and Gerlingen Germany CoreOptics enables Cisco to equip service provider customers with highly advanced 100 Gigabits per second (Gbps) transmission technology to scale their networks to meet the demands of rapidly growing Internet Protocol traffic driven by video mobility and cloud services. The acquisition of CoreOptics expands Cisco s optical presence in Europe builds on its existing European operations in Monza Italy and contributes to continued innovation in optical networking. With the close of the acquisition in July CoreOptics employees became part of the Cisco Service Provider Technology Group. Quest for Growth had invested in CoreOptics since 2006 and participated in various financing rounds for a total of almost $ 4 million. The exit to Cisco provided an excellent return to Quest for Growth. Shire plc to acquire all outstanding shares and warrants at an offer price of in cash per share valuing the Company s equity on a fully diluted basis at 428 million. Quest for Growth accepted the offer and the transaction closed in November 2010 making Movetis the biggest profit contribution in fiscal In July 2008 Quest for Growth invested through a PIPE in GoAdv a French company quoted on Alternext. Quest for Growth invested approximately 1 million in an 11 million Convertible Bond Issue together with several top investors in France. GoAdv which in the meantime has been renamed Populis is one of Europe s fastest growing digital media companies (GP Bullhound Media Momentum 2010) and European leader in the production of multilingual content on demand. Created in 2004 the Group crowdsources distributes and monetizes over items of compelling content in 8 languages per month for a vibrant network of 500 fully owned and operated websites including Excite Europe Better Deals and Nanopublishing. The media properties generate over 18.7 million unique monthly users (Source: Comscore October 2010). In June 2010 GoAdv was delisted from Alternext and Quest for Growth chooses to have its convertible loan reimbursed which provided a very good return on this investment. In December 2006 Quest for Growth invested in Movetis. At the end of 2009 Movetis had raised 85 million in the first significant sized IPO in the European Life Sciences sector since early The company had issued new shares priced at per share. Less than a year later in August 2010 Movetis received an offer from 36 l GENERAL REPORT 2010

39 GENERAL REPORT 2010 l 37

40 Company profiles Unquoted companies ACTIVE CIRCLE Created in 2002 Active Circle develops and markets an innovative software-based solution that addresses the need for storing preserving and managing large volumes of digital content. The Active Circle software has been designed for organizations that manage video content images scientific and technical data or user content to help them better control the lifecycle of their data while at the same time keeping down the costs of storage ownership and administration. Active Circle is marketed through a network of system integrators and OEMs. More information is available on ANTERYON Private investors acquired Anteryon the former optics division of Philips in Anteryon designs and produces the highest quality smallest and lowest costs micro-optics and refractive-optics enabling waferbased production packaging and integration of optics with light sensors and light sources. Anteryon s unique proven and patented WaferOptics technology revolutionizes the production of micro-optics for miniature camera and laser projection modules. Wafer-scale production enables extensive miniaturization and cost saving while using the same wafer format as the CMOS image sensor industry allows for a full integration of sensor and optics production which vastly simplifies the camera module supply chain. Anteryon is the recognized world leader in this domain with a WaferOptics product portfolio ranging from VGA to 5 megapixel and manufacturing facilities in Eindhoven and China. More information can be found at CLEAR2PAY Clear2Pay is an innovative financial technology company focused on delivering globally applicable solutions for secure timely electronic payments. Clear2Pay's technology helps to reduce transactions processing costs and to deliver new compelling payment services in a competitive way. Clear2Pay's payment solutions offer organisations easy branded ways for their customers to pay online: from complex trade-supporting business-to-business environments through e-commerce applications to retail payments and remittance services. Functions embrace payments origination reporting linkage with back-office processing systems clearing netting and settlement. Clients include global and major regional financial institutions such as ING Banco Santander Crédit Agricole VISA MasterCard BNP Paribas The Federal Reserve PBS (Denmark) The People Bank of China (PBOC) Bank of East Asia ANZ and Commonwealth Bank. Clear2Pay operates out of Belgium France the Netherlands Poland Spain United Kingdom United States Australia China Malaysia and Singapore and currently employs over 450 staff. For more information please visit 38 l GENERAL REPORT 2010

41 IDEA AG IDEA is a product-oriented company that was founded in 1993 from the Technical University of Munich. The company is located in the Munich Technology Centre. The basis of IDEA s patented technology Transfersome are carriers which allow the selective transport of certain drugs through the skin. The company develops new products based on such carriers and the current focus is on dermatological and pain therapeutics. KIADIS PHARMA Kiadis Pharma is a Dutch biopharmaceutical company that develops products for the treatment of cancer. Its pipeline contains three products that are in various stages of clinical development. ATIR the most advanced product enables a lifesaving bone marrow transplant for leukaemia patients for whom there is no suitable donor. MAGWEL Magwel is the leader in 3D co-simulation and extraction EDA solutions for ICs. Its unique patented technology co-simulates 3D drift-diffusion models for the semiconductor with Maxwell s equations for metal interconnect. Leading semiconductor vendors use Magwel tools to characterize active and passive devices and critical interconnect. Magwel is privately held and is headquartered in Leuven Belgium. For more information see GENERAL REPORT 2010 l 39

42 Unquoted companies MAPPER LITHOGRAPHY Established in 2001 MAPPER focuses on developing lithography machines for the semiconductor industry. The MAPPER machine is a highly costeffective means of manufacturing the next generation of chips eliminating the need for the very expensive mask required for standard machines while at the same time combining high resolution and high productivity. The MAPPER machine images wafers directly using parallel electron beams. MAPPER is located in Delft The Netherlands and employs 125 people. OXAGEN PLC Oxagen focuses on developing a pipeline of novel drugs to treat inflammatory diseases. The company was established in April Oxagen is based in Milton Park south of Oxford UK. PROSONIX Prosonix Ltd is a world leader in the field of developing and marketing registered valueadded ultrasonic solutions. The company set up a team of chemists and engineers in Oxford (UK) in turn offering its customers a unique multidisciplinary angle to enable complex problems to be solved. The most important market for Prosonix is currently the pharmaceutical industry. The company also has a growing intern product pipeline. For more information please refer to 40 l GENERAL REPORT 2010

43 SPHERE MEDICAL Sphere Medical Holding plc is developing highly innovative monitoring products to provide clinical and economic benefits in the critical care environment. This patented technology enables the minimally invasive real time measurement of clinical chemistry parameters and therapeutic drug concentrations giving healthcare professionals quickly and accurately the required information to more effectively manage therapy and optimise patient outcomes. Sphere Medical was founded in 2002 and is based in Cambridge UK. SYNTAXIN Syntaxin Ltd is a biopharmaceutical company that focuses on the research and development of new drugs. The company s pipeline is based on the operation of powerful pharmaceutical properties of some bacterial proteins particularly exotoxins. Syntaxin was set up in 2005 as a spin out of the UK Health Protection Agency. Investors are among others Abingworth Life Science Partners SR-One (GSK) and Johnson & Johnson Development Company. TcLAND EXPRESSION TcLand Expression SA was incorporated in 2002 as a spin-off from INSERM/ITERT in Nantes France - a major European research and clinical centre in transplantation and immunology. The company is presently a leader in the development of gene expression biomarkers in transplantation and auto-immune disorders. Investors are among others Auriga Partners (Paris France) Beviguen (Paris France) Debiopharm (Lausanne Switzerland) and Genzyme Corporation (Boston USA). GENERAL REPORT 2010 l 41

44 Venture capital funds CAPRICORN CLEANTECH FUND Capricorn Cleantech Fund is a venture capital fund investing in companies that are active in the fields of renewable energy energy efficiency water purification clean air materials recycling such as bio fuels or other bio-based materials and products etc. The fund has 112 million to invest and is managed by Capricorn Venture Partners. Quest for Growth has already invested as part of a total investment round of CAPRICORN HEALTH-TECH FUND Capricorn Cleantech Fund is a venture capital fund investing in companies that are active in the fields of biopharmaceuticals medical technology diagnostics and functional food. Today the fund already has 42 million to invest and is managed by Capricorn Venture Partners. Quest for Growth has already invested as part of a total investment round of CARLYLE EUROPE TECHNOLOGY PARTNERS (CETP and CETP II) Carlyle Europe Technology Partners is managed by subsidiaries of the Carlyle Group which is one of the leading and most experienced global private equity companies. CETP focuses on investing in European companies mainly in the technology media and telecommunications sectors. The fund focuses on both buyouts whereby potential portfolio companies can bear debt financing and the investment of equity capital in companies with existing income regardless of whether they are already profitable ("later stage venture"). Quest for Growth co-invested in many of CETP s portfolio companies through Carlyle Europe Technology Partners co-investment LP. For more information see 42 l GENERAL REPORT 2010

45 KIWI VENTURA SERVIÇOS S.A. Kiwi Ventura Serviços S.A. is a 110 million investment fund advised by Pino Venture Partners of Milan. Kiwi has made equity investments in early-stage companies providing products and services in telecommunications new media and information technology in Europe with a major focus on Italy. The most significant of its investments to date has been Tiscali an Italian ISP which was floated on the Milan Stock Exchange in October The Kiwi I fund is at the end of its lifetime and currently in the process of being liquidated. LSP III & LSP IV Life Sciences Partners (LSP) is a leading independent European venture capital firm providing private equity financing to early- to mid-stage life-science companies. Since the late 1980s LSP s management has invested in a large number of highly innovative enterprises many of which have grown to become leaders of the global life-science industry. With 450 million under management and offices in Amsterdam Munich and Boston LSP is one of Europe s largest and most experienced specialist life-science investors. SCHRODER VENTURES INTERNATIONAL LIFE SCIENCES FUND II (ILSF II) SV Life Sciences provides finance to businesses at all stages of development and across the human life sciences sector. These sectors range from biotechnology & pharmaceuticals to medical devices & instruments to healthcare information technology and services. SV Life Sciences currently advises or manages five funds with capital commitments of approximately $ 1.4 billion which primarily invest amounts of between $ 1m and $ 20m in North America and Europe. SVLSF II closed in 1999 with total commitments of $ 280 million (plus $ 30 million of co-investments committed by partners and individuals affiliated with SVLS). GENERAL REPORT 2010 l 43

46 Venture capital funds VENTECH CAPITAL 2 Ventech Capital 2 is a 112 million French venture fund based in Paris that has been active since July Ventech II is an early-stage investor investing in technology and life sciences companies that are either in the process of being formed or recently started up. Ventech invests in the information technology sector with a particular emphasis on newgeneration networks software applications online activities the internet and mobile telephony as well as services commerce and the media. In the life sciences sector they particularly focus on applied genomics. The fund is now fully invested in number of lines and will only do follow-on investments. For more information see VERTEX III Vertex III is the third venture capital fund for investments in Israeli and Israel-related technology companies established by the Vertex Group. The Fund s objective is to achieve superior long-term capital appreciation for its investors by targeting high-growth companies with unique technology and strong management teams that can adapt to rapidly growing markets. Vertex Israel Venture Capital was founded in 1997 to capitalise on emerging technology in Israel and it is headquartered in Tel-Aviv with representatives in Europe the U.S. Singapore and Japan. Vertex invests in Israeli and Israeli-related high technology companies in the early stages of development in the areas of information networking communications and subsystems components imaging enterprise software and other leading emerging technologies. For more information please refer to 44 l GENERAL REPORT 2010

47 GENERAL REPORT 2010 l 45

48 Quoted companies ABLYNX Ablynx a biopharmaceutical company with headquarters in Ghent Belgium is involved in the discovery and development of Nanobodies to treat a range of serious human diseases. Nanobodies are a novel class of antibody-derived therapeutic proteins. Due to their small size unique structure and extreme stability Nanobodies combine the advantages of conventional antibody therapeutics with the key features of small-molecule drugs. ACCELL GROUP Accell Group is one of Europe's largest manufacturers of bicycles. Brands include Batavus Bremshey Ghost Hai Bike Hercules Koga-Miyata Lapierre Loekie Redline Sparta Staiger Tunturi Winora en XLC. The group also sells bicycle parts and accessories and its subsidiary Tunturi sells fitness equipment. The group was a pioneer in the development of electrically assisted bikes so-called e-bikes. Accell Group occupies a strong position in the middle and higher segments of the market. The bicycles developed and produced by Accell Group are mainly sold through the bicycle retail specialists channel. Accell Group has production locations in the Netherlands Germany Belgium Hungary and France. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth -0.5 % 8.4 % Estimated earnings per share growth - - Operational margin - - Return on equity - - Estimated price earnings - - * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 3.3 % 14.9 % Estimated earnings per share growth 3.9 % 13.7 % Operational margin 8.39 % 8.33 % Return on equity % % Estimated price earnings 11.0x 9.7x * Consensus estimates FACTSET at December 31 st 2010 Ablynx N.V. (EUR) Accell Group N.V. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

49 ANDRITZ Andritz is an engineering company that provides hightech production systems and related services for selected industries. The group focuses on five business areas: Pulp and Paper provides technology to produce pulp used for paper board and fibreboard and machines for tissue production. Hydro Power is a supplier of turnkey electromechanical equipment for hydro power plants and this business area also includes large-scale pumps. Metals installs plants for the production of steel and non-ferrous products and metal forming. Environment and Process covers products for mechanical and thermal solid/liquid separation for municipalities and mining and steel industries. Feed and Bio fuels supplies equipment for the production of animal feed and wood/bio fuel pelleting. ARCADIS Arcadis is an engineering consultancy company that is active in three segments: environment infrastructure and facilities. Environment includes consulting on environmental policy environmental impact assessments the investigation of soil and groundwater contamination and remediation projects. In Infrastructure the company designs and manages the construction of roads railways waterways dikes harbours power plants industrial parks etc. Facilities activities are related to the development and maintenance of buildings. The company was founded in 1888 as Vereniging Nederlandse Heidemaatschappij (Heidemij) to develop land and was quoted in Amsterdam in 1995 changing its name to Arcadis in STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 7.5 % 15.8 % Estimated earnings per share growth 49.5 % 18.7 % Operational margin 6.66 % 7.11 % Return on equity % % Estimated price earnings 21.6x 18.2x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 10.3 % 2.7 % Estimated earnings per share growth -1.7 % 12.9 % Operational margin 6.59 % 7.15 % Return on equity % % Estimated price earnings 15.2x 13.5x * Consensus estimates FACTSET at December 31 st 2010 Andritz Ag (EUR) ARCADIS N.V. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 47

50 Quoted companies CENTROTEC SUSTAINABLE AG Centrotec Sustainable AG is specialised in energyefficient technology for buildings. The group comprises four business segments. Gas Flue Systems includes products such as plastic gas flue systems for condensing boilers technical roof products and advanced composites. Climate Systems' main product groups are: heat recovery ventilation systems air heaters heating systems for wall or floor installation heating systems based on renewable energies (solar thermal heat pumps and biomass) and climate systems for commercial properties. Brands include Wolf Brink and Ned Air. The subsidiary medimondi AG includes Medical Technology & Engineering Plastics. The listed 26 % owned subsidiary Centrosolar Group is active in photovoltaic solar modules systems for roofs and solar glass and PV mounting systems. ECONOCOM Econocom is a service provider specialising in IT and telecommunications infrastructure management for the corporate segment. Econocom has 4 fields of expertise: IT Financial Services provides leasing of IT and telecom fleets enhanced by administrative management of the installed infrastructure. Managed Services includes IT support services for distributed computing infrastructures including outsourcing maintenance and consulting. Products and Solutions distributes a wide range of IT hardware and solutions. Telecom Services offers solutions to make IT systems mobile. The group is active in eight European countries and operates a service centre in Morocco. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 3.4 % 6.6 % Estimated earnings per share growth % 8.4 % Operational margin 7.61 % 7.92 % Return on equity % % Estimated price earnings 10.4x 9.6x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth % -1.7 % Estimated earnings per share growth 23.8 % 5.3 % Operational margin 3.24% 3.57 % Return on equity % % Estimated price earnings 9.8x 9.3x * Consensus estimates FACTSET at December 31 st 2010 Centrotec Sustainable AG (EUR) Econocom Group S.A. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

51 EVS BROADCAST EQUIPMENT EVS Broadcast Equipment was founded in 1994 by Laurent Minguet Pierre L'Hoest and Michel Counson and listed on the Brussels Stock Exchange in October EVS is the leader in digital image-processing systems for live mobile production of television broadcasts. EVS provides integrated production systems which manage the entire work process from acquiring video signals from the cameras through to distributing the images including editing and archiving them. EVS' flagship product is the XT server. The EVS product range is compatible with High Definition Television (HDTV) standards. EVS' 41 % owned subsidiary XDS ("exchange Digital Cinema") produces high definition servers (CineStore) for the digital cinema market. FAIVELEY The Faiveley Group is a supplier of technical railway systems and services offering a wide range of products in seven categories: air conditioning onboard doors platform doors & gates braking systems couplers power/information & control (electronics and electro-mecanics) and customer services. In 1919 Etablissement Louis Faiveley was created which was a pioneer in pantographs (devices that collects electric current from overhead lines). In 2004 SabWabco was acquired and in 2008 Faiveley SA bought out the minority shares in Faiveley Transport. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 41.7 % 0.5 % Estimated earnings per share growth 45.5 % -1.3 % Operational margin % % Return on equity % % Estimated price earnings 17.5x 17.7x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 2.0 % 8.0 % Estimated earnings per share growth -0.4 % 13.7 % Operational margin % % Return on equity % % Estimated price earnings 12.4x 11.0x * Consensus estimates FACTSET at December 31 st 2010 EVS Broadcast Equipment S.A. (EUR) Faiveley Transport S.A. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 49

52 Quoted companies HEWLETT PACKARD Hewlett-Packard Co. is a global provider of products technologies software solutions and services to individual consumers small-and medium-sized businesses and large enterprises including customers in the government health and education sectors. Their offerings span: multivendor customer services including infrastructure technology and business process outsourcing technology support and maintenance application development and support services and consulting and integration services; enterprise information technology infrastructure including enterprise storage and server technology networking products and resources and software that optimizes business technology investments; personal computing and other access devices; and imaging and printing-related products and services. The company operations are organized into seven business segments: Services Enterprise Storage and Servers HP Software the Personal Systems Group the Imaging and Printing Group HP Financial Services and Corporate Investments. The company was founded by Bill Hewlett and Dave Packard in 1939 and is headquartered in Palo Alto CA. IMTECH Imtech is a European technical services provider in the fields of electrical engineering ICT and mechanical engineering. Activities cover the entire value chain from design consultancy engineering and implementation (installation) to maintenance services and maintenance management. Imtech is active in different market segments such as buildings care & cure industry marine and infra & traffic in each of which a substantial portion of the revenue is related to energy & environment. The Internatio-Müller conglomerate which had been established in 1970 as the result of a merger between the trading and shipping concerns Internatio (1863) and Müller (1878) decided in the nineties to focus on technical solutions and changed its name into Imtech in STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 17.7 % 5.5 % Estimated earnings per share growth 27.2 % 13.8 % Operational margin % % Return on equity % % Estimated price earnings 9.2x 8.1x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 4.6 % 7.6 % Estimated earnings per share growth 4.8 % 8.5 % Operational margin 5.32 % 5.67 % Return on equity % % Estimated price earnings 14.1x 13.0x * Consensus estimates FACTSET at December 31 st 2010 Hewlett - Packard Co. (USD) Imtech N.V. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

53 INIT INNOV IN TRAFFIC SYSTEMS Init (Innovation in Traffic Systems) is active in the area of telematics and electronic fare collection systems for public transport. Its products assist transportation companies in making public transport more attractive faster and more efficient. As a turnkey supplier Init provides integrated hardware and software solutions including products for the control center (intermodal transport control system-icts) for communication and for vehicles (on-board computer electronic ticketing automatic passenger counting...). Other activities include planning software and analysis systems for the automotive industry. Stakes in associated companies are 43 % of iris GmbH (infrared and intelligent sensors) and 44 % of id system (personnel planning software Perdis). INIT was founded in 1983 by Dr.-Ing. Gottfried Greschner as a university spin-off. The company is headquartered in Karlsruhe Germany. KPN Royal KPN NV provides international telecommunication services such as wireline and wireless telephony internet and television end-to-end communications and ICT services to business customers. It operates in the consumer business wholesale & operations mobile wholesale and E-plus segments. It was founded in 1852 and is headquartered in The Hague Netherlands. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 22.2 % 6.7 % Estimated earnings per share growth 37.5 % 8.2 % Operational margin % % Return on equity % % Estimated price earnings 13.0x 12.0x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth -0.8 % 0.0 % Estimated earnings per share growth % 6.4 % Operational margin % % Return on equity % % Estimated price earnings 9.5x 8.9x * Consensus estimates FACTSET at December 31 st 2010 init innovation in traffic systems AG (EUR) Koninklijke KPN N.V. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 51

54 Quoted companies LEGUIDE.COM LeGuide.com is a publisher of online shopping guides comparison websites shopping search engines and platforms for consumer ratings. Websites include LeGuide.com (online shopping guide) LeGuide.net (shopping search engine) dooyoo.com (social shopping guide) Webmarchand.com (shopping directory) Mercamania.es and Antag.de. The CPCbased (cost per click) business model accounts for most of the group's revenue while other revenues include advertising sponsored links etc. The company is present in 14 European countries (France Belgium Luxemburg Switzerland Germany Austria the United Kingdom Ireland Spain Italy the Netherlands Sweden Denmark and Poland) and in 9 different languages. The company was founded in 1998 and has offices in Paris and Berlin. LEM HOLDING LEM produces components for power electronics. Its core products are transducers for measuring electrical parameters like current and voltage. LEM's transducers are used in applications such as railway motor drives power supplies AC/DC converters and wind and solar power generation. The products provide more control more reliable energy and better energy efficiency. LEM reports two business segments: The Industrial segment includes the businesses Industry Traction and Energy & Automation. In the Automotive segments solutions have been developed for battery management and electrical motor controls. Liaisons Electroniques- Mecaniques LEM SA was founded in The group has production plants in Geneva (Switzerland) Machida (Japan) and Beijing (China). STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 17.4 % 10.7 % Estimated earnings per share growth 12.6 % 17.3 % Operational margin % % Return on equity % % Estimated price earnings 16.2x 13.8x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st CHF Market capitalisation at December 31 st m EUR Performance in % (in CHF) FINANCIAL DATA* Estimated sales growth 88.0 % 7.1 % Estimated earnings per share growth % 9.3 % Operational margin % % Return on equity % % Estimated price earnings 16.7x 15.3x * Consensus estimates FACTSET at December 31 st 2010 LeGuide.com S.A. (EUR) LEM Holding S.A. (CHF) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

55 NEMETSCHEK Nemetschek AG is a software vendor in the architectureengineering-construction (AEC) field. It provides products for the complete life cycle of buildings from the design right through to construction and management. For the Design phase the company supplies computeraided-design (CAD) software for architects and civil and construction engineers. Its main products are Allplan Architecture (high end) and VectorWorks (mid market). The business unit Build provides ERP solutions and technical applications for construction companies. Furthermore the company provides software solutions for facility and commercial real estate management (Manage). New Business Opportunities (NBO) includes multimedia software in the field of visualisation and animation. The company was founded in 1963 by Prof. Georg Nemetschek listed on the stock exchange in 1999 and acquired Hungarian competitor Graphisoft at the beginning of PHARMAGEST INTERACTIVE Pharmagest Interactive develops management software packages for pharmacies and the pharmaceutical industry. In France the LGPI ("Logiciel de Gestion à Portail Integré") solution is considered as a standard in pharmacies enabling stock management optimisation of orders data exchange pricing policy optimisation management of loyalty cards etc. The activities for pharmacies in Belgium and Luxembourg include the Sabco Optimum- Ultimate products. To the pharmaceutical industry ("e-labos") the group offers communication and online advertising services. The subsidiary Malta Informatique offers IT for nursing homes ("EHPADs") such as the Titan software platform. The company was founded in 1996 and is headquartered in Villers-les- Nancy France. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 11.6 % 7.9 % Estimated earnings per share growth 58.8 % 11.9 % Operational margin % % Return on equity % % Estimated price earnings 12.8x 11.5x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 13.9 % 4.1 % Estimated earnings per share growth 23.3 % 9.8 % Operational margin % % Return on equity % % Estimated price earnings 12.6x 11.5x * Consensus estimates FACTSET at December 31 st 2010 Nemetschek AG (EUR) Pharmagest Interactive (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 53

56 Quoted companies PHOENIX SOLAR Phoenix Solar AG operates in the photovoltaic sector. The company's business segments include Components and Systems segment and Power Plants segment. The Components and Systems segment offers system solutions and support in planning and logistics services. The Power Plants segment provides planning services turnkey construction and maintenance of power plants. It operates in Australia France Germany Greece Italy Oman Spain Singapore and United States of America. Phoenix Solar was founded on November and is headquartered in Sulzemoos Germany. PFEIFFER VACUUM TECHNOLOGY AG Pfeiffer Vacuum Technology is a manufacturer of components and systems for vacuum generation measurement and analysis. Vacuum produces conditions that are similar to those encountered in outer space and are indispensable in the production of numerous high-tech products (solar cells semiconductors insulated glass mechanical tools etc.) and also plays a major role in the analytical industry R&D and environmental technology. The company's most important product group is turbo molecular pumps (for high to ultra-high vacuum) which were invented at Pfeiffer. Backing pumps are used for low and medium vacuum ranges. Components and instruments include pressure controllers leak detectors and mass spectrometers. Arthur Pfeiffer founded the company in 1890 and the company had its IPO (on the NYSE) in The company has its headquarters and manufacturing site in Asslar Germany. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 44.8 % 5.2 % Estimated earnings per share growth % -9.8 % Operational margin 5.86 % 5.04 % Return on equity % % Estimated price earnings 6.2x 6.9x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 17.6 % % Estimated earnings per share growth 33.3 % 43.8 % Operational margin % % Return on equity % % Estimated price earnings 20.4x 14.2x * Consensus estimates FACTSET at December 31 st 2010 Phoenix Solar AG (EUR) Pfeiffer Vacuum Technology AG (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

57 ROCHE HOLDING Roche Holding s principal activities are to discover develop manufacture and market novel health care solutions. The Group operates through two Divisions namely Pharmaceuticals and Diagnostics. The Pharmaceuticals Division consists of Roche Pharmaceuticals along with Genentech and Chugai which the company has majority shareholdings in. It focuses on innovative medicines primarily in the areas of Oncology Autoimmunity Metabolism Virology and CNS. The Diagnostics Division provides products and services for in-vitro diagnostic testing which includes reagents and instrumentation in the area of molecular biology clinical chemistry immunochemistry haematology and coagulation. The Diagnostics division consists of five business areas: Diabetes Care Professional Diagnostics Molecular Diagnostics Tissue Diagnostics and Applied Science. It operates in over 180 countries worldwide. SMA SOLAR TECHNOLOGY AG SMA Solar Technology AG develops and sells solar power inverters which perform the conversion of the variable direct current (DC) generated by a solar module into grid-acceptable alterating current (AC). Within the Photovoltaic Technology division its Sunny Boy branded inverters are suitable for use in small and mid-range PV systems (up to 20 kw). Sunny Mini Central devices are suited for mid-range systems from 15 kw. Sunny Tower and Sunny Central are installed as central inverters for large scale PV systems and open-field plants. Two smaller divisions are Railways Technology and Electronic Manufacturing of which the latter produces mainly for internal demand. SMA was founded in 1981 by Günther Cramer Peter Drews and Reiner Wettlaufer in Kassel. Since June 2008 the company is listed on the Frankfurt Stock Exchange. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 17.3 % 1.6 % Estimated earnings per share growth 26.8 % 10.4 % Operational margin % % Return on equity % % Estimated price earnings 10.5x 9.5x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 97.4 % -7.8 % Estimated earnings per share growth % % Operational margin % % Return on equity % % Estimated price earnings 6.8x 8.7x * Consensus estimates FACTSET at December 31 st 2010 Roche Holding AG (CHF) SMA Solar Technology AG (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 55

58 Quoted companies STRATEC BIOMEDICAL Stratec Biomedical Systems AG develops and manufactures automated analyzer systems in the fields of clinical diagnostics and biotechnology. Its partners market such systems in general together with their own reagents as system solutions to laboratories blood banks and research institutes. Partners are mostly global players operating in the in-vitro diagnostics industry such as Siemens Diasorin Abbott Biomérieux Qiagen Gen-Probe and Immucor. Stratec Biomedical Systems was founded in 1979 and is headquartered in Birkenfeld Germany. TEVA PHARMACEUTICAL Teva Pharmaceutical Industries Ltd. is a global pharmaceutical company that develops produces and markets generic drugs covering all major treatment categories. It also has a significant growing branded pharmaceutical portfolio including Copaxone for multiple sclerosis and Azilect for Parkinson's disease respiratory products and women's health products. Teva's global presence covers North America Europe Latin America Asia and Israel. It has direct operations in more than 60 countries including 38 finished dosage pharmaceutical manufacturing sites in 17 countries 15 generic R&D centers operating mostly within certain manufacturing sites and 21 AP manufacturing sites around the world. Teva Pharmaceuticals Industries Ltd. was incorporated in Israel on February and is the successor to a number of Israeli corporations the oldest of which was established in It is headquartered in Petach Tikva Israel. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 27.0 % 19.5 % Estimated earnings per share growth 27.9 % 24.7 % Operational margin % % Return on equity % % Estimated price earnings 24.3x 19.4x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 25.9 % 15.4 % Estimated earnings per share growth 44.7 % 15.4 % Operational margin % % Return on equity % % Estimated price earnings 11.5x 10.0x * Consensus estimates FACTSET at December 31 st 2010 Stratec Biomedical Systems AG (EUR) Teva Pharmaceutical Industries Ltd. (ILS) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

59 TRANSICS Transics is a provider of fleet management systems (FMS) or telematics for truck and transport fleets. Transics' FMS hardware or on-board computers (OBC) with the Laura Plus and Quattro Plus brand names registers information relating to both the vehicle and driver. The subsidiary DIS provides digital tachographs to register rest and driving times. Software includes TMS used for reporting and analysis and TFM to access real-time information. Transics provides subscription based services such as software and hardware maintenance GPRS communication and navigation. The Field Services team manages project implementation and consultancy. The company was founded in 1990 by Walter Mastelinck and Ludwig Lemenu. In May 2006 the Carlyle Group acquired 80% of the company and this was followed by an IPO in June UMICORE Umicore is a materials technology group with four business areas: The Catalysis group is one of the world's largest manufacturers of automotive emission control catalysts. This segment also includes precious metals chemistry. Energy Materials produces cobalt and specialty materials electro-optic materials thin film products and fuel cells. Applications for these products include rechargeable batteries and photovoltaics. Performance Materials includes building products electroplating platinum engineered materials technical materials zinc chemicals + the 40% stake in Element Six Abrasives. Recycling is the world's largest recycler and refiner of complex materials containing precious metals. Precious metals management (trading leasing hedging...) battery recycling and jewellery & industrial metals are also included in this segment. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 9.7 % 10.5 % Estimated earnings per share growth % Operational margin 7.77 % % Return on equity 2.66 % 5.44 % Estimated price earnings * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 27.8 % 7.9 % Estimated earnings per share growth % 9.5 % Operational margin 3.73 % 3.84 % Return on equity % % Estimated price earnings 17.9x 16.3x * Consensus estimates FACTSET at December 31 st 2010 Transics International N.V. (EUR) Umicore S.A. (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec 10 GENERAL REPORT 2010 l 57

60 Genoteerde ondernemingen UNIT 4 Unit 4 is an international software company that is headquartered in the Netherlands (Sliedrecht) and has been listed on the Amsterdam stock exchange since The company is active in business software selling licenses maintenance and services for software to control support and optimise various business processes and to improve business operations. Its main international product is Agresso Business World. Coda acquired in 2008 provides financial management solutions designed to meet the needs of financial directors and finance departments. In the Benelux and some other countries Unit 4 Agresso delivers business software to small and medium-sized enterprises (SME) and specific sectors. The group sold its "Internet & Security" division in early UNITED DRUG United Drug is a healthcare services provider operating through 3 divisions. Healthcare Supply Chain combines all logistics operations of the group i.e pharma wholesale pre-wholesale (contract distribution outsourcing) and sales and marketing of medical and scientific equipment and consumables. Contract Sales & Marketing Services operating through Ashfield In2Focus specialises in recruiting and employing contract sales representatives hospital specialists and nursing professionals on behalf of pharmaceutical companies. Packaging & Specialty Services includes contract packaging of pharmaceuticals provision of flu/travel vaccines and direct to home healthcare. STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 11.3 % 9.6 % Estimated earnings per share growth 10.0 % 24.9 % Operational margin % % Return on equity % % Estimated price earnings 16.3x 13.1x * Consensus estimates FACTSET at December 31 st 2010 STOCK MARKET DATA Stock price at December 31 st EUR Market capitalisation at December 31 st m EUR Performance in % (in EUR) FINANCIAL DATA* Estimated sales growth 0.5 % 3.2 % Estimated earnings per share growth -2.6 % 1.3 % Operational margin 3.48 % 3.86 % Return on equity % - Estimated price earnings 9.2x 9.1x * Consensus estimates FACTSET at December 31 st 2010 UNIT4 N.V. (EUR) United Drug PLC (EUR) dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec dec 09 jan 10 feb 10 mrt 10 apr 10 mei 10 jun 10 jul 10 aug 10 sep 10 okt 10 nov 10 dec l GENERAL REPORT 2010

61 Explanatory notes to Stock market data and financial data. Explanatory notes to Stock market data and financial data. Stock price on December 31 st 2010: Closing price of the stock in local currency on the last trading day of Market capitalisation on December 31 st 2010: Stock market capitalisation of the company in euros on the last trading day of Market capitalisation is calculated as the total number of shares outstanding multiplied by the stock price. Performance in 2010: Total share performance of the stock in local currency being the increase of the stock price plus the dividend yield (reinvested). Estimated sales growth: Percentage rise of the estimated sales (turnover) of the year compared to the previous year. Estimated earnings per share growth: Percentage rise of the estimated earnings per share of the year compared to the previous year. Earnings per share is generally calculated by analysts as net profit possibly corrected for non recurring elements divided by the average number of outstanding shares of the year. Operating margin: Estimated operating profit (or profit before financial income and costs and before taxes) possibly corrected for non recurring items divided by the estimated sales (turnover) of the year. Return on equity: Estimated earnings per share of the year divided by the average estimated equity per share of the year. This ratio is an indicator for the profitability of the company. Estimated earnings per share ratio: Stock price at December 31 st 2010 divided by the estimated earnings per share of the year. All financial data are based on the database of Factset which calculates consensus figures based on collected estimates from analysts. The estimates are not necessarily in accordance with possible estimates from the company involved. All figures are as estimated on December 31 st Performance in 2010 as calculated by Bloomberg. GENERAL REPORT 2010 l 59

62 GENERAL INFORMATION Name legal form and registered office The company is a public limited company trading under the name of Quest for Growth. It is incorporated as an investment company with a fixed capital for investment in listed and unlisted companies hereinafter called the Privak (Private Equity Bevak). The company s registered office is situated at Lei 19 box 3 B-3000 Leuven. The company is registered in Belgium under Leuven trade register number and company registration number Formation changes to the Articles of Association duration The company was incorporated in the form of a public limited company (NV/SA) by deed passed before Notary Hans Berquin in Brussels on the ninth of June nineteen hundred and ninety-eight and published in the Riders to the Belgian Official Gazette of the following twentyfourth of June under the number The Articles of Association were amended by deed passed before Notary Hans Berquin in Brussels on the thirtieth of June nineteen hundred and ninety-eight and published in the Riders to the Belgian Official Gazette on the following nineteenth of September under the number The Articles of Association were amended by deed passed before Notary Eric Spruyt in Brussels on the twenty-second of July nineteen hundred and ninety-eight and published in the Riders to the Belgian Official Gazette on the following nineteenth of September under the number A deed amending the Articles of Association including a decision to increase the capital was drawn up before Notary Eric Spruyt in Brussels on the twenty-fifth of August nineteen hundred and ninety-eight and published in the Riders to the Belgian Official Gazette on the following twenty-fifth of November under the number The Articles of Association were amended by deed passed before Notary Hans Berquin in Brussels on the twenty-second of September nineteen hundred and ninety-eight and published in the Riders to the Belgian Official Gazette on the following eleventh of November under the number The Articles of Association were amended by deed passed before Notary Eric Spruyt on the seventeenth of September two thousand and published in the Riders to the Belgian Official Gazette on the tenth of January two thousand and one under the number The Articles of Association were amended by deed passed before Notary Luc Hertecant in Overijse on the nineteenth of September two thousand and two and published in the Riders to the Belgian Official Gazette on the twenty-ninth of October two thousand and two under the number The Articles of Association were amended by deed passed before Notary Luc Hertecant in Overijse on the ninth of February two thousand and four and published in the Riders to the Belgian Official Gazette on the twenty-second of April two thousand and four under the number The Articles of Association were amended by deed passed before Notary Luc Hertecant in Overijse on the fifteenth of September two thousand and five and published in the Riders to the Belgian Official Gazette on the eighth of November two thousand and five under the number The Articles of Association were amended by deed passed before Notary Eric Spruyt in Brussels on the eighth of November two thousand and five and published in the Belgian Official Gazette on the ninth of December two thousand and five under the number The Articles of Association were amended by deed passed before Notary Luc Hertecant in Overijse on the tenth of November two thousand and five and published in the Belgian Official Gazette on the ninth of December two thousand and five under the number l GENERAL REPORT 2010

63 The Articles of Association were last amended by deed passed before Peter Van Melkebeke in Brussels on the thirtieth of April two thousand and seven and published in the Belgian Official Gazette on the seventh of June two thousand and seven under the number The company is established for an indefinite period and shall commence trading on the date of its formation. Financial year and audit The Company s financial year begins on January 1 st and ends on December 31 st. The annual accounts are audited by Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Burg. CV represented by Mr Pierre Berger Prins Boudewijnlaan 24D B-2550 Kontich. Consultation of company documents Decree and by the provisions in these Articles of Association and the prospectus published with regard to the issue of shares to the public. The Privak shall focus its investment policy on investment in growth industries in various sectors of the economy including but not limited to the sectors of medicine and health biotechnology information technology software and electronics and new materials. Furthermore the company may incidentally keep liquid funds in the form of savings accounts investments at notice or short term investment certificates. From the second year of operations onwards such liquid funds shall in principle be limited to ten percent (10 %) of the assets unless a special decision by the Board of Directors temporarily authorises a higher percentage. Day-to-day management is carried out by Quest Management NV acting as the Managing Director. The company s Articles of Association are available from the Registry of the Commercial Court at Leuven. The annual accounts of the Company are filed with the National Bank of Belgium. These documents as well as the annual interim and quarterly reports and all published information intended for shareholders can also be obtained at the company s registered office. The company s annual report is sent each year to all registered shareholders and other persons who request it. General meeting The General Meeting shall be held on the third Thursday of March at 11am. Where that date falls on a public holiday the meeting shall take place on the next working day. The AGM for the accounting year starting January 1 st 2011 and ending December 31 st 2011 will take place on March 15 th Company objectives The objects of the Privak are the collective investment of funds collected from the public pursuant to the Royal Decree of the eighteenth of April nineteen hundred and ninety-seven in listed and unlisted growth companies and funds with a similar objective to the Privak. It shall be governed in its investment policy by the aforesaid Royal GENERAL REPORT 2010 l 61

64 GENERAL INFORMATION ABOUT THE COMPANY S CAPITAL Issued capital of the Company The Company was incorporated on June 9 th 1998 with share capital of BEF through the issue of ordinary shares 750 A shares and 250 B shares. On June 30 th 1998 the share capital was increased by BEF up to BEF through the issue of ordinary shares. On July 22 nd 1998 the share capital was increased by BEF up to BEF through the issue of ordinary shares. On September 22 nd 1998 the share capital was increased by BEF up to BEF through a public offer to subscribe for new ordinary shares. On November 17 th 2000 the share capital was increased by EUR to EUR through a public offer to subscribe for new ordinary shares. On September 15 th 2005 the capital was reduced by EUR to EUR by means of a capital reduction to clear incurred losses. The number of shares remained unchanged. On November 8 th 2005 the share capital was increased by EUR to EUR by exercising warrants and creating new ordinary shares. On November 10 th 2005 the share capital was reduced by EUR to EUR by creating an available reserve of EUR. The number of shares remained unchanged. On April 30 th 2007 the share capital was increased by EUR to EUR by creating new ordinary shares. The subscribed capital of the Company is EUR and is represented by ordinary shares 750 A shares and 250 B shares without nominal value. All ordinary shares have the same rights and privileges represent the same fractional value of the capital of the Company and are fully paid-up. All of these ordinary shares have the same voting rights dividend entitlements and rights to the liquidation surplus. The holders of Class A and Class B shares will receive a preference dividend. That preference dividend will be paid out from part of the net profit that exceeds the amount necessary to pay all shareholders a dividend equal to the return of a risk-free investment based on a reference index (Bund 10 years) increased by a 1.5 % nominal risk premium calculated on the basis of the net asset value as expressed on the balance sheet (after profit appropriation) at the beginning of the financial year to which the dividend relates. The reference index (Bund 10 years Bloomberg code=gdbr10) for a given financial year is determined and presented to the Annual Evolution Company's Capital and Reserves l GENERAL REPORT 2010

65 General Meeting each year by the Board of Directors on the day of the Annual General Meeting that deliberates over the results of the previous fiscal year. Of that surplus amount twenty percent (20 %) will be paid out to holders of Class A and Class B shares as preference dividends. The remaining eighty percent (80 %) will be distributed equally among all shareholders. If the capital is increased during the year the new capital contributed will be included in the calculation on a pro rata temporis basis. Authorised capital of the company The updated text of the Articles of Association as at November 10 th 2005 has expressly permitted the Board of Directors to increase the share capital on one or more occasions by a maximum amount of This authorisation was granted for a period of five years with effect from publication of the deed of capital increase of the Company on November 10 th 2005 published in the Riders to the Belgian Official Gazette. It can be renewed one or more times for a maximum period of five years on each occasion. The General Meeting may have increased or reduced the subscribed capital. In the event of an increase in capital by issuing shares in return for a contribution in cash it was not possible to deviate from the priority right of the existing shareholders. This authorization expired in 2010 and is not renewed. Warrants warrants were issued on September 26 th Each warrant entitled the holder to subscribe to one new ordinary share of the company upon exercise of the warrant during one of the exercise periods against payment of the strike price of 8 per ordinary share warrants have been converted into new ordinary shares warrants were issued on April 10 th Four warrants entitled the holder to subscribe to one new ordinary share of the company upon exercise of the warrant during the exercise period against payment of GENERAL REPORT 2010 l 63

66 the strike price of 8.5 per ordinary share new ordinary shares were issued upon exercise of preferential subscription rights. The remaining new ordinary shares were issued in an open tranche. Share buy-back The Extraordinary General Meeting of March 15 th 2007 decided to authorise the Board of Directors to acquire the Company s own shares for the Company s account under the conditions stipulated by the Belgian Companies Code the combined fractional value of which was not more than ten per cent (10 %) of the issued capital for a minimum price of six euros ( 6.00) per share and a maximum price of twelve euros ( 12.00) per share. This authorisation applied for a period of eighteen (18) months effective from publication of the decision of this EGM in the Riders to the Belgian Official Gazette (April 1 st 2007). The Board of Directors may dispose of the shares so purchased either directly or through the intermediary of a person acting in his or her own name but for account of the Company at a price that lies within the range determined for the authorisation to purchase own shares. Own shares were purchased without reducing the capital but by forming an unavailable reserve equal to the value at which the acquired shares were recorded in the inventory. The voting right associated with these shares will be suspended for as long as the shares are in the Company s possession. The authorisation given to the Board of Directors to purchase own shares expired on October 30 th The share buy-back programme was not renewed. Currently the company holds own shares. Information on share ownership The following shareholders have notified the Company of their interest of 5 % or more in the Company Name and address % Number of shares on Dexia Insurance Belgium NV Livingstonelaan Brussels Belgium Laxey Partners Limited 4th Floor Derby House 64 Athol Street Douglas Isle of Man IM1 1JD United Kingdom % 21/06/ % 17/09/ l GENERAL REPORT 2010

67 KEY INFORMATION Board of Directors Audit Committee Investment Committee Managing Director Auditors Depositary bank Dr Jos B. Peeters Chairman Quest Management NV Managing Director represented by Mr René Avonts Managing Director of Quest Management NV Bergendal & Co SPRL Vice Chairman Independent Director represented by Count Diego du Monceau de Bergendal Tacan BVBA Vice Chairman Independent Director since 17 July 2009 represented by Mr Johan Tack Euro Invest Management NV Director represented by Prof Philippe Haspeslagh De Meiboom NV Director represented by Mr Edward Claeys Pamica NV Independent Director represented by Mr Michel Akkermans Auxilium Keerbergen BVBA Independent Director represented by Mr Frans Theeuwes Gengest BVBA Independent Director represented by Mr Rudi Mariën Prof Koenraad Debackere Independent Director Mr Dirk Vanderschrick Director Auxilium Keerbergen BVBA Chairman represented by Mr Frans Theeuwes Bergendal & Co SPRL represented by Count Diego du Monceau de Bergendal Tacan BVBA represented by Mr Johan Tack Euro Invest Management NV Chairman represented by Prof Philippe Haspeslagh Dr Jos B. Peeters Quest Management NV represented by Mr René Avonts De Meiboom NV represented by Mr Edward Claeys Pamica NV represented by Mr Michel Akkermans Gengest BVBA represented by Mr Rudi Mariën Mrs Goedele Ertveldt Quest Management NV Lei 19 box 2 B-3000 Leuven represented by Mr René Avonts Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Burg. CV represented by Mr Pierre Berger Prins Boudewijnlaan 24D B-2550 Kontich DEXIA BANK Pachécolaan 44 B-1000 Brussels Incorporation June 9 th 1998 Official listing September 23rd 1998 on Euronext Brussels Security number ISIN: BE Company reports Published quarterly the next report will be the quarterly report to be published in April Stock Price Estimated Net Asset Value Bloomberg: QFG BB Equity Reuters: QUFG.BR Telekurs: Published every first Saturday of the month in De Tijd in L Echo Moneytalk and on the Quest for Growth website. GENERAL REPORT 2010 l 65