Annual Report and Audited Financial Statements for the Year Ended 31 December 2011

Transcription

1 Europe/Americas Select Private Equity (Ireland) II, PLC (An Irish Investment Company) Annual Report and Audited Financial Statements for the Year Ended 31 December 2011

2 Europe/Americas Select Private Equity (Ireland) II, PLC Table of Contents ANNUAL REPORT: Page Directors and Other Information 1 Background to the Company 2-3 Investment Adviser s Report 4-5 Directors Report 6-9 Custodian s Report Independent Auditors Report Statement of Assets and Liabilities Statement of Operations Statement of Changes in Shareholders Equity Statement of Cash Flows Notes to Financial Statements Schedule of Investments 64 Schedule to the Directors Report Americas Select Private Equity Partners II LLC Financial Statements Attachment A Europe Select Private Equity Partners II LP Financial Statements Attachment B

3 Europe/Americas Select Private Equity (Ireland) II, PLC 1 Directors and Other Information 31 December 2011 Board of Directors Investment Adviser Michael Jackson (Irish)* AXA Private Equity (US), LLC Frank Ennis (Irish)* 1370 Avenue of the Americas 22nd Floor Michael Ferragamo (American) New York, NY Aymeric Lepeu (French) USA Vladimir Colas (French) Independent Auditors PricewaterhouseCoopers Chartered Accountants and Registered Auditors One Spencer Dock North Wall Quay Dublin 1, Ireland Solicitor Matheson Ormsby Prentice 70 Sir John Rogerson s Quay Dublin 2, Ireland Custodian Administrator, Transfer Agent, Secretary, State Street Custodial Services (Ireland) Limited Registrar 78 Sir John Rogerson s Quay International Fund Services (Ireland) Limited Dublin 2 78 Sir John Rogerson s Quay Ireland Dublin 2 Ireland Sponsoring Stockbroker Registered Office Davy 78 Sir John Rogerson s Quay Davy House Dublin 2 49 Dawson St Ireland Dublin 2 Registered No Ireland * Independent Directors

4 Europe/Americas Select Private Equity (Ireland) II, PLC 2 Background to the Company 31 December 2011 The following information is derived from and should be read in conjunction with the full text and definitions sections of the prospectus. Structure: Europe/Americas Select Private Equity (Ireland) II, PLC (the Company ) was incorporated in the Republic of Ireland as a public limited company on 19 July 2000 under the Companies Acts, 1963 to The Company is a closed-ended investment company with variable capital which has been authorised as a designated Company pursuant to Part XIII of the Companies Act, The Company is listed on the Irish Stock Exchange. The Company is organised in the form of an umbrella fund and commenced operations on 28 December Investment Objective: The Company seeks to achieve its investment objective by investing substantially all of its investable assets into Europe Select Private Equity Partners II LP (the Europe Portfolio II or Europe Fund II ) and Americas Select Private Equity Partners II LLC (the Americas Portfolio II or Americas Fund II ) (collectively, the Portfolios or the Master Funds ), which have the same investment objective as the Company. As of 31 December 2011 and 2010, the Company owned 63.61% of the Europe Fund II and 79.40% of the Americas Fund II. Other Relevant Information: The Company was organised to provide institutional and individual investors (collectively, Investors ) access to the Portfolios. The Portfolios invested in a range of private equity funds, which primarily invested in Europe and the United States of America. It is intended that the Company will liquidate at 31 December 2012, unless this period is extended by special resolution of the Shareholders. As the Portfolios are winding down the directors believe it is likely that the Company will be liquidated in 2012 in accordance with the governing documents. Management will organize the necessary steps to comply with the governing documents of the Company within the specified deadlines. The Directors may from time to time, with the prior approval of the Central Bank, issue different classes of shares representing separate sub-funds ( class or sub-fund ). The assets of each sub-fund will be invested, in accordance with the investment objective and policies applicable to such sub-fund. Although each sub-fund will be treated as bearing its own liabilities, the Company as a whole will remain liable to third parties for all of the liabilities of the Company.

5 Europe/Americas Select Private Equity (Ireland) II, PLC 3 Background to the Company (continued) 31 December 2011 The Company operates as a feeder fund to the Master Fund contributing substantially all of its investable assets to the Portfolios. Specifically, the investable assets attributable to the Euro denominated Class A Shares, Class B Shares, Class C Shares and Class D Shares (the Euro Classes ) will be invested in the Europe Portfolio II and the investable assets attributable to the U.S. Dollar denominated Class E Shares, Class F Shares, Class G Shares and Class H Shares (the Dollar Classes ) will be invested in the Americas Portfolio II. As of 31 December 2011, Classes A, B, C, D, E, G and H have been issued and are outstanding. The Company is sponsored by AXA Investment Managers GS Limited ( AXA-IM ), the asset management arm of AXA, and the Portfolios are co-sponsored by AXA-IM and AIG Capital Partners, Inc. ( AIGCP ), a subsidiary of American International Group, Inc., (AIGCP, together with AXA-IM, the Co-Sponsors ). AXA-AIG Asset Management II, LLC, which is jointly owned by AXA-IM and AIGCP, serves as managing member (the Managing Member ) of the Americas Portfolio II. AXA-AIG Asset Management II, L.P., which is jointly owned by AXA Investment Managers and AIGCP, serves as the general partner (the General Partner ) of the Europe Portfolio II. AXA Private Equity (US), LLC (formerly AXA Investment Managers Private Equity Fund of Funds, LLC), an affiliate of AXA, serves as the investment adviser (the Investment Adviser ) of the Portfolios. AIGCP serves as sub-adviser (the Sub-Adviser ) to the Investment Adviser. The Portfolios are permitted to invest a portion of their committed capital in Direct and Secondary Investments. At 31 December 2011 and 2010, no Secondary Investments or Direct Investments were held.

6 Europe/Americas Select Private Equity (Ireland) II, PLC 4 Investment Adviser s Report (continued) 31 December 2011 Dear Investor: We are pleased to present to you the financial statements for Europe/Americas Select Private Equity (Ireland) II, plc (the Fund ) as of December 31, The NAVs for the share classes can be found on the website of the Irish Stock Exchange at Portfolio Progress US Share Classes The Americas Select Private Equity Partners II LLC portfolio, with which the US share classes E, G, H of the Fund invest into, is fully committed as of December 31st Following a competitive auction process on the secondary market, a Sale and Purchase Agreement for underlying funds were signed on July 8, 2011 providing the following performances: Portfolio progress Euro Share Classes Cumulative capital calls $138,535,000 Cumulative distributions $153,616,115 Total Fund size/commitment $138,535,000 Paid in Capital 100% Multiple 1.33x Cash on Cash return 1.11x Residual value 0.21x Internal Rate of Return 5.75% The Europe Select Private Equity Partners II LP portfolio, with which the Euro share classes A, B, C, D of the Fund invest into, will not require any additional funding. Following a competitive auction process on the secondary market, Sale and Purchase Agreements for underlying funds were signed on July 15th, July 21st, 2011, September 1st 2011 and October 10th 2011 providing the following performances: Cumulative capital calls 210,740,453 Cumulative distributions 238,996,408 Total Fund size/commitment 240,107,400 Paid in Capital 88% Multiple 1.27x Cash on Cash return 1.13x Residual value 0.14x Internal Rate of Return 5.74%

7 Europe/Americas Select Private Equity (Ireland) II, PLC 5 Investment Adviser s Report (continued) 31 December 2011 In conjunction with the sale process of the Americas Select Private Equity Partners II LLC and Europe Select Private Equity Partners II LP portfolios, an orderly winding down process is occurring; a final distribution to investors will take place by the end of Very truly yours, AXA Private Equity (US), LLC 26 April, 2012

8 Europe/Americas Select Private Equity (Ireland) II, PLC 6 Directors Report 31 December 2011 The Directors submit their annual report together with the audited financial statements for the year ended 31 December Review of business and future developments Assets under management for the Company decreased (including distributions of 57,837,854) from 113,302,597 to 36,681,437. The Net Asset Value ( NAV ) per share decreased from to for Class A, to for Class B, to for Class C, to for Class D, $ to $96.05 for Class E, $ to $ for Class G, and $ to $ for Class H during the year. A detailed review of the business and future developments is included in the Investment Adviser's Report on pages 4 to 5. Directors' responsibilities The Directors are responsible for preparing the Annual report and the financial statements in accordance with the applicable Irish Law and the Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Irish company law requires the Directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and include a report containing a review of the performance and a description of the principal risks and uncertainties facing the Company which are contained in the Investment Adviser s Report on pages 4 to 5 and Note 11 Risks of Investments respectively. The Directors confirm that they have complied with the above requirements in preparing the financial statements. The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with the Irish Companies Acts, 1963 to The measures taken by the Directors to secure compliance with the Company s obligations to keep proper books of account are the use of appropriate systems and procedures and the employment of competent persons. Accordingly, the books of account are kept at 78 Sir John Rogerson s Quay, Dublin 2, Ireland. The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under the non-ucits Regulations, the Directors are required to entrust the assets of the Company to State Street Custodial Services (Ireland) Limited for safekeeping. International Fund Services (Ireland) Limited maintains the books of account. Statement of Corporate Governance A. General Requirements The Company is subject to the requirements of the Irish Companies Acts, 1963 to 2009 (the Companies Acts ) and the Central Bank of Ireland in its Non-UCITS Notices and Guidance Notes.

9 Europe/Americas Select Private Equity (Ireland) II, PLC 7 Directors Report (continued) 31 December 2011 Statement of Corporate Governance (continued) A. General Requirements(continued) Although there is no statutory corporate governance code applicable to Irish collective investment schemes whose shares are admitted to trading on the Irish Stock Exchange, the Company is subject to corporate governance practices imposed by: (i) (ii) (iii) (iv) the Irish Companies Acts, 1963 to 2009 which can be obtained from the Irish statute book website at and are available for inspection at the registered office of the Company; the Articles of Association of the Company (the Articles ) which are available for inspection at the registered office of the Company and may be obtained at the registered office of the Administrator or at the Companies Registration Office in Ireland; the Central Bank of Ireland in their Non-UCITS notices and guidance notes which can be obtained from the Central Bank of Ireland s website at and the Irish Stock Exchange ( ISE ) through the ISE Code of Listing Requirements and Procedures which can be obtained from the ISE s website at B. Board of Directors In accordance with the Irish Companies Acts and the Articles, unless otherwise determined by an ordinary resolution of the Company in general meeting, the number of Directors may not be less than two. The Board currently comprises of five Directors, three of whom are related to the promoter of the Company and two of whom are independent. Details of the current Directors are set out in the Directors and Other Information section on page 1, under the heading Board of Directors. The Board meets on at least a semi-annual basis to fulfil its responsibilities. However, additional meetings in addition to the two meetings may be convened as required and the Board may meet more frequently in general sessions of the Board to discuss matters of general importance to the Company. The Board has delegated management of the Company to certain delegate service providers. These delegate service providers are set out in the Directors and Other Information section on page 1. Board materials, including a detailed agenda of items for consideration at each Board meeting, minutes of the previous meeting and reports from various internal and external stakeholders, including delegate service providers, are generally circulated in advance of the meeting to allow all Directors adequate time to consider the material. The quorum necessary for the transaction of business at a meeting of Directors is two. Directors generally attend all Board Meetings.

10 Europe/Americas Select Private Equity (Ireland) II, PLC 8 Directors Report (continued) 31 December 2011 Statement of Corporate Governance (continued) B. Board of Directors (continued) The Board has not directly established any committees to whom business is delegated. The Board has regular direct contact with the delegate service providers and thus delegated responsibilities to committees are not deemed necessary. C. Internal Control and Risk Management Systems in relation to Financial Reporting The Board is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. The Board have entrusted the administration of the accounting records to the Administrator. The Board, through delegation to the Administrator, has put in place a formal procedure to ensure that relevant accounting records for the Company are properly maintained and are readily available, and includes the procedure for the production of audited annual financial statements and unaudited semi-annual financial statements for the Company. The annual and semi-annual financial statements of the Company are prepared by the Administrator and presented to the Board of Directors for approval, prior to applicable filing such as with the Central Bank of Ireland or the ISE. The Board has hired an independent external audit firm to audit the annual financial statements in accordance with the Companies Acts. The auditor s report to shareholders, including any qualifications, is reproduced in full in the annual report. D. Shareholder Meetings All general meetings of the Company shall be held in Ireland. Each year the Company shall hold a general meeting as its annual general meeting. Reasonable notice shall be given in respect of each general meeting of the Company. The notice shall specify the venue and time of the meeting and the business to be transacted at the meeting. A proxy may attend on behalf of any Shareholder. An ordinary resolution is a resolution passed by a simple majority and a special resolution is a resolution passed by a majority of 75 per cent or more of the votes cast. The Articles provide that matters may be determined by a meeting of Shareholders on a show of hands unless a poll is requested by five Shareholders or by Shareholders holding 10 per cent or more of the Shares or unless the Chairman of the meeting requests a poll. Each Share (excluding the Subscriber Shares) gives the holder one vote in relation to any matters relating to the Company which are submitted to Shareholders for a vote by poll. Results and dividends The results for the year are set out in the Statements of Operations on pages 22 to 29. During the year ended 31 December 2011 Classes A, B, C and D have received distributions from the Portfolios of 4,621,409, 1,773,583, 3,403,735 and 13,213,708 respectively. Classes E, G and H have received distributions from the Portfolios of $5,261,364, $4,276,628 and $37,397,105 respectively. Distributions of 4,546,408, 1,698,584, 3,328,733 and 13,138,707 have been paid for the year ended 31 December 2011 to Shareholders of classes A, B, C and D respectively. Distributions of $4,885,292, $3,907,898 and $36,602,920 have been paid for the year ended 31 December 2011 to Shareholders of classes E, G and H respectively.

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12 Europe/Americas Select Private Equity (Ireland) II, PLC 10 Custodian s Report 31 December 2011 We have enquired into the conduct of Europe/Americas Select Private Equity (Ireland) II, PLC (the Company ) for the year ended 31 December 2011, in our capacity as Custodian to the Company. This report including the opinion has been prepared for and solely for the shareholders in the Company in accordance with the Central Bank of Ireland Non - UCITS Notice 7, and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown. Responsibilities of the Custodian Our duties and responsibilities are outlined in the Central Bank of Ireland Non - UCITS Notice 7. One of those duties is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders. Our report shall state whether, in our opinion, the Company has been managed in that period in accordance with the provisions of the Company s Memorandum and Articles of Association and the Non - UCITS Notices. It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as Custodian must state why this is the case and outline the steps which we have taken to rectify the situation. Basis of Custodian Opinion The Custodian conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in Non - UCITS Notice 7 and to ensure that, in all material respects, the Company has been managed (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations and (ii) otherwise in accordance with the Company s constitutional documentation and the appropriate regulations.

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14 Europe/Americas Select Private Equity (Ireland) II, PLC 12 Independent Auditors Report 31 December 2011 Independent Auditors' report to the Shareholders of Europe/Americas Select Private Equity (Ireland) II, PLC ( the Company ) We have audited the Company s financial statements for the year ended 31 December 2011 which comprise the Statement of Assets and Liabilities, the Statement of Operations, the Statement of Changes in Shareholders Equity, the Statement of Cash Flows, the Schedule of Investments and the related notes. As further explained in Note 2, these financial statements have been prepared on a termination basis and under the accounting policies set out therein. Respective responsibilities of directors and auditors The directors responsibilities for preparing the Annual Report and the financial statements in accordance with applicable Irish law and the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the Statement of Directors Responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the Company s members as a body in accordance with Section 193 of the Companies Act, 1990 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to We state whether we have obtained all the information and explanations we consider necessary for the purposes of our audit, and whether the financial statements are in agreement with the books of account. We also report to you our opinion as to: whether the Company has kept proper books of account; and whether the directors report is consistent with the financial statements. We also report to you if, in our opinion, any information specified by law regarding directors remuneration and directors transactions is not disclosed and where practicable, include such information in our report. We read the other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

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32 Europe/Americas Select Private Equity (Ireland) II, PLC 30 Statement of Changes in Shareholders Equity Note Class A Class B Balance at 1 January ,944,077 4,011,689 Distributions made 9 (4,546,408) (1,698,584) Decrease in shareholders equity resulting from operations (2,384,715) (958,275) Balance at 31 December ,012,954 1,354,830 Note Class A Class B Balance at 1 January ,943,842 4,460,764 Distributions made 9 (3,163,004) (1,123,671) Increase in shareholders equity resulting from operations 2,163, ,596 Balance at 31 December ,944,077 4,011,689 The accompanying notes are an integral part of these financial statements.

33 Europe/Americas Select Private Equity (Ireland) II, PLC 31 Statement of Changes in Shareholders Equity (continued) Note Class C Class D Balance at 1 January ,940,359 31,398,118 Distributions made 9 (3,328,733) (13,138,707) Decrease in shareholders equity resulting from operations (1,716,180) (6,317,364) Balance at 31 December ,895,446 11,942,047 Note Class C Class D Balance at 1 January ,123,616 36,720,298 Distributions made 9 (2,276,652) (9,224,091) Increase in shareholders equity resulting from operations 1,093,395 3,901,911 Balance at 31 December ,940,359 31,398,118 The accompanying notes are an integral part of these financial statements.

34 Europe/Americas Select Private Equity (Ireland) II, PLC 32 Statement of Changes in Shareholders Equity (continued) Note Class E (in USD) Balance at 1 January ,452,467 Distributions made 9 (4,885,292) Decrease in shareholders equity resulting from operations (1,521,602) Balance at 31 December ,045,573 Note Class E (in USD) Balance at 1 January ,138,079 Distributions made 9 - Increase in shareholders equity resulting from operations 1,314,388 Balance at 31 December ,452,467 The accompanying notes are an integral part of these financial statements.

35 Europe/Americas Select Private Equity (Ireland) II, PLC 33 Statement of Changes in Shareholders Equity (continued) Note Class G (in USD) Class H (in USD) Balance 1 January ,161,319 64,440,368 Distributions made 9 (3,907,898) (36,602,920) Decrease in shareholders equity resulting from operations (1,229,742) (9,320,503) Balance at 31 December ,023,679 18,516,945 Note Class G (in USD) Class H (in USD) Balance 1 January ,331,351 57,177,204 Distributions made Increase in shareholders equity resulting from operations 829,968 7,263,164 Balance at 31 December ,161,319 64,440,368 The accompanying notes are an integral part of these financial statements.

36 Europe/Americas Select Private Equity (Ireland) II, PLC 34 Statement of Changes in Shareholders Equity (continued) Total* Total* Balance 1 January 113,302, ,262,731 Translation Adjustments (See Note Below) 1,933,867 3,942,293 Distributions made (57,837,854) (15,787,418) Decrease in shareholders equity resulting from operations (20,717,173) 14,884,991 Balance at 31 December 36,681, ,302,597 *US Dollar Classes (Classes E, G, and H) have been converted to Euro for purposes of including the results in the total column at 31 December 2011 and (See Note 14) Note: Translation to Presentation Currency For the purposes of combining the financial statements of the Company to arrive at total figures (required under Irish Company Law) the amounts in the financial statements have been translated to Euro at the exchange rate at 31 December 2011 and These rates approximate actual rates. The method of translation has no effect on the NAV per share attributable to each of the share classes. The accompanying notes are an integral part of these financial statements.

37 Europe/Americas Select Private Equity (Ireland) II, PLC 35 Statement of Cash Flows CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class A For Year Ended 31 December 2010 Class A Interest income Direct expenses (92,961) (49,585) Increase/(decrease) in creditors 57,630 (30,853) Distributions received from Financial Assets 4,621,409 3,300,593 Net cash inflow from operating activities 4,586,143 3,220,206 CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (4,546,408) (3,163,004) Net cash outflow from financing activities (4,546,408) (3,163,004) Increase in cash and cash equivalents 39,735 57,202 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 60,512 3,310 CASH AND CASH EQUIVALENTS, END OF YEAR 100,247 60,512 The accompanying notes are an integral part of these financial statements.

38 Europe/Americas Select Private Equity (Ireland) II, PLC 36 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class B For Year Ended 31 December 2010 Class B Interest income Direct expenses (96,363) (48,434) Increase/(decrease) in creditors 60,283 (32,753) Distributions received from Financial Assets 1,773,583 1,262,761 Net cash inflow from operating activities 1,737,528 1,181,593 CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (1,698,584) (1,123,671) Net cash outflow from financing activities (1,698,584) (1,123,671) Increase in cash and cash equivalents 38,944 57,922 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 58, CASH AND CASH EQUIVALENTS, END OF YEAR 97,375 58,431 The accompanying notes are an integral part of these financial statements.

39 Europe/Americas Select Private Equity (Ireland) II, PLC 37 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class C For Year Ended 31 December 2010 Class C Interest income Direct expenses (96,367) (48,434) Increase/(decrease) in creditors 60,285 (32,755) Distributions received from Financial Assets 3,403,735 2,415,742 Net cash inflow from operating activities 3,367,701 2,334,591 CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (3,328,733) (2,276,652) Net cash outflow from financing activities (3,328,733) (2,276,652) Increase in cash and cash equivalents 38,968 57,939 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 60,699 2,760 CASH AND CASH EQUIVALENTS, END OF YEAR 99,667 60,699 The accompanying notes are an integral part of these financial statements.

40 Europe/Americas Select Private Equity (Ireland) II, PLC 38 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class D For Year Ended 31 December 2010 Class D Interest income Direct expenses (96,365) (48,436) Increase/(decrease) in creditors 60,284 (32,754) Distributions received from Financial Assets 13,213,708 9,363,181 Net cash inflow from operating activities 13,177,815 9,282,141 CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (13,138,707) (9,224,091) Net cash outflow from financing activities (13,138,707) (9,224,091) Increase in cash and cash equivalents 39,108 58,050 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 59,256 1,206 CASH AND CASH EQUIVALENTS, END OF YEAR 98,364 59,256 The accompanying notes are an integral part of these financial statements.

41 Europe/Americas Select Private Equity (Ireland) II, PLC 39 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class E (in USD) For Year Ended 31 December 2010 Class E (in USD) Interest income 4 1 Direct expenses (188,261) (70,333) (Decrease)/ increase in creditors (27,624) 69,541 Distributions received from Financial Assets 5,261,364 - Net cash inflow/(outflow) from operating activities 5,045,483 (791) CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (4,885,292) - Net cash outflow from financing activities (4,885,292) - Increase/(decrease) in cash and cash equivalents 160,191 (791) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,542 4,333 CASH AND CASH EQUIVALENTS, END OF YEAR 163,733 3,542 The accompanying notes are an integral part of these financial statements.

42 Europe/Americas Select Private Equity (Ireland) II, PLC 40 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class G (in USD) For Year Ended 31 December 2010 Class G (in USD) Interest income 4 1 Direct expenses (192,263) (67,625) (Decrease)/ increase in creditors (23,399) 66,832 Distributions received from Financial Assets 4,276,628 - Net cash inflow/(outflow) from operating activities 4,060,970 (792) CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (3,907,898) - Net cash outflow from financing activities (3,907,898) - Increase/(decrease) in cash and cash equivalents 153,072 (792) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 463 1,255 CASH AND CASH EQUIVALENTS, END OF YEAR 153, The accompanying notes are an integral part of these financial statements.

43 Europe/Americas Select Private Equity (Ireland) II, PLC 41 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Class H (in USD) For Year Ended 31 December 2010 Class H (in USD) Interest income 31 3 Direct expenses (352,687) (71,731) (Decrease)/ increase in creditors (52,476) 70,939 Distributions received from Financial Assets 37,397,105 - Net cash inflow/(outflow) from operating activities 36,991,973 (789) CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (36,602,920) - Net cash outflow from financing activities (36,602,920) - Increase/(decrease) in cash and cash equivalents 389,053 (789) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 29,818 30,607 CASH AND CASH EQUIVALENTS, END OF YEAR 418,871 29,818 The accompanying notes are an integral part of these financial statements.

44 Europe/Americas Select Private Equity (Ireland) II, PLC 42 Statement of Cash Flows (continued) CASH FLOWS FROM OPERATING ACTIVITIES For Year Ended 31 December 2011 Total* For Year Ended 31 December 2010 Total* Interest income Direct expenses (949,381) (352,071) Increase in creditors 158,399 26,285 Distributions received from Financial Assets 59,328,654 16,342,277 Net cash inflow from operating activities 58,538,028 16,016,753 CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to holders of participating shares (57,837,854) (15,787,418) Net cash outflow from financing activities (57,837,854) (15,787,418) Increase in cash and cash equivalents 700, ,335 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 264,252 32,897 Foreign exchange movement on opening US Dollar Classes bank balances 816 2,020 CASH AND CASH EQUIVALENTS, END OF YEAR 965, ,252 *US Dollar Classes (Classes E, G, and H) have been converted to Euro for purposes of including the results in the total column at 31 December 2011 and (See Note 14) The accompanying notes are an integral part of these financial statements.

45 Europe/Americas Select Private Equity (Ireland) II, PLC 43 Notes to Financial Statements 1. ORGANISATION AND GENERAL The Europe/Americas Select Private Equity (Ireland) II, PLC (the Company ) was organised to provide institutional and individual investors (collectively, Investors ) access to the Europe Select Private Equity Partners II LP (the Europe Portfolio II or Europe Fund II ) and Americas Select Private Equity Partners II LLC (the Americas Portfolio II or Americas Fund II ) (collectively, the Portfolios or the Master Funds ). The Portfolios invested in a range of private equity funds, which primarily invested in Europe and the United States of America. The Portfolios will dissolve and terminate on the later of 30 September 2012 or one year after the date when all of the Portfolios investments have been liquidated, unless the General Partner for the Europe Portfolio II and the Managing Member for the Americas Portfolio II extends the terms of the Portfolios, with the consent of a majority of the limited partnership interests. It is intended that the Company will liquidate at 31 December 2012, unless this period is extended by special resolution of the Shareholders. As the Portfolios are winding down the directors believe it is likely that the Company will be liquidated in 2012 in accordance with the governing documents. Management will organize the necessary steps to comply with the governing documents of the Company within the specified deadlines. As of 31 December 2011, the Company owned approximately 63.61% (2010: 63.61%) of the Europe Fund II and 79.40% (2010: 79.40%) of the Americas Fund II. The Directors may from time to time, with the prior approval of the Central Bank of Ireland, issue different classes of shares representing separate sub-funds ( class or sub-fund ). The assets of each sub-fund will be invested, in accordance with the investment objective and policies applicable to such sub-fund. Although each sub-fund will be treated as bearing its own liabilities, the Company as a whole will remain liable to third parties for all of the liabilities of the Company. The Company operates as a feeder fund to the Portfolios by contributing substantially all of its investable assets to the Portfolios. Specifically, the investable assets attributable to the Euro denominated Class A Shares, Class B Shares, Class C Shares and Class D Shares (the Euro Classes ) will be invested in the Europe Portfolio II and the investable assets attributable to the U.S. Dollar denominated Class E Shares, Class G Shares and Class H Shares (the Dollar Classes ) will be invested in the Americas Portfolio II. As of 31 December 2011, Classes A, B, C, D, E, G and H have been issued and are outstanding. The Company is sponsored by AXA Investment Managers Private Equity Europe ( AXA-IM ), the asset management arm of AXA, and the Portfolios are co-sponsored by AXA-IM and AIG Capital Partners, Inc. ( AIGCP ), a subsidiary of American International Group, Inc., (AIGCP, together with AXA-IM, the Co-Sponsors ). AXA-AIG Asset Management II, LLC, which is jointly owned by AXA-IM and AIGCP, will serve as managing member (the Managing Member ) of the Americas Portfolio II. AXA-AIG Asset Management II, L.P., which is jointly owned by AXA Investment Managers and AIGCP, will serve as the general partner (the General Partner ) of the Europe Portfolio II. AXA Private Equity (US), LLC (formerly AXA Investment Managers Private Equity Fund of Funds, LLC), an affiliate of AXA, will serve as the investment adviser (the Investment Adviser ) of the Portfolios. AIGCP will serve as sub-adviser (the Sub-Adviser ) to the Investment Adviser. The Portfolios are permitted to invest a portion of their committed capital in Direct and Secondary Investments. At 31 December 2011 and 31 December 2010, no Secondary Investments or Direct Investments were held.

46 Europe/Americas Select Private Equity (Ireland) II, PLC 44 Notes to Financial Statements (continued) 2. ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. Basis of preparation The financial statements for the year ended 31 December 2011 have been prepared on a termination basis. Assets have been valued at their fair value amounts. The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Companies Acts, 1963 to Accounting standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board ( ASB ). The format and certain wordings of the financial statements has been adapted from those contained in the Companies (Amendment) Act, 1986 and FRS 3 Reporting Financial Performance so that, in the opinion of the directors, they more appropriately reflect the nature of the Company s business as an investment fund. Critical accounting estimates and judgements Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined in note 2 of the Master fund financial statements and in the Fair value estimation, Investment Transactions and Income/Expense Recognition and Cash and other liquid assets points below. Investments at fair value through profit or loss All of the Company s investments are classified as financial assets at fair value through profit or loss. This category has two sub-categories: financial assets and liabilities held for trading, and those designated by management at fair value through profit or loss at inception. The Company s investment in each of the Portfolios will generally be fair valued at the capital account value provided to it by such Portfolio. The Portfolios investments will generally be based upon the most recent values provided (in the case of Partnership Investments and Secondary Investments) to the Portfolios by the underlying fund managers. The general partners or management of the Partnership Investments apply various methods in determining fair values; in many cases adjustments are made to cost only if there is a substantial arm s length transaction in an underlying investment or there is significant evidence of permanent impairment. Accordingly, the values that may be realised by the underlying partnerships on an investment may differ materially from fair value assigned by such general partner or management in the computation of the Portfolios capital account balance in such partnership. The Directors have satisfied themselves that the General Partner or the Managing Member of each Portfolio has determined that these amounts represent the best estimate of fair value of each Portfolios investments ( Fair Value ). The Fair Value of direct investments is determined by the Managing Member or the General Partner of the Portfolios.

47 Europe/Americas Select Private Equity (Ireland) II, PLC 45 Notes to Financial Statements (continued) 2. ACCOUNTING POLICIES (CONTINUED) Investments at fair value through profit or loss (continued) As described previously the financial statements of the Portfolios, the Fair Value of the Portfolios investments and accordingly the carrying value of the Company s investments in such Portfolios, do not necessarily represent amounts, which may be ultimately realised. Accordingly, because of the inherent uncertainty of valuation, the Company s carrying values of its investments in the Portfolios may differ significantly from the values that would have been used had a readily available market existed for the Portfolios and those differences could be material to the financial statements. It is noted that the carrying values of the Company s investments are based on a best estimate basis of valuation, as outlined above and may not reflect actual values at which investments are ultimately realised. Fair value estimation The Company values its assets based on the fair value communicated by the Portfolios as at the accounting closing date. The Portfolios prepare their financial statements in accordance with generally accepted accounting principles in the United States of America. These accounts are audited as at the 31 December of each year. To value their portfolio of investments, the General Partner of the Portfolios relies upon the latest valuations communicated to them by the General Partners of their underlying investments. These may include the valuation of financial instruments that are not traded in an active market where the use of valuation techniques may be required such as comparable recent arm s length transactions and discounted cash flow analysis. As at 31 December 2011 the underlying Portfolios have disposed of their investments and their assets consist predominantly of cash therefore there is no material difference between the fair value of investments and their net realisable value. The fair value of investments held by the Company are disclosed in the Statement of Assets and Liabilities and the Schedule of Investments on page 64. Foreign exchange translation (a) Functional and Presentation currency Items included in the Company s financial statements are measured using the currencies of the primary economic environment in which it operates ( the functional currency ). This is the Euro for Class A, Class B, Class C and Class D, as all of their net assets are denominated in Euro. This is US Dollars for Class E, Class G and Class H, as all of their net assets are denominated in US Dollars. The Company's financial statements are prepared using Euro as the presentation currency. The US Dollar Class E, Class G and Class H have been converted using the exchange rate as at 31 December (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Operations. The closing rate approximates the average rate for the year.

48 Europe/Americas Select Private Equity (Ireland) II, PLC 46 Notes to Financial Statements (continued) 2. ACCOUNTING POLICIES (continued) Net Asset Value The Net Asset Value of the Company is equal to the value of the assets of the Company less its liabilities. The Net Asset Value of each class in issue is calculated as of close of business on the last Business Day of each calendar quarter by determining the value of the Company s assets attributable to such class (i.e. the value of its investment in the applicable Portfolio and any cash held pending investment in the Portfolio or pending distribution to Shareholders and of any other assets) and subtracting all liabilities attributable to such class in accordance with the Articles of Association. In the Company, for share issuance purposes, the valuations of the underlying investments are based upon the latest available valuations provided by the underlying investments management and, because of the lag in reporting such values, may differ from the more current values used for financial statement purposes. The Net Asset Value per share attributable to such class is calculated by dividing the Net Asset Value of such class by the number of Shares of such class then in issue, including shares provisionally allotted with the approval of the Company s Board of Directors. The Net Asset Value of the Company will be reported to the Irish Stock Exchange immediately upon calculation Investment Transactions and Income/Expense Recognition Investments are generally recorded in the Portfolios upon the capital call dates; however, in connection with the final closings of the Portfolios, amounts legally due to the Portfolios are also recorded as investments in the Master Funds and as corresponding payables to the Master Funds by the Company. Investors in each class of the Portfolios will bear the pro rata portion of the fees payable out of the assets of that class. These fees will include the pro rata portion of the organisational expenses of the Company attributable to that class as well as pro rata portion of the administration and custody fees of the class. These fees will be reflected in the Net Asset Value per share. Investors in the Portfolios, including the Company, bear the pro rata portion of the fees payable out of the assets of the Portfolios. These fees will be reflected in the value of the Company s interests in the Portfolios and, therefore, indirectly in the Net Asset Value per share. Investors in the Portfolios, including the Company, also indirectly bear a pro rata portion of fees paid by the underlying funds, in which the Portfolios may invest. These fees will be reflected in the value of the relevant Portfolio Investment of the Portfolio and will therefore, indirectly, also be reflected in the value of the Company s interests in the Portfolios and ultimately in the Net Asset Value per share. Interest income is recognised in the Statement of Operations using the effective yield method. Distributions received from the Portfolios are recorded when received. Net (loss)/gain on Financial Assets at fair value through profit or loss includes all realised and unrealised fair value changes and foreign exchange differences, but excludes interest income. The impact of distribution and capital gains arising (after deduction of returns of capital) is included with Net gains/loss on financial assets at fair value through profit and loss on the statement of operations. Participating shares In accordance with FRS 25, the participating shares are classified as equity as in accordance with the Company s Offering Memorandum the Shareholders shall generally have no right to redeem their shares (except that the Fund may effect a mandatory redemption of a Shareholder s Shares in certain limited circumstances outlined in the Offering Memorandum).

49 Europe/Americas Select Private Equity (Ireland) II, PLC 47 Notes to Financial Statements (continued) 2. ACCOUNTING POLICIES (continued) Withholding taxes Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to withholding taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its shareholders, where such taxes are recovered they will be netted against the withholding tax expense. Basis of presentation of financial statements As of 31 December 2011 and 31 December 2010, the Company owned approximately 63.61% of the Europe Fund II and approximately 79.40% of the Americas Fund II. Consolidated financial statements have not been prepared for the Company as the Limited Partnership Agreements governing the operation of the Europe Fund II and the Americas Fund II grant effective control over the operations of the Europe Fund II and the Americas Fund II to the General Partner of the Europe Fund II and the Managing Member of the Americas Fund II. As a Limited Partner in each of the Master Funds the Company does not have the ability to control the operations of the Europe Fund II and the Americas Fund II and hence the directors do not consider the Europe Fund II and the Americas Fund II to be subsidiaries of the Company. Cash and Other Liquid Assets Cash and other liquid assets will be valued at their face value with interest accrued on an effective yield basis, where applicable, at the close of the regular trading session of the Irish Stock Exchange on the relevant business day. 3. TAXATION Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997, as amended (the TCA ). On that basis, it is not chargeable to Irish tax on its income or gains. However, Irish tax may arise on the occurrence of a "chargeable event". A chargeable event includes any distribution payments to shareholders or any encashment, redemption, transfer or cancellation of shares and any deemed disposal of shares for Irish tax purposes arising as a result of holding shares in the Company for a period of eight years or more. No Irish tax will arise in respect of chargeable events in respect of a shareholder who is an Exempt Irish Investor (as defined in Section 739D of the TCA) or who is neither Irish resident nor ordinarily resident in Ireland for tax purposes at the time of the chargeable event, provided, in each case, that an appropriate valid declaration in accordance with Schedule 2B of the TCA is held by the Company or where the Company has been authorised by Irish Revenue to make gross payments in absence of appropriate declarations. Distributions, interest and capital gains (if any) received on investments made by the Company may be subject to withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its shareholders. U.S. Federal Income Taxation of the Company and the Portfolio The Portfolios will elect to be treated as partnerships for United States of America ( U.S. ) federal income tax purposes. It is intended that neither the Company nor the Portfolios will conduct a trade or business in the U.S. or invest in direct securities the income from which is treated, for U.S. federal income tax purposes, as arising from a U.S. trade or business.