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Interim Report as of June 30, 2011 This English language report is a courtesy translation of the original German report. For the interpretation of the report the German text shall prevail. We Invest Into the best entRepReneuRs. Key Financial Figures Amounts in EUR million Q1– Q2 Q1– Q2 2011 2010 Sales 21.9 25.2 EBITDA 2.2 3.1 Consolidated net income 14.2 2.0 Amounts in EUR million 30.06.2011 31.12.2010 Number of investments * 8 11 Financial assets 32.9 31.2 Liquidity 30.7 41.4 Shareholders’ equity 66.3 50.6 Equity ratio 67 % 39 % Total assets 98.6 131.1 Liabilities to banks 4,0 10.7 Net debt – 26.7 – 30.7 Stock market price in EUR 3.00 4.12 NAV per share in EUR 5.63 5.62 Market capitalisation 33.5 47.7 * With a value > EUR 1 million according to IFRS. Content 2 Mission statement 4 highlights in the 1st half of 2011 6 Letter to shareholders 8 share 10 Management Report 11 performance of our Core Investments 16 Financial performance 17 Macroeconomic Framework and sector Climate 19 opportunity and Risk Report 25 outlook 29 Consolidated Financial statements 30 Consolidated Income statement 31 segment Reporting 31 Consolidated statement of Comprehensive Income 32 Consolidated statement of Financial position 34 Consolidated Cash Flow statement 35 Consolidated statement of Changes in equity 36 notes to the Interim Consolidated Financial statements 52 statement of Fixed Assets heLIAD QuARteRLy FInAnCIAL RepoRt 2 Q2 2011 Mission statement We are an investment company that supports companies in growth and change phases as equity partner. We focus on established companies aiming for their next round of growth by increasing capital or amending their shareholder structures. We are reliable partners offering solutions even in complex financing situations. As reliable partners, we have an entrepreneurial mindset and act quickly and responsibly. our stock market listing not only provides us with great financial flexibility, but also ensures maximum transparency and legal security for all of our activities. MIssIon stAteMent 3 We are aware of our responsibility towards all of our stakeholders and act in accordance with this. Focusing our activities and organisational structures on this mission helps us to achieve our vision: We aim to attain market leadership in the sector of specialist equity financing and want to stand out by our professionalism, network of contacts and entrepreneurial approach. heLIAD QuARteRLy FInAnCIAL RepoRt 4 Q2 2011 hIGhLIGhts 5 highlights in the 1st half of 2011 R. häsler AG on track with buy-and-build strategy by acquiring Gerber + Güntlisberger AG. Increased liquidity due to receipt of cash from sale of the funds neuhaus III, Aheim I and Aheim Ia and sale of the investment in bCG baden baden Cosmetics Group. Deconsolidation of Rt Group due to announce- ment of insolvency in March 2011 leads to deconsolidation gain. Deconsolidation of unicorn by way of sale. Relaunch of share buyback programme. heLIAD QuARteRLy FInAnCIAL RepoRt 6 Q2 2011 Dear Ladies and Gentlemen, Dear shareholders, we made further progress in stabilising our portfolio in the 1st half of 2011. Heliad Equity Partners thus benefited from exit revenues and accounting gains on its publicly listed investments. Together with the gains of EUR 0.7 million on asset disposals and the decon solidation gains from the RT Group and Unicorn, these positive valuation adjustments of EUR 3.0 million enabled the company to post halfyear earnings of EUR 13.7 million. Our net asset value per share of EUR 5.63 is thus virtually unchanged on the figure as of 31 December 2010. The positive performance of our listed investments had enabled us to post a higher NAV figure in the 1st quarter. This key figure then slipped slightly in the 2nd quarter due to weaker developments on the stock markets. suCCessFuL sALe oF InvestMents AnD pLeAsInG AveRAGe poRtFoLIo peRFoRMAnCe The investments held in the Aheim I and Aheim Ia funds, via which the investment in time:matters had been held, were sold with an accounting gain on the basis of a purchase agreement dated 31 March 2011. Furthermore, on 3 June 2011 we sold our 40 % stake in BCG BadenBaden Cosmetics Group AG at cost and including a debtor warrant. This disposal generated an accounting gain, as the investment had previously been written down slightly at the end of the financial year. The investment held in Unicorn Geld und Werttransporte GmbH was sold as of 30 June 2011. The Unicorn Group was deconsolidated out of Heliad’s consolidated financial statements upon the sale as of 30 June 2011. LetteR to shARehoLDeRs 7 On average, the portfolio performed in line with our targets, leading to net increases in sales and earnings. The measures introduced in the 2010 financial year have already led to sustainable improvements. By implementing an addon acquisition, R. Häsler AG has continued to implement its buyandbuild strategy, while at the same time laying a founda tion for further growth. posItIve DeveLopMents not ReFLeCteD In heLIAD’s shARe pRICe peRFoRMAnCe While Heliad managed to generate its first positive results in the 1st half of 2011 by selling parts of its portfolio and making necessary adjustments to operations, the company’s share price developed in the opposite direction due to the announcements concerning our negative results for the 2010 financial year. An initial recovery has been apparent since the launch of the share buyback programme. The fact that our net asset value is still significantly higher than our share price shows that the capital market is not yet prepared to place the necessary trust in the company and that Heliad will first have to earn this confidence in the coming quarters. The operating and balance sheet measures already taken and those still planned represent a first major step towards building up that trust. Frankfurt am Main, August 2011 Yours faithfully, Andreas Lange heliaD Quarterly Financial report 8 Q2 2011 Share Heliad Share Price vs. NAV HPB Equity NAV 7.00 6.00 5.00 4.00 3.00 2.00 1.00 07.10 08.10 09.10 10.10 11.10 12.10 01.11 02.11 03.11 04.11 05.11 06.11 SHAre 9 HeliAd’S SHAre Price iNflueNced by SHAre buybAck ProgrAmme ANd SelectiVe Portfolio SAleS The price of Heliad’s share was influenced in the 2nd quarter by the launch of the share buyback programme and the sale of two portfolio companies. Overall, the share price declined slightly in the three months from April to June and was listed at EUR 3.00 as of 30 June 2011 (31 March 2011: EUR 3.40). Heliad sold its investments in BCG Baden-Baden Cosmetics Group AG and Unicorn Geld- und Wertdienstleistungen GmbH in the 2nd quarter. The resultant announcements were mostly positively received on the capital market. The share buyback programme was launched on 7 June 2011, drawing on the correspond- ing authorisation granted by the Annual General Meeting on 26 August 2010. The pro- gramme was extended on 9 June 2011 to enable a higher number of shares to be acquired each day. By 30. 06. 2011, a total of 93,099 shares had been acquired at an average price of EUR 2.85. Stock mArket PerformANce offerS PoSitiVe momeNtum for HeliAd’S SHAre Stock markets showed overwhelmingly positive developments in the 2nd quarter. The SDAX rose 5.3 % to 5,417 points by the end of the quarter (31 March 2011: 5,144 points). This development provided positive momentum for the development in Heliad’s share. The LPX 50, the index portraying the development in the 50 most liquid and largest private equity companies, decreased by 3.0 % in the 2nd quarter. Given its positive performance in the 1st quarter, by the end of the first half the index was more or less at the same level as at the beginning of the year. Net ASSet VAlue Still SigNificANtly HigHer tHAN SHAre Price The net asset value per share amounted to EUR 5.63 at the end of the quarter. At 47 %, the discount in the share price to the company’s net asset per share remained persistently high. The three financial analysts monitored by Heliad recommend holding the stock. These analysts have stated figures ranging from EUR 3.50 to EUR 4.20 as long-term share price targets. The investor relations team was available to answer questions about Heliad and its share once more in the 2nd quarter. In particular, shareholders and investors were informed in detail about the Annual General Meeting and the share buyback programme. The company used various communications channels to answer questions, while also pressing ahead with its policy of attracting new investors. heliaD Quarterly Financial report 10 Q2 2011 Interim Group Management Report InteRIM GRoup ManaGeMent RepoRt 11 peRfoRMance of ouR coRe InvestMents performance of our core Investments oveRvIew of InvestMents Heliad subdivides its investments into core investments and other investments. Core investments include those investments consistent with Heliad’s investment strategy, namely those companies which have scalable business models and contribute a fair value of more than EUR 1 million to the Group’s total net asset value. Following the sale of the investments in time:matters and unicorn, this category currently includes four investments: assona, R. Häsler AG, DEAG, Seven Principles. At the balance sheet date, the net asset value of core investments amounted to EUR 32.6 million while the net asset value of other investments amounted to EUR 12.0 million. overview of Investments as of 30 June 2011 Core portfolio Sector Deal Situation Investment Share- Sales in EUR million Employees since holding in % 2010 2009 2010 2009 assona Insurance Brokerage Buyout September 2007 97.2 12.9 13.6 60 54 Häsler Business Services Buy-and-Build December 2009 86.5 15.5 14.1 75 67 Seven Principles Business Services PIPE November 2005 6.5 79.2 65.9 600 449 DEAG Entertainment PIPE December 2008 29.0 125.2 116.7 169 175 heliaD Quarterly Financial report 12 Q2 2011 assona Year of investment 2007 Sector Insurance Brokerage Deal Situation Buyout This specialist provider of cover notes and guarantee extensions for electronics appliances generated sales of EUR 3.1 million in the 2nd quarter of 2011 (YTD: EUR 6.3 million). In terms of the volume of new contracts concluded, assona thus managed to maintain the extremely positive trend already seen in the 1st quarter of 2011. By successfully imple- menting new cooperation agreements, developing innovative product concepts and access- ing new sales channels, assona can be expected to uphold and further extend its positive performance in the 2nd half of 2011 as well. By implementing retailer-specific marketing campaigns, assona has managed to acquire new sales partners, retain existing partners and tap new distribution channels by offering innovative products. assona’s status as an independent agent enables it to tailor its products to meet customers’ individual wishes ever more closely. The company will be exploiting this flexibility in the future to optimally position itself within its competitive environment. InteRIM GRoup ManaGeMent RepoRt 13 peRfoRMance of ouR coRe InvestMents DeaG Year of investment 2009 Sector entertainment Deal Situation pIpe DEAG, one of Europe’s leading live entertainment providers, posted clear operating earn- ings growth in the 1st quarter of 2011. EBITDA improved year-on-year by 14 % to EUR 1.8 million (previous year: EUR 1.6 million). What’s more, operating earnings (EBIT) grew by 23 % to EUR 1.6 million (previous year: EUR 1.3 million). Earnings per share (EPS) rose by 33 % to 4 cents per share (previous year: 3 cents). The sales growth of 17 % generated in the 1st quarter was driven by the company’s international classical and rock/pop divisions, as well as by its national folk and pop music segments. Moreover, earnings also benefited from cost savings in the company’s administration, sales and marketing activities. In the medium term, DEAG will continue to profit from the “360 degree strategy” and “content focus” it has adopted. This strategy has enabled it to tap additional revenue sources and generate a wealth of potential opportunities and prospects for the future. DEAG will continue to press ahead with expanding its high-margin classical music business, as well as with further developing its folk and pop music activities. To this end, the company managed to forge long-term links with David Garrett, Anna Netrebko and Erwin Schrott in the 1st quarter and concluded an exclusive sales agreement with Sony Music Entertain- ment Germany in June 2011. heliaD Quarterly Financial report 14 Q2 2011 R. Häsler aG Year of investment 2009 Sector Business services Deal Situation Buy-and-Build In the 2nd quarter of 2011, R. Häsler AG managed to make up for much of the ground lost in terms of sales and earnings due to its weak start in the 1st quarter, traditionally a period of low construction activity. Due to an acquisition (add-on acquisition of Gerber + Güntlisberger AG, Riehen, as of 2 February 2011) and assisted by organic growth, the company’s half-year sales of CHF 12.0 million were CHF 2.0 million up on the previous year’s figure. This pleasing development was driven in particular by the company’s performance in May and June 2011 – since May 2011 it has managed to generate substantially higher sales. Due to the cautious accounting treatment (earnings recognition) of several major projects, the company’s margins have not yet been able to match its sales performance. Given the volume of orders on hand and the expected recognition of earnings for major pro- jects, the company’s management expects to reach its targets for the 2011 financial year. InteRIM GRoup ManaGeMent RepoRt 15 peRfoRMance of ouR coRe InvestMents seven principles (7p) Year of investment 2005 Sector Business services Deal Situation pIpe 7P posted a very pleasing operating performance in the 1st half of 2011, with 31 % sales growth to EUR 48.4 million (previous year’s period: EUR 36.8 million). Operating earnings (EBIT) showed disproportionate growth of 111 % to EUR 2.5 million in the 1st half (previous year’s period: EUR 1.2 million). This positive business performance was attributable on the one hand to the sharp improvement in the economic climate and on the other to the step- ping up in the company’s sales activities (“Vertrieb@7P“ project). Of the increase in sales, organic growth contributed about 20 percentage points, while the acquisitions made in 2010 accounted for about 12 percentage points. After a very strong 1st half 2011 further positive developments are forecast for 2011 as a whole, as demand for IT-related services is expected to increase, especially in the field of mobile solutions and services. The company has therefore corrected both its sales and its earnings forecast upwards. Heliad Quarterly Financial report 16 Q2 2011 Financial Performance In the 1st half of the 2011 financial year, Heliad generated earnings of EUR – 0.4 million from continuing operations and a consolidated net surplus of EUR 13.7 million (H1 2010: EUR 2.2 million). The consolidated net surplus after minority interests for the first six months of the current financial year thus amounted to EUR 14.2 million (H1 2010: EUR 2.1 million). Consolidated sales amounted to EUR 21.9 million in the 1st half of 2011 (H1 2010: EUR 25.2 million) and mainly consisted of the sales of EUR 16.6 million generated at sub- sidiaries (H1 2010: EUR 13.7 million). The positive half-year earnings were due in particular to the deconsolidation of the RT Group due to insolvency, which resulted in an earnings contribution of EUR 18.3 million. Further- more, the group companies classified as continuing operations in the Services segment made a positive earnings contribution of EUR 3.4 million to consolidated earnings (H1 2010: EUR 3.0 million). Given the negative development in the stock market prices of our listed investments, the net impact of the fair value measurement of financial assets (net balance of revaluations and write-downs) was, at EUR –1,5 million, significantly lower than the equiv- alent figure of EUR +0.2 million for the 1st half of 2010. Heliad’s operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 2.2 million for the 1st half of 2011 were lower than in the previous year (H1 2010: EUR 3.1 million). The year-on-year sales growth at group companies by EUR 2.9 million to EUR 16.6 million was driven in particular by the improvement in sales at R. Häsler AG. Following the deconsolidation of the RT Group and unicorn, Heliad has a solid equity ratio of 67 % (31 December 2010: 39 %). Cash and cash equivalents at the holding company amounted to EUR 21.2 million as of 30 June 2011 (31 December 2010: EUR 25.4 million). Alongside current operating expend- iture, funds were used in the 1st half year in particular in order to repay the existing credit line (EUR 6.9 million) and to service a capital call at a fund investment (EUR 2.6 million). The development in liquidity on the level of the holding company was driven in particular by the purchase price payments for Neuhaus III, BCG Baden-Baden Cosmetics Group and a distribution from a fund investment. Overall, there was therefore a reduction in the volume of liquidity at the holding company. Due mainly to the repayment of loans, cash and cash equivalents on group level reduced to EUR 30.7 million (31 December 2010: EUR 41.4 million). The reduction in assets and liabilities reported under discontinued operations was due to the deconsolidation of the RT Group and the Unicorn Group. The repayment of loans reduced financial liabilities to EUR 4.0 million (31 December 2010: EUR 10.7 million). Overall, Heliad thus has a stable financing structure and adequate liquidity to extend its portfolio with attractive new investments in 2011. Moreover, the pleasing performance of our portfolio companies in the current year provides a good basis for generating further sales and earnings growth. InterIm GrouP manaGement rePort 17 FInancIal PerFormance macroeconomIc Framework and Sector clImate macroeconomic Framework and Sector climate 1st half of 2011 macroeconomIc Framework The overall economy performed well in the 1st half of 2011 Leading economic research institutes expect to see GDP growth of 3.5 % in the current year. The economy already grew by 1.5 % in the 1st quarter of 2011 alone. Compared with historical figures, the Ger- man economy is thus undergoing a period of strong growth. Year-on-year and adjusted for calendar-related factors, GDP grew by 4.9 % by the end of the 1st quarter. This strong growth in the 1st half was chiefly driven by the recovery in domestic demand, consist- ently high export demand and a revival in the construction industry. In the coming year, the rate of GDP growth is expected to decrease slightly to 2.3 %. This is due to the ex- pected slowdown in investment activity and a slight decline in exports. The outlook is also negatively affected by the uncertainty on the capital markets due to the yet unsolved euro debt crisis. With a net balance of 27.0 points, the KfW-ifo Mittelstandsbarometer, an indicator of con- fidence among medium-sized companies, remained high in June 2011. Companies are especially positive in their assessment of their current situation, where the relevant figures have risen to record levels. By contrast, companies’ expectations as to their future busi- ness performance have slipped since the beginning of the year, reflecting a more cautious assessment of the further development in the growth trend in the 2nd half of the year. The pleasing figures for the overall assessment are due to medium-sized companies’ assess- ments of their current situations. The German economy currently stands out positively when compared with its international peers. Even though the USA also reached a level of GDP more or less corresponding to pre-crisis levels at the beginning of 2011, the EU as a whole has so far only made up for 62 % of its crisis-related downturn in output. These figures underline the sound funda- mental state of the German economy. develoPmentS In the PrIvate equIty Sector Overall, the private equity sector can look back on a positive 1st half. At EUR 1,169 million, the volume of direct investment in German companies in the 2nd quarter was slightly down on the previous quarter’s figure of EUR 1,362 million. All in all, however, it is apparent that investment activity has stabilised once again. With a 79 % share, buyout transactions once helIad quarterly FInancIal rePort 18 q2 2011 again accounted for by far the largest share of transactions. At 21, the number of trans- actions in the 2nd quarter more or less matched the figure for the 1st quarter (23 trans- actions). Based on its statistics for the German private equity market, the BVK sector asso- ciation expects to see ongoing positive developments in the year as a whole. The German Private Equity Barometer rose by 5 points to 47.0 points in the 1st quarter of 2011. This positive assessment was supported by both early-stage and late-stage players. Confidence in the late-phase financing segment relevant to Heliad improved further in the 1st quarter. The business confidence index here rose to 53.5 points. The positive overall trend witnessed with only brief interruptions since 2009 has thus continued. The positive figure is mainly due to positive assessments concerning exit opportunities and fundraising conditions. Confidence in the sector has also benefited from a lower need for write-downs of entire investments. Consistent with this development, companies are generally negative in their assessment of entry prices for new investments. This development is not surprising given the development in market conditions. From companies’ perspectives, current borrowing opportunities can also be assessed posi- tively. The credit hurdle calculated by the ifo institute reduced yet again to 21.4 % in June, thus even falling short of its previous low in the summer of 2007. Given these figures and the future outlook, the private equity market currently offers posi- tive opportunities for Heliad. Market conditions for new investments and targeted exits are mostly advantageous and justify a positive outlook for the financial year as a whole. Sources: Bundesverband Deutscher Kapitalbeteiligungsgesellschaften (BVK): Der deutsche Beteiligungsmarkt im 1. Quartal 2011, ifo Institut für Wirtschaftsforschung e.V.: Die Kredithürde – Ergebnisse des ifo Konjunkturtests im Juni 2011, ifo Institut für Wirtschafts- forschung e.V.: ifo Geschäftsklima Deutschland – Ergebnisse des ifo Konjunkturtests im Juni 2011, KfW Bankengruppe: German Private Equity Barometer – 1. Quartal 2011, KfW Bankengruppe: KfW-ifo-Mittelstandsbarometer: Juni 2011, KfW Bankengruppe: KfW Investbarometer: Juni 2011, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) – Pressemitteilung vom 16. 06. 2011. InterIm GrouP manaGement rePort 19 macroeconomIc Framework and Sector clImate oPPortunIty and rISk rePort opportunity and risk report oPPortunItIeS oFFered by helIad’S buSIneSS model opportunities upon acquisition To perform positively, Heliad needs access to new investment opportunities. Only by making an adequate number of transactions and future profitable exits we can manage Heliad profitably. Our aim is to gain early awareness of investment opportunities arising in German-speaking countries and to ensure that we have the resources and instruments necessary to secure an adequate, high-quality deal flow. The new management team has developed and imple- mented IT-supported processes for this purpose. By working with various filter processes, we are able to manage the deal flow ourselves in quantitative and qualitative terms. Overall, we expect this targeted acquisitions strategy to enable us to identify promising companies and raise the probability of deals actually being completed by avoiding structured sales pro- cesses with increased competition. The excellent network available through the investment team and the Angermayer, Brumm & Lange Group provides an ongoing supply of new investment opportunities. This network consists of former investment partners, banks, advisors, lawyers and auditors, as well as of experienced industry experts with whom we work together when identifying and reviewing investment opportunities. We were offered around 100 investment opportunities in the past financial year. Due to the period of transition at Heliad (including the merger with TIG and the change of management), these investment opportunities could not always be pursued consistently. The newly intro- duced structured deal sourcing process will significantly increase the number of investment opportunities identified and offered in the coming year, while simultaneously enhancing the suitability of such transactions to Heliad’s needs. opportunities during the holding period During the holding period, Heliad focuses on implementing the chosen growth strategy, and thus on increasing the value of its investments. Current income from investments, such as dividends, profit shares and interest income support Heliad’s economic performance. The new management will accord greater importance to the supervision and development stage at portfolio companies. New controlling structures and processes are already being established to ensure consistent monitoring of the development and exit strategy, as well as to proactively identify value growth potential. Consistent integration into our day-to-day business will enhance the performance of our portfolio companies. Heliad Quarterly Financial report 20 Q2 2011 opportunities upon company exits Our stock market listing and the availability of adequate liquidity resources means that we are not obliged to make overly hasty exits or to sell investments at inappropriate times as it is sometimes the case with traditional private equity structures. We rather cooperate with the management of our portfolio companies on the basis of an exit strategy defined at the beginning of the investment that enables us to realise the created value at a suitable time. Due to our excellent network and industry expertise, we have especially valuable contacts when it comes to implementing divestments. rISk rePort risk management Risk management at Heliad involves optimally managing those significant risks arising due to its business activities and effectively exploiting opportunities. One of the key risk management tasks involves identifying, analysing, managing and monitoring risks. The main opportunities and risks faced by an investment company result from the acquisi- tion, holding and sale of investments. The management of opportunities and risks is there- fore closely linked to the operating business of the investment team and firmly integrated into the relevant processes. Opportunities and risk should be weighed up in such a way as to enable opportunities to be seized without any risk to Heliad’s continued existence. Our risk management system is based on our Risk Handbook, which we believe presents and evaluates all significant risks. We have laid down suitable measures to manage and monitor risks and have integrated these measures into our processes. These are supple- mented by a large number of instruments and measures which we draw on to monitor and manage specific company opportunities and risks. The management monitors, maintains and enhances the risk management system on an ongoing basis. The results of current risk observation are summarised in a quarterly risk management report. Risks are monitored immediately should unexpected relevant develop- ments occur. The management deals directly with the evaluation and management of opportunities and risks, regularly reviews whether assessments have changed and determines the measures to be taken as a result. Due to its regular involvement with the investments, the management is aware of all key opportunities and risks. The management informs the Supervisory Board at least once a quarter about the risk situation at the company and its portfolio companies. The Supervisory Board is informed immediately in the event of any unexpected, material change in the risk situation. We currently see no risks that could endanger Heliad’s continued existence. InterIm GrouP manaGement rePort 21 oPPortunIty and rISk rePort Internal controlling system in respect of the financial reporting process Key features of the internal controlling and risk management system in respect of the finan- cial reporting process involve regular, analytical reviews of the main processes involved in the financial reporting process. Heliad has a clearly defined organisational, controlling and supervisory structure, one which the new management team has also provided with extended structures and processes. The processes involved in financial reporting are clearly allocated. All individuals involved in the financial reporting process are suitably qualified for the relevant tasks. They are also sufficient in number to ensure that the tasks can be man- aged. The completeness and accuracy of the financial reporting data is regularly reviewed on the basis of manual trial samples and plausibility checks. Given the limited number of transactions, entries are checked regularly and virtually in full. Relevant risks are docu- mented. The management and Supervisory Board regularly address the key issues involved in financial reporting and risk management. company-related risks management and personnel risks Heliad’s success is closely linked to the composition and competence of its management team. This is due not least to the small scale of the overall organisational structure, one in which every individual is called on to make a responsible contribution. Heliad further enhanced the professionalism of its team at the end of 2010 by taking on new staff with many years of experience in finance, private equity and consulting gained at renowned companies. The resultant mix of skills and degree of professionalism enable us to contribute maximum expertise in every stage of the investment process. Information systems (It) Our business needs suitable software and hardware. Above all, it also requires data secu- rity, ensuring that authorised parties have access at all times to the relevant data and pro- tecting data from unauthorised access. Heliad works with an external provider to manage its IT systems. No IT-related risks were discernible in the past financial year. We do not expect any change in our operating risk situation. risks specific to heliad’s business model risks upon acquisition The investment strategy is the key factor in determining Heliad’s opportunity /risk profile. This was revised in the 2010 financial year and is subject to permanent review and enhancement. We focus on acquiring companies already established that have leading market positions and business models offering potential for growth. We mostly acquire companies that do not have large-scale investment requirements in order to avoid subsequent follow-up financing rounds for our investments. Furthermore, no loss on an individual investment Heliad Quarterly Financial report 22 Q2 2011 may endanger Heliad’s continued existence. For this reason, individual investments are generally made on a scale of up to EUR 10 million per transaction. During the acquisition stage, it is essential for us to understand the business model and market and to identify and evaluate the resultant risks. Alongside our experienced team we also work with external advisors who support us when reviewing companies in financial, tax and legal terms (due diligence). We prefer the management teams of portfolio companies to invest in their companies as well in order to enhance their commitment even further and ensure a community of inter- est when it comes to increasing and realising the value of their companies. Each investment is presented to the Supervisory Board before being implemented. risks during the holding period The development in our investments directly influences Heliad’s performance. However, no negative performance or decline in value at an investment should be permitted to endanger Heliad’s position. We initially review additional financing requirements at a portfolio company by reference to the same criteria we apply for new investments. Moreover, further aspects are also factored into the decision. In some circumstances, this may then increase the risk profile of the follow-up financing. Should a portfolio company perform negatively, this may at worst lead to the loss of all of the capital invested. This may involve further negative consequences, such as a loss of reputation. We counter this risk by working with a range of risk supervision instruments, and in partic- ular by analysing monthly and quarterly reports and ensuring that the relevant investment manager is regularly present on location at the portfolio company. Furthermore, the man- agement is also represented on the supervisory or advisory boards of many companies and advises them in various matters. The investment controlling department evaluates infor- mation independently and calculates the net asset value per portfolio company each quarter. We analyse the investments by reference to these quarterly reports. We also discuss the latest developments at weekly update meetings. risks upon company exits We lay foundations for a successful exit during the acquisition stage already. This way, we only enter into investments which will subsequently attract clear interest from strategic or financial investors. In our quarterly discussions of the controlling reports we regularly also address the relevant exit opportunities. InterIm GrouP manaGement rePort 23 oPPortunIty and rISk rePort macroeconomic and market-related risks macroeconomic risks Heliad’s economic performance is dependent on the economic performance of its portfolio companies. As our portfolio companies operate in different sectors and regions, their per- formance is influenced by a variety of sector-specific and regional economic developments and political and financial frameworks. Given the diversification of the investment portfolio across various sectors and regions within German-speaking countries, only a small number of investments are affected by specific economic developments. developments due to the financial crisis As the company mainly specialises in the services sector, its investments were not affected by the financial crisis to the same extent as companies operating in capital-intensive sectors. However, the financial crisis also meant that less debt financing resources were available and that a correspondingly lower volume of investments was traded, as a result of which fewer potential buyers were available. Sector-specific risks Heliad’s performance is directly dependent on its access to new investment opportunities. The company’s business model can only succeed if there is an adequate number of potential investment and profitable exit opportunities. We have no possibility of influencing develop- ments in the private equity market. Our possibilities of countering the risk of a decline in the number of potential investment opportunities are correspondingly limited. Financial risks Interest, currency and liquidity risks Heliad typically finances its acquisitions with equity and bank loans. The structuring of this financing is a crucial factor during the acquisition stage. Liquidity risk involves the risk of the company’s liquid funds being insufficient for it to meet its financial obligations on time. Notwithstanding the restrictive debt market, we classify our liquidity risk as relatively low. This is due to our solid financing structure. As of the balance sheet date, we had a comparatively high volume of cash funds, amounting to EUR 30.7 mil- lion (Group level). Heliad Quarterly Financial report 24 Q2 2011 On the level of the portfolio companies, the development in liquidity, debtor creditworthi- ness and payment obligations is monitored within period-based reporting structures, as well as by the relevant investment manager at Heliad. Accordingly, Heliad’s exposure to risks in connection with a lack of refinancing funds or rising interest rates is currently comparatively low. Exchange rate movements only affect Heliad’s performance to a relatively limited extent. R. Häsler AG, a Swiss company acquired in December 2009, is exposed to EUR / CHF exchange rate risks. The other portfolio companies generate most of their sales in the euro area. Investment opportunity and risk report The investment business is typically exposed to risks in the relevant sectors and due to the macroeconomic cycle. The diversification of our portfolio enables us to counter part of this risk. Our investment focus on established companies minimises the risk of high follow-up financing requirements at our investments due to reinvestments in non-current assets. Heliad is nevertheless exposed to risks arising due to potential below-average developments at its portfolio companies and the resultant risks to its NAV and annual results. These also include the risk of portfolio company insolvency, a possibility which cannot be excluded. We have countered valuation risks with the conservative balance sheet approach maintained in the 1st half of 2011. We counter insolvency risks by taking suitable measures at the compa- nies. However, it is not possible to provide any guarantee that Heliad’s management will succeed in profitably managing its investments. overall assessment of risk at heliad equity Partners Overall, the assessment of all of the aforementioned risk aspects shows that the risks faced by the Group and its investments primarily involve market and macroeconomic risks and those risks typical to the investment business. Based on the information currently available, individual and cumulative risks currently present no threat to Heliad’s continued existence. Moreover, no financial risks that could inhibit the company in its development are currently discernible. InterIm GrouP manaGement rePort 25 oPPortunIty and rISk rePort outlook outlook Global economIc Framework The macroeconomic situation is moreover positive. Leading economic research institutes have forecast growth of 3.5 % for 2011 as a whole. This rate of growth is expected to decline to 2.3 % in 2012, as the economy is not expected to maintain the currently very high levels of investment and exports. Medium-sized companies, the economic segment particularly relevant to Heliad, are cautiously positive in their assessment of economic developments. While the current situa- tion is assessed very favourably, companies’ expectations as to their future business per- formance have deteriorated since the beginning of the year. Having said this, companies nevertheless remain positive concerning their future development. Macroeconomic risks result from the intensification of the yet unsolved debt crisis of the euro area, a factor that could impact negatively on exports. The downgrading in the credit- worthiness of the USA and resultant negative reaction on the capital markets represents a further source of uncertainty. Additionally, there is the risk that the recovery in domestic demand will stall. Any failure on the part of private consumer spending to recover could impact negatively on the development in the overall economy in Germany. Heliad’s situation is thus on the one hand positively affected by the underlying economic framework, while on the other hand the uncertainty on the capital markets means that its listed investments still have relatively weak valuations. However, the company is not exposed to any exceptional risks and the outlook is therefore positive overall. outlook For InveStment market and InduStry clImate Market players are overwhelmingly confident in their assessment of the situation in the private equity sector. The number of transactions and investment volumes stabilised towards the end of the 1st half of 2011. Market players expect these positive developments to continue in the 2nd half of the year and in 2012. Capital providers are especially positive in their assessment of the fundraising situation and exit opportunities. Accordingly, the improvement in market conditions means that entry prices for investments can be expected to increase. As entry prices have risen significantly in the past 12 months, this factor has a sustainable impact on the company’s outlook. All in all, the positive developments in the private equity market can be expected to continue in 2011. For Heliad, current market conditions offer opportunities to make new invest- ments and targeted exits. Heliad can therefore issue a mostly positive outlook concerning developments in the sector and the overall market. Heliad Quarterly Financial report 26 Q2 2011 outlook For helIad business policy in view of the situation on investment markets (planned acquisitions, exits) Given our strategic alignment and our capital resources, we believe we are well positioned in the current market environment and expect Heliad to perform stable in the course of 2011. Given the high uncertainity regarding the macroeconomic development, however, we will be very selective in terms of making new investments. We aim to have sufficient room for manoeuvre in financial terms in the event of any medium-term deterioration in the business climate. Having said this, the continuing recovery in the private equity industry should generate attractive exit opportunities. Short-term targets In the short term, we will be focusing on stabilising and enhancing our portfolio, as well as on pressing ahead with the further disposal of individual investments. Alongside these measures, we also plan to make one to two acquisitions in the 2011 financial year. Indications for medium-term outlook In the medium term, we plan to secure Heliad’s profitability in line with our optimised pro- cesses and structures by exploiting the maximum potential available in the existing portfolio. We also aim to exclusively acquire investments that offer substantial growth and earnings potential, are consistent with our strategy and favourably priced. In this, the company should largely finance its activities internally from its day-to-day income and via disposals. expected earnings position in 2011 and subsequent years Earnings from the investment business are set to grow in future. However, these earnings are at present not quantifiable. On the one hand, it is currently not possible to issue any reli- able forecast concerning macroeconomic developments in the coming years, a factor that will directly influence the performance of the portfolio. On the other hand, this would require a forecast concerning investments and divestments in our portfolio. We cannot reliably fore- cast these factors. Furthermore, consolidated sales at continuing operations are set to increase further in view of the further revival in the economy throughout 2011 as a whole. Other operating expenses at the Heliad holding company will reduce on account of the measures taken to cut costs. InterIm GrouP manaGement rePort 27 outlook development in liquidity From a current perspective, Heliad will be further pursuing its investment strategy. The company will thus be making one to three investments a year. Depending on the specific situations involved, purchases and sales may also be delayed. In general, however, we expect to execute a comparable number of acquisitions and disposals. Our liquidity is expected to reduce as we plan to seize attractive investment oppor- tunities. Furthermore, there is the risk that individual investments will require follow-up financing during the stabilisation stage. dividend policy Last year, Heliad defined the basic features of its future dividend policy. Accordingly, the company plans to distribute 25 % to 50 % of its profit to its shareholders. Such distributions are based on the company’s unappropriated net profit calculated in accordance with the German Commercial Code (HGB). However, our primary aim is firstly to stabilise Heliad’s earnings performance to enable us to distribute dividends thereafter. Summary of expected developments Given the measures introduced in 2010 to optimise the company’s structures, processes and portfolio and the expected continuation in the economic recovery, Heliad has laid a strong foundation in 2011 for its performance in the coming years, not least in view of its robust liquidity situation. The management is therefore confident that, assuming the macroeconomic framework remains stably positive and the climate on the capital markets remains favourable, the company should be able to generate positive group earnings in the current and following financial years. Heliad quarterly Financial report q2 2011 29 Interim Consolidated Financial Statements Heliad quarterly Financial report 30 q2 2011 Consolidated Income Statement for the 1st half of 2011 Amounts in EUR k Notes 01. 01. – Comparison 01. 04. – Comparison 30. 06. 2011 01. 01. – 30. 06. 2011 01. 04. – 30.06.2010 30.06.2010 1. Proceeds on the sale of financial assets 8.1 5,261 11,516 4,511 9,041 2. Other sales revenues 8.2 16,634 13,727 9,520 6,931 3. Other operating income 8.4 4,314 2,085 3,673 1,204 4. Income from revaluation 8.5 2,991 3,000 –1,590 1,382 5. Retirement of financial assets 8.6 – 4,561 –10,822 – 3,811 – 8,220 6. Cost of purchased services 8.7 – 6,248 – 3,972 – 3,746 –2,199 7. Personnel expenses 8.8 – 4,216 – 3,651 –2,257 –1,950 8. Amortisation and depreciation of intangible assets and property, plant and equipment 8.9 – 290 – 272 –148 – 146 9. Other operating expenses 8.10 – 9,018 – 5,775 – 4,829 – 2,279 10. Write-downs of financial assets and securities 8.11 – 4,509 – 2,798 –2,728 –1,348 11. Other financial income 8.12 236 625 95 336 12. Interest and similar expenses 8.13 –16 – 208 89 –102 13. Earnings before taxes 578 3,455 –1,221 2,650 14. Taxes on income – 997 –1,229 – 406 – 561 15. Earnings from continuing operations – 419 2,226 –1,627 2,089 16. Earnings from discontinued operations 8.14 14,136 0 – 767 0 17. Result for the period 13,717 2,226 – 2,394 2,089 18. Result for period attributable to non-controlling interests 7.12 484 –166 405 1 19. Result for period attributable to limited shareholders 14,201 2,060 –1,989 2,090 EarnIngS pEr SharE (dIlutEd and baSIC) Eur 8.15 1.26 0.20 – 0.17 0.20 IntErIm ConSolIdatEd FInanCIal StatEmEntS 31 Segment reporting for the 1st half of 2011 Amounts in EUR k Services Investment and group total other activities 01. 01. – 01. 01. – 01. 01. – 01. 01. – 01. 01. – 01. 01. – 30. 06. 2011 30. 06. 2010 30. 06. 2011 30. 06. 2010 30. 06. 2011 30. 06. 2010 Proceeds from the sale of financial assets 0 0 5,261 11,516 5,261 11,516 Sales with external customers 15,704 13,381 930 346 16,634 13,727 Other operating income 3,470 1,677 844 408 4,314 2,085 Income from the revaluation of financial instruments 0 0 2,991 3,000 2,991 3,000 Retirement of financial assets 0 0 – 4,561 –10,822 – 4,561 –10,822 Cost of purchased services – 6,248 – 3,972 0 0 – 6,248 – 3,972 Personnel expenses – 4,216 – 3,651 0 0 – 4,216 – 3,651 Amortisation and depreciation of intangible assets and property, plant and equipment – 274 – 265 –16 –7 – 290 – 272 Other operating expenses – 4,134 –1,779 – 4,884 – 3,996 – 9,018 – 5,775 Write-downs of financial assets 0 0 – 4,509 – 2,798 – 4,509 – 2,798 SEgmEnt opEratIng EarnIngS 4,302 5,391 – 3,944 – 2,353 358 3,038 Net financial result 220 417 Taxes – 997 –1,229 EarnIngS From ContInuIng opEratIonS – 419 2,226 Segment assets 73,877 40,756 30,326 93,039 104,203 133,795 Consolidation – 5,562 – 20,535 SEgmEnt aSSEtS aFtEr ConSolIdatIon 98,641 113,260 Investments in non-current assets (excluding financial assets) 361 373 0 30 361 403 Consolidated Statement of Comprehensive Income for the 1st half of 2011 Amounts in EUR k 01. 01. – Comparison 01. 04. – Comparison 30. 06. 2011 01. 01. – 30. 06. 2011 01. 04. – 30.06.2010 30.06.2010 Result for period 13,717 2,226 – 2,394 2,089 Unrecognised gains and losses on currency translation 370 –1,398 – 307 –1,085 ComprEhEnSIvE InComE 14,087 828 – 2,701 1,004 of which attributable to non-controlling interests 250 173 171 5 of which attributable to limited shareholders 13,837 655 – 2,872 999 Heliad quarterly Financial report 32 q2 2011 Consolidated Statement of Financial position for the 1st half of 2011 assets Amounts in EUR k Notes 30. 06. 2011 Comparison 31.12. 2010 non-CurrEnt aSSEtS Goodwill 7.1 / 7.2 8,745 8,728 Other intangible assets 7.1 / 7.3 1,205 1,190 Property, plant and equipment 7.1 / 7.3 1,138 1,090 Financial assets Investments 7.1 / 7.4 17,357 16,947 Loans to companies linked by virtue of investment 7.1 / 7.4 98 196 Loans 7.1 / 7.4 787 723 Investment securities 7.1 / 7.4 14,690 13,372 Deferred taxes 6. 75 66 Other non-current assets 0 17 total non-CurrEnt aSSEtS 44,095 42,329 CurrEnt aSSEtS Work in progress 7.5 1,324 826 Inventories 7.5 226 205 Trade receivables 7.6 15,497 8,171 Receivables from companies linked by virtue of investment 35 23 Other assets 7.7 6,462 6,957 Cash and cash equivalents 7.8 30,719 41,391 Assets classified as held for sale 7.9 283 4,922 Assets at discontinued operations classified as held for sale 7.10 0 26,269 total CurrEnt aSSEtS 54,546 88,764 98,641 131,093 INterIm CoNSolIdAted FINANCIAl StAtemeNtS 33 equity and liabilities Amounts in EUR k Notes 30. 06. 2011 Comparison 31.12. 2010 equIty Share capital 7.11 12,146 12,146 Capital reserve 45,332 45,332 Retained earnings –2,167 17,585 Treasury stock 7.11 – 3,728 – 3,463 Result for the period attributable to limited shareholders in the company 14,201 –19,388 equIty ComPoNeNtS AttrIbutAble to lImIted ShAreholderS 65,784 52,212 Non-controlling interests 7.12 512 –1,636 totAl equIty 66,296 50,576 NoN-CurreNt lIAbIlItIeS Pension provisions 7.13 365 351 Deferred taxes 6. 806 516 Non-current provisions 7.13 414 387 Provisions for share-based payments 7.13 875 841 Liabilities to banks 7.14 3,587 8,209 Other non-current liabilities 8 8 totAl NoN-CurreNt lIAbIlItIeS 6,055 10,312 CurreNt lIAbIlItIeS Provisions 7.13 3,538 2,777 Liabilities to banks 417 2,498 Trade payables 7.15 1,650 2,192 Other liabilities 7.15 20,685 20,353 Liabilities at discontinued operations 7.10 0 42,385 totAl CurreNt lIAbIlItIeS 26,290 70,205 98,641 131,093 Heliad quarterly Financial report 34 q2 2011 Consolidated Cash Flow Statement for the 1st half of 2011 Amounts in EUR k Notes 01. 01.– Comparison 30. 06. 2011 01. 01.– 30. 06. 2010 1. Result for the period 13,717 2,060 2. + Depreciation of non-current assets and amortisation of securities 7.4 / 8.11 4,799 3,070 3. – Write-ups of financial instruments 7.4 / 8.5 – 2,991 – 3,000 4. – /+ Other non-cash income /expenses – 2,214 694 5. +/– Increase /decrease in provisions 7.13 835 – 2,318 6. +/– Decrease /increase in receivables and other assets 20,776 – 5,088 7. – /+ Decrease /increase in liabilities – 41,916 3,040 8. = CaSh Flow uSEd In opEratIng aCtIvItIES* –6,994 –1,542 9. – Payments for investments in intangible assets and property, plant and equipment 7.1 – 361 – 403 10. – Payments for acquisitions of subsidiaries 4. – 885 0 11. – Payments for loans made to other parties 7.1 – 35 0 12. – Payments for investments in financial assets and securities 7.1 – 2,945 – 3,998 13. + Proceeds from disposals of financial assets and securities 5,261 11,516 14. = CaSh Flow From InvEStIng aCtIvItIES 1,065 7,115 15. + Proceeds from taking up of loans 0 3,450 16. – Payments for redemption of loans –6,926 – 5,857 17. – Buyback of treasury stock 7.11 – 266 –1,110 18. = CaSh Flow uSEd In FInanCIng aCtIvItIES –7,191 – 3,517 19. nEt InCrEaSE In CaSh and CaSh EquIvalEntS (Subtotal oF lInES 8, 14 and 18) –13,121 2,056 20. – /+ Net foreign exchange difference 54 0 21. + Increase in cash and cash equivalents due to first-time consolidations 4. 881 0 22. + Cash and cash equivalents at continuing operations at beginning of period 41,391 26,630 23. CaSh and CaSh EquIvalEntS at ContInuIng opEratIon at End oF pErIod 29,205 28,686 24. + pledged cash and cash equivalents 7.8 1,514 1,511 25. = amount dISCloSEd In balanCE ShEEt 30,719 30,197 * The negative cash flow from operating activities in the 1st half of 2011 is mainly due to the conversion in the settlement system at a subsidiary. Furthermore, the figure includes the cash flow from operating activities at discontinued operations. (Note 8.14). IntErIm ConSolIdatEd FInanCIal StatEmEntS 35 Consolidated Statement of Changes in Equity 1 January 2011 – Share Capital retained Result of Treasury total equity Non- total equity 30 June 2011 capital reserve earnings the period stock components controlling attributable attributable to interests to limited shareholders shareholders Amounts in EUR k in company balanCE at 31.12. 2010 12,146 45,332 17,585 – 3,463 71,600 –1,636 69,964 rESult oF thE pErIod 2010 –19,388 –19,388 –19,388 balanCE at 01. 01. 2011 12,146 45,332 –1,803 – 3,463 52,212 –1,636 50,576 Result of the period 0 14,201 14,201 – 484 13,717 Currency differences – 364 – 364 734 370 ComprEhEnSIvE InComE – 364 14,201 13,837 250 14,087 Disposal of subsidiaries 0 1,898 1,898 Acquisition of treasury stock – 265 – 265 – 265 balanCE at 30. 06. 2011 12,146 45,332 – 2,167 14,201 – 3,728 65,784 512 66,296 Note 7.11 7.11 7.12 1 January 2010 – Share Capital retained Result of Treasury total equity Non- total equity 30 June 2010 capital reserve earnings the period stock components controlling attributable attributable to interests to limited shareholders shareholders Amounts in EUR k in company balanCE at 31.12. 2009 10,853 42,419 28,443 – 2,063 79,652 6,996 86,648 rESult oF thE pErIod 2009 – 9,893 – 9,893 – 9,893 balanCE at 01. 01. 2010 10,853 42,419 18,550 – 2,063 69,759 6,996 76,755 Capital increase in kind 862 2,439 3,301 3,301 Change in shareholding not leading to loss of control 1,065 1,065 – 4,266 – 3,201 Currency differences –1,391 –1,391 –7 –1,398 Acquisition of treasury stock –1,110 –1,110 –1,110 Result of the period 2,060 2,060 166 2,226 balanCE at 30. 06. 2010 11,715 44,858 18,224 2,060 – 3,173 73,684 2,889 76,573 Heliad quarterly Financial report 36 q2 2011 notes to the Interim Consolidated Financial Statements as of 30 June 2011 1 general disclosures Heliad has its registered office in Grüneburgweg 18, Frankfurt / Main, and is registered in the Commercial Register of Frankfurt / Main District Court (HRB 73524). Heliad is an investment company that supports companies in growth and change phases as Equity Partner. The object of Heliad’s business is the acquisition, holding, management and sale of majority and minority investments in private and publicly listed companies and investments in private equity funds (venture capital, buyout, special situations, mezzanine), as well as the performance of management, consulting and other services, particularly for the companies in which it invests, to the extent that no specific legal authorisation is re- quired to perform such services. Furthermore, the company is also authorised to invest its cash assets in securities of all kinds on its own behalf and on its own account. The consolidated financial statements have been prepared in euros (EUR). All of the amounts stated in these notes to the consolidated financial statements, including the previous year’s figures, are denominated in thousand euros (EURk). The income statement has been prepared using the total cost method. The company’s financial year corresponds to the calendar year. 2 accounting policies baSIS oF prEparatIon These interim consolidated financial statements of Heliad Equity Partners GmbH & Co. KGaA (hereinafter “Heliad”) have been prepared in accordance with International Financial Report- ing Standards (IFRS) as applicable in the European Union. The accounting policies applied in the interim financial statements are consistent with IAS 34 – Interim Financial Reporting. notES to thE IntErIm ConSolIdatEd 37 FInanCIal StatEmEntS The company has drawn on the possibility provided for under IAS 34.7 of voluntarily disclos- ing additional information. These financial statements nevertheless do not include all notes and disclosures required for year-end financial statements and should therefore be read in conjunction with the consolidated financial statements prepared in accordance with IFRS as of 31 December 2010. The interim financial statements have not been subject to any audit review pursuant to § 37w (5) of the German Securities Trading Act (WpHG), neither have they been audited pursuant to § 317 of the German Commercial Code (HGB). aCCountIng polICIES applIEd The accounting policies applied here are basically consistent with those applied in the con- solidated financial statements as of 31 December 2010 apart from the following IFRS and interpretations that only became effective as of 1 January 2011: nEw StandardS, IntErprEtatIonS or amEndmEntS thErEoF, adoptEd by thE group IaS 24 “related party disclosures (amended)” The amended version of this standard requires application in financial years beginning on or after 1 January 2011. The amendment has clarified the definition of related parties to facilitate the identification of such parties and eliminate inconsistencies in application. The amended standard has partly exempted companies closely related to a government body from disclosure obligations. The Group does not expect this amendment to have any impli- cations for its net asset, financial and earnings position. Premature application is permitted both for the exemption requirements and for the overall standard. IaS 32 “Financial Instruments: presentation – Classification of rights Issues (amended)” The amended version of IAS 32 requires application in financial years beginning on or after 1 February 2010. The definition of a financial liability has been amended to require classifi- cation of specified rights issues (and specified options and warrants) as equity instruments when they entitle their bearers to acquire a fixed number of equity instruments in the com- pany at a fixed amount in any currency and the company offers such rights on a prorated basis to all current owners of the same class of its non-derivative equity instruments. IFrIC 14 “prepayments of a minimum Funding requirement (amended)” The amended version of IFRIC 14 requires retrospective application in financial years begin- ning on or after 1 January 2011. The amendment sets out guidelines for determining the recoverable amount of a net pension asset. The amendment allows companies to treat pre- payments of minimum funding requirements as assets. The amendment is not expected to have any implications for the consolidated financial statements. Heliad quarterly Financial report 38 q2 2011 IFrIC 19 “Extinguishing Financial liabilities with Equity Instruments” IFRIC 19 requires application in financial years beginning on or after 1 July 2010. This inter- pretation clarifies that equity instruments issued to a creditor to extinguish a financial liability must be classified as consideration paid. The equity instruments thereby issued are measured at fair value. Where this cannot be reliably determined, measurement should be based on the fair value of the liability thereby extinguished. Gains and losses are recognised directly through profit or loss. Application of IFRIC 19 is not expected to have any material implications for the consolidated financial statements. The other amendments to IFRS/IAS and interpretations are currently not relevant to Heliad. IFrS that have been published but not yet applied Standards already published upon publication of these consolidated financial statements but not yet requiring mandatory application are listed below. This list includes those stand- ards and interpretations published which the Group can reasonably expect to require future application. The Group intends to apply these standards when they become effective. IaS 1 “presentation of Financial Statements (amended)” IAS 19 (amended 2011) requires application in financial years beginning on or after 1 July 2012. The IASB issued amendments to IAS 1 on 16 June 2011. These amendments intro- duce new requirements concerning the presentation of other comprehensive income. The amendments retain the option for individual appliers to provide either one or two presen- tations of the relevant items. Only the presentation of other comprehensive income has been amended such that subtotals have to be stated for those items capable of recycling (e.g. cash flow hedges, foreign currency translations) and those items not capable of recycling (e.g. items under IFRS 9 “Financial Instruments” requiring recognition through profit or loss under other comprehensive income). IaS 12 “deferred taxes (amended)” This amendment to IAS 12 was published in December 2010 and requires first-time applica- tion in financial years beginning on or after 1 January 2012. The amendment stipulates that the deferred tax assets and liabilities recognised for specified assets must be measured on the assumption that the carrying amount of these assets can be required in full via disposal. IaS 19 (amended 2011) “Employee benefits” IAS 19 (amended 2011) requires application in financial years beginning on or after 1 January 2013. Prior to the amendment, IAS 19 permitted choices on how to account for actuarial gains and losses on pensions and similar items, including the so-called “corridor approach” which results in the deferral of gains and losses. The draft amendment proposed eliminating the use of the “corridor approach” and instead requiring that all remeasurement impacts be recognised in other comprehensive income (with the remainder in profit or loss). Further- more, it was proposed to extend these requirements to all long-term employee benefits notES to thE IntErIm ConSolIdatEd 39 FInanCIal StatEmEntS (such as certain long service leave schemes). The final amendments make the changes in the presentation of other comprehensive income in respect of pensions (and similar items) only, but all other long-term benefits are required to be measured in the same way even though changes in the recognised amount are fully reflected in profit or loss. Also changed in IAS 19 is the treatment for termination benefits, specifically the point in time when a company would recognise a liability for termination benefits. The final amend- ments adopt the equivalent US-GAAP (which requires individual employees to be notified), although not verbatim. Specifically, the recognition timeframe may be extended in some cases. Finally, various other amendments to IAS 19 may have impacts in particular areas. For instance, employee benefits not settled wholly before twelve months after the end of the reporting period must be recognised as “other long-term benefits” rather than as “short-term benefits”, and whilst presented as a current item in the balance sheet, would be measured differently under the revised version of IAS 19. IaS 27 (amended 2011) “Separate Financial Statements” IAS 27 (amended 2011) requires application in financial years beginning on or after 1 Janu- ary 2013. IAS 27 has the objective of setting standards to be applied in accounting for investments in subsidiaries, associates and joint ventures, and associates in cases where a company decides (or is required by local regulations) to present separate (non-consoli- dated) financial statements. IaS 28 (amended 2011) “Investments in associates and Joint ventures” IAS 28 (amended 2011) requires application in financial years beginning on or after 1 Janu- ary 2013. The objective of IAS 28 (amended 2011) is to prescribe the accounting for investments in associates and to set out the requirements for application of the equity method when accounting for investments in associates and joint ventures. IFrS 9 “Financial Instruments: Classification and measurement” In its published version, IFRS 9 reflects the first stage of the IASB project to replace IAS 39 and deals with the classification and measurement of financial assets as defined in IAS 39. The standard requires application in financial years beginning on or after 1 January 2013. The IASB will address the classification and measurement of financial liabilities, hedges and retirements in future stages. This project is expected to be completed in 2011. Application of the first stage of IFRS 9 will have implications for the classification and measurement of financial assets at the Group. To provide a comprehensive overview of the potential implica- tions, the Group will only quantify the respective implications in connection with the results of the other stages of the project once these have been published. Heliad quarterly Financial report 40 q2 2011 IFrS 10 “Consolidated Financial Statements” IFRS 10 was published in May 2011 and requires first-time application in financial years beginning on or after 1 January 2013. IFRS 10 creates a uniform definition for the concept of control, and thus a uniform basis for the existence of a parent/subsidiary relationship and the resultant delineation of the scope of consolidation. The new standard will replace the previously relevant standards (IAS 27) “Consolidated and Separate Financial State- ments” and SIC-12 “Consolidation – Special Purpose Entities”). IFrS 11 “Joint arrangements” IFRS 11 was published in May 2011 and requires first-time application in financial years beginning on or after 1 January 2013. IFRS 11 governs the accounting treatment of arrangements in which a company exercises joint control over a joint venture or a joint operation. The new standard will supersede IAS 31 “Interests in Joint Ventures” and SIC-13 “Jointly Controlled Entities – Non-Monetary Contributions by Venturers” in terms of providing the relevant requirements for the accounting treatment of joint ventures. The most significant amendment in IFRS 11 compared with IAS 31 is the abolition of pro- portionate consolidation for joint ventures. In the future, joint ventures will in all cases have to be recognised using the equity method. IFrS 12 “disclosures of Interests in other Entities” IFRS 12 was published in May 2011 and requires first-time application in financial years beginning on or after 1 January 2013. IFRS 12 sets out the disclosures required in the notes in respect of links to other companies in the consolidated financial statements and joint arrangements. IFrS 13 “Fair value measurement” IFRS 13 was published in May 2011 and requires first-time application in financial years beginning on or after 1 January 2013. IFRS 13 sets out how fair values must be determined and extends the note disclosures required for fair values. amendment to IFrS 1 “Severe hyperinflation and removal of Fixed dates for First-time adopters” This amendment to IFRS 1 was published in December 2010 and requires first-time applica- tion in financial years beginning on or after 1 July 2011. The amendment abolishes the fixed application dates for retirement and requirements for gains or losses upon addition set out in IFRS 1 and replaces these with the date of transition to IFRS. The amendment further clarifies how IFRS accounting can be resumed following a period in which the com- pany was unable to comply with IFRS due to a currency subject to severe hyperinflation. amendment to IFrS 7 “disclosures on transfers of Financial assets” The amendment to IFRS 7 was published in October 2010 and requires first-time application in financial years beginning on or after 1 July 2011. The amendment stipulates extensive new qualitative and quantitative disclosures about transferred financial assets that are not retired and about the company’s ongoing engagement in connection with transferred financial assets at the balance sheet date. notES to thE IntErIm ConSolIdatEd 41 FInanCIal StatEmEntS As of the reporting date, IFRS 9, IFRS 10, IFRS 11, IFRS 12, IFRS 13 and the amendments to IAS 1, IAS 12, IAS 19, IAS 27, IAS 28, IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters, and IFRS 7 had not yet been approved by the EU Commission within its endorsement process. Future application of these standards and interpretations is not expected to have any materials implications for the Group’s net asset, financial and earnings position. The Group intends to apply these IFRS upon their date of mandatory application provided that corresponding approval has been provided within the endorse- ment process. 3 Consolidation principles The consolidated financial statements include those companies (subsidiaries) in which Heliad indirectly or directly exerts a controlling influence or, due to its economic powers of disposal, benefits from a majority of the economic advantages and bears a majority of the related risks resulting from the activities of the companies in question. IAS 27.4 defines control as the possibility of influencing the financial and business policy of a company in such a way as to derive advantage. Such control can be assumed when the parent company either directly or indirectly holds a majority of the voting rights. Subsidiaries are fully consolidated from the date of acquisition, i.e. from such time that the Group gains control. Consolidation ends when the parent company no longer has the possibility of exer- cising control. Company acquisitions are accounted for using the purchase method pursuant to IFRS 3, i.e. assets, liabilities and contingent liabilities are recognised at fair value upon acquisition. Differential amounts may result from any difference between the costs of a company acquisition and the buyer’s share of the fair values of the assets, liabilities and contingent liabilities thereby acquired. Debit differences are recognised under IFRS 3 as goodwill. Credit differences are recognised directly through profit or loss. The costs of a company acquisition are measured as the total of the consideration thereby assigned, measured at fair value upon acquisition, and of non-controlling interests. Non-controlling interests are measured at their respective share of the net assets identifiable at the company acquired. Any transaction costs incurred are recognised as expenses. For business combinations executed prior to 1 January 2010, transaction costs directly attributable to the acquisition were treated as a component of acquisition costs. In the case of step business combina- tions, the share of equity previously held by the buyer in the company thereby acquired is revalued at fair value upon acquisition, with the resultant income or expenses being charged to earnings. In line with IFRS 3.55, resultant goodwill is not amortised, but is instead tested for impair- ment once a year in line with IAS 36 in order to identify any potential impairment require- ment. Potential impairment is determined by calculating the recoverable amount of the cash generating unit to which the respective goodwill is allocated. Impairment losses are Heliad quarterly Financial report 42 q2 2011 recognised when the recoverable amount of the cash generating unit falls short of its respective carrying amount. The impairment test is performed more frequently should events or circumstances indicate possible impairment. The interim financial statements of the companies included in the interim consolidated financial statements of Heliad have been based on uniform accounting policies. 4 Scope of consolidation Alongside Heliad Equity Partners GmbH & Co. KGaA, the interim consolidated financial statements as of 30 June 2011 also include Investment Due AG, Midlake Holding AG, assona GmbH, TIG Vermögensbeteiligung 1 GmbH and the R. Häsler AG subgroup. Heliad Equity Partners GmbH & Co. KGaA (“Heliad”) sold its shareholding in Unicorn, a cash and valuables transport service provider, on the basis of a purchase agreement dated 30 June 2011. Heliad’s shares in Unicorn were sold to the company’s management in the context of a management buyout. The Unicorn Group subgroup was therefore decon- solidated as of 30 June 2011. This deconsolidation generated deconsolidation income of EUR 15k, which has been recognised under earnings from discontinued operations. The assets and liabilities of the Unicorn Group, as well as all of its income and expenses, had already been allocated to discontinued operations in the consolidated financial statements as of 31 December 2010. On 24 March 2011, Reprotechnik Beteiligungsgesellschaft mbH, Leipzig, and other compa- nies within the RT Group filed for insolvency. The RT Group subgroup was therefore decon- solidated as of 24 March 2011. This resulted in deconsolidated income of EUR 18,305k, which has been recognised under earnings from discontinued operations. The assets and liabilities of the RT Group, as well as all of its income and expenses, had already been allo- cated to discontinued operations in the consolidated financial statements as of 31 Decem- ber 2010. Via its subsidiary R. Häsler AG, Heliad acquired all of the shares in the equity of Gerber + Güntlisberger AG, Riehen, Switzerland, as of 2 February 2011. The business object of Gerber + Güntlisberger AG is the planning and execution of heating, ventilation and sanitary installation, customer service and the development of alternative energy technologies. In line with IFRS 3.62, the initial inclusion of Gerber + Güntlisberger in Heliad’s consolidated financial statements could only be based on preliminary balance sheet figures, as the fair values attributable to the identifiable assets, liabilities and contingent liabilities could only be determined on a preliminary basis prior to the preparation of these interim financial statements. The acquisition costs amounted to EUR 855k. Upon the date of initial consoli- dation, these acquisition costs were offset by equity amounting to EUR 1,285k. The result- ant credit difference of EUR 430k has been charged to earnings. notES to thE IntErIm ConSolIdatEd 43 FInanCIal StatEmEntS The preliminary fair values of the assets and liabilities at Gerber + Güntlisberger identifiable upon acquisition were as follows: Amounts in EURk Fair value Previous upon acquisition carrying amount Plant and office equipment 67 22 Work in progress 307 3 Inventories 39 2 Trade receivables 181 181 Other assets 341 91 Cash and cash equivalents 881 881 1,817 1,181 Provisions for guarantees 9 54 Deferred taxes 175 0 Trade payables 113 113 Other provisions 186 186 Other liabilities 49 49 532 403 nEt aSSEtS at FaIr valuE 1,285 Credit difference 430 total ConSIdEratIon 855 nEt CaShFlow oF FundS duE to Company aCquISItIon Funds acquired with subsidiary 881 Outflow of funds for acquisition in period under report 855 nEt InFlow oF FundS In pErIod undEr rEport 26 Since its addition to the scope of consolidation, Gerber + Güntlisberger has contributed sales of EUR 235k and net income of EUR –17k to the Group. Had the acquisition taken place at the beginning of the 2011 reporting period, then as of 30 June 2011 the sales of the Heliad Group would have amounted to EUR 16,784k and its consolidated net income would have amounted to EUR 13,724k. Heliad quarterly Financial report 44 q2 2011 5 Investments involving shareholdings of more than 20 % Under IAS 28.1, venture capital companies have the option to recognise shareholdings in companies in which they hold more than 20% of voting rights either at equity or in line with IAS 39. This option may only be exercised if first-time recognition is at fair value through profit or loss. The requirements for exercising this option were met for the following invest- ments, as a result of which Heliad opted for recognition in line with IAS 39. Share capital Heliad’s share Additions Disposals heliad’s share nominal as of as of 31.12. 2010 30.06.2011 EURk in % in % in % in % Aheim Unternehmer-Fonds la GmbH & Co. Parallel KG, Starnberg 20,002 49.995 0.0 49.995 0.0 DEAG Deutsche Entertainment Aktiengesellschaft, Berlin 12,389 28.31 0.64 0.0 28.95 CFC Industriebeteiligungen AG, Dortmund 8,448 22.12 0.0 0.0 22.12 The shares held in Aheim Unternehmer-Fonds Ia GmbH & Co. KG were sold at a purchase price of EUR 1,919k in the 2nd quarter of 2011. The following investments are measured using the equity method and were reclassified as assets held for sale at the end of the 2010 financial year: Share capital Heliad’s share Additions Disposals heliad’s share nominal as of as of 31.12. 2010 30.06.2011 EURk in % in % in % in % new i-d media AG, Cologne 50 49.0 0.0 0.0 49.0 BCG Baden-Baden Cosmetics Group AG, Baden-Baden 3,000 40.0 0.0 40.0 0.0 The shares held in BCG Baden-Baden Cosmetics Group AG were sold at a purchase price of EUR 1,200k in the 2nd quarter of 2011. The shares held in new i-d media AG continue to reported at an amount of EUR 283k under assets classified as held for sale. notES to thE IntErIm ConSolIdatEd 45 FInanCIal StatEmEntS 6 accounting principles These abridged interim consolidated financial statements have been based on the same accounting policies as those applied in the consolidated financial statements as of 31 December 2010. goodwIll If, on capital consolidation, the cost of acquisition exceeds the parent company’s pro rata share of the subsidiary’s revalued equity, this excess is reported as goodwill in line with IFRS 3.41. Under IFRS 3.55, goodwill is not amortised, and is instead tested for impairment once a year in line with IAS 36. Impairment testing is carried out more frequently if events or circumstances indicate a possible impairment. othEr IntangIblE aSSEtS Acquired intangible assets are capitalised in line with IAS 38 when it is likely that the use of such assets will entail a future economic benefit and the costs of the assets can be reliably determined. Acquired intangible assets are measured at cost and written down on a straight-line basis. Internally produced intangible assets are recognised at the value of directly allocable labour costs and external development services and have been written down on a straight-line basis. Intangible assets with indefinite useful lives are tested for impairment annually as of 31 December and when there are indications that their value might be impaired. propErty, plant and EquIpmEnt Property, plant and equipment are carried at cost less depreciation and, where necessary, any impairment in line with IAS 36. Gains or losses on the disposal of non-current assets are reported in other operating income and expenses. Depreciation is generally recognised on a straight-line basis over the customary useful life of the asset at the respective company. Heliad quarterly Financial report 46 q2 2011 ImpaIrmEntS oF non-FInanCIal aSSEtS Assets with indefinite useful lives are not depreciated or amortised, but are rather tested for impairment once a year or more frequently if there are indications of impairment. Assets that are subject to depreciation and amortisation are tested for impairment when events or changes in circumstances arise that indicate that their carrying amount may no longer be recoverable. Impairment is recognised at the amount by which the carrying amount exceeds the recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For impairment testing, assets are pooled at the lowest level at which cash flows can be separately identified (cash gener- ating unit). If impairment is subsequently reversed, the carrying amount of the asset (or cash generat- ing unit) is written up to its new estimated recoverable amount. The carrying amount can- not be written up beyond the amortised or depreciated value the asset (or cash generating unit) would have if impairment losses had not been recognised in previous years. Reversals of impairment losses are recognised directly in income. Impairment of goodwill cannot be reversed. FInanCIal aSSEtS Investments in associates are basically accounted for using the equity method pursuant to IAS 28. An associate is a company over which the Group exercises significant, but not controlling, influence. According to IAS 28.6, there is a refutable assumption that signifi- cant influence exists if 20 % or more of the voting rights are held in an investment. In the equity method, interests in associates are carried in the balance sheet at cost plus any changes in the prorated net assets of the associate arising following acquisition. Changes in value are recognised directly in income. Under IAS 28.1, venture capital companies such as Heliad have the option of recognising interests in companies in which they hold more than 20 % of the voting rights either using the equity method or at fair value through profit or loss pursuant to IAS 39. This option must be exercised upon initial recognition. For the investments in question, Heliad has opted for recognition at fair value pursuant to IAS 39. The investments affected by the exercising of this option have been reported under “Invest- ments” and “Investment securities”. notES to thE IntErIm ConSolIdatEd 47 FInanCIal StatEmEntS The investments and securities reported under financial assets are classified as measured at fair value through profit or loss (IAS 39). Changes in their fair values are recognised through profit or loss in the income statement. If the fair value of unlisted investments can- not be measured reliably, they are alternatively recognised at cost, unless their fair value is lower (IAS 39.46c). The cost of acquisition is based on the price at the settlement date. Loans are measured at amortised cost. InvEntorIES Inventories are carried at the lower of cost and net realisable value. dEFErrEd taxES Deferred tax liabilities are calculated on the basis of the standard international liability method (IAS 12). This involves deferred taxes being recognised on all temporary differences between the IFRS carrying amounts and the tax carrying amounts of the individual com- panies and on the corresponding consolidation adjustments. A tax rate of 30.6 % is assumed for calculating deferred taxes. In addition to the corporate income tax of 15 % and the soli- darity surcharge of 5.5 %, this also includes the average trade tax rate of 14.775 %. A tax rate of 19% has been assumed for the Swiss subsidiaries. Deferred tax assets have been netted with deferred tax liabilities in accordance with the requirements of IAS 12. worK In progrESS Work in progress is carried at the lower of cost and net realisable value. rECEIvablES, othEr aSSEtS and banK balanCES Receivables, other assets and bank balances are recognised at their nominal amounts or at amortised cost. The values stated for receivables and other assets also account for any necessary impairments. Heliad quarterly Financial report 48 q2 2011 SECurItIES Securities exclusively allocated to the held-for-trading category of financial instruments have been measured at fair value. Changes in their values have been recognised through profit or loss. aSSEtS ClaSSIFIEd aS hEld For SalE and aSSEtS at dISContInuEd opEratIonS Assets classified as held for sale are assets previously recognised as financial assets whose sale in the near future is intended and likely. They are measured in accordance with the requirements of IAS 39. The financial instruments reported in this item are recognised at fair value through profit or loss. The assets and liabilities classified as held for sale at discontinued operations relate to sub- sidiaries due to be sold in the near future or whose business operations are to be discontinued. These assets and disposal groups have been measured at the lower of their carrying amount or their fair value less costs to sell and are not depreciated or amortised following classifica- tion as held for sale. In the income statement, the income and expenses from discontinued operations are reported separately from the income and expenses from continuing operations and subsequently reported separately as earnings after taxes at discontinued operations. trEaSury StoCK Any treasury stock acquired by Heliad is recognised at cost and deducted from equity. Heliad is not entitled to exercise the voting rights accruing to its treasury stock holdings. pEnSIon provISIonS The liability for pension obligations includes the present value of the defined benefit obliga- tion less retrospective service cost not yet recognised and the fair value of the plan assets available to meet the obligations. notES to thE IntErIm ConSolIdatEd 49 FInanCIal StatEmEntS The amount of pension provisions is calculated using the actuarial projected unit credit method. Future obligations are measured on the basis of pro rata benefit entitlements acquired as of the balance sheet date. Assumptions as to the future development in certain parameters affecting the amount of future benefits are taken into account. Pension pro- visions only show the component of pension obligations recognised in profit or loss in the past. The portion of pension obligations not yet recognised in pension provisions is based on actuarial gains and losses. If actuarial gains and losses exceed a corridor of 10 % of the present value of the obligation, they are recognised in profit or loss on a straight-line basis over the average remaining period of service. tax provISIonS Provisions for current taxes are recognised in line with the expected back payment of taxes for the year under report and previous years. provISIonS Other provisions are recognised where a past event means that the company has a present legal or constructive obligation towards a third party which will probably lead to an out- flow of resources in the future and where such asset reductions can be reliably estimated. Provisions are not recognised for expenses (IAS 37). The provision for share-based payment relates to claims on the part of former managing directors of a subsidiary to participation in the proceeds on disposal of a subsidiary. These former employees have no entitlement to subscribe to shares in Heliad as the topmost group company. lIabIlItIES Liabilities are recognised at amortised cost. Heliad quarterly Financial report 50 q2 2011 InComE and ExpEnSES Sales and income are recognised when an agreement arises, a price is agreed and can be measured and it is assumed that it will be paid. The risks and rewards must have been transferred to the buyer and the seller’s control must have expired. Sales are reported net of sale allowances, such as bonuses, discounts granted or rebates. Income from current services is recognised on performance, compensation over time is recognised pro rata temporis. Proceeds from the sale of securities and financial assets relate to the proceeds from the sale of financial assets. The retirement of the carrying amount of securities and financial assets relates to the carrying amount pertaining upon the retirement of financial assets. taxES Taxes on income include current, non-period and deferred taxes. lEaSIng Finance leases, in which all major rewards and risks associated with ownership of the leased item are transferred to the Group, lead to capitalisation of the leased item at the beginning of the leasing arrangement. The leased item is carried at the lower of fair value or the present value of minimum leasing payments. Leasing payments are split into financing expenses and principal repayments for the remaining obligation such that the interest rate on the remain- ing liability remains constant over the leasing term. Leased items are depreciated over their useful lives. Leasing payments for operating leases are expensed on a straight-line basis over the term of the leasing arrangement. ContIngEnt lIabIlItIES and FInanCIal oblIgatIonS Contingent liabilities are potential obligations to third parties or obligations that already exist but where the outflow of resources is not likely or cannot be reliably measured. Con- tingent liabilities are not recognised in the balance sheet. The volume of obligations for contingent liabilities disclosed in the notes corresponds to the scope of the respective obli- gation on the balance sheet date and to the residual payment obligations for contingent contributions not yet called in for shares in partnerships. notES to thE IntErIm ConSolIdatEd 51 FInanCIal StatEmEntS CurrEnCy tranSlatIon The consolidated financial statements have been compiled in euros. Foreign currency receivables and liabilities in the separate financial statements are measured using the clos- ing rates as of the balance sheet date and translation differences are recognised in profit or loss. For financial statements for which the euro is not the functional currency, balance sheet items have been translated using the closing rates as of the balance sheet date and income statement items have been translated using average annual rates. Changes in the value of the previous year’s net assets on account of changes in exchange rates are recog- nised directly in equity. KEy dISCrEtIonary dECISIonS, EStImatES and aSSumptIonS The carrying amounts stated in the consolidated financial statements are partly based on discretionary decisions, assumptions and estimates, as are income and expenses. Due to the uncertainty involved in discretionary decisions, assumptions and estimates, it may be necessary to adjust the carrying amounts of these assets and liabilities in future periods. The assumptions and estimates included in the consolidated financial statements mainly relate to the calculation of recoverable amounts in the context of impairment tests on current and non-current financial assets and goodwill, as well as to the recognition and measure- ment of deferred taxes and provisions. Owing to market uncertainty, individual discounts of between 15 % and 100 % have been recognised in the measurement of unlisted shares in partner funds compared with the fair values reported by the fund companies. In the coming financial year, significant adjustments of the reported assets and provisions could be required by way of remeasurement of the following items: Amounts in EURk Goodwill 8,745 Financial assets 32,932 Provisions 5,192 Heliad quarterly Financial report 52 q2 2011 7 notes to the balance Sheet 7.1 StatEmEnt oF FIxEd aSSEtS The composition and development in individual non-current items has been presented in the non-current asset schedule. Statement of Fixed assets Amounts in EUR k historical cost 01.01.2011 Effect of Addition due Additions Disposals 30. 06. 2011 exchange rate to acquisition changes of a subsidary I. IntangIblE aSSEtS Goodwill 8,611 8,611 Other intangible assets 7,409 63 – 4,763 2,709 16,020 0 0 63 – 4,763 11,320 II. propErty, plant and EquIpmEnt 1,709 – 65 67 298 0 2,009 III. FInanCIal aSSEtS Investments 40,864 2,712 – 76 43,500 Loans to companies linked by virtue of investment 196 196 Loans 723 29 35 787 Investment securities 7,135 233 7,368 48,918 29 0 2,980 –76 51,851 66,647 – 36 67 3,341 – 4,839 65,180 notES to thE IntErIm ConSolIdatEd 53 FInanCIal StatEmEntS valuation adjustments Carrying amounts „–“ = carrying amount reduced, „+“ = carrying amount increased 01.01.2011 Effect of Write- Write- Disposals 30. 06. 2011 30. 06. 2011 31.12. 2010 exchange rate downs ups changes 117 17 134 8,745 8,728 – 6,219 14 – 52 4,753 –1,504 1,205 1,190 – 6,102 31 – 52 0 4,753 –1,370 9,950 9,918 – 619 – 26 – 226 0 0 – 871 1,138 1,090 – 23,917 – 3,503 1,201 76 – 26,143 17,357 16,947 0 – 98 – 98 98 196 0 0 787 723 6,237 1,085 7,322 14,690 13,372 –17,680 0 – 3,601 2,286 76 –18,919 32,932 31,238 – 24,401 5 – 3,879 2,286 4,829 – 21,160 44,020 42,246 Heliad quarterly Financial report 54 q2 2011 7.2 goodwIll The goodwill recognised as of 30 June 2011 was structured as follows: Amounts in EUR k assona GmbH 5,600 R. Häsler AG 3,111 TIG Vermögensbeteiligung 1 GmbH 34 8,745 assona GmbH, R. Häsler AG and TIG Vermögensbeteiligung 1 GmbH have been specified as the cash generating units to which the goodwill has been allocated pursuant to IAS 36. 7.3 othEr IntangIblE aSSEtS and propErty, plant and EquIpmEnt Intangible assets mainly relate to an internally generated database, industrial property rights and similar rights and acquired software licences, as well as to acquired order volumes. The useful lives of the main intangible asset items are as follows: Internally generated software 10 years Acquired software 3 years Acquired order volumes 1 year Other 3 –13 years Property, plant and equipment mainly relate to plant and office equipment. The useful lives for plant and office equipment range from 3 to 13 years. Acquisition costs are written down on a straight-line basis. notES to thE IntErIm ConSolIdatEd 55 FInanCIal StatEmEntS 7.4 FInanCIal aSSEtS The investments and securities reported under financial assets have been allocated to the “fair value through profit or loss” category. The investments and securities for which a stock market price was available, and which were regularly traded on the stock market during the reporting period, have been measured at their market prices as of the balance sheet date. The carrying amount of these financial assets amounted to EUR 15,669k at the balance sheet date. Furthermore, securities also in- clude shares in investment funds measured at their prices as of the balance sheet date (EUR 4,289k). The measurement of listed financial assets and shares in investment funds as of the balance sheet date resulted in write-ups of EUR 1,610k and write-downs of EUR 2,407k. Unlisted investments have been measured using the budgeting assumptions of the compa- nies in question and using multiplier procedures based on empirically determined multi- pliers normal for the respective sector. Shares in private equity funds are measured on the basis of the net asset values calculated by the fund managers, with individual discounts equivalent to those customary on the secondary market being accounted for. These discounts amount to between 15 % and 100 %. The carrying amount of unlisted investments, including shares in private equity funds, amounted to EUR 12,089k. Based on these valuations, the carrying amounts were written up to fair value by a total of EUR 1,381k. In addition, write-downs of EUR 1,977k were also recognised. The loans reported involve loans and interest receivables due from Heliad’s portfolio com- panies. Heliad’s interest receivables are generally due upon final maturity of the respective loans. 7.5 worK In progrESS and InvEntorIES The work in progress and inventories relate to fully consolidated subsidiaries in the “Services” segment. The work in progress involves projects not yet invoiced for which the subsidiaries in question have already rendered performance. 7.6 tradE rECEIvablES Trade receivables mainly relate to fully consolidated subsidiaries in the “Services” segment. Heliad quarterly Financial report 56 q2 2011 7.7 othEr aSSEtS Other assets have been recognised at face value and generally have remaining terms of up to one year. This item includes remaining purchase price receivables of EUR 3,630k. The remaining term for the receivable has not been set at one year and may therefore exceed one year. 7.8 CaSh and CaSh EquIvalEntS Bank balances chiefly consist of overdraft facilities, call money accounts and fixed-term deposits. Bank balances of EUR 1,514k have been pledged as security for third-party liabilities. The secured party can access these funds if the debtor defaults. In turn, Heliad has rights of recourse against the grantor of the security in the event of such utilisation. 7.9 aSSEtS ClaSSIFIEd aS hEld For SalE Assets classified as held for sale involve investments recognised prior to reclassification as investments measured at equity. The assets classified as held for sale are allocated to the “Investment and Other Activities” segment. 7.10 aSSEtS and lIabIlItIES ClaSSIFIEd aS hEld For SalE at dISContInuEd opEratIonS The RT Group and Unicorn Group subgroups were classified as discontinued operations as of 31 December 2010. Companies within the RT Group filed for insolvency in the 1st quarter of the current financial year. The RT subgroup has therefore been deconsolidated. Heliad’s shares in Unicorn were sold to the management in the context of a management buyout based on a purchase agreement dated 30 June 2011. The Unicorn Group subgroup was therefore deconsolidated as of 30 June 2011. No assets and liabilities classified as held for sale at discontinued operations were reported as of 30 June 2011. notES to thE IntErIm ConSolIdatEd 57 FInanCIal StatEmEntS 7.11 SharE CapItal The share capital amounts to EUR 12,145,802.00 and is fully paid in. The general partner is authorised until 31 March 2012, subject to approval by the Super- visory Board, to increase the company’s share capital by up to EUR 30,285,338.00 in total by issuing up to 30,285,338 new individual registered shares with a nominal value of EUR 1.00 per share in return for cash or non-cash contributions on one occasion or in par- tial amounts on several occasions (Authorised Capital 2007). The general partner is author- ised to exclude limited shareholders’ basic subscription rights in specified cases. The share capital is conditionally increased by up to EUR 3,000,000 by issuing up to 3,000,000 new individual registered shares with profit entitlement from the beginning of the financial year in which they are issued (Conditional Capital 2009). This conditional capital increase is only executed to the extent that bearers/creditors of convertible bonds, warrant bonds, profit participation rights and/or profit participation bonds, or combinations of such instruments with conversion or option rights, or conversion obligations, issued by Heliad up to 24 May 2014 in return for cash on the basis of the authorisation provided by the Annual General Meeting on 25 May 2009 actually exercise their conversion or option rights, or to the extent that the conversion obligations relating to such bonds are met. No bonds or profit participation rights had been issued as of the balance sheet date. By resolution of the Annual General Meeting on 26 August 2010, the company was author- ised until 25 August 2015 to acquire treasury stock up to a total of 10 % of its existing share capital upon the resolution being adopted. This authorisation may be exercised in full or in part. Pursuant to IAS 32.33, treasury stock must be measured at cost and deducted from equity. As of the balance sheet date, Heliad had acquired 967,599 treasury stock shares 31.12. 2010: 874,500 treasury stock shares) at a cost of EUR 3,728k (31.12. 2010: EUR 3,463k). 7.12 non-ControllIng IntErEStS Non-controlling interests relate to the shares held by minority shareholders in the equity of the following companies included in the consolidated financial statements: assona GmbH and Häsler Group. Heliad quarterly Financial report 58 q2 2011 7.13 provISIonS Pension provisions involve claims to retirement pensions on the part of employees at R. Häsler AG (Switzerland), a company included in the consolidated financial statements. Non-current provisions relate to guarantee provisions, sales commissions and dismantling obligations. The provisions for share-based payment relate to obligations in connection with a stock option plan. In the 2008 financial year, Heliad introduced a stock option plan based on the shares of a specific subsidiary on behalf of the managers at this subsidiary. The stock options entitle their bearers in the event of any exit from the relevant group company to acquire shares in this group company or to participate in any disposal proceeds. The stock options were classified as cash-settled share-based payments. The resultant liability is revalued at each balance sheet date and on the performance date. Changes in its fair value are recognised through profit or loss. Due to materiality considerations, the expenses incurred in connection with the stock option plan have not been included in the interim financial statements. 7.14 lIabIlItIES to banKS The liabilities to banks reported under non-current liabilities mainly relate to a loan of EUR 3,587k of a portfolio company. 7.15 othEr lIabIlItIES and tradE payablES Liabilities are carried at amortised cost and have terms of up to one year. Other liabilities mainly relate in an amount of EUR 6,306k to received insurance premiums to be passed on to insurance companies by a subsidiary in the “Services” segment and to liabilities of EUR 8,946k from profit participations. Trade payables chiefly involve liabilities at subsidiaries in the “Services” segment. notES to thE IntErIm ConSolIdatEd 59 FInanCIal StatEmEntS 8 notes to the Income Statement 8.1 proCEEdS From thE SalE oF FInanCIal aSSEtS These proceeds relate to the sale of a portfolio company and fund investments. 8.2 othEr SalES rEvEnuES Other sales revenues chiefly relate to sales at subsidiaries allocated to the “Services” segment. 8.3 ChangES In InvEntorIES Changes in inventories relate exclusively to changes in the volume of services not yet invoiced at subsidiaries in the “Services” segment. 8.4 othEr opEratIng InComE Other operating income mainly relates to income at subsidiaries in the “Services” segment. 8.5 InComE From rEvaluatIon Income from revaluation involves write-ups resulting from increases in the fair values of financial assets recognised under non-current assets. 8.6 rEtIrEmEnt oF FInanCIal aSSEtS and SECurItIES The retirement of financial assets and securities chiefly relates to the disposal of a portfolio company and fund investments. 8.7 CoSt oF purChaSEd SErvICES The cost of purchased services relates exclusively to the subsidiaries allocated to the “Services” segment. Heliad quarterly Financial report 60 q2 2011 8.8 pErSonnEl ExpEnSES Personnel expenses include the compensation paid to the managing directors and employ- ees of the fully consolidated subsidiaries allocated to the “Services” segment. The parent company Heliad Equity Partners GmbH & Co. KGaA does not have any proprietary employees. 8.9 amortISatIon and dEprECIatIon oF IntangIblE aSSEtS and propErty, plant and EquIpmEnt This item includes scheduled amortisation and depreciation. 8.10 othEr opEratIng ExpEnSES An amount of EUR 752k was recognised in the 1st half for the compensation due to Heliad’s general partner pursuant to the Articles of Association. An amount of EUR 1,755k relates to current other operating expenses at Heliad. The remaining amount of EUR 6,511k relates to other operating expenses at fully consoli- dated subsidiaries. 8.11 wrItE-downS oF FInanCIal aSSEtS and SECurItIES The write-downs of financial assets and securities are attributable to the measurement of financial instruments at fair value and relate to investments in private equity funds and in listed investments and securities. 8.12 othEr FInanCIal InComE This item mainly involves interest on loans granted to companies linked by virtue of invest- ment and interest on bank balances. The interest received during the reporting period and included in the cash flow from operat- ing activities amounted to EUR 236k. notES to thE IntErIm ConSolIdatEd 61 FInanCIal StatEmEntS 8.13 IntErESt and SImIlar ExpEnSES This item particularly involves interest on loans. This interest relates exclusively to interest on liabilities carried at amortised cost. The interest paid during the reporting period and included in the cash flow from operating activities amounted to EUR 16k. 8.14 rESult From dISContInuEd opEratIonS The result from discontinued operations was structured as follows: Amounts in EURk 01. 01. – 30. 06. 2011 Income 51,285 Expenses – 36,575 groSS proFIt 14,709 Financial expenses – 572 Impairment losses due to revaluation at fair value less costs to sell 0 proFIt bEForE taxES From dISContInuEd opEratIonS 14,137 taxES on current earnings before taxes –1 proFIt aFtEr taxES From dISContInuEd opEratIonS 14,136 Earnings per share from discontinued operations (diluted and basic) (EUR) 1.26 The net cash flow from discontinued operations was structured as follows: Amounts in EURk 01. 01. – 30. 06. 2011 Cash flow from operating activities – 819 Cash flow from investing activities 0 Cash flow from financing activities 0 total CaSh Flow From dISContInuEd opEratIonS – 819 Heliad quarterly Financial report 62 q2 2011 8.15 EarnIngS pEr SharE Earnings per share are structured as follows: 01. 01. – 01. 01. – 30. 06. 2011 30.06.2010 Net surplus /deficit for the period attributable to limited shareholders (EURk) 14,201 2,060 Weighted average number of limited shares 11,240,269 10,557,634 Basic and diluted earnings per share (EUR) 1.26 0.2 Earnings per share – based on the share of earnings from continuing operations attributable to limited shareholders – are structured as follows: 01. 01. – 01. 01. – 30. 06. 2011 30.06.2010 Earnings from continuing operations (EURk) – 419 2,226 less non-controlling interests for continuing operations (EURk) 484 –166 equals earnings from continuing operations attributable to limited shareholders (EURk) 65 2,060 per share (EUR) 0.01 0.2 No dividend payment is planned. The stock option plan is based on the shares in a specific subsidiary. notEs to thE intErim ConsolidatEd 63 FinanCial statEmEnts 9 Contingent liabilities and other financial obligations As of the balance sheet date, residual payment obligations for contingent contributions not yet called in for shares in partnerships amounted to EUR 13,659k. Subsidiaries of Heliad included in the scope of consolidation have concluded operating lease agreements for mobile assets (vehicles, machines and technical equipment) and immobile assets (building letting agreements). The leased assets are attributable to the lessor. The following leasing obligations apply: Amounts in EURk Movable Buildings assets due within one year 72 433 due in between one and five years 35 945 due over five years – – sum oF minimum lEasE paymEnts 107 1,378 10 segment report For the purposes of managing the company, the Group is organised in business units struc- tured in terms of products and services and has two segments: “Services” and “Investment and Other Activities”. “Services”: this segment consists of the “Midlake /assona” subgroup and R. Häsler AG. The business operations of the “Midlake Holding AG” subgroup, which includes the operating subsidiary assona GmbH, involve the placing and contract management of cover notes pro- tecting against theft, breakage and other damages to mobile phones and other mobile and stationary electronics appliances. The business operations of R. Häsler AG involve the perfor- mance of trade services in the field of heating technology. “Investment and Other Activities”: the business operations of this segment relate to Heliad’s activities in its investment business. In particular, these involve managing direct investments in which Heliad holds less than 50% of the voting rights or shares. Heliad quarterly Financial report 64 q2 2011 Segment performance is measured on the basis of segment operating earnings. The oper- ating earnings of the business units are monitored separately by the management when reaching its decisions concerning the allocation of resources and determining the earnings strength of the individual units. Group financing (including financial expenses and income) and taxes on income are managed centrally and are not allocated to individual operating segments. The sales generated in the “Services” segment with external customers that account in each case for more than 10 % of total sales amount to EUR 5,032k in total (H1 2010: EUR 6,354k). The Heliad Group operates exclusively in German-speaking countries and generates the predominant share of its sales in Germany and Switzerland. Where applicable, transfer prices between operating segments are determined on customary market terms as would be agreed between third parties. 11 d & o disclosures The general partner, Altira Heliad Management GmbH, Frankfurt / Main, is solely authorised and obliged to manage the company. The sole Managing Director of the general partner is Andreas Lange (since 26 April 2011), Frankfurt / Main. Until 26 April 2011, Bernd Sexauer, Kelkheim, acted as the sole Managing Director. The following individuals are appointed as members of the Supervisory Board: David Zimmer, member of the Management Board of Altira AG, was appointed by court order to be a member of Heliad’s Supervisory Board as of 31 May 2011. Following Andreas Lange’s move to the management, the Supervisory Board now consists of three members once again, namely David Zimmer, Prof. Hans-Olaf Henkel and Volker Rofalski. – Volker Rofalski, Munich, Managing Director of only natural munich GmbH – Prof. Dr. h.c. Hans-Olaf Henkel, Berlin, Honorary Professor at Mannheim University – David Zimmer, Frankfurt / Main, Businessman, since 31 May 2011 – Herr Andreas Lange, Frankfurt / Main, Businessman, until 26 April 2011 The members of the Supervisory Board are entitled to compensation of EUR 70k in the 2011 financial year. notES to thE IntErIm ConSolIdatEd 65 FInanCIal StatEmEntS 12 related party disclosures IAS 24 requires disclosures to be made concerning the company’s relationships with related parties. When transactions have been performed between Heliad and any such related party, Heliad is obliged to disclose the nature of the relationship and provide information about the respective transactions and any outstanding balances. Altira AG, Frankfurt / Main, is the sole shareholder in the general partner Altira Heliad Management GmbH. As there is no relationship of control between Altira Heliad Manage- ment GmbH and Heliad, there is also no relationship of control between Altira AG and Heliad. Indirectly, however, Altira AG exercises significant influence over Altira Heliad Management GmbH and thus counts as a related party. The majority shareholder in Altira AG is Angermayer, Brumm & Lange Unternehmensgruppe GmbH (ABL), Frankfurt / Main. All companies in a position to exercise significant influence on ABL or its shareholders are thus to be viewed as related parties. Pursuant to § 8a of the Articles of Association, as compensation for its activities and for assuming liability the general partner receives an advance annual payment amounting to 2.5% of the shareholders’ equity of the Group as reported in the balance sheet prepared in accordance with IFRS accounting standards as of the balance sheet date for the pre- vious financial year, plus any VAT thereby incurred. Further, the general partner receives profit-related compensation amounting to 20 % of the company’s annual net surplus before taxes as stated in the adopted financial statements. Pursuant to § 8b of the Articles of Association, the general partner or any of its affiliated companies may also charge Heliad for advisory services provided to Heliad or one of its portfolio companies in lieu of an external company at an amount that bears comparison with services charged between third parties. Capital market service contracts (designated sponsoring, capital market communications and advisory services) are in place with Silvia Quandt & Cie. AG, Frankfurt / Main. Via their investments, the partners of Angermayer, Brumm & Lange Unternehmensgruppe GmbH exercise significant influence on Silvia Quandt & Cie. AG. It should in all cases be noted that Silvia Quandt & Cie. AG represents biw Bank für Investments und Wert- papiere AG (biw), Willich. Angermayer, Brumm & Lange Unternehmensgruppe GmbH indirectly exercises significant influence on biw. Heliad quarterly Financial report 66 q2 2011 The compensation paid to related parties for services received in the 1st half of the year under report is presented below: Amounts in EURk 01. 01. – 01. 01. – 30. 06. 2011 30.06.2010 CompanIES In KEy poSItIonS Altira Heliad Management GmbH (general partner) 752 969 Altira AG (sole shareholder in general partner) 63 172 815 1,141 othEr CloSEly rElatEd CompanIES Silvia Quandt & Cie. AG 39 18 A prorated amount of EUR 752k was recognised under other operating expenses in the 1st half of the year under report in connection with the payments due in line with the Articles of Association (H1 2010: EUR 969k). Contribution obligations of EUR 12,978k were due to Clearsight Turnaround Fund I, L.P. at the end of the period under report (31.12. 2010: EUR 15,565k). Via its investment, Altira AG exercises significant influence on the management company of the Clearsight Turnaround Fund I. Heliad had bank credit balances maturing daily and amounting to EUR 648k deposited at biw Bank für Investments und Wertpapiere AG, Willich, as of the balance sheet date (31.12. 2010: EUR 881k). notES to thE IntErIm ConSolIdatEd 67 FInanCIal StatEmEntS 13 risk management objectives and methods The company’s risk management objectives and methods have been laid down and docu- mented in a risk handbook. To ensure a systematic approach, the risks have been allocated into three categories: 1. Strategic risks: – Investment portfolio performance – Financing – Human Resources 2. Financial risks, including: – Valuation risks on new investments – Existing investment portfolio performance – Foreign currency risk – Liquidity risk – Risks for guarantees and other off-balance-sheet obligations – Legal risks 3. Operating risks: – Financial accounting, controlling and financial reporting – Cash flows – Data loss and other electronic data processing risks For each area of potential risk, the early detection, communication and management of the relevant risks is ensured by setting out and implementing appropriate countermeasures. The risks involved in financial instruments are especially important in this respect. Valua- tion risk involves the risk of the fair value of investments developing unfavourably. When the continued existence of an investment is in question, this investment and any receiv- ables due from it may lose all of their value. Not only that, the fair value of an investment may basically be determined by the individual business performance of the respective portfolio company, as well as by external factors such as macroeconomic developments, exchange rates and interest rates. Heliad’s portfolio companies focus on a variety of sectors in terms of their activities. This diversification means that Heliad’s overall portfolio is relatively immune to fluctuations in individual sectors. However, the value of individual portfolio companies may be highly dependent on develop- ments in individual sectors or on sector-specific factors. The business performance of R. Häsler AG, a heating system installation service provider, for example, is highly depend- ent on the willingness of private households to invest and on the volume of construction activity. Heliad quarterly Financial report 68 q2 2011 Due to its subsidiaries in Switzerland, Heliad is exposed to exchange rate changes involv- ing Swiss francs. Apart from these investments, Heliad only invests in companies in the euro area. The investments in US partner funds still in the portfolio are earmarked for sale. Fluctuations in exchange rates could nevertheless impact indirectly on the value of our portfolio companies should their earnings or assets be significantly affected by exchange rate movements. Heliad is only debt-financed to a slight extent on the level of the Heliad Equity Partners GmbH & Co. KGaA parent company. However, interest rate risk could impact on the company indirectly to the extent that investments in its portfolio are dependent on debt capital. Given its available liquid resources, its high equity ratio and the available credit line, Heliad’s liquidity risk is assessed as representing a subordinate risk. 14 Capital management As the managing company, Altira Heliad Management GmbH manages the capital of Heliad, with such capital being deemed to represent the entire equity. The key management figure in this respect is the net asset value (NAV) per share. The aim of the management is to invest in high-performance companies and develop these investments, thus enabling limited share- holders to participate in the value growth of these portfolio companies as reflected in Heliad’s NAV figure. The company aims to achieve consistent NAV growth. notES to thE IntErIm ConSolIdatEd 69 FInanCIal StatEmEntS 15 tax situation In the current legal framework, Heliad’s business activities are largely tax-exempt. The tax loss carryovers accumulated to date are therefore not relevant. No deferred taxes have to be considered for the parent company. The tax expenses reported chiefly relate to sub- sidiaries in the “Services” segment. 16 Shareholdings The following subsidiaries have been included in the consolidated financial statements: Company name and domicile Share of capital % assona GmbH, Berlin 97.2 Gerber + Güntlisberger, Riehen, Switzerland 86.47 Investment Due AG, Switzerland 100 Midlake Holding AG, Schaan, Liechtenstein 100 R. Häsler AG, Möhlin, Switzerland 86.47 TIG Vermögensbeteiligung 1 GmbH, Frankfurt / Main 100 17 Events after the reporting period No transactions or events of material significance have arisen since the end of the 1st half of the 2011 financial year. Frankfurt / Main, August 2011 The Management of Altira Heliad Management GmbH ContaCt Heliad Equity Partners GmbH & Co. KGaA Grüneburgweg 18 60322 Frankfurt / Main Germany info @ heliad.com T +49 (0) 69.71 91 59 65 - 0 F +49 (0) 69.71 91 59 65 -11 www.heliad.com
"Interim Report as of June 30_ 2011"