Mutual fund (SICAV) governed by Luxembourg law

A NNUAL
REPORT
Mutual fund (SICAV)
governed by
Luxembourg law
2006
A NNUAL
REPORT
For the year ended
31 December 2006
DEXIA BANQUE INTERNATIONALE À LUXEMBOURG
69 Route d’Esch
L-1470 Luxembourg
PUILAETCO DEWAAY PRIVATE BANKERS S.A.
44-46 Avenue Herrmann Debroux
B-1160 Brussels
FOYER S.A.
12 Rue Léon Laval
L-3372 Leudelange
Mutual fund (SICAV)
governed by
Luxembourg law
2006
A NNUAL
REPORT
2006
C ONTENTS
Page
Board of Directors
3
Administration
4
Board of Directors’ activity report
5
Auditors’ report
8
Statement of consolidated net assets
10
Statement of changes in consolidated net assets
11
Consolidated cash flow statement
12
Changes in investment property
13
Changes in number of shares in issue
13
Statistics
For the period from 1 January 2006 to 31 December 2006
14
Changes in consolidated net assets
14
Changes in the listed share price in Luxembourg and
in net asset value per share
15
Changes in consolidated portfolio holdings
16
Statistics for the last three years
16
Consolidated portfolio holdings
17
Notes to the consolidated financial statements
19
Shareholder information
37
No subscriptions can be accepted on the
basis of the financial reports alone. Subscriptions are valid only if made on the basis
of the prospectus and a copy of the latest
annual report, plus the latest half-yearly
report if this is more recent than the annual
report. Subscriptions are accepted only as
part of an issue duly announced by the Board
of Directors. Redemptions of shares cannot
be made at the unilateral request of shareholders.
2
IMMO CROISSANCE
A NNUAL
B OARD OF D IRECTORS
Registered office Immo-Croissance SICAV
69 Route d’Esch
L-1470 Luxembourg
www.immocroissance.com
Chairman of the Mr Frank WAGENER
Board of directors Chairman of the Management Committee
Dexia Banque Internationale à Luxembourg
69 Route d’Esch
L-1470 Luxembourg
Members of the Mr Marcel DELL
Board of directors Director
Foyer S.A.
12 Rue Léon Laval
L-3372 Leudelange
Mr Benoît DOURTE
Director
Foyer S.A.
12 Rue Léon Laval
L-3372 Leudelange
Mr Pierre MALEVEZ
Member of the Management Committee
Dexia Banque Internationale à Luxembourg
69 Route d’Esch
L-1470 Luxembourg
Mr Richard SCHNEIDER
Member of the Board of Directors
Puilaetco Dewaay Luxembourg S.A.
2 Boulevard Emmanuel Servais
L-2535 Luxembourg
Mr Henri SERVAIS
Member of the Board of Directors
Puilaetco Dewaay Private Bankers S.A.
44-46 Avenue Herrmann Debroux
B-1160 Brussels
IMMO CROISSANCE
3
REPORT
2006
A NNUAL
REPORT
2006
A DMINISTRATION
Department head Mr Karl Heinz DICK
IMMO-CROISSANCE SICAV
69 Route d’Esch
L-1470 Luxembourg
Tel.: +352 4590 4205
Fax: +352 4590 3425
e-mail: [email protected]
Website: www.immocroissance.com
Consultant Immo Croissance Conseil S.A.
69 Route d’Esch
L-1470 Luxembourg
Custodian bank RBC Dexia Investor Services Bank S.A.
14 Porte de France
L-4360 Esch-sur-Alzette
Financial services
– Luxembourg RBC Dexia Investor Services Bank S.A.
14 Porte de France
L-4360 Esch-sur-Alzette
– Belgium Fortis Banque S.A.
3 Montagne du Parc
B-1000 Brussels
Puilaetco Dewaay Private Bankers S.A.
44-46 Avenue Herrmann Debroux
B-1160 Brussels
Auditors Ernst & Young S.A.
Réviseurs d’Entreprises
7 Parc d’Activité Syrdall
L-5365 Munsbach
Property appraiser Cushman & Wakefield
Consultants Immobiliers Internationaux
58 Avenue des Arts, Box 7
B-1000 Brussels
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IMMO CROISSANCE
A NNUAL
B OARD OF D IRECTORS ’ ACTIVITY REPORT
To the shareholders,
Your Board of Directors is pleased to present its activity report for the year
ended 31 December 2006.
At the General Meeting of 12 April 2006 we confirmed our intention to
refocus our activities on the Luxembourg market.
Activity in the banking and financial sectors, the massive increase in investment and other private equity funds, and all their related activities confirm
Luxembourg’s importance as a financial market. The continuous growth of
these sectors explains why the rental yields on offer in the Grand Duchy are
higher than the European average.
Convinced that in-depth knowledge of the markets in which we operate is
a strategic advantage that is key to the success of our business, and aware
of the need for scale when investing in a given market, we have consequently made the decision to dispose of our investments located outside
the Grand Duchy of Luxembourg. We believe that this is the right time to do
this because of the amount of cash available for investment in the property sector.
It is with this in mind that we sold Le César in Lyon, our only building in
France. We posted a net gain of €2.6m on the purchase price as a result of
this transaction. We are also in contact with potential investors for our
properties in Belgium and Germany.
During 2006 we noted increased interest in developments located outside
the Brussels region, especially Waterloo and Wavre. We also signed at the
start of 2007 a long-term lease on a substantial part of our K2 building in
Diegem, renovation work having been completed by mid-December. As a
result of these events we foresee a positive conclusion to our policy of withdrawal from Belgium.
During the period we also sold our Central Parc office development located in the Luxembourg Central Business District. Following the departure of
the tenant who had been occupying the entire property, this building, part
of a major co-ownership, turned out to be too small to be marketed independently. A sale proved to be the best option as we made a profit of €0.3m
on the purchase price.
For 2006 the Fund posted an effective consolidated profit slightly ahead of
projections. Net profit for the year was €18m compared to €16.8m in 2005.
This increase of 7.6% resulted principally from strong rental income and
property sales.
Costs were €6.1m against €5.6m in 2005, an increase of 10.3% arising
from consulting and surveying fees, various studies such as asbestos
detection tests, and marketing expenses. This relates to initiatives undertaken following the departure of numerous tenants.
Consolidated operating profits for 2006 were therefore €11.9m compared
to €11.3m in 2005, an increase of 6.3%.
IMMO CROISSANCE
5
REPORT
2006
A NNUAL
REPORT
2006
As at 31 December 2006 the gross value of our property holdings was
€160.5m compared to €172.7m on 31 December 2005, a fall of 7.1%. Apart
from property sales, this fall resulted from the expiry of leases on our
Newton and Edison buildings in Strassen. In order to accelerate the marketing of these empty buildings, we have strengthened our links with the
leading Luxembourg property agents. We remain confident that these
buildings will find new tenants very quickly due to the combination of
healthy demand for medium-sized developments and the exodus from citycentres by businesses with far greater needs for office space. We have
already agreed two leases during the first quarter of 2007 for 2,000 sq.m.
of the 6,700 sq.m. Edison building.
Consequently the result, after allowing for unrealised losses and before
tax, is a loss of €1.4m.
For the same reasons the value of our assets as at 31 December 2006 was
€176.4m with liabilities of €66.1m, giving a net asset value of €110.3m
compared to €117.5m in 2005.
As part of our strategy of refocusing on Luxembourg, and subsequent to
the divestments effected during 2006, we are actively prospecting the
Luxembourg market and studying new investment projects on a regular
basis. We have therefore acquired the part of the Arsenal building that we
did not own.
Again with a view to improving the quality of our property holdings, after
various consultations and analysis of a number of scenarios we decided to
completely demolish and rebuild the Arsenal building. This building, which
dates from the 1970s, is located on Boulevard Royal, a highly sought-after
6
IMMO CROISSANCE
A NNUAL
address in Luxembourg, but no longer meets the standards of quality
expected by prime tenants. This project will thus enable us to re-let a
larger development at a significantly higher price per square metre than
it currently obtains, thereby generating a better return over the long
term. Work is expected to commence during the second half of 2007.
Particular attention will be paid to sustainable development and energy
conservation issues both in this construction project and for maintenance of leased buildings. The Fund will aim to have an energy certificate
for each building attesting to its compliance with current European legislation, so that it can claim to be a property fund that is committed to
sustainable development.
The outlook for developments in the office sector of the Luxembourg
property market is generally favourable. In fact, record levels of new
leases were recorded in both of the last two quarters of 2006. This trend
is set to continue during 2007. Moreover, the stability and attractiveness
of the Luxembourg market has been confirmed by the Statec’s
announcement of 5.5% growth in GDP during 2006, compared to 4% in
2005. This strong growth should support demand for office space, since
more than 11,000 jobs were created by businesses based in the Grand
Duchy during 2006. Naturally the Fund hopes to benefit from these
favourable market conditions.
As a result, given the 2006 results and the favourable outlook for 2007,
your Board proposes to pay a dividend of €18.00 per share, slightly lower
than that of the previous year (€19).
The Board of Directors
IMMO CROISSANCE
7
REPORT
2006
A NNUAL
REPORT
2006
A UDITORS ’ REPORT
To the shareholders of Immo-Croissance (a Luxembourg SICAV)
Report on the consolidated financial statements
We have audited the consolidated financial statements comprising the
statement of consolidated net assets, the statement of changes in the consolidated net assets (including the consolidated income statement), the
consolidated cash flow statement, the statement of consolidated portfolio
holdings and other net assets and the appendix containing a summary of
principal accounting methods and other explanatory notes.
Responsibility of the Board of Directors in the drawing up and presentation of
the consolidated financial statements
The Board of Directors is responsible for the drawing up and faithful presentation of the consolidated financial statements in conformity with the
International Financial Reporting Standards adopted in the European
Union. This responsibility includes the design, implementation and monitoring of an internal control mechanism for the drawing up and faithful
presentation of consolidated financial statements that do not include
material misstatements, whether as a result of fraud or errors, and the
determination of accounting estimates that are reasonable in the current
circumstances.
Responsibility of the auditor
Our responsibility is to express an opinion on the consolidated financial
statements on the basis of our audit. We have carried out our audit in
accordance with the International Audit Standards as adopted by the
Institut des Réviseurs d’Entreprises (Luxembourg Institute of Auditors).
These standards require us to comply with the code of ethics and to plan
and perform our work so as to obtain reasonable assurance that the financial statements are free from any material misstatement.
An audit consists of an examination, on a sample basis, of evidence supporting the amounts and information contained in the consolidated financial statements. The choice of procedures is at the discretion of the auditor, as is the assessment of the risk that the consolidated financial statements contain material misstatements, whether as a result of fraud or
errors. In assessing these risks the auditor considers the internal controls
in place within the entity for the drawing up and faithful presentation of the
consolidated financial statements in order to define appropriate audit procedures in the circumstances, and not for the purpose of expressing an
opinion on the effectiveness of these controls. An audit also includes an
assessment of the appropriateness of the accounting methods used and
the accuracy of the accounting estimates made by the Board of Directors,
as well as the overall adequacy of presentation of the consolidated financial statements.
We believe that the information gathered in the course of our audit provides
a reasonable basis for our opinion.
8
IMMO CROISSANCE
A NNUAL
Opinion
In our opinion, the consolidated financial statements give a true and fair
view of the financial position of Immo-Croissance SICAV as at 31 December
2006, its consolidated results, cash flows and changes in net assets for the
year then ended, in accordance with the framework of International
Financial Reporting Standards as adopted by the European Union.
We have reviewed the additional information contained in the Annual
Report as part of our assignment, but we have not applied any specific
audit procedures under the above-mentioned standards. As a result, we
are not expressing an opinion on this information. Nevertheless, this information does not call for any observations on our part in the context of the
financial statements taken as a whole.
Report on other legal or regulatory obligations
The management report, which is the responsibility of the Board of
Directors, is consistent with the consolidated financial statements.
ERNST & YOUNG
Limited liability company (Société Anonyme)
Auditors
Olivier LEMAIRE
Luxembourg, 7 March 2007
IMMO CROISSANCE
9
REPORT
2006
A NNUAL
REPORT
2006
STATEMENT OF CONSOLIDATED NET ASSETS
ASSETS
Non-current assets
Investment property
Other property, plant and equipment
Available-for-sale financial assets
Long-term deposits
Deferred tax assets
Current assets
Trade receivables and other debtors
Prepayments
Other current assets
Cash and cash equivalents
Notes
31 December 2006,
in euros
31 December 2005,
in euros
2d
16
160,520,000
1,854,406
68,930
11,359,646
–
172,790,000
3,528,624
1,033,387
11,359,646
406,626
173,802,982
189,118,283
175,154
–
826,197
1,573,098
119,274
72,518
811,284
2,034,752
2,574,449
3,037,828
176,377,431
192,156,111
58,050,306
–
–
28,059,780
2,521
108,169
58,050,306
28,170,470
3,523,211
4,372,453
162,966
3,414,510
42,662,430
394,357
8,058,630
46,471,297
66,108,936
74,641,767
110,268,495
117,514,344
668.52
47,688
678.71
50,492
255.59
306,692
277.81
299,645
4
15
2e
2f, 5
Total assets
LIABILITIES
Non-current liabilities
Interest-bearing bank borrowings
Provisions
Deferred tax liabilities
Current liabilities
Trade payables and other creditors
Short-term portion of interest-bearing bank borrowings
Other current liabilities
Total liabilities
Net asset value
Net asset value per accumulation share
Number of accumulation shares in issue
Net asset value per distribution share
Number of distribution shares in issue
The attached notes form part of the financial statements.
10
IMMO CROISSANCE
6
15
9
6
A NNUAL
REPORT
STATEMENT OF CHANGES
IN CONSOLIDATED NET ASSETS
Notes
Income
Rental income
Interest income
Dividends on transferable securities
Other income
Total income
Charges
Consulting fees and related parties
Custodian fees
Bank charges, debit interest
Operating charges
Other charges
8
11
6
12
13
Total charges
Net income
on investments
Realised gain (loss) on sales of securities
Realised gain (loss) on property disposals
Total net income
Unrealised gain (loss) on
investment property
Unrealised gain (loss)
on financial assets
2d
Profit before tax
Current taxation
Deferred tax liabilities
Deferred tax assets
Net profit on operations
15
15
Year ended
31 December 2006,
in euros
Year ended
31 December 2005,
in euros
15,212,382
610,466
588
719,766
15,329,244
725,163
4,204
799,059
16,543,202
16,857,670
482,327
120,506
2,981,585
2,252,612
350,809
431,438
112,747
2,938,755
1,746,926
376,511
6,187,839
5,606,377
10,355,363
11,251,293
175,023
1,427,267
–
–
11,957,653
11,251,293
(13,382,276)
(1,816,184)
1,424
6,015
(13,380,852)
(1,810,169)
(1,423,199)
9,441,124
(740,041)
(298,457)
–
(27,764)
176,367
(76,707)
(2,461,697)
9,513,020
IMMO CROISSANCE
11
2006
A NNUAL
REPORT
2006
C ONSOLIDATED CASH FLOW STATEMENT
Year ended
31 December 2006,
in euros
Year ended
31 December 2005,
in euros
(1,423,199)
9,441,124
13,382,276
319,930
(75,050)
1,724
1,810,169
312,406
(27,764)
(396,766)
(122,689)
(1,224,606)
12,082,992
9,914,563
(6,628)
(2,619,221)
976,131
(956,135)
(1,125,136)
(1,496,184)
–
–
(2,605,853)
(2,621,320)
-
–
(12,910)
(878,565)
(5,757,342)
(15,163)
(5,929,805)
(6,648,817)
(5,944,968)
2,828,322
1,348,275
Cash at bank
Bank overdrafts
2,034,752
(7,662,429)
2,729,287
(9,705,239)
Cash and cash equivalents at the start of the year
(5,627,677)
(6,975,952)
Cash at bank
Bank overdrafts
1,573,098
(4,372,453)
2,034,752
(7,662,429)
Cash and cash equivalents at the end of the year
(2,799,355)
(5,627,677)
Net cash flow from operating activities
Profit before tax
Adjusted for:
Decrease (increase) in unrealised gains and losses on
investment property and other financial assets
Depreciation and provisions on property, plant and equipment
Tax paid
Decrease (increase) in current assets
(Decrease) increase in current and non-current liabilities
excluding bank borrowings and taxes
Net cash flow from operating activities
Net cash flow from investing activities
Acquisition of property, plant and equipment
Increase in the cost of investment property
Sales of REITs
Sale of subsidiary net of cash
Net cash flow from investing activities
Net cash flow from financing activities
Repayment/Increase of bank borrowings
Interest paid
Share subscriptions (redemptions)
Sale of own shares
Distributions to shareholders
Net cash flow from financing activities
Net decrease (increase) in cash and
cash equivalents
12
IMMO CROISSANCE
A NNUAL
REPORT
C HANGES IN INVESTMENT PROPERTY
For the period from 1 January 2006 to 31 December 2006
Description
Opening balance
Change in value
Acquisition cost
(in euros)
Unrealised gain
(loss)
(in euros)
Carrying value
(in euros)
185,122,171
(12,332,171)
172,790,000
(13,382,276)
(10,763,055)
2,619,221*
(1,506,945)**
Closing balance
187,741,392
(1,506,945)
(27,221,392)
160,520,000
* Net increase in sales
** This amount corresponds to the unrealised gain recorded until 2005 concerning the sale of the Central Parc
and Le César buildings that took place during the 2006 financial year.
For the period from 1 January 2005 to 31 December 2005
Description
Acquisition cost
(in euros)
Unrealised gain
(loss)
(in euros)
Carrying value
(in euros)
Opening balance
183,625,987
(10,515,987)
173,110,000
Change in value
1,496,184
(1,816,184)
(320,000)
185,122,171
(12,332,171)
172,790,000
Closing balance
C HANGES IN NUMBER OF SHARES IN ISSUE
For the period from 1 January 2006 to 31 December 2006
Accumulation
shares
Distribution
shares
50,492
299,645
Number of shares subscribed
1,543
10,990
Number of shares redeemed
4,347
3,943
47,688
306,692
Number of shares in issue at the start of the period
Number of shares in issue at the period end
IMMO CROISSANCE
13
2006
A NNUAL
REPORT
2006
S TATISTICS
For the period from 1 January 2006 to 31 December 2006
Accumulation shares
Distribution shares
Net assets per share:
– high
– low
€ 704.09 (May 2006)
€ 667.96 (June 2006)
€ 286.11 (April 2006)
€ 255.38 (June 2006)
Price on Luxembourg stock exchange:
– high
– low
€ 760.00 (05.09.2006)
€ 651.00 (06.01.2006)
€ 320.00 (07.04.2006)
€ 268.00 (01.12.2006)
Price on Brussels stock exchange:
– high
– low
€ 750.00 (30.08.2006)
€ 618.50 (22.05.2006)
€ 310.00 (07.04.2006)
€ 270.10 (16.06.2006)
C HANGES IN CONSOLIDATED NET ASSET VALUE
Year ended
31 December 2006
Net asset value at 1 January
Redemptions
Subscriptions
Dividends paid
Net profit on operations
(Un)realised gain (loss) on available-for-sale assets
Change in scope - disposals of subsidiaries
Sale of own shares
Net asset value at 31 December
117,514,344
(4,069,179)
4,056,269
(5,697,188)
(2,461,697)
80,218
(32,837)
878,565*
110,268,495
Year ended
31 December 2005
113,614,394
(8,594,052)
8,578,889
(5,869,651)
9,513,020
271,744
–
–
117,514,344
* During the 2006 financial year Immo Croissance sold its own shares. From an accounting point of view, in the event of a share buyback the value of these shares would be deducted from the net asset value. No profit or loss would be recorded on the statement
of consolidated changes in net assets.
14
IMMO CROISSANCE
A NNUAL
CHANGES IN THE LISTED SHARE PRICE IN
LUXEMBOURG AND IN NET ASSET VALUE PER SHARE
780.00
730.00
680.00
630.00
580.00
530.00
480.00
430.00
380.00
330.00
280.00
June Dec. June Dec. June Dec. June Dec. June Dec. June Dec. June Dec.
00
00
01
01
02
02
03
03
04
04
05
05
06
06
Market value of accumulation shares
Net asset value of accumulation shares
340
320
300
280
260
240
220
200
June Dec. June Dec. June Dec. June Dec. June Dec. June Dec. June Dec.
00
00
01
01
02
02
03
03
04
04
05
05
06
06
Market value of distribution shares
Net asset value of distribution shares
With effect from 31 December 2004, the net asset value has been calculated in accordance with the new accounting standards (IAS/IFRS). The decline
in the net asset value is due to the transition to this new calculation method.
IMMO CROISSANCE
15
REPORT
2006
A NNUAL
REPORT
2006
C HANGES IN CONSOLIDATED
PORTFOLIO HOLDINGS
For the period from 1 January 2006 to 31 December 2006
During the financial year ended 31 December 2006 the Central Parc and Le
César buildings were sold, generating profit on the sales of EUR 2,934,212
in total. An amount of EUR 1,427,267 is recorded as a gain realised during
2006.
S TATISTICS
for the last three years
Total net asset value
Net asset value per share
accumulation shares
distribution shares
Dividend paid during the year
in respect of distribution shares
16
IMMO CROISSANCE
2006
in euros
2005
in euros
2004
in euros
110,268,495
117,514,344
113,614,394
668.52
255.59
678.71
277.81
622.89
273.39
19.00
19.00
19.00
A NNUAL
REPORT
C ONSOLIDATED PORTFOLIO HOLDINGS
A S AT 31 D ECEMBER 2006
A. P ORTFOLIO – P ROPERTY
O FFICE AND RESIDENTIAL BUILDINGS
Acquisition
Year of
Office
date
construction space
GRAND DUCHY OF LUXEMBOURG
Arsenal
6 Av. E. Reuter • L-2420 Luxembourg
Royal Arsenal
12-14 Av. E. Reuter • L-2420 Luxembourg
Centre Monterey
23 Av. Monterey • L-2163 Luxembourg
Résidence 22 Monterey
22 Av. Monterey • L-2163 Luxembourg
Auf der Hart
1 Ceinture Um Schlass • L-5880 Hesperange
Edison
7 Rue Thomas Edison • L-1445 Strassen
Newton
5 Rue Thomas Edison • L-1445 Strassen
Gutenberg
3 Rue des Primeurs • L-2361 Luxembourg
OTHER COUNTRIES
Mörsenbroich
359 Münsterstraße • D-4000 Düsseldorf
Waterloo Office Park
161 Drève Richelle • B-1410 Waterloo
Keyberg 2
2 Kouterveldstraat
B-1831 Diegem-Zaventem
Les Collines de Wavre - Centre d’affaires
50 Chaussée des Collines • B-1300 Wavre
Marcel Thiry Court
200 Avenue Marcel Thiry
B-1200 Woluwe Saint Lambert
Residential/
Commercial
space
(sq. m.)
(sq. m.)
(sq. m.)
(sq. m.)
1973
5,177
–
1,240
87
Government dept.
23.05.89
1992
3,048
–
205
81
Government dept.
22.11.88
1965
1,668
–
252
21
Trustee
29.06.89
1993
–
913
112
3
Commercial, residential
27.10.88
1990
2,950
–
–
95
Multinational
10.02.99
2000
6,579
–
–
379
Bank
01.10.99
2001
6,150
–
192
313
Bank
13.09.99
2002
5,952
–
443
219
Government dept.
10.01.90
1990
4,044
–
350
51
Large companies
and SMEs
17.12.93
1993
2,331
–
60
67
Large companies
31.03.95
1993
7,123
–
1,085
174
Currently being
marketed
27.11.95
1995
1,372
–
150
34
Multinational
26.06.98
1990
4,664
–
–
122
Large companies
Estimated
value
(in euros)
(in euros)
GRAND DUCHY OF LUXEMBOURG
143,322,063
134,150,000
121.66
OTHER COUNTRIES
44,419,329
26,370,000
23.91
187,741,392
160,520,000
145.57
TOTAL PROPERTY PORTFOLIO
Tenants
22.11.88
Value on
acquisition
Valuation
Archives Car park
space
% of
net assets
IMMO CROISSANCE
17
2006
A NNUAL
REPORT
2006
B. P ORTFOLIO – R EITS
to 31 December 2006
Name
Quantity
Purchase price
Estimated value
% of
net assets
EUR Marie-Thérèse
565
185,900
68,930
0.06
TOTAL REITS PORTFOLIO
565
185,900
68,930
0.06
Quantity
Purchase price
Estimated value
% of
net assets
EUR Marie-Thérèse
EUR Metropolitan Buildings
565
5,615
185,900
1,561,207
65,258
945,566
0.06
0.80
TOTAL REITS PORTFOLIO
6,180
1,747,107
1,010,824
0.86
to 31 December 2005
Name
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IMMO CROISSANCE
A NNUAL
N OTES
TO THE CONSOLIDATED FINANCIAL
STATEMENTS
for the year ended 31 December 2006
Note 1 – General information
Immo-Croissance is a property investment company that was formed on
22 September 1988 in the form of a mutual fund (Luxembourg SICAV) in
accordance with the Luxembourg law of 10 August 1915 (as modified) relating to commercial companies, and that of 30 March 1988 relating to collective investment undertakings. With effect from 13 February 2004, the Fund
has been governed for legal purposes by the law of 20 December 2002.
Immo-Croissance’s registered office is located at 69 route d’Esch, L-1470
Luxembourg. Immo-Croissance is registered in the Luxembourg trade and
companies registry under number RCS B 28872.
The Fund’s objective is to offer private and institutional investors the
chance to invest in a diversified portfolio that is specialised in high-quality
property assets located within the European Union. While the Fund’s property investments take a variety of forms, they primarily concern commercial and office premises.
Immo-Croissance’s investment policy is directed towards the long term
and frequent purchases and sales of assets are not envisaged. The Board
of Directors may, however, sell the Fund’s property assets at any time in
view of the future prospects for the assets or markets concerned, or for any
other reason that they deem appropriate.
The consolidated financial statements are prepared in euros, which is the
functional and reporting currency of the entity and its subsidiaries.
The Fund’s financial statements were approved by the Board of Directors
on 7 March 2007. They will be submitted for approval by the shareholders’
General meeting of 11 April 2007.
Note 2 – Main accounting methods
The consolidated financial statements of the Fund and all its subsidiaries
were prepared in accordance with the International Financial Reporting
Standards (“IFRS”) as adopted by the European Union.
2a
Principles applied to the preparation of consolidated financial
statements
The Fund’s consolidated financial statements were prepared based on the
historical cost principle, except in the case of investment property and
available-for-sale financial assets, which are measured at fair value.
IMMO CROISSANCE
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2b
Consolidation principles
Subsidiaries
A subsidiary is a company in which the Fund holds a direct or indirect controlling interest. Control is the power to direct the financial and operating
policies of the company in order to benefit from the results of its activities.
A list of subsidiaries is included in Note 3.
The consolidated financial statements include the financial statements of
the mutual fund Immo-Croissance and those of its subsidiaries, prepared
to 31 December of each year. The subsidiaries are consolidated from the
date on which the Fund assumes control through to the date on which the
Fund ceases to have control. The subsidiaries are incorporated into the
consolidated financial statements using the acquisition method. As such,
the acquisition cost is allocated to the assets and liabilities based on their
fair value on the acquisition date.
To prepare the consolidated financial statements, the individual financial
statements of the Fund and of its subsidiaries are combined on a lineby-line basis by adding together similar assets, liabilities, income and
charges. To ensure that the consolidated financial statements present the
group’s financial information as if it related to a single company, the
following steps are then taken:
(a) the carrying value of the Fund’s holding in each subsidiary and the
Fund’s share of the shareholders’ equity of each subsidiary are eliminated;
(b) minority interests in the net results of the consolidated subsidiaries for
the year are identified and deducted from the group’s results to obtain
the net earnings attributable to the Fund’s shareholders.
Intra-group eliminations
Intra-group balances and transactions, including sales, charges and dividends, are eliminated in full.
2c
Foreign currency translation
Foreign currency transactions, i.e. those performed in a currency other
than the euro, are recorded at the exchange rate prevailing on the transaction date. Monetary assets and liabilities denominated in foreign currency
are translated at the exchange rate prevailing on the balance sheet date.
All translation differences are recorded in the consolidated income statement.
20
IMMO CROISSANCE
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2d
Investment property
Investment property includes property assets (land and buildings) held by
the Fund under a lease agreement with a view to earning rental income
from these assets or enhancing their capital value, or both.
Investment property assets are initially measured at acquisition cost.
Transaction costs are included in this initial valuation. The cost of a purchased investment property includes its purchase price plus all directly
attributable expenditure, including, for example, legal fees, transfer duties
and other transaction costs.
Subsequent to initial recognition, investment property assets are measured
at their fair value, which is defined as the best price that could reasonably
be expected to be obtained by the seller and the most attractive price that
could reasonably be expected to be obtained by the buyer in an over-thecounter transaction in which the parties act with full knowledge of the
facts, while exercising caution and without constraint. Since the adoption of
IFRS, this fair value excludes all legal fees.
Subsequent expenditure relating to an investment property that has
already been recognised must be added to the carrying value of the investment property when it is probable that future economic benefits, over and
above the level of performance defined at the outset for the investment
property concerned, will accrue to the company.
The fair value of investment property is determined based on a valuation
prepared by an independent property appraiser possessing an appropriate
and recognised professional qualification, as in the case of Cushman &
Wakefield, who has proven experience in the valuation of investment property. The appraiser’s appointment is renewed annually by the General
Meeting of shareholders.
The fair value of investment property is established based on discounted
future cash flow projections. These projections are based on the lease
terms and conditions, other existing agreements and external evidence
such as current rental values offered on the market for similar properties
in the same location. The discount rates applied on the balance sheet
date are calculated by Cushman & Wakefield. Fair value estimates of
investment property are subjective and actual values can be established
only during a sale transaction.
Unrealised gains and losses arising from changes in the valuation of
investment property are recognised in the consolidated income statement for the current year.
Profits and losses arising from investment property being taken out of
service or sold, which are defined as the difference between the net proceeds of the disposal and the carrying value of the asset concerned, are
IMMO CROISSANCE
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recognised in income or charges
in the consolidated income
statement for the current year.
A detailed breakdown of investment property is provided in the
table of changes in investment
property.
2e
Trade receivables and other debtors
Trade receivables and other debtors, which are generally due between 15
and 90 days, are recognised and recorded at the initial amount of the
invoice, less any provisions for the write-down of non-recoverable
amounts. An estimate of the amount of impaired receivables is made when
it is no longer likely that a receivable will be collected in full. Irrecoverable
receivables are recognised as a loss immediately upon being identified as
such.
2f
Cash and cash equivalents
Cash and cash equivalents include cash at bank and short-term deposits
with an initial maturity of less than three months.
For the purposes of the consolidated cash flow statement, cash and cash
equivalents are stated net of bank overdrafts.
2g
Interest-bearing borrowings
All borrowings are initially recorded at historical cost, which corresponds
to the fair value of the amount received, net of any borrowing costs.
Subsequent to initial recognition, interest-bearing borrowings are
measured at amortised cost, which is calculated by taking into account all
issuance costs and any redemption premiums or discounts.
Profits and losses are recorded in the income statement when the liabilities are reversed or are subject to a loss in value, or via an amortisation
process.
2h
Provisions
Provisions are recognised when the Fund has a present obligation (legal or
constructive) arising from a past event and it is deemed likely that a payment will be required in order to extinguish this obligation and the amount
of this payment can be reliably estimated.
22
IMMO CROISSANCE
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2i
Rental income
Leases are agreements under which the lessor transfers to the lessee the
right to use all or part of the investment property for a given period in
exchange for payment of a rent.
A non-cancellable lease is a lease that can be cancelled only:
(a) if an unlikely event occurs;
(b) with the authorisation of the lessor;
(c) if the lessee enters into a new lease with the same lessor for the same
investment property or an equivalent asset; or
(d) on payment by the lessee of an additional amount (any form of compensation), agreed on the signing of the lease.
The term of the lease indicates the non-cancellable period for which the
lessee undertakes to rent the property asset, and any subsequent periods
for which the lessee has the option to extend his lease in exchange for the
payment of an additional amount if applicable provided that, from the
inception of the lease, there is reasonable certainty that the lessee will
exercise his option.
Rental income on investment property is recognised on a straight-line
basis over the duration of the leases in force.
2j
Financial risk management policy and objectives
The Fund’s instruments mainly comprise bank borrowings. The objective of
these financial instruments is to facilitate the financing of the Fund’s operations. The Fund also holds other financial instruments such as property
certificates and equities.
The main risks attached to the Fund’s financial instruments are interest
rate risk, liquidity risk, market risk and credit risk. However, the Fund is not
exposed to a significant concentration of credit risk. The Fund’s Board of
Directors checks and evaluates these risks periodically.
2k
Interest rate risk
The group’s exposure to the risk from changes in interest rates concerns
the Fund’s long-term borrowings. The Fund’s policy involves managing its
interest expense through a combination of fixed-rate and variable-rate
borrowings.
2l
Liquidity risk
Liquidity risk arises when the lessees are unable to pay their rent within an
acceptable timeframe.
IMMO CROISSANCE
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2m Market risk
Market risk is analysed at both macro- and micro-economic level. An
analysis is undertaken for the European markets, and, more specifically,
for the individual markets in which our buildings are located. This risk also
encompasses the exposure to political risk, i.e. a property market’s sensitivity to supranational political decisions.
2n
Credit risk
The Fund has commercial relationships only with third parties that are
proven to be financially sound. The Fund’s policy is to check the financial
health of all lessees. In addition, trade receivables are monitored on an
ongoing basis, thereby ensuring that the group’s exposure to irrecoverable
receivables is immaterial. The credit risk is not concentrated on any one
third party.
2o
Investment restrictions
In accordance with the Luxembourg law of 10 August 1915 (as modified)
relating to commercial companies, to that of 20 December 2002 relating to
collective investment undertakings and to the prospectus, the Fund is subject to certain investment restrictions, the main ones being:
– The Fund can invest no more than 20% of its net assets in a single property. This limit is applicable at the time of acquisition of the asset concerned. Property assets whose economic viability is interconnected are
not considered as separate properties.
- The Fund can invest up to a maximum of 20% of its net assets in property certificates or in securities of open- or closed-ended collective
investment undertakings investing in property. They must be admitted
for official listing on a stock exchange in a European State, or traded on
another market of a European country, and the investment in collective
investment undertakings cannot exceed 15% of the Fund’s assets.
- The Fund can temporarily invest its assets that are pending investment
in property in term deposit accounts and other short-term or mediumterm money market investments such as certificates of deposit and
short-term notes.
2p
Financial instruments and de-recognition of financial assets and
liabilities
Available-for-sale assets
Available-for-sale financial assets are non-derivative financial assets that
are designated as being available for sale or which are not classified in any
other category of financial assets. Subsequent to initial recognition, the
available-for-sale financial assets are measured at fair value and any gains
and losses on such assets are recognised directly in net assets, until such
time as the investment is derecognised or is identified as necessitating a
write-down, in which case the cumulative profit or loss previously recognised in net assets is then transferred to the statement of changes in net
24
IMMO CROISSANCE
A NNUAL
assets. The fair value of investments that are actively traded on organised
financial markets is determined by reference to the published market price
on the balance sheet date.
The methods used to measure the fair value of financial instruments are as
follows:
Current assets and liabilities:
The fair value of assets and liabilities is approximately equal to the carrying value used in the financial statements. This is due to the fact that these
assets and liabilities are realisable in the short term. Current assets for
which a value adjustment is necessary are presented in the financial statements net of the value adjustment, thereby reflecting their estimated
recoverable amount.
Short-term debt:
The carrying value of short-term debt used in the financial statements is
approximately equal to its fair value due to the short-term maturity of this
debt.
Long-term debt:
The fair value of long-term debt is based on the market value of listed debt
with similar characteristics. At 31 December 2006 and 31 December 2005,
the fair value of long-term debt was approximately equal to its carrying
value.
Financial Assets
A financial asset (or, if applicable, part of a financial asset or part of a group
of similar financial assets) is derecognised if:
• The rights to cash income relating to the financial asset expire,
• The Fund has transferred its rights to receive cash income relating to
the financial asset and has either transferred the bulk of the risks and
benefits inherent in ownership of the financial asset, or has neither
transferred nor retained the bulk of the risks and benefits inherent in
ownership of the financial asset but has ceded control of the financial
asset.
Financial liabilities
A Financial liability is derecognised if the obligation relating to the liability
is extinguished or cancelled, or expires. An exchange between the Fund
and an existing lender of loan instruments with significantly different terms
and conditions is recognised as an expiry of the initial financial liability, and
a new financial liability is recognised. The same applies in the event of a
significant modification of the terms and conditions of an existing financial
liability. The difference between the respective accounting values of the initial financial liability and the new financial liability is recognised in the profit and loss account.
IMMO CROISSANCE
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REPORT
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2q
Post-balance sheet events
Post-balance sheet events are events, both favourable and adverse, that
occur between the balance sheet date and the date on which the financial
statements are published.
2r
Sector information
All operating activities are carried out exclusively in the sector of office and
commercial investment property located within the European Union.
2s
Shares
The Immo-Croissance shares comprise distribution shares and accumulation shares.
The distribution shares, known as Immo-Croissance Distribution, are
remunerated by dividends allocated out of earnings approved by the
General Meeting of Shareholders.
The accumulation shares, known as Immo-Croissance Accumulation
(Immo-Croissance Capitalisation) are not entitled to any dividend payments,
as their respective portion of earnings is capitalised.
2t
Related parties
Related parties are defined as parties that are directly or indirectly controlled by the Fund or by the management company. When control exists,
information on relations between the related parties is provided, whether
or not any transactions have actually taken place between the parties.
2u
Taxation
Current tax assets and liabilities for the year and prior years are measured
at the amount that is expected to be collected from or paid to the tax
authorities. The tax rates and regulations used in determining these
amounts are those that were adopted, or about to be adopted, at the balance sheet date.
Deferred tax is recognised on all temporary differences existing at the balance sheet date between the carrying value of the assets and liabilities and
their value for tax purposes.
The carrying value of deferred tax assets is reviewed at each balance sheet
date and is reduced when it is no longer probable that a sufficient taxable
profit will be available to permit utilisation of the benefit of all or part of
these deferred tax assets. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised when it becomes
probable that a future taxable profit will permit their collection.
26
IMMO CROISSANCE
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Deferred tax assets and liabilities are offset if a legal enforceable right of
set-off of current tax assets and liabilities exists, and provided that these
deferred taxes concern the same taxable entity and the same tax authority.
2v
Adoption of International Financial Reporting Standards (IFRS)
during the year
Early adoption
The Fund adopted the following revised standards during 2006:
Amendment IAS 39 and IFRS 4 concerning financial guarantee contracts
The IASB amended the scope of application of IAS 39 to include financial
guarantee contracts. However, if an issuer of financial guarantee contracts
has clearly stated in advance that it treats these contracts as insurance
policies and that it has applied the accounting rules appropriate for insurance policies, it can choose to apply either IAS 39 (in its current form) or
IFRS 4 to the financial guarantee contracts in question.
According to these new amendments to the IAS 39 standard, financial
guarantee contracts are initially valued at fair value, and subsequently at
the higher amount of either (a) that recognised under IAS 37 ‘Provisions,
contingent liabilities and contingent assets’ or (b) the amount initially
recognised less, when appropriate, cumulative amortisation recognised in
accordance with IAS 18 ‘Income from ordinary activities’.
The issuer may choose IAS 39 or IFRS 4 on a contract-by-contract basis,
but the choice for each contract will be final.
IFRIC 4: determine whether a contract contains a rental contract.
The adoption of these standards has had no impact on the consolidated
financial statements.
IFRS and IFRIC interpretations not yet in force
The Fund has not applied the following standards and interpretations that
have been published but which are not yet in force:
* IFRS 7 Financial Instruments: Disclosures.
IFRS 7 cancels and replaces the current IAS 30 ‘Information to be disclosed
in the financial statements of banks and similar financial institutions’, as well
as the part concerning obligations of disclosure (and not presentation)
required by IAS 32 ‘Financial instruments: disclosure and presentation’.
IMMO CROISSANCE
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REPORT
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Amendment IAS 1 – Capital disclosures
The IAS 1 amendment ‘Presentation of financial statements’ adds provisions
concerning capital disclosures by an entity, that enable users of these
financial statements to evaluate its objectives, policies and procedures for
management of its capital.
IFRIC 9 concerning revaluation of embedded derivatives
IFRIC 10 concerning depreciation of assets, and intermediaries’ accounts
These standards and interpretations must be applied to accounting years
commencing on or after 1 January 2007. The Fund anticipates that adoption of the official positions listed above will have no impact on the Fund’s
financial statements for their first period of application.
Note 3 – Subsidiaries
The consolidated financial statements combine the financial statements of
the Fund with those of its subsidiaries listed below:
Name
Country of
registration
Belgium
Luxembourg
Belgium
Belgium
Belgium
Luxembourg
France
Immo Wavre Office Parc S.A. • Mail 3, boîte 15 • B-1083 Brussels
Immo Diegem S.A. • 180 rue des Aubépines • L-1145 Luxembourg
Estaks Properties N.V. • Mail 3 boîte 15 • B-1083 Brussels
Immo Thiry Avenue S.A. • Mail 3, boîte 15 • B-1083 Brussels
Immo Waterloo S.A. • Mail 3, boîte 15 • B-1083 Brussels
Immo Orléans S.A. • 180 rue des Aubépines • L-1145 Luxembourg
Immo Neuilly S.A. • 40 boulevard Henri Sellier • F-92156 Suresnes
% holding and control
2006
2005
100
100
100
100
100
100
100
100
100
100
100
100
Note 4 – Long-term deposits
Effective interest rate Maturity date
Estaks Properties N.V
Immo Wavre S.A
4.50%
8.50%
Summe
31.Mar.10
30.Nov.10
2006
2005
9,053,071
2,306,575
9,053,071
2,306,575
11,359,646 11,359,646
Long-term deposits are not liquid assets and are held as guarantees for
bank borrowings (Note 6).
28
IMMO CROISSANCE
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Note 5 – Cash and cash equivalents
31 Dec. 2006
31 Dec. 2005
1.573.098
2.034.752
Cash at bank and in hand
Cash at bank is remunerated at variable interest rates indexed to the rates
paid on demand deposits. Short-term deposits cover various periods ranging from one day to one month depending on the group’s immediate cash
needs.
Note 6 – Interest-bearing bank borrowings
At 31 December 2006, the Fund had bank borrowings and overdrafts
totalling EUR 62,422,759 (2005: EUR 70,722,210). These borrowings were
secured by mortgages on the buildings located in Luxembourg and
Diegem. Furthermore, certain rental income was pledged as a guarantee.
Interest payments for the financial year came to EUR 2,981,585 (2005: EUR
2,938,755).
Effective
interest rate
Current
Bank overdrafts
Credit line of €15m
Credit line of €10m
Credit line of €10m
Overdraft of €25m
Non-current
Credit line of €15m
Credit line of €10m
Credit line of €10m
Immo Neuilly S.A.
Immo Neuilly S.A.
Immo Thiry S.A.
Immo Wavre S.A.
Estaks Properties N.V.
Other borrowings
3.82%
2.89%
3.37%
3.23% *
Maturity
date
31 Dec.
2006
31 Dec.
2005
19-Jan-06
19-Jan-06
19-Jan-06
1,460
–
–
–
4,370,993
2,279,420
15,000,000
10,000,000
10,000,000
5,383,010
4,372,453
42,662,430
Effective
interest rate
Maturity
date
31 Dec.
2006
31 Dec.
2005
3.82%
2.89%
3.37%
3.53%
3.71%
5.42%
8.50%
4.50%
19-Jan-11
19-Jan-11
19-Jan-11
3-Apr-07
3-Apr-07
26-Jun-08
30-Nov-10
31-Mar-10
15,000,000
10,000,000
10,000,000
–
–
11,690,659
2,306,575
9,053,072
–
–
–
3,885,387
1,124,087
11,690,659
2,306,575
9,053,072
58,050,306
28,059,780
62,422,759
70,722,210
(*) Variable rate bank loan: this rate corresponds to the 1 month Euribor effective during 2006.
IMMO CROISSANCE
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A maturity analysis of the carrying value of the borrowings is provided in
the table below:
Bank borrowings
<1 year
1-5 years
> 5 years
Total
2006
2005
4,372,453
58,050,306
–
62,422,759
42,662,430
28,059,780
–
70,722,210
Dexia Banque Internationale à Luxembourg and Dexia Banque Bruxelles are
the counterparties for the majority of the borrowings made by the group.
Note 7 – Sale of holdings in subsidiaries
On 16 November 2006 the Fund sold its subsidiaries Immo Orléans and
Immo Neuilly for a total of EUR 1,801,640. The following assets and liabilities were sold.
Assets
Current Assets
Other debts
Tax liabilities
Net assets sold
Profit on sale
Boulevard Royal Luxembourg
Foto: Carlo Hommel – © Photothèque V.d.L.
30
IMMO CROISSANCE
3,024,477
(724,694)
(664,191)
1,635,592
166,048
A NNUAL
Note 8 – Consulting fees and related parties
Immo-Croissance takes investment advice from Immo-Croissance Conseil
S.A. (the “Consultant”), a company owned equally by Dexia Banque
Internationale à Luxembourg, Foyer S.A. (an insurance group) and
Puilaetco Dewaay Private Bankers S.A., and formed specifically for this
purpose on 22 September 1988 for an unspecified period. On 14 April 2004,
a new agreement was signed between the above-mentioned parties.
Immo-Croissance Conseil S.A. receives consulting fees, payable at each
quarter end, at a maximum rate of 0.25% per annum of the Fund’s gross
assets as valued by the independent appraisers.
The Consultant also receives 5% of the net gain realised when buildings are
sold.
Immo-Croissance may terminate the agreement at any time, on payment
of an amount equivalent to 3% of the value of the Fund’s gross assets.
Immo-Croissance Conseil S.A. is the only related party with which ImmoCroissance enters into transactions. Charges relating to the consulting
fees are as follows:
Related party
(in euros)
Immo-Croissance Conseil S.A.
Year to
31 December 2006
Year to
31 December 2005
482,327
431,438
IMMO CROISSANCE
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Note 9 – Trade payables and other creditors
31 Dec. 2006
31 Dec. 2005
Consulting fees (note 8)
210,300
431,437
Trade payables
305,268
190,977
Interest payable
1,817,186
1,624,456
Other creditors
1,190,457
1,167,640
3,523,211
3,414,510
Note 10 – Lease commitments
Minimum future lease payments receivable in respect of non-cancellable
operating leases were as follows as at 31 December 2006 and 31 December
2005:
31 Dec. 2006
31 Dec. 2005
Due in less than 1 year
1,544,849
14,782,151
Due in 1 to 5 years
3,952,805
14,938,986
Due in more than 5 years
3,422,489
5,819,135
8,920,143
35,540,272
Minimum future lease payments were lower during 2006 due to the early
departure of a large tenant. New leases were signed during the first quarter of 2007.
Note 11 – Custodian fees
Based on the agreement signed on 23 September 1988 between ImmoCroissance and Dexia Banque Internationale à Luxembourg (the “custodian bank”), the Fund entrusts the custodian bank to act as custodian for
cash, marketable securities, other assets and ownership deeds that the
Fund owns or may acquire.
The custodian bank has the right to levy a custodian fee on the Fund’s
assets, which is payable at each quarter end and is calculated as follows:
(a) 0.10% per annum of the gross value at the quarter end of marketable
securities, cash and other assets excluding any direct investment in
property assets;
(b) 0.01% of property assets up to a maximum of €1,239.47 per building.
In addition, the custodian bank will be reimbursed by the Fund for all
charges and fees levied by correspondents (clearing systems or banks) for
the Fund’s assets and marketable securities.
32
IMMO CROISSANCE
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Note 12 – Operating charges
The main charges in respect of rental properties concern individual and
collective services (maintenance, lighting, etc.), property charges (cleaning,
sewerage and household waste), land taxes, caretaking charges, management charges and insurance.
Other rental property charges such as individual services (e.g. hot water,
meter rental and heating) are recoverable from the lessees. The Fund
makes available to lessees, prior to the expiry of their leases, supporting
evidence for all expenses incurred by the group as well as the calculations
of the split by lessee.
Year to
31 Dec. 2006
Year to
31 Dec. 2005
Maintenance
415,730
324,247
Depreciation of renovation
and fitting-out work
319,930
312,406
24,723
105,321
Insurance
Independent property
appraiser’s fees
Operating charges
62,328
58,906
1,429,901
946,046
2,252,612
1,746,926
The Fund bears all property brokerage charges and operating charges
(including any emoluments and certain expenses of directors, administrative management, paying agent, auditors and property appraisers, legal
advisors, transfer duties, and the cost of printing and distributing annual
and half-yearly reports and the prospectus), all fees and brokerage
charges, contributions and charges on companies payable by the Fund, and
fees for registration of the Fund and maintenance of this registration
payable to any government bodies and stock exchanges.
Note 13 – Other charges
Year to
31 Dec. 2006
Year to
31 Dec. 2005
Levy
59,205
57,133
Other
291,604
319,378
350,809
376,511
Pursuant to current legislation and regulations, the Fund is liable in
Luxembourg to an annual levy of 0.05% payable quarterly and calculated on
the basis of the Fund’s net assets at each quarter end.
Pursuant to current legislation in Luxembourg, the Fund is not liable for any
company levies or taxes on capital gains, or any property taxes on buildings
that it owns in the Grand Duchy of Luxembourg, apart from land taxes.
IMMO CROISSANCE
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2006
Note 14 – Issue, redemption and conversion of shares
The Board of Directors may issue shares at any time in accordance with the
provisions set out in the prospectus of May 2004. It may authorise any
financial body to undertake this procedure. The issue price may be
increased by an issuance fee of up to 3%.
The net asset value is calculated on the last business day of each month.
The net asset value is not calculated when subscriptions are in progress.
Immo-Croissance has the right to purchase its own shares. Such purchases must be made on the Luxembourg stock market or on any other organised market on which the shares are traded. The Board of Directors has full
discretion to make such purchases in the general interest of the Fund and
its shareholders. However, the Board of Directors is not obliged to purchase the total number of shares authorised for purchase. The purchase
price cannot exceed the most recently calculated net asset value.
Shares purchased by Immo-Croissance may be held in the Fund’s portfolio
and put back on the Luxembourg stock market or any other organised
market on which the shares are traded.
Distribution shares may be converted into accumulation shares and vice
versa, twice each year, based on the net asset values determined on the
last business day of March or September as appropriate.
Note 15 – Taxation
The breakdown of the total tax charge for the periods to 31 December 2005
and to 31 December 2006 was as follows:
Year to
31 Dec. 2006
Year to
31 Dec. 2005
Current tax
Current tax charge
Adjustment for current tax of prior years
(740,041)
–
(27,764)
–
Deferred tax
On the origination and reversal of temporary differences
(298,457)
99,660
(1,038,498)
71,896
Tax (charge) income recognised in the
consolidated income statement
34
IMMO CROISSANCE
A NNUAL
A reconciliation of the tax charge and the accounting profit multiplied by
the tax rate prevailing in Luxembourg is provided below for the periods to
31 December 2005 and to 31 December 2006:
Year to
31 Dec. 2006
Year to
31 Dec. 2005
Profit before tax
(1,423,199)
9,441,124
Tax charge at the tax rate prevailing in Luxembourg
for the Fund
Adjustment for current tax of prior years
Impact of tax rates applicable in other jurisdictions
–
–
(1,038,498)
–
(76,707)
148,603
Tax charge at the effective tax rate
(1,038,498)
71,896
The sources of deferred tax for the period to 31 December 2006 are shown
in the table below:
(in euros)
Statement of consolidated
Consolidated income
net assets
statement
At 31 Dec. 2006 At 31 Dec. 2005 At 31 Dec. 2006 At 31 Dec. 2005
Deferred tax liabilities
Revaluation of land and
buildings at fair value
–
108,169
108,169
176,367
Deferred tax assets
Losses available for carry
forward against
future taxable profits
–
406,626
(406,626)
(76,707)
Tax assets deferred in connection with tax deficits generated in Belgium
(EUR 1,215,690) have not been recognised as their use is uncertain.
In accordance with tax laws applicable to group companies, distributions of
carried-forward earnings by the subsidiaries to the Fund are not taxable.
Therefore, no deferred tax liabilities were recognised (2005: 0) for taxes that
would be payable on the undistributed earnings of subsidiaries.
IMMO CROISSANCE
35
REPORT
2006
A NNUAL
REPORT
2006
Note 16 – Other property, plant and equipment
Plant, equipment
and tooling
At 31 December 2004
Gross carrying value
Accumulated depreciation
Net carrying value
Movements during 2005
Acquisitions
Transfers
Depreciation
At 31 December 2005
Gross carrying value
Accumulated depreciation
Net carrying value
Movements during 2006
Acquisitions
Transfers
Depreciation
At 31 December 2006
Gross carrying value
Accumulated depreciation
Net carrying value
Boulevard Royal Luxembourg
Foto: Carlo Hommel – © Photothèque V.d.L.
36
IMMO CROISSANCE
Other property,
plant and
equipment in progress
Total
3,106,373
(700,098)
2,406,275
309,619
–
309,619
3,415,992
(700,098)
2,715,894
64,617
–
(312,406)
1,370,138
(309,619)
–
1,434,755
(309,619)
(312,406)
3,170,990
(1,012,504)
2,158,486
1,370,138
–
1,370,138
4,541,128
(1,012,504)
3,528,624
6,628
9,222
(319,930)
–
(1,370,138)
–
6,628
(1,360,916)
(319,930)
3,186,840
(1,332,434)
1,854,406
–
–
–
3,186,840
(1,332,434)
1,854,406
A NNUAL
S HAREHOLDER INFORMATION
The value of the net assets of Immo-Croissance and the net asset value of
its shares are available at the registered office of Immo-Croissance, from
Banque Puilaetco Dewaay Private Bankers S.A. and from Fortis Banque S.A.
in Brussels. In the event of a major change in the net asset value or when
this value cannot be established, Immo-Croissance will request that its listings be suspended and will issue an explanatory communication.
The Fund publishes a detailed annual report on its activity and the management of its assets. In addition, at each half year, it produces an interim
report. These documents may be obtained by any interested party free of
charge from the Fund’s registered office, Dexia Banque Internationale à
Luxembourg, Puilaetco Dewaay Luxembourg S.A., Puilaetco Dewaay Private
Bankers S.A. and Fortis Banque S.A. in Brussels.
The Fund’s financial year runs to 31 December of each year.
The Annual General Meeting of shareholders is held each year at ImmoCroissance’s registered office or at any other location in Luxembourg specified in the document convening the meeting. This Annual General Meeting
takes place on the second Wednesday of April at 11am. The date and time
of all other General Meetings of shareholders are specified in the documents convening the meetings. These meeting notices are published in the
Mémorial in Luxembourg, the Moniteur in Belgium, the Luxemburger Wort,
in one other Luxembourg newspaper, the Echo and De FinancieelEkonomische Tijd and in any other foreign publications that may be determined by the Board of Directors. Invitations to participate in General
Meetings are sent by mail to registered shareholders at least two weeks
prior to the date of the meeting.
The invitations will set out the agenda for the meeting and the terms of
admission and the quorum and majorities required, in conformity with the
provisions of the law of 10 August 1915 governing commercial companies
established in the Grand Duchy of Luxembourg.
The Fund’s shares are listed on the Luxembourg and Brussels stock
exchanges. Distribution shares entitle the holder to a portion of the dividend, the amount of which is proposed by the Board of Directors to the
General Meeting of shareholders for approval. The portion of earnings due
to the holders of accumulation shares is automatically reinvested in full. The
Board may decide to pay an interim dividend for the last or current financial
year in compliance with the relevant legal provisions.
All shareholder notices are published in the Luxemburger Wort, in another
Luxembourg newspaper, in the Echo and in De Financieel-Ekonomische
Tijd, and in any other foreign publications as agreed.
IMMO CROISSANCE
37
REPORT
2006