160.107 EF RA 2007 FTQ ANG.indd

Transcription

Our capital starts with people
2007 ANNUAL REPORT_solidarity fund qfl
S uite 200
545 Crémazie Blvd. E ast
Montréal, Qué bec H2 M 2W4
Telephone: 514 383-8383
Fax: 514 383-2502
Toll free: 1 800 361-5017
www.fondsftq.com
2007
ANNUAL REPORT
solidarity
fund qfl
Mission
Create, maintain or protect jobs
Invest in companies impacting the Québec economy and
offer them services to further their development and create,
maintain or protect jobs.
Train workers
Promote economic training for workers so they can increase
their influence on the economic development of Québec.
Develop the Québec economy
Stimulate the Québec economy through strategic investments
that benefit both Québec workers and companies alike.
Prepare for retirement
Make workers aware of the need to save for retirement
and encourage them to do so, as well as encourage them
to participate in the development of the economy by
purchasing Fund shares.
Go i n g Carbon- Neutral
1
6
17
89
Highlights
Shareholder Base
Financial Information
2
10
86
Message from the Chairman
of the Board OF DIRECTORS
Training
glossary
Management Committee
Special Boards
Committees
Union
12
88
90
Investments
Board of Directors
Permanent Employees
4
Message from the President
and Chief Executive Officer
At the Annual General Meeting and the national local representative meeting preceding it, the Solidarity Fund QFL decided to
adhere to the principles of a conference encouraging the reduction of polluting emissions. Therefore, to reduce greenhouse
gas emissions (GGE), we encouraged the participants of these meetings to use public transportation.
The Fund also hired Planetair, a not-for-profit organization, to calculate the GGE generated by these two meetings
(transportation, meal preparation, etc.). Once the results are final, the Fund will remit to Planetair a compensatory amount in
keeping with current practice. This money will be invested in renewable energy or energy efficiency projects that will reduce
GGE at their source in developing countries.
HIGHLIGHTS
Key data 1
For the years ended
(in millions of dollars except Class A shares, in thousands)
Statement of earnings
Revenues
Net earnings (net loss)
JUNE 30
2003
Balance sheet
Net assets
Class A shares outstanding Ratio 2
Operating expenses/Average net assets
MAY 31
2004
2005
2006
2007
(11 moNTHS)
(209.1)
(325.5)
347.0
247.3
372.5
271.1
463.3
366.5
588.9
475.0
4,620.2
225,956
5,233.3
243,946
5,955.2
264,845
6,607.1
277,466
7,239.0
284,628
1.8%
1.8% 3
1.5%
1.4%
1.4%
1. Comparative data has been restated to reflect new accounting standards affecting investment companies.
2.The operating expense ratio does not include capital tax.
3.Annualized.
As at May 31
(except 2003, as at June 30)
Net value per share
( I n d o l l arS )
2003
2004
2005
2006
200 7
Rate of return of the Fund
( a s a p e rc e nta g e )
20.36
21.37
22.41
23.74
25.36
2003
2004*
2005
2006
2007 1, 2
(6.9)
5.2
5.0
6.0
7.1
Share issues
( in mi l l i o n s o f d o l l ar s )
2003
2004*
2005
2006
2007
* (11 months)
Average annual return since inception: 5.1%
* (11 months)
NUMBER OF JOBS CREATED,
MAINTAINED OR PROTECTED IN QUÉBEC
BY THE FUND AND ITS PARTNERS
Number
of shareholders
Number of partner
companies
( F u n d an d n e t w o r k )
2003
2004
2005
2006
2007
2003
2004
2005
2006
2007
91,694
96,000
105,596
116,644
122,460
Redemptions
2003
2004*
2005
2006
2007
313.0
188.5
255.6
328.7
402.3
550,119
554,796
568,383
573,086
574,794
2003
2004
2005
2006
2007 1,666
1,722
1,683
1,681
1,696
FAIR VALUE OF INVESTMENTS
IN PARTNER COMPANIES 3
investments 3
( in M I LL I O N S o f d o l l arS )
2003 2004
2005 2006 2007
2003
2004*
2005
2006
2007
2,633.5
2,695.4
2,900.8
3,342.5
3,741.9
* (11 months)
724.7
554.2
706.5
613.8
570.7
368.5
404.7
492.2
642.8
667.7
* (11 months)
1. Earnings (loss) per share divided by the share price at the beginning of the fiscal year.
2.Return does not take into account tax credits for shareholders. 3.These investments include the funds committed but not disbursed as well as funds for guarantees and suretyships.
2 0 0 7 ann u A l R EPO R T
Sustained efforts
to create and
maintain jobs
From left to right
LOUISE ST-CYR
Chairholder, Chair of Small and Medium-Sized
Businesses, HEC Montréal, and President
of the Audit Committee of the Fund
RENÉ ROY
General Secretary, QFL, and Secretary
of the Board of Directors of the Fund
HENRI MASSÉ
President, QFL, and Chairman
ME S S A G E F R OM T H E C H A I R MAN
OF T H E BOA R D OF D I R E C T O R S
Fiscal 2006-2007 was a remarkable year for the Fund, one in
which we fulfilled our role as investor in SMEs and had a major
impact on the Québec economy. Our efforts reflect our
commitment to build a stronger Québec economy and keep
jobs here at home.
We must back any worthwhile initiative that will help
entrepreneurs in this sector adapt to the current context,
which means modernizing, developing new markets, and
boosting exports. While wealth creation is necessary, it must
be well distributed and focus on employment.
For us, investing is part of an approach to create collective
wealth by focusing on quality jobs: those we can create and
those we must preserve. That’s why we invest throughout Québec. We made this decision from the outset and it has made
us pioneers in local and regional development. With our SOLIDE (Sociétés locales d’investissement dans le développement
de l’emploi) and regional and specialty funds network, we have
invested with our collaborators and partners in projects that
are of interest to all the regions. Together, we have created a
unique, responsible investment model that is founded on the
importance of supporting economic development across Québec.
Our collective priority must therefore be the Québec economy.
Once again, I do not understand why governments are still
not doing everything they can to help entrepreneurs and promote the restructuring and modernization of our industries.
Except in the forestry sector, no concrete measure has been
implemented to help workers suffering the fallout of the
changes in the manufacturing industry.
Working together
I have always stressed the vital economic role government
corporations play and would like to highlight the efforts made
by some of them. Although, in my opinion, they could still do
more, at least they are becoming more economically focused.
In this regard, the work of the Caisse de dépôt et placement du
Québec, for example, merits acknowledgment. By partnering
with other organizations last May and launching the Centre
international sur la prospérité des entreprises du Québec,
the Caisse was on the right track, since the success of our
local companies requires that they adapt their business plans
to globalization. I was part of the working group that set up
this centre, and now, the Fund’s President and Chief Executive
Officer, Yvon Bolduc, has taken the reins to help ensure that
all this economic prosperity also translates into quality jobs
for Quebecers.
As for our companies, we must all work together to help them
grow. The tough economic times we are experiencing,
particularly in the manufacturing sector, concerns us all. No
one is spared. Our manufacturing sector has been permanently
weakened: since 2002, more than 100,000 jobs have been
swept away by the wave of globalization. Everyone is affected
by this disastrous situation, and with a strong Canadian dollar
nearing parity with the U.S. dollar, volatile oil prices, a global
economic slowdown, unrelenting Asian competition, and
a graying population, our problems are far from over.
Consequently, we must all join forces and work together:
employers, unions, governments, government corporations and
all the organizations concerned.
A medium- and long-term vision
It certainly is no secret that I am against purely speculative
investments, particularly those made by U.S. private funds.
There is no medium- and long-term vision behind these
strategies; the investors are not at all concerned with
the survival of the companies in which they invest. Their sole
interest is to turn a quick profit. To be sure, we have nothing
against seeking out attractive returns to increase wealth,
but not to the detriment of our social values or mission to
create and protect jobs and help grow the economy.
In fact, since 2003, the Fund has invested hundreds of millions
of dollars in more than 30 private funds in a variety of sectors.
We make these types of investments when they generate
concrete economic spin-offs for Québec and help our
entrepreneurs build solid businesses, create jobs and take
up the challenge of international competition.
In closing, I would like to congratulate all the Fund’s employees
for their remarkable work, to which we owe this year’s excellent
results. I would also like to thank our local representatives for
their tremendous contribution.
And finally, a very special thanks to you, our shareholders,
for your valued trust for which we are extremely grateful.
Henri Massé
Chairman of the Board of Directors
Success based
on expertise
and teamwork
From left to right
YVON BOLDUC
President and Chief
Executive Officer
GAÉTAN MORIN
Executive Vice-President,
Investments
DENIS LECLERC
Shareholder Services
ME S S A G E f r o m T H E P R E S I DEN T
AND C H I EF E X E C U T I VE OFF I C E R
As you may recall, last year was a record year for profits and
investments. Well, this year we beat those records! Indeed, fiscal
2006-2007, ended May 31, was a great year, and I am extremely
pleased to report our results. But first, I would like to highlight
the excellent work of the Solidarity Fund QFL’s employees.
Their expertise, professionalism and unwavering commitment
are the reason we were able to make so many quality
investments and why our partners and shareholders are
so satisfied with our services. I sincerely thank them.
The strength of our networks
I would now like to acknowledge the contribution of all those
who contribute from near and far to the Fund’s success. Our
organization is a group of networks comprising hundreds of
thousands of people who subscribe to our values and economic
development mission. Firstly, this group consists of our
investment network, composed of our multidisciplinary
investment teams at headquarters, our specialty funds, and
our regional and local investment funds that cover all of Québec.
Our share value rose for the ninth consecutive time to $25.36
on July 5. Net earnings amounted to $475 million, which
translated into a return of 7.1%, our best in the last seven years,
and our net assets reached $7.2 billion. But that’s not all. We set
a new record of $668 million in investments! Despite an
increasingly competitive environment, our multidisciplinary
investment teams put forth colossal efforts which bore fruit. Our
investment portfolio generated a gross return of 10.1% for the
year. Through these investments, the Fund provides growing
support in all the economic sectors of Québec. For example,
during the year we invested $20 million in Spectra Premium and
$75 million in Van Houtte. These two strategic transactions
allowed us, among other things, to set ourselves apart in terms of
buyouts and succession planning and to expand our role into new
stages of the financing chain for Québec companies. I would also
like to point out that 47% of our investments were made in
manufacturing companies. Helping to boost the competitiveness
of local manufacturers that have been especially hard hit by
global competition and the rising Canadian dollar is a priority.
Given these additional challenges, we are all the more proud of
our performance this year.
Next, we have our shareholder network, which as at May 31,
boasted 574,794 shareholders. We are particularly proud of their
participation: more than half a million Quebecers who band
together to help the economy become more competitive so that
Québec can thrive. The Fund is also made up of its vast network
of 2,127 local representatives (LRs) who volunteer their time
to promote the Fund’s mission and RRSP in their workplace.
This exceptional and vital network is an integral part of the
Fund’s success. I would therefore like to thank all the LRs for
their invaluable work.
I would like to congratulate Québec’s entrepreneurs for
the adaptability, creativity and boldness they have shown
these last few years in response to their many challenges,
and for converting their good ideas into action to enhance
their competitiveness.
Lastly, the Fund is a network of entrepreneurs, business leaders
and workers who have decided to capitalize on the added value
of our approach and services, including our unique economic
training program. They have chosen the Fund because it offers
more than money: we stand by them as they grow by providing
patient capital tailored to their ambitions and projects and by
placing all our expertise at their disposal. As they themselves
have told us, these are the reasons they chose us as partner in
their growth.
I am very pleased with the Fund’s performance in 2006-2007
and sincerely thank each and every one of you for contributing
to our success.
Yvon Bolduc
President and Chief Executive Officer 2 0 0 7 ann u A l R EPO R T
Jocelyne Bourget
Pratt & Whitney employee
and Spouse of Claude Bourget
“It’s true that the Solidarity Fund
provides impeccable customer
service, and we’re not just
saying that – we’ve experienced
it first hand!”
Claude Bourget
and Fund shareholder
“Buying a house is a big deal and
a little stressful! I’m really happy
to have been able to redeem my Fund’s shares to use the Home Buyers’ Plan and make this wonderful purchase. It’s really great,
especially since everything went
smoothly and quickly.”
Daniel Grisé
Local Representative
of the Fund and
“I always take a lot of pride in
showing my colleagues the
advantages of the Fund’s RRSP.
It was a real pleasure to help
Jocelyne and Claude use their Fund’s
shares to take advantage of the
Home Buyers’ Plan.”
Your contribution
creates rewarding
opportunities
S H A R E H O L DE R BA S E
The Shareholders’ Booklet turns 10!
Introduced in 1997, the shareholders’ booklet is a communication
tool that has set itself apart over the years by its quality and
personalized information. This tool was a singular success
from the start and is increasingly valued by shareholders, who
not only pay careful attention to the information it provides on
their portfolio’s performance and the growth scenarios for their
retirement savings, but also recognize the quality of the booklet
itself. As a direct result of the time and effort invested in this
special means of communication, the booklet has played a key
role in building shareholder loyalty over the last 10 years.
“My online account”
One of the concerns of the Executive Vice-President,
Shareholder Services was to offer shareholders a totally
secure website where they could make even more transactions. On April 2, 2007, the Fund launched such a site, and now, besides being able to consult their accounts, shareholders can also sign up for payroll deduction or preauthorized withdrawal, and even change the amount of their
contribution online. This is one more way to encourage systematic savings, which accounted for 74% of all subscriptions in 2006-2007.
This success pushed us to pursue further efforts to personalize
the booklet, which led to the creation of a new generation of
fully personalized booklets that now also contain a regional
dimension. This newly added element provides an opportunity
to remind our shareholders of the Fund’s commitment to their
region and reassert how important that commitment is to us.
Since most of these transactions are processed electronically,
we can make it easier for shareholders to access these
contribution methods by cutting down on paper forms and
processing time. This also helps us maintain a high standard
of service quality. Also, one of the greatest advantages of
this new site is that it provides another tool to facilitate our
LRs’ work in the field.
Also, in the interest of efficiency and economy, we have merged
three mailings into one. Now when shareholders receive their
booklet, they also receive their Relevé 10 and extracts of the
Fund’s most recent financial statements.
Shareholder services
On May 31, 2007, the Solidarity Fund QFL had 574,794
shareholders. It should be noted that, in the last year, our
agents fielded nearly 340,000 calls, including more than 134,000
during the RRSP campaign. This front-line, person-to-person
(no automated voice response) service, adapted to our
shareholders’ needs, remains a priority for the Fund.
Carine Bonnardeaux
Fund Shareholder
“I was really proud to receive my shareholders’ booklet! I think it
is well put together and a great communication tool for personal
finances. The information on my transactions and RRSP and non-RRSP portfolio is clear. It also provides different personalized scenarios
showing my portfolio’s future growth so I can easily see how much money I will have to iMPROVE my quality of life during retirement.
This is truly a helpful tool!”
S H A R E H O L DE R BA S E
Our first network As at May 31, 2007, the Fund had 2,127 local representatives
(LRs). This network – our very first – is a tremendous
source of pride. And it is thanks to our LRs, who explain
the advantages of payroll deduction so well, that so many
shareholders enjoy payroll deduction and the immediate tax
savings with each pay. Thanks to the LRs’ promotional efforts,
thousands of Fund shareholders are not only enjoying a more
comfortable retirement, but using the popular Home Buyers’
Plan (HBP) to purchase their first home (see table below).
Because they are present in the workplace, the LRs can better inform shareholders about the Fund’s economic mission and the important role its shareholders play in Québec’s economic development.
Solidly trained people
The LR network was created at the same time as the Solidarity
Fund QFL. The Fund’s founders and affiliated unions were
right when they insisted that union activists promote the Fund,
its mission and RRSP in the workplace. Today, this network
is the envy of many financial institutions.
LRs acquire solid training and ongoing support to help them
execute their mandate as the Fund’s representatives. In
addition to the basic training they receive when they join the
network, the LRs attend follow-up meetings within six months
to review what they learned and clarify certain points.
Each year they also participate in three activities designed
exclusively for LRs by the Fund as part of a continuous
training program. In September 2006, they attended
a workshop on the tax impact of retirement savings plans and
in January 2007, participated in an in-depth session on the
Home Buyers’ Plan and the Lifelong Learning Plan. During
regional meetings last spring, our LRs learned about retirement
income, more specifically, the Registered Retirement Income
Fund (RRIF).
LRs also receive support on a daily basis from their primary
source of coaching, the coordinators at the Fund’s Subscription
Development Department. And besides the many reference
tools we make available to them, they can call LR Services at
any time to obtain information or documents. In fact, they have
their own dedicated call centre.
Solidarity above all
The Fund’s LRs are motivated by a sincere desire to heighten
their co-workers’ understanding of the importance of saving
for retirement. They believe in the Fund’s mission and want
to encourage workers to support it.
Our LRs can be described as activists with people skills who
want to learn and master all the subtleties of the Fund’s shares
and RRSP for the benefit of their co-workers.
We’re proud to be able to count on them.
Redemption breakdown by criterion
Shareholder profile
For the year ended May 31, 2007
Criteria
Retirement and early retirement
Access to home ownership Unforeseen events (job loss or other)
Death, disability, redemption
within 60 days Return to studies
Other criteria (capital injection into a business,
emigration, redemption of pension
credits and ineligibility for tax credits)
Total
NUmbEr As at May 31, 2007
Millions $
%
33,337
4,418
4,816
321
34
16
80
8
4
2,026
399
627
23
2
6
5
1
2
45,623
402
100
N u m b e r o f sh a r e h o l d e rs 574,794
st a t u S
Unionized
Non-unionized
58%
42%
332,184
242,610
NUMBER OF
LOCAL REPRESENTATIVES
AT YOUR SERVICE:
2,127
Melvin Marquis LOCAL REPRESENTATIVE
“Long Live Systematic Savings!
Many years ago, I witnessed some layoffs and saw some of my
co-workers retire without enough savings. I said to myself, ‘Never
again!’ For more than 15 years now, I’ve been promoting the Fund’s RRSP
as an ideal complement to a pension plan. I’m a firm believer in payroll
deduction because it makes saving for retirement easy. Not only does it
become a habit, but with the immediate tax reduction, people don’t even
notice the difference on their net pay!”
Gabriel Charky
President and
Chief Executive Officer
Allianz Madvac
“The Fund’s economic training
program is a very effective program
that is worth getting to know.
Investing in the workforce in this
way, we’re investing in the future of
the company.”
Diane du Tremble
Guy Croteau
Training Advisor,
Solidarity Fund QFL
Training Advisor,
Solidarity Fund QFL
“Many entrepreneurs shared
with us extremely positive
reactions to the economic
training program.”
“Economic training gives management
and employees a common understanding
of the company’s challenges, which
allows them to communicate using the
same language.”
Training: a value-added
advantage of the Fund
10
TRAINING
The economic training provided by the Fund is geared toward
all the employees of its partner companies, and springs from
the Fund’s desire to contribute to their growth.
By counting on transparency and good communication practices
between management and employees of the companies receiving training, the economic training program seeks, among
other things, to establish a common understanding, from a financial perspective, of the issues and challenges the
companies face. In this way, everyone “speaks the same
language” and is better equipped and mobilized to make
suggestions that may help secure the company’s future while
maintaining and creating quality jobs.
Since 2006, it has truly become a training program, and during
the last year the program has been comprehensively applied. It
is no longer a question of training sessions, but a real economic
training “program” spread over three years and designed in
response to the needs of both employers and employees.
This past year, in addition to the courses on business plans,
financial health analysis and financial communication practices,
we added a course on the situation of companies in the context
of globalization.
Many entrepreneurs have noticed that each time a training
session is offered, the participants’ questions become
more specific. This is because the courses are well adapted
to the experience of the participants and motivate them to take
part in the company’s success.
Continuous training for LRs
During the year, the Fondation de la formation économique,
working closely with the Fund’s subscription coordinators,
continued to develop ongoing training activities for our LRs
(for more details, see page 8).
The Fondation also introduced a global evaluation process
for LR training aimed at ensuring that the content continues
to adequately meet the needs and reflect the experience
of our LRs.
Training activities
Year ended May 31, 2007
ParticipantscoursES
Local representatives
In the workplace
Network members
Students
3,111
2,264
570
396
212
132
26
21
Total
6,341
391
Manon Bélec
Regional Sales Manager, Eastern Canada, Laura Secord
“The Fund’s economic training was well adapted to our employees’ needs
and experience. Now everybody has the same level of understanding
of the company’s financial issues. They all found the program very
interesting and they now have a global picture of Laura Secord, one
that goes beyond store sales. They understand that everything we do
affects the bottom line. This course was a real catalyst, motivating
them to work as a team.”
11
Charles Dutil
President and Chief
Operating Officer, Manac
“The Fund’s investment allowed us
to reposition our product line in
order to maintain our growth pace
in the competitive environment
of our industry.”
Richard Cloutier
Senior Marketing
Advisor
Sonia Lévêque
Legal Advisor
Two members of the Fund’s multidisciplinary team that worked
closely on the company’s repositioning
and contributed to its success.
Raynald Aubin
Portfolio Manager –
Investments, Transportation
Equipment and Automobile
Sector, Solidarity Fund QFL
“Manac is a great example of
regional economic development and
our sectoral teams’ expertise
contributed to this success.”
Our teams back you
at every level
12
i n v e st m e n ts
Our success is based on expertise and patient capital
To help our partner companies meet the numerous challenges
they face, we provide patient capital – capital that will truly
allow them to carry out modernization or expansion projects
and to boost their competitiveness. Our advisors all have
solid investment expertise and are competent business people
who speak the same language as entrepreneurs. Indeed, the
figures bear this out: for the year ended May 31, 2007, the Fund
alone invested $668 million, setting yet another annual record.
Including the investments made by our regional funds, we
backed 145 companies, including 92 new ones. Our investment
portfolio generated a gross return of 10.1% over the last year.
As we can see, our achievements this past year clearly show
that our capital is not only patient but also profitable.
We also set ourselves apart on the SME private equity
market here at home, where we are one of the leaders. The
Fund alone accounted for nearly one third of all venture and development capital investments in Québec. And thanks
to our patient capital approach and unique positioning,
Québec entrepreneurs are now fully aware of the Fund’s
advantages. They choose to partner with us because of our
large investment capacity and our extensive knowledge of
SMEs and of Québec’s economic fabric. For these reasons
the Fund is increasingly becoming the partner of choice
for entrepreneurs.
The Fund’s specialized Investment teams and the impressive
resources of its multidisciplinary teams (market analysis,
business valuation, taxation, legal support, marketable
securities, due diligence and social audit) are well known by
our partners. They also know that in order to modernize their
equipment, conquer new markets, develop and launch new
products, or innovate, grow and make acquisitions, they need
a solid backer whose financial products and financing offer
can be tailored to their needs. And that is exactly what we do.
Moreover, because of our mission and size, we can stand by
our partners through tough times when they need the most
support to carve out a competitive position or to grow.
According to a study conducted by SECOR,1 jobs increased 31%
in companies in which the Fund invested, compared to 23% in
other businesses, our partner companies export three times
more than the Canadian average and invest nearly four times
as much in research and development as their competitors.
Successful partners
The Fund’s success is first and foremost our partners’ success. In this regard, the testimonials are clear: thanks to the Fund, “we were able to make acquisitions” (CVTech), “we succeeded in penetrating the U.S. market” (Allianz Madvac), “we built a business network, designed new products
and conquered new markets” (Manac). Some business
owners have also told us that we were a big help in improving
their succession plan (Labrie Environmental Group).
1. SECOR and Regional Data Corporation, February 2005.
Gilles Fradette and Dany Dumont
co-prEsidents, Glendyne, Saint-Marc-du-Lac-Long
“Glendyne had a tough start. In 1995, slate extraction did not exist
in Québec and since no one really had the right training, the trade
had to be learned. Many were sceptical, but the Fund believed in us,
and because of their backing, we’ve been able to surpass every target we set. It’s clear that, thanks to their patience, we’ve been able to
grow and become leaders in our market.”
13
i n v e st m e n ts
Others point out how we helped them structure their company
or set up their board of directors. These are the types
of value-added services that convinced them to choose the
Fund as a financial partner.
Major transactions
Backing start-ups, enabling larger acquisitions and
stimulating SME growth are all vital to building a stronger
Québec economy.
In 2006-2007, we positioned ourselves as an important
economic player in a number of major transactions, such as
the $20 million investment in Spectra Premium, the support
that allowed Kruger to acquire Maison des Futailles, and more
recently, the $75 million investment in coffee giant Van Houtte.
Among other things, these investments have allowed some
of our Québec flagship companies to keep their operations
in Québec, preserve jobs or even to take a step further in
their growth.
As well, to ensure Québec has a healthy, diversified and
vibrant venture capital industry, we invested in specialty
private funds both here and internationally. These investments
not only stimulated the Québec venture capital industry by
spawning new funds (MSBI II and GO Capital, for example) and
attracting foreign funds to Québec, they also provided access
to capital for businesses in the seed or start-up stage.
Moreover, these investments give our partner companies
access to specialized expertise and to a network of contacts
that will facilitate their expansion in foreign markets.
We also invest directly in companies targeting high-potential
niches such as Cellfish Media, Bluestreak Network,
Oz Communications, Trellia Networks, Envivio and
Coveo Solutions.
We are proud of how well our focus on patient capital has
paid off, particularly in the biotech sector. In the last 10 years,
we have invested hundreds of millions of dollars in this
cutting-edge sector, where we have over 50 partners, of
which 18 are publicly traded. Québec has become a major life
sciences hub in North America, and this sector is responsible
for thousands of quality jobs here at home.
We meet all types of financing needs (seed, start-up, consolidation, expansion, export, IPO) and are present in all
spheres of activity. Moreover, because of our size, we play a fundamental role in the regions: as at March 31, our network
of regional funds had 261 partner companies in Québec.
No matter the sector we invest in, our strategy is the same:
to help our partner companies grow. And as this year’s results
show, it is a winning strategy.
FROM LEFT TO RIGHT
Oz Communications
Sk u li M o g en son
MethylGene
D ona l d f. Corcoran
CVTech
M onia C ôt é
14
INVESTMENTS
FOR THE YEAR:
$668 M
Jean Bourgeois
Chief Executive Officer
Labrie Environmental Group saint-nicolas
“In addition to greatly facilitating our succession process, the Fund’s
financial backing also allowed us to make a major acquisition in the
U.S. We were the first to introduce selective waste collection trucks
on the market, and our product line revolutionized the industry.
By focusing on innovation and growth, we are now among the leaders
in our industry.”
15
i n v e st m e n ts
122,460 jobs created,
maintained or protected in Québec
by the Fund and its partners
As at May 31, 2007
Distri b u ti o n
INDIRECT JOBS
DIRECT JOBS
INDUCED JOBS
Solidarity Fund QFL
Regional and local funds
Specialty funds
4 1,657
20,395
2,742
64,7941
31,016
64,794
26,650
1.With its partners, the Fund has helped create, maintain or protect more than 102,000 direct jobs since inception.
Change in investments
(at cost) 2006-2007 1
REgions 3
Western Québec Montréal Region Central Québec
Québec City Region
Eastern Québec
All of Québec
Outside Québec
Total
Balance as at May 31, 2006 2
No. Millions $
%
Investments
No. Millions $
%
Disinvestments
Balance as at May 31, 2007
No. Millions $
%
No. Millions $
%
15
138
17
32
31
43
34
310
82
1,222
112
363
215
869
264
3,127
3
39
3
12
7
28
8
100
3
47
8
5
2
8
12
85
2
313
25
12
19
143
154
668
0
47
4
2
3
21
23
100
4
39
7
14
11
16
14
105
10
142
9
32
98
79
120
490
2
29
2
6
20
16
25
100
14
146
17
28
29
45
37
316
74
1,393
128
343
137
933
297
3,305
2
42
4
11
4
28
9
100
9
29
295
377
9
12
3
1
43
17
6
3
2
3
23
7
5
1
10
23
315
386
9
12
146
1,530
49
46
474
71
66
376
77
157
1,628
49
126
310
925
3,127
30
100
35
85
134
668
20
100
34
105
84
490
17
100
126
316
976
3,305
30
100
SectOrs
Real estate
Regional development 4
Industries, services,
natural resources
and consumer Technology
investments 5
Total
1. Excludes stock held in Entreprises publiques québécoises à faible capitalisation and includes the funds committed but not disbursed as well as funds for guarantees and suretyships.
2. The breakdown by regions and sectors as at May 31, 2006 has changed to account for reorganizations undergone by companies in the portfolio.
3. Regional groupings: Western Québec: Abitibi-Témiscamingue/Outaouais. Montréal Region: Montréal/Laval/Laurentides/Montérégie/Lanaudière. Central Québec:
Estrie/Mauricie/Centre-du-Québec. Québec City Region: Capitale-Nationale/Chaudière-Appalaches. Eastern Québec: Bas-Saint-Laurent/Saguenay–Lac-SaintJean/Gaspésie–Îles-de-la-Madeleine/Côte-Nord/Nord-du-Québec. All of Québec: Investments impacting more than one region. Outside Québec: Investments
in companies headquartered outside Québec.
4. Regional funds, local funds and regional investment companies.
5. Life sciences, information technologies, telecommunications, industrial innovations, and bio-food.
16
FINANCIAL
INFORMATION
Fonds
d e s o li da rité
d e s tr ava ill e u rs
d u q u é b e c ( f. t. q . )
Fondation de la formation
économique du fonds de
solidarité des travailleurs
du québec ( f. t. q . )
19
Financial Statements
as at May 31, 2007 AND 2006
MANAGEMENT’S DISCUSSION
AND ANALYSIS
80
Auditors’ Report
as at May 31, 2007 AND 2006
33
81
Statements
OF FINANCIAL POSITION
Management’s Report
and Auditors’ Report
82
34
83
Balance Sheets
35
Statements
of Changes in Net Assets
Statements of Earnings
84
36
Notes
to Financial Statements
Statements of Changes
in Net Assets
Statements OF OPERATIONS
37
Statements
of Cash Flows
38
Notes to
investments made
as at may 31, 2007
54
Auditors’ Report
55
Schedule of Investments
at Cost
INVESTMENTS made
by the Specialty Funds
as at may 31, 2007
62
List of Investments
at Cost made by
the specialty funds (unaudited)
17
Finance:
a strategic role
in the organization
From left to right
MICHEL PONTBRIAND
Finance
ANDRÉ McDONALD
Director, Financial Services
SYLVAIN PARÉ
Vice-President,
Financial Management
and Strategy
18
M A N AG E M ENT’S DISCUSSION AND ANALYSIS
F O R T H E YEAR ENDED MAY 31, 2007
This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader to assess the Fund’s financial position and any
material changes that occurred therein during the year ended May 31, 2007. To have a thorough understanding of events and
uncertainties, this MD&A should be read together with our financial statements and the notes thereto.
This MD&A contains forward-looking statements about the Fund’s activities, results, and strategies. Because forward-looking statements
involve assumptions, uncertainties and risks, it is possible that a number of factors may cause forecasts not to materialize. For example,
legislative or regulatory changes, economic and business conditions and the level of competition are just a few of the major factors
that could influence the accuracy of the forward-looking statements in this report. This MD&A is dated June 21, 2007.
A N A LY S I S O F R E S U LT S
The 2006 results presented in this section were restated to reflect the new accounting standards affecting investment companies.
Accordingly, interests in investment companies are measured and presented at the fair value and are no longer consolidated.
This change does not affect net earnings, earnings per share, or net share value but does result in some reclassifications in
the financial statements.
Ov e r a l l Re s ults
Solid performance characterized the year ended May 31, 2007, during which the Fund recorded net earnings of $475 million, an increase
of $109 million or 30% over last year’s record net earnings of $366 million. With these solid results the Fund generated a return
of 7.1% for the year, higher than the 6.0% return generated the previous year and above the forecasts that were made last year. These
results mark the Fund’s best performance since the technology bubble burst at the beginning of this decade.
The two main sectors of the Fund, investments and other investments, were both major contributors to the excellent results posted
for the year. The assets managed by the investments sector are essentially mission-driven investments in public and private partner
companies in the form of shares, units or loans. The 2006-2007 gross return for this sector reached 10.1%, a higher return than the
8.2% generated the previous year. The average assets in this sector represented $2.5 billion or 36% of the Fund’s average assets
under management.
The other investments sector manages the remaining assets not invested in partner companies, which consists of bonds, money market
securities, sector-based shares, funds of hedge funds and a portfolio of high-revenue securities. 1 The gross return for this sector for
the fiscal year ended May 31, 2007 was 7.9%, which was also higher than last year’s return of 7.1%. The average assets of this sector
amounted to $4.3 billion, or 64% of the Fund’s average assets under management.
Our concern with operational efficiency and controlling our operating expenses also significantly contributed to our results, as evidenced
by the ratio of operating expenses to average net assets of 1.4% for the fiscal year ended May 31, 2007, which equals last year’s ratio.
Including income and capital taxes, the ratio of expenses to average net assets is 1.7%. This slight increase compared to the 1.6% ratio
posted for fiscal 2005-2006 is the result of a higher income tax expense compared to the previous year.
Return by sector
Years ended May 31
2007
Average
Weight
Return Contribution
Average
assets underassets undER
managemenT management
$M
%
%
%
$M
Investments
2,452
36.2
Other investments
4,327
63.8 6,779
100.0
Operating expenses
Income and capital taxes
Fund return
10.1 7.9
8.8
(1.4)
(0.3)
7.1
2006 (restated)
Weight
Return Contribution
%
%
3. 7
2,21 7
35.7
5.1 3,986
64.3
8.8
6,203
100.0
(1.4)
(0.3)
7.1
8.2
7.1 7.6
(1.4)
(0.2)
6.0
%
3.0
4.6
7.6
(1.4)
(0.2)
6.0
1. The portfolio of high-revenue securities is comprised of preferred shares, high-dividend shares, and income trust units.
2007 ANNUAL REPORT
19
S e c to r Re s u lts
The performance of the investments sector is influenced by various factors, including the behaviour of the financial markets, the economic
and business conditions in which our partner companies operate, and active management of our investments. The 10.1% return of the
investment sector for fiscal 2007 is largely explained by the following:
• Significant improvement of the results of our portfolio of private securities and specialty funds, which continued to improve during fiscal
2007, generating a 9.9% return on an average portfolio of $1.7 billion, compared to a return of 2.8% recorded the previous year. With
a 14.6% return, compared to 5.2% in fiscal 2006, the private securities portfolio was largely responsible for the investment sector’s
performance this past year. Taking into consideration the continuous increase in the annual investment volume over the last four years,
these results are evidence of our efforts and rigor in managing our portfolio over the years;
• The stock market’s solid performance over the last year, which led the portfolio of listed securities of our investment sector to achieve
a return of 10.4% on average assets of $736 million. This outstanding performance follows the exceptional return of 21.6% generated
by the portfolio in last year’s bull market.
The strategies adopted, combined with the evolution of the interest rates and the performance of the stock markets, are the determining
factors in analyzing the performance of the other investments sector. Accordingly, the results achieved by this sector are influenced
by the behaviour of the financial markets and the conditions affecting the economic environment in which the Fund operates. The return
of 7.9% of the other investments sector for the year ended May 31, 2007 is largely explained by the following:
• The performance of the stock markets magnified the results of the sector-based strategy implemented three years ago to convert
our large-cap stocks into publicly traded securities in four specific sectors 2, thereby resulting in a return of 18.3% on average assets
of $1.0 billion. This strategy, implemented to reduce our overall portfolio’s volatility, delivered the expected results, and the solid
performance of the stock markets helped generate a higher than expected return. This performance follows returns of 21.0% and
20.3% recorded for the years ended May 31, 2006 and 2005, respectively;
• A return of 4.4% earned on our portfolio of fixed-income securities during the last year on outstanding assets of $3.2 billion in
a Canadian financial market characterized by volatility in interest rates, which were lowered in the first half of the fiscal year, followed
by a sharper increase in the second half of the fiscal year. The hedging strategy implemented to mitigate the anticipated interest rate hike
was fruitful, notably at the end of the fiscal year, allowing us to reduce the impact of the depreciation of the bond portfolio caused
by the increase in interest rates. The 4.4% return for the year represents an improvement over the 3.0% generated last year in an
environment characterized by rising interest rates.
Return by asset class
Years ended May 31
2007
2006 (restated)
Average
Weight
Return Contribution
Average
assets under
assets under
managemeNT management
$M
%
%
%
$M
Investments
Private securities
and specialty funds
Listed securities
Other investments
Fixed-income securities
Sector-based shares 2
and other investments 3
Weight
Return Contribution
%
%
%
1,716
736
25.3 10.9
9.9
10.4
2.6
1. 1
1,578
639
25.4
10.3
2.8
21.6
0.7
2.3
3,186
47.0
4.4
2.1 3,036
49.0
3.0
1.5
1,141
6,779
16.8
100.0
17.8
8.8
3.0
8.8
950
6,203
15.3
100.0
20.0
7.6
3.1
7.6
2. Sectors are materials, energy, consumer staples and utilities.
3. Other investments include funds of hedge funds and the portfolio of high-revenue securities (including preferred shares, high-dividend shares, and income trust units).
20
2007 ANNUAL REPORT
A N A LY S I S O F C A S H F L O W S , B A L A N C E S H E E T ,
AND OFF-BAL ANCE SHEET ITEMS
Cash flows from operating and financing activities totalled $355 million in 2006-2007, down from the $433 million recorded a year
earlier. This decrease stems primarily from the combined effect of a reduction in shares issued to $571 million during the year to comply
with the lower contribution limit in effect, and an increase in shares redeemed, which reached $400 million for the year, on a cash flow
basis. In 2005-2006, shares issued and shares redeemed totalled $614 million and $324 million, respectively.
The Fund’s direct investments in partner companies reached $668 million for the year, representing an increase over last year’s record
investments of $643 million. Once again, the investment sector outperformed its historic records and the goals set at the beginning
of the year. Including the regional fund network, investments were made in 145 partner companies, of which 92 were new partners.
The 2006-2007 proceeds from the disinvestment of direct investments amounted to $459 million, a higher amount than the $248 million
recorded the previous year. This increase is largely the result of the sale of our three joint-interests with Hydro-Québec International,
which accounted for $126 million of the disinvestments for the year.
Balance sheet investments increased from $2.7 billion as at May 31, 2006 to $3.1 billion as at May 31, 2007. This increase is the result
not only of net investments made during the year (investments made less disinvestments), but also of the equally important appreciation
recorded by the portfolio over the year.
Canada’s Venture Capital & Private Equity Association (CVCA) proposes classifying private equity investments into three categories:
buyout capital, venture capital and mezzanine capital investments.4 Applying this definition to our $2.3 billion investment portfolio5, at
cost, as at May 31, 2007, 37.8% of the portfolio was invested in buyout capital, 26.6% was invested in venture capital, and mezzanine
capital represented 35.6% of the portfolio.
Breakdown of investment portfolio5
by category (at cost)
As at May 31, 2007
buyout Capital
37.8%
Mezzanine capital
35.6%
Venture Capital
26.6%
Other investments increased by some $300 million over the year to reach $4.5 billion as at May 31, 2007. This rise is principally the
result of net cash inflows (share issues less redemptions) as well as interest and dividends earned on Fund assets and the appreciation
of shares resulting from the solid performance of the stock market.
Thus, net assets rose by $632 million to reach $7.2 billion as at May 31, 2007. The net value per outstanding Class A share continued
its rise this year, increasing by $1.62 to $25.36.
4. Based on the classification proposed by the CVCA, a buyout capital investment is made by purchasing shares of an established private or public company looking to grow organically or
through acquisition. A venture capital investment is made by purchasing shares of a company that is generally unlisted and is in the start-up or the early development stage. Mezzanine
capital consists of subordinated debt or preferred shares with or without a variable portion in equity warrants.
5. On a fund disbursement basis, excluding investments in real estate funds and in listed shares acquired on the secondary market.
2007 ANNUAL REPORT
21
Change in net value per Class A share
Years ended May 31
(in dollars)
2007 2006 (restated)
Net value at beginning
23.7 4
Change in accounting policy
(0.04)
Increase due to operations
0.85
Interest and dividends
0.87
Gains on investments and other investments 0.61 0.04
Change in unrealized appreciation or depreciation 0.60
0.82
Operating expenses
(0.33)
(0.33)
Income and capital taxes
(0.07)
1.68
(0.03)
(0.02)
Variance due to share issues and redemptions
Net value at end
25.36
22.41 –
1.35
(0.02)
23.74
VALUAT I O N o f Finan c ial Assets
Investments and other investments are recorded on the balance sheet at their fair value. The fair value of other investments was
established as at May 31, 2007 based on the closing bid price on the stock and bond markets, or, in the case of unlisted financial
instruments, by professional valuators using appropriate and acknowledged pricing models.
With regards to investments, listed securities were also valued based on their bid price at market close as at May 31, 2007. The value of
private securities and listed securities for which the market price exceptionnally is not representative of their fair value, was established
using recognized valuation techniques by specialized business valuators who possess the necessary expertise and experience. These
valuation techniques are based on international guidelines that ensure that fair value 6 is established in a reliable manner. The specialized
valuators report to the Executive Vice-President, Finance, and follow a structured process comprising several verification and validation
steps to ensure the quality, uniformity and integrity of the work performed and of the resulting fair value.
The fair value of our investments in specialty funds is established based on the latest audited financial statements of those funds.
The fair value may be adjusted by the specialized valuators employed by the Fund to incorporate more recently available
financial information.
ACCO U N T I N G PO L I C I ES
New accounting standards issued by the Canadian Institute of Chartered Accounts (CICA) resulted in changes to the Fund’s accounting
policies, as described in Note 3 of the financial statements.
Effective June 1, 2006, the Fund modified the valuation basis of financial instruments to use the bid price instead of the closing price.
The effect of this change was a reduction of $11.5 million of the investment and other investment portfolio and net assets. This change
does not affect the comparison between the years ended May 31, 2006 and May 31, 2007, even if the comparative figures are not
restated, as the impact on net earnings and earnings per share for those years and net value per share as at May 31, 2007 is not material.
The Fund early adopted the new standards published by the CICA in March 2007 regarding investment companies. Interests in
investment companies are therefore presented at the fair value under Investments and are no longer consolidated. For comparability
purposes, the previous year was restated. This change did not affect net earnings and earnings per share for the years ended
May 31, 2006 and 2007, or net value per share as at May 31, 2006 and 2007.
The Fund does not anticipate adopting any new accounting policies that would materially affect next year’s net earnings or the value
of its net assets as at May 31, 2008.
CONTRIBUTION TO QUÉBEC’S
ECONOMIC DEVELOPMENT
The economy did not improve much in 2006-2007, especially for companies in the manufacturing sector. In fact, Québec’s small and
medium-sized businesses (“SMEs”) must reposition themselves and streamline their operations to remain competitive in the face of
a weaker U.S. dollar and U.S. demand, continuously climbing raw material and energy costs, and ever present foreign competition.
6. Using fair value is a best practice recognized by venture capital firms and private equity funds. Fair value is defined as the amount of the consideration that would be agreed upon in an
arm’s length transaction between knowledgeable, willing parties who are under no compulsion to act.
22
2007 ANNUAL REPORT
On the other hand, a wave of mergers and acquisitions is happening across the world, fuelled by money from certain large funds
that specialize in these activities. These funds often initiate these transactions and are playing an increasingly important role
in the financial market. Some of our best companies are at risk of being acquired unless they can manage to become acquirers.
The Fund remains sensitive to such structural changes of our economy, which strongly affect companies in the manufacturing sector.
This sensitivity significantly contributed to generating record investments of $668 million in 2006-2007. Of that amount, 47%, or
$314 million, was used to support the development of our Québec-based SMEs in the manufacturing sector.
The Fund is always concerned with supporting entrepreneurial efforts in Québec and continues to support companies in the
start-up phase with $119 million invested in 2006-2007, for a total of more than $550 million invested over the last four years.
The support provided by the Fund to funds specializing in start-ups significantly increased access to financing sources and expertise
for our Québec-based entrepreneurs.
In the context of its strategic investment program 7, the Fund intends to inject new momentum into our larger SMEs by supporting
the major players in their market or those operating in sectors that are strategic for our economy, or those wishing to improve their
productivity. A $75 million investment was authorized in April 2007 to support the officers of Van Houtte Inc. in the transaction to
privatize the company and allow it to implement an expansion strategy that would encourage job preservation and creation in Québec.
In addition, a new investment of $20 million allowed the privatization of Les Industries Spectra Premium Inc., an automobile parts
manufacturer. Its acquisition by members of management assured the preservation of these jobs in Québec, and also helped the
company implement a strategy to increase its competitive position in a sector with fierce international competition.
Over the years the Fund’s investments under the Policy for investment outside Québec8 have had large economic benefits for Québec,
in compliance with the requirements of the Policy. In terms of investments in companies impacting on the economy, during fiscal
2006-2007 the Fund spent an amount equivalent to CA$88 million through five investments that have sizeable and immediate economic
benefits for Québec. The Fund also sold its interest in three companies jointly held with Hydro-Québec International this year. These
investments generated notable economic spin-offs for Québec while contributing to the Fund’s return.
In fiscal 2005-2006, the Policy for investment outside Québec was amended to include two new categories of eligible foreign
investments: investments in certain private funds outside Québec that invest in Québec and investments in large-scale projects
in Québec executed by certain companies outside Québec.
The Fund’s investments in foreign private funds are conditional on reinvestment in Québec companies of an amount at least equal
to the amount invested by the Fund. The foreign private funds should also provide their partner companies specific expertise and an
international business network necessary for their development. During the past year the Fund has invested an amount equivalent
to CA$57 million in four private funds outside Québec and anticipates that each of these funds, in addition to supporting the Fund’s
efforts in developing the Québec economy, will invest in Québec companies at least the same amount as they received.
In terms of the second new category of eligible investments, the Fund has not yet made an investment in companies outside Québec
that execute large-scale projects in Québec.
T h e F u n d N e t wo rk
Since its inception in 1983, the Fund has built a solid investment network that provides entrepreneurs who follow their ambitions with
patient capital based on their needs. A veritable business hub brimming with ideas, talent and knowledge, this network offers the Fund’s
partner companies the opportunity to share common concerns with other SMEs, learn from past experiences and forge new business ties.
The Fund’s investment network revolves around four levels of investment:
• The Solidarity Fund QFL offers $2 million and up for large companies.
• The 16 Regional Solidarity Funds QFL offer $100,000 to $2 million per company to meet the needs of Québec’s regional companies.
The Equity Loan and the Growth Loan are the two main products offered by the regional funds.
7. The 2003-2004 Québec budget allowed the Fund the opportunity to move forward with strategic investments in large Québec companies with assets under $500 million or equity
less than $200 million.
8. Since 1998, the Fund has been authorized by the Québec Minister of Finance to invest outside Québec provided certain clearly defined conditions are met, particularly with regards
to economic spin-offs. The main group of eligible investments are companies impacting on the economy, private funds and large-scale investment projects (expansion financing,
modernization, productivity improvement).
2007 ANNUAL REPORT
23
• The 84 SOLIDEs created by the Fund and the Fédération québécoise des municipalités offer $5,000 to $100,000 to small businesses.
• The specialty funds form an investment network in Québec and abroad in many industries. The Fund’s commitment to this network
continued in 2006-2007, resulting in strengthening its various networks and facilitating Québec SMEs’ access to capital in all their
stages of development. The Fund’s investments in specialty funds cover all the main sectors of the economy, with a preponderance
in the sectors of information technology, telecommunications and life sciences.
The following graph presents the breakdown of the Fund’s investments by each component of its network:
Breakdown of investments
by network (at cost)
As at May 31, 2007
solidarity fund qfl
79.1%
Regional AND local funds (including the SOLIDEs)
11.4%
Specialty Funds
9.5%
de v elo p ment C A P I TA L I N D U S T R Y , T R E N D S A N D C O M P E T I T I O N
The recovery that began in 2005 now seems largely confirmed. Indeed, 2006 and the beginning of 2007 were characterized by a clear
rise in activity in Québec’s development capital industry. Numbers indicate a 9% increase of investments from 2005 to 2006.
The increase in activity in the first quarter of 2007 was even larger than the increase seen in the first quarter of 2006.
In accordance with what statistics show, 2006 and the beginning of 2007 were characterized by an upsurge in activity in the
Québec development capital market. The main Québec players have now completed reorienting their investment targets and are
expected to continue investing heavily.
In terms of fundraising, it can be seen that development capital funds established in Québec have attracted close to two-thirds of the
funds raised at the national level. The Fund’s fundraising campaigns largely contributed to positioning Québec as the provincial
leader in this area in Canada.
The heightened presence of specialty funds and particularly foreign funds – a presence supported and encouraged by the Fund’s
investments in many of these foreign funds – is also an important fact worth noting for 2006. As such, foreign investors increased
their investments in Québec by 63% between 2005 and 2006, demonstrating their interest in Québec companies. The presence
of these funds allows the Québec companies they finance access to a network and to expertise that can assist in their growth on the
international economic scene.
On the national level we see a large rise in buyout capital activity, partly to the detriment of venture capital. This situation is explained
by the actions of a few very large U.S. funds having completed transactions with unit values in the billions. This progression is also
partly explained by the increase in available funds for this type of activity. Lately, numerous pension funds significantly increased the
percentage of their assets dedicated to private placement activities, and more specifically to buyout capital activities that have recently
provided better returns than venture capital activities. Unless there is a significant change in the return outlook of the various asset
classes that are accessible to pension funds, there is every reason to believe that the trend will continue. Since the Fund also invests
a large part of its assets in buyout capital, thereby supporting our Québec companies and contributing to their business development,
this trend amounts to heightened competition in this market segment for the coming years.
Overall, the strength of investment activity and the importance of available capital are both positive elements for our Québec
entrepreneurs in need of capital to satisfy their needs, from start-up to expansion or acquisition.
24
2007 ANNUAL REPORT
ECONOMIC CONDITIONS AND FINANCIAL MARKETS
2 0 0 6 - 2 0 0 7 R e v iew
Economic growth for the fiscal year ended May 31, 2007 was anticipated with some apprehension. At least that is what the North American
monetary authorities were expecting after having increased interest rates and having established more rigid credit conditions in 2005.
In retrospect, the growth continued, although at a slower rate. There was definitely a slowdown, but it was less pronounced than anticipated
and occurred later than expected. The real estate market correction, which should have eroded household optimism and dampened
consumption, was slow to materialize on a large scale. Even though companies saw their earnings grow by 12% in 2006 compared to
22% the previous year, they were high enough to justify an increase in capital spending to the tune of 4.3%.
With economic growth not slowing as much as expected and price increases in some areas of the energy and food sectors, inflation could
only rise in 2006, most pointedly in the later months of the year. This is what led the North American monetary authorities to consider
potential interest rate hikes and question the synchronization and magnitude of the downturn. It is not surprising that, in the face of
choosing between stimulating the economy or containing inflation, the Federal Reserve and the Bank of Canada opted for stability in their
respective monetary policies. Accordingly, over the twelve-month period ended May 31, 2007, discount rates moved from 5.0% to 5.25% in
the United States and were held constant at 4.25% in Canada. Anticipating that central banks would hike interest rates, short-term bond
rates increased more than long term bond rates. Two-year Canadian rates moved from 4.18% to 4.58% while ten-year rates moved from
4.45% to 4.49% as at May 31, 2007.
Canada has always possessed an abundance of natural resources, making it the envy of many countries. This situation has become all the
more pronounced as emerging countries have inexhaustible demand for raw materials, placing a good number of Canadian companies in
the sights of international investors with significant capital at their disposal. Aside from the rampantly climbing prices of these acquisitions
and the decreasing number of Canadian companies making up the S&P/TSX index, the most dramatic consequence of this hunt for Canadian
assets is the spectacular rise of the Canadian dollar. However, the appreciation of our currency affects the competitive strength of
Canadian companies trying to remain competitive in an international context. The strength of the Canadian dollar can then be interpreted
as an involuntary restrictive measure of the monetary policy.
We can add to this fact that stock markets generated exceptional returns in the course of the fiscal year ended May 31, 2007. More
specifically, the Canadian stock market took advantage of the global trend of mergers and acquisitions. In this context, the Canadian stock
market (S&P/TSX composite) recorded a performance of 22.7%, US technology stocks (NASDAQ composite) generated a return of 16.0%
(19.5% in local currency) and the world stock market (MSCI World) increased by 20.8% in Canadian dollars (23.3% in local currency).
Translating the short-term interest rate hike and long-term interest stability, the Canadian bond market underperformed the Canadian stock
market, as it generated a return of 4.6% for the 12-month period ended May 31, 2007.
E c ono mi c a n d Financ ial Outl oo k
While global economic growth should be up in 2007, growth in the United States could slow down after a period prosperous for both
consumers and businesses. The ripple effect such a slowdown could have on other economies is no longer what it used to be. There
is no doubt that the weight of the United States’ population and economy has only diminished over the last 20 years and this broad trend
should only strengthen over the next decades. As such, a slowing of the United States’ economy is expected in 2007 since the interest
rate hikes implemented by the monetary authorities over the last few years have just started to slow growth. Over the next few months
U.S. consumers will face tighter credit conditions, higher food and energy costs, and in some cases, lower property values. However,
conditions in Canada are different as Canadian households are in healthier financial positions than their U.S. counterparts and are not
suffering a correction in the housing market. In addition, while Canadian companies face fierce international competition, a dollar that
remains strong and higher production costs, their capacity to increase productivity should not be underestimated. As a consequence, it is
expected that North American growth will continue at a lower rate in 2007, around 2.0% for the United States and 2.5% for Canada.
The combination of hikes in some energy and food costs, higher rents (influenced by a strong housing market), and a low unemployment
rate from an historical standpoint (justifying higher hourly wages) saw Canadian inflation increase from an average of 2.0% for 2005
to 2.8% during 2006. The upward trend seen over the first quarter of 2007 put the Canadian monetary authorities on high alert and in
a precarious position since they want to avoid declining economic conditions while making sure that inflation is well and truly under
control. However, the Bank of Canada and the Federal Reserve could still wait a few months before taking necessary action, which
would then likely amount to preventative interest rate hikes to avoid climbing inflation. Conditions are more critical in the United States
since the economy is slowing. Inflation in Canada and the United States should hover around 2.5% in 2007.
2007 ANNUAL REPORT
25
On the Canadian bond market, long-term rates should remain relatively stable and settle at around 4.45% in May 2008. Credit spreads
(provincial and corporate) are at historically low levels as many investors have a big appetite for these securities which generate higher
yields than Federal bonds. With a slowdown in the United States and an increasing number of mergers and acquisitions (notably
those financed in large part by debt), an increase in the credit risk premium can be expected.
Over the last two years the Canadian stock market has been driven by mergers and acquisitions, as well as the energy and materials
sectors, and is now overvalued. Taking into consideration the current level of valuations, an expected increase in corporate earnings
of around 5% and higher short-term interest rates, the stock market will likely only provide an anaemic return for the fiscal year ending
in May 2008. However, the wave of mergers and acquisitions could result in higher prices for the stocks targeted directly or indirectly
by these transactions. Given this, the Canadian stock market would be artificially held at high levels for several more months, increasing
the risk of a future and more severe correction.
Two elements could modify this main scenario. First, the collapse of the real estate market could turn out to be more drastic and more
painful for the overall U.S. economy, specifically in the area of household spending and the effect on indirect employment. Second, the
monetary authorities could overestimate the economic slowdown, therefore underestimating the expected inflation. In such a case,
additional interest rate hikes may be necessary to contain inflationary pressures.
2007-2008 OUTLOOK 9
In light of the economic outlook, the Fund has implemented a strategy using derivative products to soften the impact of the anticipated
interest rate hikes on its bond portfolio, which makes up more than 42% of the organization’s assets. Given the protection this strategy
provides, we must sacrifice part of the increase in the bond portfolio’s value if interest rates drop. This strategy is necessary to meet
shareholder expectations and to avoid a decline in our share price. We also use other measures to reduce the likelihood of the share
price decreasing. This risk cannot, however, be eliminated.
For the year ending May 31, 2008, the Fund projects a lower return than the 7.1% achieved in 2007 and less than the 6.0% and 5.0%
respectively posted in the previous two years. This decrease will primarily stem from anticipated lower stock market returns. The return
of our private securities may also be lower than last year due to higher interest rates, a stronger Canadian dollar in relation to the
U.S. dollar, a slowdown in North American economic growth and the effects of foreign competition. The fund is targeting a ratio of
operating expenses (before income and capital taxes) to average net assets of 1.4% for 2008, which is similar to the ratio for the year
ended May 31, 2007.
If we add to expected earnings the expected share issue of $534 million 10 and substract the estimated $465 million in redemptions, net
assets should increase from $7.2 billion as at May 31, 2007 to about $7.5 billion as at May 31, 2008. On the other hand, investments
by the Fund could be lower than the $668 million recorded in 2006-2007 and the $643 million recorded in 2005-2006.
In the longer term, based on the anticipated financial and economic outlook, and considering our mission and investment strategies, we
are projecting an average annual return around 4% for the next few years. This return does not take into account the tax credits granted
to shareholders for purchasing shares of the Fund.
60% RULE
The 60% rule set out in the Fund’s incorporating act stipulates that the Fund’s average unsecured investments in qualified business
enterprises must represent at least 60% of its average net assets of the previous fiscal year. The remaining assets may be invested
in other financial vehicles for asset diversification and sound management purposes. The calculation method for this rule is based
on the value of the Fund’s assets, which depends in part on interest rate fluctuations and on the performance of the stock market
and the economy in general.
9.The outlook presented in this annual report reflects the Fund’s expectations with respect to future events, based on information available to the Fund as of June 21, 2007, and
presupposes certain risks, uncertainties and assumptions. Many factors, several of which are beyond our control, may cause the Fund’s actual results, performance, or achievements
to differ materially from explicit or implicit expected future results, performance or achievements.
10.This amount is limited based on the rules governing the 60% rule.
26
2007 ANNUAL REPORT
As at May 31, 2007, the value of our average qualified investments amounted to $3,445 million or 55.5% of average net assets of the
previous year (compared to 53.2% as at May 31, 2006). The improvement recorded this year is in large part attributable to the full
effect on the ratio of the increase in qualified investments recorded in 2005-2006. Qualified investments increased by $602 million
in 2006-2007 to reach $3,746 million as at May 31, 2007.
Given that the 60% threshold was not reached, the Fund will have to limit the shares it will issue in 2007-2008 through lump-sum
contributions and new payroll deduction enrolments to 75% of the value of the shares issued in 2006-2007 for these contributions.
For fiscal 2007-2008, the total value of shares giving rise to tax credits issued should be approximately $534 million. The Fund does not
expect to reach the 60% threshold by May 31, 2008 but continues to target it in the medium term.
VISION AND PRIORITIES
At the outset of the 2006-2007 fiscal year, we identified three priorities at the heart of our operations: maintaining our profitability,
meeting our market challenges and mobilizing and communicating. The following section summarizes the main actions we have taken
over the year for each priority.
M a in ta inin g Our Pro fitability
With record net earnings of $475 million, the 2006-2007 year saw the Fund earn a return of 7.1%, which is better than both the
performance we forecasted for the year and the projected long-term average annual return. Favourable stock market conditions, a very
strong performance of the private securities portfolio and constant monitoring of operating expenses all played an important role in
achieving this result and are a testimony to the success of the strategies implemented over the last few years and to the combined efforts
of all the activity sectors of the Fund.
With the objective of optimizing the risk-return profile of the Fund’s financial assets, toward the end of last year we began building a
portfolio of high-revenue securities, which represented 2% of the Fund’s total financial assets as at May 31, 2007. This portfolio is made up
of preferred shares, high-dividend shares, and income trust units and was created in the wake of a strategy of diversification of the Fund’s
financial assets that should continue over the next year.
M e e tin g O u r M arket Challe n ges
The Fund’s market challenges mainly revolve around the Shareholder Services and Investments sectors.
In the Shareholders sector, we continued our efforts to improve growth of systematic savings, and we carried out activities to recruit new
shareholders by encouraging payroll deduction in the workplace. Thanks to the remarkable work of our LR network, we achieved
unparalleled results by collecting $427 million in systematic savings. We also continued our proposed activities developed in our last fiscal
year to follow up on terminated payroll deductions, in particular with a personalized mailing encouraging shareholders to begin payroll
deductions once again. This strategy was successful since nearly one shareholder out of four began payroll deductions again as a result
of our mailing.
One of the main projects of this year was definitely the complete review of the shareholder files in order to create informational and
promotional tools for systematic savings that are highly personalized and targeted to the regions. This was a first in personalization
technology in North America. This new file now allows us to group three mailings into one. Since last spring, we also offer an all-new
transactional website that allows our shareholders to begin or modify a payroll deduction or a preauthorized withdrawal to buy Fund shares.
In the Investments sector, the 2006-2007 year presented a new record as the Fund invested $668 million in the Québec economy.
This remarkable amount clearly shows the leadership position the Fund occupies in Québec’s development capital market and the
structuring role it plays in the economy. The amount invested helped improve our position regarding the 60% rule as the ratio increased
to 55.5% as at May 31, 2007 from 53.2% last year. This performance marks a milestone that should lead the Fund to improve the ratio
next year.
More than a simple investor, the Fund is establishing itself more and more as a value-added partner that puts its human capital at
the service of companies. Developing this human capital was again at the heart of our priorities this year and we are convinced
that it is a competitive advantage that is increasingly recognized in the marketplace. To that effect, each of the multidisciplinary teams
prepared an action plan targeting to increase their efficiency even further and take maximum advantage of the synergy of all team
members’ skills. We also continued to market our flexible and adaptable financial products such as the Trademark Loan and the
Productivity Loan.
2007 ANNUAL REPORT
27
Mob i l i z in g an d Commu nicating
Since our personnel and the network of local representatives (LR) represent our greatest asset in achieving our mission, their
mobilization and development are continuous concerns. To strengthen an internal culture of development, we have implemented different
activities such as training for all our multidisciplinary teams working on investment files and the continuation of two co-development
groups for our management. We agreed to put together development plans focused on customer service for technical and office staff.
We carried out several internal communication activities such as holding a conference for all employees to perfect their knowledge of
the intricacies of our organization and have a full understanding of the issues we face. We launched an employee service recognition
program and numerous articles spotlighting particularly impressive employee achievements were issued internally.
To support and maintain our LR network we developed a three-year strategic plan centered on three main objectives: encouraging
the recognition of LRs in their community; training and adequately briefing the LRs; and supporting them, listening to them, and giving
them feedback, all in the context of continuously improving the critical role they play in their workplace. An all-new training approach
was also started during the annual regional tour of our network and was a tremendous success.
As for external matters, we were involved in various ways with federal and provincial government authorities as well as different civic
and economic players to solidify the crucial role the Fund plays in Québec’s economic development. As a member of the Québec Venture
Capital Association and the Canadian Venture Capital Association, we also strengthened our ties with other key venture capital players
with the aim of directly contributing to the prosperity of this industry in Québec.
T h e Vi s ion
The Fund is driven by a vision: place priority on creating and maintaining jobs as well as generating a return for our shareholders by becoming
the partner of choice for companies impacting the Québec economy.
To create an internal image, we summarized this text into an expression that carries the message of the vision, Partner Vision:
• Partner with our employees to achieve a common goal;
• Partner with Québec SMEs as an accompanier in growth;
• Partner with our shareholders to encourage retirement savings and provide a reasonable return;
• Partner with governments and Québec society to create wealth for Québec;
• Partner with LRs and the QFL structure so the Fund remains an indispensable institution in Québec’s economic development.
As planned, the six committees created in May 2006 to refine the different action plans that materialize our vision submitted their
recommendations last December. The following is an overview of the main recommendations made by the committees, which were
endorsed by the Fund’s Management Committee and its Board of Directors for implementation over the next few years.
Be internal partners and focused on the client
An inclusive partnership definition for all staff was adopted. All employees will receive training on behaviours leading to becoming
better internal partners. Structured, quality service initiatives will be gradually implemented in all sectors of the Fund.
Emphasize employee development
Several benchmark studies have been performed to identify best practices in employee recognition, performance evaluation
and skills development. We will pursue this work to find clear paths toward improving development.
Leverage our investment markets
The committee’s discussions centered on developing the Fund’s SME products and services as well as increasing the value of
the companies in our portfolio. The committee identified a certain number of products and services that will be reviewed or created,
as well as approaches aimed at improving our ability to be even more active partners in the development of the companies in which
we invest and thereby increase their value.
Actions aiming to create a more efficient synergy between the Regional Funds and the Funds were identified. The committee also
agreed on ways to more efficiently collaborate with our networks, such as our business people network, as well as effective ways
to fully profit from our investment rules with respect to large companies.
The spectacular rise of emerging countries presents substantial challenges to Québec SMEs, particularly to those in the
manufacturing sector. Like other economic and social players, the Fund continues to accompany those affected and will continue
to reflect on the situation to figure out how to help them meet the challenges and increase their productivity and competitiveness.
Simplify our ways of doing things and increase their efficiency
Committees will be launched on a rotational basis to improve our way of doing things in each sector to keep our processes as efficient
as possible. A common centralized repository of information will be created aiming at having, on a timely basis and in a reliable
manner, the necessary management information required to make efficient and optimal decisions.
28
2007 ANNUAL REPORT
Efficiently communicate internally and externally
The committee recommended completing the branding exercise launched last year. This work was taken up again recently with the aim
of endowing the Fund and its network with a strong and clear corporate identity. Afterwards, a decisional table will take up the role
of promoting the corporate identity across the organization.
Strengthen and coordinate the Fund’s business intelligence activities
We will gradually implement an even more structured business intelligence program that will specifically focus on the trends and
developments in our industry and identify risks and opportunities.
In summary, these six Vision committees made up of members of management and employees of the Fund performed some remarkable
work during the year that will certainly impact the Fund’s growth over the next few years. They have clearly identified the direction we
should take to assert and strengthen the key role we play in Québec’s economy.
RISK MANAGEMENT
Sound risk management practices are vital to the success of the Fund. We manage our risk within a framework taking into account the
nature of the Fund’s activities and the level of risk we can reasonably assume in light of the desired risk/return ratio and shareholder
expectations. To this end, a structured risk management process is used to determine, measure and control the substantial risks with
which the Fund must contend.
Our financial assets are managed in an integrated, comprehensive manner. Our aim is to optimize the risk/return ratio while
respecting the Fund’s mission and enabling our shareholders to achieve their goals of expected reasonable return.
Our risk management approach did not change materially during the year ended May 31, 2007. In the normal course of business,
the Fund is exposed to different risks; the main ones are presented below.
M a r k e t Ri s k
Market risk is inherent to the Fund’s participation in financial markets and represents the risk of losses arising from fluctuations
in interest rates, exchange rates and stock prices. More specifically, this risk varies with the financial markets’ conditions and relates
to the potential negative effects of market conditions on the organization’s balance sheet or income statement as well as variations in
market parameters, such as volatility, that may lower the value of its financial assets, which are sensitive to fluctuations in bond interest
rates and listed stock prices. Since most of its transactions are in Canadian dollars, the Fund’s exposure to exchange risk is relatively
low. However, hedging mechanisms are used for our other investments booked in a foreign currency.
The Fund manages market risk by allocating its financial assets across several classes (money market, bonds, income trusts, preferred
shares, equity stakes in private companies, listed shares, funds of hedge funds, etc.) and by diversifying the industries (life sciences,
financial services, industrial goods and services, etc.) and geographic areas, within the limits allowed by its incorporation act, in which
it invests.
The overall financial assets management policy sets limits, procedures and controls that ensure the target risk/return profile is met on
an operational basis. Sensitivity analyses and simulations are used to inform senior management of our level of market risk exposure.
Sensitivity of the Fund’s return to market risk
(Based on net assets as at May 31)
(%)
2007 2006
1% increase in bond interest rates*
1% decrease in bond interest rates*
10% increase in the stock market
10% decrease in the stock market
(1.2)
1.2
2.7
(2.7)
(0.9)
0.9
2.6
(2.6)
* At the end of 2004, the Fund implemented a hedging strategy using derivatives to reduce the sensitivity of the Fund’s return to rising interest rates.
On average, our hedging strategy brought us to hedge $1.3 billion of bonds during the year against the consequences of an interest rate
hike in 2006-2007. Given the interest rate’s increase in the second half of the fiscal year, the hedging strategy implemented was fruitful,
allowing us to reduce the impact of the depreciation of the bond portfolio caused by this increase.
2007 ANNUAL REPORT
29
C r e di t a n d Co unter party Risk
The Fund’s exposure to credit risk stems mainly from development capital activities associated with its mission. Its other investment
activities entail less of this risk since the counterparties concerned are typically more financially solid (governments, banks, etc.).
Credit risk is the potential for loss due to the failure of a partner company, issuer or counterparty to honour its financial obligations
or due to a degradation of its financial position. The Fund manages this risk and maintains a sound diversification of its assets through
its overall financial assets management policy, which sets guidelines and limits by asset class. This policy also allows us to manage
the concentration risk associated with exposure to an issuer or group of issuers with common characteristics (regions, industries,
credit ratings).
Sector-based targets are set each year for the investment sector. These targets are set according to risk budgets. Based on an optimal
risk level defined for the entire investment portfolio, management by risk budget will allow us to more effectively monitor and control the
portfolio profile and sector allocation by risk level. The investment portfolio’s risk-return balance is thus achieved through sector-based
allocation of risk budgets in order to offset the high risk of our investments in certain sectors.
A few years ago, the Executive Vice-President, Investments, formed multidisciplinary teams and a due diligence committee to ensure an
acceptable level of credit risk for the Fund. The Fund acquired special tools to calculate the probability of default by our debt-financed
partners, thus improving our ability to assess credit risk for these instruments. Moreover, to deal with more difficult situations,
the Senior Vice-President, Turnaround Management and Special Projects, works with the Vice-President, Legal Affairs, to keep a close
eye on files that entail greater credit risk.
In the case of the other investments portfolio, our assets are carefully diversified following strict criteria pertaining to issuer
and counterparty credit ratings and exposure limits by borrower or counterparty, thus ensuring that our results will not be materially
affected in the event of a default.
Exposure to credit and counterparty risk
(as a percentage of net assets as at May 31)
2007 2006
Weight of the five largest investments
Weight of the five largest issuers or counterparties (other investments) 10.8
27.4*
11.1
26.7*
* Of this percentage, the governments of Québec and Canada represented 20.1% and 22.6% as at May 31, 2007 and 2006, respectively.
Li q ui di t y Ris K
The Fund must honour certain disbursements on a daily basis, mainly when shareholders redeem their Class A shares or when the
Fund invests in companies. The Fund must be able to obtain the cash and cash equivalents required to meet its commitments. Liquidity
risk is therefore tied to the possibility of incurring a loss if the Fund cannot meet its obligations as they fall due.
The Fund’s incorporating act stipulates that part of the financial assets may be invested in publicly-traded securities that are easily
convertible into cash. The Fund also has access to bank credit facilities for additional sources of liquidity.
As at May 31, 2007, the ratio of liquid financial assets as a percentage of aggregate financial assets was 62.5% (64.0% as at
May 31, 2006), demonstrating that the Fund has the required liquidity to fulfill all its obligations.
O p e r at iona l Risk
Inherent to all the Fund’s activities, operational risk is the risk of sustaining losses as a result of the inadequacy or failure of certain
processes or systems in place or due to human factors or external events. This risk also includes legal risk.
30
2007 ANNUAL REPORT
Effective policies, standards and procedures help us manage this risk. Control principles and mechanisms are continuously monitored
and periodically revised with the purpose of continuous improvement. The Fund’s operational risk management and the effectiveness of
its management framework are underpinned by the following guiding principles:
• Competent, well-trained staff;
• A culture of integrity;
• Segregation of incompatible duties and delegation of decision-making authority;
• Control of technology development and information security;
• A planning process for resumption of activities in the event of business interruption;
• Monitoring of changes in legislation, regulations and standards as well as our compliance in this regard;
• Risk identification and assessment when new products and activities are introduced.
To diversify its financial assets management, the Fund also calls upon the services of specialized external managers and acquires equity
stakes in specialty funds. Where appropriate, the Fund purchases insurance that transfers certain components of operational
risk to insurers.
Ot h e r Ri s k s
The Fund is also exposed to other risks such as reputation and strategic risks, which could result in unfavourable financial
consequences.
Reputation risk is the risk that negative publicity, whether founded or unfounded, will or may cause financial losses, a decrease in
liquidity or a decline in the customer base. In order to mitigate reputation risk, the Fund has formulated and implemented a Code
of Ethics and Conduct for its directors, officers and employees. It also ensures its employees are properly trained, and applies sound
governance practices, policies and procedures. The Fund is a responsible corporate citizen that takes ethical, social and environmental
aspects into consideration when making investment decisions. We have also adopted a voting rights policy with regards to partner
companies and a code of conduct for international business dealings. The Fund also ensures that any financial information released
outside the organization is accurate and validated beforehand.
Strategic risk, which includes competitive risk and risk associated with regulatory changes, refers to the possibility of incurring losses
as a result of ineffective strategies, lack of integrated business strategies or the inability to adapt the strategies to changes in the
business environment. We manage this risk through a strategic and operational planning process that seeks input from all levels of
the organization before being submitted to the Board of Directors for approval. The Management Committee then periodically monitors
each sector’s business plan. Any strategic decision or change to the Fund’s orientations that could have a material impact is authorized
beforehand by the appropriate authorities.
GOVERNANCE
Ri s k Gov e r na nce
Because risk management is an essential part of overall financial assets management, the Fund has put in place a management
framework to ensure that risk management and control strategies and resulting operational decisions take the established level of
acceptable risk into account.
BOARD OF DIRECTORS
AUDIT
COMMIT TEE
SHAREHOLDER EXPECTATIONS
IN TERMS OF RETURN
AND VOLATILITY
FINANCIAL ASSETS
MANAGEMENT COMMIT TEE
ETHICS
COMMIT TEE
OVERALL FINANCIAL
ASSETS MANAGEMENT
DELEGATE
BOARDS
RISKS INHERENT TO THE
FUND’S ACTIVITIES AS A RESULT
OF ITS MISSION
OVERALL FINANCIAL ASSETS
MANAGEMENT POLICY,
PROCEDURES, STANDARDS, ETC.
2007 ANNUAL REPORT
31
Our risk governance structure comprises a series of policies approved by the Board of Directors. Policies, standards and procedures are
regularly reassessed to ensure that we rely on only the best possible practices. It should be noted that the functions of Chairman of the
Board and President and CEO are separate.
The overall financial assets management policy defines a target allocation of financial assets. It is a key policy that allows the Fund
to fulfill its mission while meeting its desired risk/return ratio through a sound investment mix. This policy also provides limits within
which our managers and professionals perform their duties and carry out their mandates.
The Fund’s Board of Directors is responsible for making investment decisions and for adopting risk management policies. To this end,
it delegates part of its responsibilities to the following committees:
Audit Committee
Comprised entirely of independent members, the Audit Committee recommends approval of the audited financial statements by the
Board of Directors, reviews internal controls, the compliance process and risk management, and provides feedback. It ensures the
Fund’s compliance with the statutes, regulations and agreements that govern its operations and that have a material financial impact.
Financial Assets Management Committee
The Financial Assets Management Committee is responsible for implementing and ensuring compliance with the overall financial assets
management policy. Its primary mandate is to coordinate and oversee asset management. In this capacity, it recommends the financial
vision and orientation for financial assets management to the Board of Directors. This committee also monitors performance and
changes in the risk/return ratio.
Ethics Committee
The Ethics Committee oversees the application of the Fund’s Code of Ethics, which defines, among other things, rules of conduct for
employees, officers, and directors to prevent, for example, conflicts of interest. The Code prohibits the use of any advantage, information
or interest in relation to the Fund that would be incompatible with that person’s duties and responsibilities.
Delegate Boards
In addition to the Board of Directors, investment decisions are entrusted to delegate boards such as the Executive Committee and the
Mining Portfolio Steering Committee, and special boards created for the Turnaround and Technology Investments sectors.
Fina n c i a l Gover nan ce
The Fund continued its work over the last fiscal year aiming to develop a financial compliance program. While not required to apply
MI 52-109 issued by the Canadian Securities Administrators, the Fund has decided to base its work upon the principles contained in this
rule, thereby demonstrating its willingness to respect best practices in financial governance. This framework applies to controls
providing reasonable assurance that the financial information prepared and reported is reliable and that the financial statements are
prepared in accordance with Canadian Generally Accepted Accounting Principles.
During the year the Fund completed documenting its processes and controls with respect to its overall control environment and the
preparation and reporting of its financial information, including information technology controls. The evaluation of the design of these
controls as well as the related validation will be completed over the next year. In 2008-2009 this work will be continued to evaluate the
effectiveness of these controls aiming to conform to the principles set out in MI 52-109.
32
2007 ANNUAL REPORT
FINANCIAL
STAT E M E NTS
M A N AG E M E NT’S RE PORT
The financial statements of the Fonds de solidarité des travailleurs du Québec (F.T.Q.) and the other financial information in this annual
report are the responsibility of the Board of Directors, which has delegated the responsibility of their preparation to management.
The Board of Directors carries out its responsibility for financial statements through the Audit Committee, made up of outside,
unrelated directors. The auditors mandated by shareholders have unrestricted access to the Audit Committee, with or without
management’s presence.
To fulfill its responsibility about the accuracy and reliability of the financial information, management has a system of internal controls
to provide assurance the financial information is reliable, form a proper basis for preparing the financial statements, and the Fund’s
assets are properly accounted for and safeguarded.
These financial statements, audited by Samson Bélair/Deloitte & Touche s.e.n.c.r.l., Chartered accountants, and Raymond Chabot Grant
Thornton LLP, present the financial information available as at June 21, 2007, and have been prepared in accordance with Canadian
generally accepted accounting principles.
The financial information presented elsewhere in this annual report conforms with the Fund’s financial statements, which have been
approved by the Board of Directors.
Executive Vice-President, Finance
Michel Pontbriand, CA
Montréal, June 21, 2007
Auditors’ Re port
To the Shareholders of the
Fonds de solidarité des travailleurs du Québec (F.T.Q.)
We have audited the balance sheets of the Fonds de solidarité des travailleurs du Québec (F.T.Q.) as at May 31, 2007 and 2006, and the
statements of earnings, changes in net assets and cash flows for the years then ended. These financial statements are the responsibility
of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at May 31, 2007
and 2006, and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted
accounting principles.
Samson Bélair/Deloitte & Touche s.e.n.c.r.l.
Chartered accountants
Raymond Chabot Grant Thornton LLP
2007 ANNUAL REPORT
33
Balance Sheets
As at May 31
2007
$
2006
$
(In thousands, except net value per share)
Assets
Investments (Note 4)
Other investments (Note 5)
Accounts receivable and other assets
Cash
Capital assets (Note 7)
Future income taxes (Note 12)
3,056,834
4,476,784
360,895
9,408
65,282
720
7,969,923
2,693,705
4,175,267
160,342
6,081
68,798
9,345
7,113,538
Liabilities
Loans (Note 8)
Accounts payable
Income taxes
Future income taxes (Note 12)
Net assets
361,423
347,546
21,166
740
730,875
7,239,048
325,907
158,002
22,547
—
506,456
6,607,082
Number of outstanding Class A shares
284,628 277,466
Net value per Class A share
25.36 23.74
Contingencies (Note 10)
The accompanying notes form an integral part of these financial statements.
On behalf of the Board of Directors,
Yvon Bolduc, DirectorHenri Massé, Director
34
2007 ANNUAL REPORT
(Restated – Note 3b)
Statements of E arnings
For the years ended May 31
(In thousands, except earnings per share)
Revenues
Realized revenues
Interest (Note 11)
Dividends
Gain on investments and other investments
Change in unrealized appreciation or depreciation
Operating expenses (Note 11)
Corporate expenses
Investment and other investment expenses
Shareholder development and administration and economic training expenses
Capital tax
Amortization of information systems development and other capital assets
Earnings before income taxes
Income taxes (Note 12)
Net earnings
2007
$
197,800
49,706
171,922
169,445
588,873
2006
$
189,121
42,190
11,153
220,878
463,342
30,579 27,238 26,793
26,802
30,919 4,096 29,106
4,782
6,046 98,878 6,968
94,451
489,995 14,950 475,045 368,891
2,436
366,455
Weighted average number of Class A shares
282,335 271,462
Earnings per Class A share
1.68 1.35
2007 ANNUAL REPORT
35
Statements of C hanges in Net Assets
(In thousands)
2007
Balance at beginning of year,
as reported
Change in accounting policy (Note 3a)
Change in accounting policy (Note 3b)
Balance at beginning of year,
as restated
Share issues
Net change in share subscriptions
Realized net earnings
Share redemptions
Transfers (Note 9)
Balance at end of year
2006
Balance at beginning of year, as reported
Change in accounting policy (Note 3b)
Balance at beginning of year, as restated
Share issues
Share subscriptions
Realized net earnings
Share redemptions
Transfers (Note 9)
Share
Capital
Contributed
Surplus
(Note 9)
(Note 9)
$
$
2007 ANNUAL REPORT
Unrealized
$
Realized
$
Net Assets
Total
$
$
104,091
6,065,763
368,883
12,093
68,345
(11,483)
(12,093)
172,436
(11,483)
—
6,607,082
(11,483)
—
116,184
44,769
160,953
6,595,599
570,695
43
305,600
305,600
570,695
43
305,600
6,065,763
368,883
169,445
(35,974)
(366,360)
100,000
(100,000)
285,810
214,214
6,370,141
368,883
169,445
(35,974)
(100,000)
500,024
169,445
(402,334)
—
7,239,048
5,681,841 5,681,841 368,883 368,883 60,475 8,630 69,105 (155,996) (8,630) (164,626) (95,521) — (95,521) 5,955,203
—
5,955,203
613,805 346 145,577 145,577 613,805
346
145,577
(310,229)
80,000
6,065,763
368,883
36
Retained Earnings (Deficit)
(18,498)
(80,000)
116,184
220,878
56,252
220,878
(18,498)
(80,000)
172,436
220,878
(328,727)
—
6,607,082
Statements of C ash F lows
2006
$
(In thousands)
Operating activities
Cash inflows – investment and other income
Cash outflows – suppliers and compensation
Income taxes received (paid)
260,330
(83,668)
(12,768)
163,894
219,457
(87,246)
20,057
152,268
Financing activities
Loans
Loans repaid
Shares issued and subscribed
Shares redeemed
Cash flows from operating and financing activities
119,083
(99,174)
570,738
(400,033)
190,614
354,508
111,363
(120,362)
614,151
(324,437)
280,715
432,983
Investing activities
Acquisition of investments
Proceeds on disposal of investments
Acquisition of other investments
Proceeds on disposal of other investments
Information systems development
Other capital assets
Cash flows used in investing activities
Increase (decrease) in cash
(976,317) 790,218 (8,752,352) 8,589,800 (1,126) (1,404) (351,181) 3,327 (908,077)
623,258
(7,816,027)
7,668,033
(2,218)
(2,000)
(437,031)
(4,048)
Cash at beginning of year
Cash at end of year
2007
$
6,081 9,408 10,129
6,081
2007 ANNUAL REPORT
37
N otes to F inancial Statements
As at May 31, 2007 and 2006
1. I ncorporation Act
Statutes and Objectives of the Fund
The Fonds de solidarité des travailleurs du Québec (F.T.Q.) (the “Fund”), incorporated by an Act of the Québec National Assembly,
is a joint-stock company with the following objectives:
a) to invest in Québec business enterprises and provide them with services in order to create, maintain or protect jobs;
b) to invest in business enterprises whose activities outside Québec contribute to creating or maintaining jobs or economic activity
in Québec;
c) to promote the training of workers in economic matters to enable them to increase their influence on Québec’s economic
development;
d) to stimulate the Québec economy by making strategic investments that will be of benefit to Québec workers and business
enterprises;
e) to promote the development of Québec business enterprises by inviting workers to participate in that development by purchasing
the Fund’s shares.
To this end, the Fund endeavours to concentrate most of its investments in unsecured investments, mainly in small and mediumsized enterprises, granting priority to requests from enterprises whose workers are members of unions affiliated with the Québec
Federation of Labour (“Q.F.L.”) and developing sector-based strategies. As a general rule, the Fund will take a minority interest in
the projects in which it invests.
60% Rule
The Fund may invest in any business enterprise with or without security. However, in any given fiscal year, the proportion of
unsecured investments made in qualified business enterprises must represent an average of at least 60% of the Fund’s average
net assets of the previous year.
In 2007, this figure is 55.5% (53.2% in 2006).
Because the Fund did not satisfy the 60% rule as at May 31, 2007 and 2006, it must limit its share issues of the following fiscal year
to 75% of the total value of shares issued in the preceding year, except for shares acquired through payroll deduction and employer
contributions stipulated in agreements concluded at the end of the preceding period. For the year ending May 31, 2008, the 60% rule
limits the Fund’s share issues to approximately $534 million.
2 . S ignificant Accounting Policies
The Fund is an investment company as defined in Accounting Guideline AcG-18, Investment Companies and, as such, applies the
accounting principles stated therein.
Section 1530 requires companies to present comprehensive income. This financial statement is not provided since net earnings
and comprehensive income are the same.
Use of estimates
The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management
to make estimates and assumptions, in particular when determining allowances and the fair value of investments and other invest
ments, that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
Recognition of financial instruments
Financial instruments are recognized on the transaction date, and cost represents historical cost.
38
2007 ANNUAL REPORT
2 . S ignificant Accounting Policies (continued)
Measurement of financial instruments (see Note 3a)
All investments and other investments are measured at fair value, established as follows:
a) Unlisted financial instruments
Unlisted financial instruments consist of shares, partnership units, loans and advances, guarantees and suretyships, bonds and
money market securities. These instruments are valued using appropriate valuation techniques, including comparison to arm’slength transactions or takeover bids and the capitalization or discounting of cash flows. Units of funds of hedged funds are valued
at the value set by their respective managers at the date closest to the Fund’s year-end.
b) Listed financial instruments
Listed financial instruments consist of shares, partnership units and bonds. These instruments are valued at bid price at the close
of trading. In exceptional instances, when this price does not adequately reflect the fair value of an instrument, these securities
are then valued using appropriate valuation techniques, including the techniques used for unlisted financial instruments.
c) Derivative financial instruments
As part of its investment and other investment activities, the Fund uses a number of derivative financial instruments mainly to
hedge its exposure to interest, foreign exchange and market fluctuations. Derivative financial instruments authorized under the
overall financial asset management policy are:
– put or call options;
– swap agreements;
– futures contracts.
These derivative financial instruments are valued using appropriate valuation techniques, including option pricing models using
in particular the bid price for assets and the ask price for liabilities at the close of trading.
All other financial assets and liabilities are also measured at fair value.
Securities loans
To generate additional income, the Fund carries out securities loan transactions on its portfolio of short-term securities, stocks
and bonds. This income is recorded under Fees and other income in Note 11.
Capital assets
Capital assets are stated at cost and are amortized over their estimated useful life using the following methods and annual rates:
Methods
Buildings
Office furniture and equipment
Computer hardware and software
straight-line
diminishing balance
straight-line
straight-line
Rates
%
2.5
20.0
25.0
33.3
Capital assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may
not be recoverable. An impairment loss is recorded when their carrying amount exceeds the undiscounted cash flows that would
result from their use and eventual disposition. The recognized impairment loss is measured as the amount by which the carrying
amount of the asset exceeds its fair value.
Revenue recognition
Dividends
Dividends are recorded as income when they are declared, except for cumulative dividends which are recorded on an accrual basis.
2007 ANNUAL REPORT
39
N otes to F inancial Statements ( c o n t i n u e d )
As at May 31, 2007 and 2006
2 . S ignificant Accounting Policies (continued)
Revenue recognition (continued)
Gains and losses on investments and other investments
Gains and losses on disposals of investments and other investments, including derivative financial instruments, are recorded at the
time of sale and included in Gain on investments and other investments. The amount is the difference between the proceeds from the
sale and the average cost, without considering the unrealized appreciation or depreciation recorded in prior years, which is reversed
and taken into account under Change in unrealized appreciation or depreciation.
Income taxes
The Fund uses the asset and liability method of accounting for income taxes. Under this method, future income taxes are recognized
based on the expected future tax consequences of differences between the carrying amounts of balance sheet items and their tax
bases, using the enacted or substantively enacted income tax rates for the years in which the differences are expected to reverse.
Foreign currency translation
Monetary assets and liabilities and assets and liabilities measured at fair value are translated into Canadian dollars at the year-end
exchange rate. Revenues and expenses denominated in foreign currencies are translated at the exchange rate prevailing at the
transaction date. Foreign exchange gains and losses are recognized in the Statement of Earnings.
Employee future benefits
The cost of pensions and other retirement benefits earned by employees is actuarially determined using the projected benefit
method prorated on service and management’s best estimate of expected return on plan assets, salary escalation and retirement
ages of employees.
For the purposes of calculating the expected return on plan assets, those assets are valued at fair value.
Net actuarial gains or losses which are greater than 10% of the accrued benefit obligation or the fair value of the plan assets,
whichever is higher, are amortized over the average remaining service period of active employees. The average remaining service
period of covered active employees is between 10 and 14.5 years for 2007 and 2006.
The transitional obligation of the individual insurance plan is amortized using the straight-line method over the average remaining
service period of active employees.
3. C hanges in Accounting Policies
a) Financial instruments
On June 1, 2006, the Fund early adopted and retroactively applied, without restatement of prior period financial statements,
CICA Handbook Section 3855, Financial Instruments – Recognition and Measurement. Since the Fund is an investment company,
the changes in accounting policies arising from the application of this section apply only to some items.
Under Section 3855, listed financial instruments and derivative instruments, if any, are measured at fair value, as defined by
the bid price for assets and the ask price for liabilities at the close of trading. Prior to the introduction of this standard, these
instruments were measured based on their closing price. As at June 1, 2006, the impact of this change was a reduction of
$5.8 million in Investments and $5.7 million in Other investments.
These adjustments, totalling $11.5 million, were recorded as an adjustment to the opening balance of Unrealized Retained Earnings.
This change had no material impact on net earnings and earnings per share for the year, nor on net value per share as at
May 31, 2007.
b) Investment companies
The Fund early adopted the amendment of AcG-18, Investment Companies, published in March 2007. This amendment changes
the criteria for identifying interests in investment companies that must be consolidated. As a result of this amendment, the Fund’s
interests in investment companies are measured and presented at fair value and are no longer consolidated.
40
2007 ANNUAL REPORT
3. C hanges in Accounting Policies (continued)
b) Investment companies (continued)
The comparative figures for the year ended May 31, 2006 were restated for consistency purposes. The restatement had the
following impact: Investments increased by $263 million, Loans increased by $255 million, and Non-controlling interests of
$11 million were eliminated. Other assets and liabilities decreased by a net amount of $19 million. Revenues and expenses,
including non-controlling interests, each decreased by $14.5 million.
As at June 1, 2005 and 2006, the restatement resulted in the reclassification of $8.6 million and $12.1 million, respectively, from
unrealized retained earnings to realized retained earnings.
This change had no impact on net earnings and earnings per share for the years ended May 31, 2007 and 2006, nor on net value
per share as at May 31, 2007 and 2006.
4 . I n vestments
(In thousands)
Unsecured
Listed shares and units
Unlisted shares and units
Loans and advances
Secured
Loans and advances
Derivative financial instruments
614,715
1,457,019
826,251
847,426 1,413,497 776,137 589,076 1,497,330 647,889 806,965
1,262,492
601,314
26,641
2,924,626
—
2,924,626
13,624
3,050,684
6,150
3,056,834
33,027
2,767,322
—
2,767,322
13,551
2,684,322
9,383
2,693,705
2007
Cost
$
2006 (Restated – Note 3b)
Fair
value
Cost
$
$
Fair
value
$
Investments include securities denominated in foreign currencies, mainly the U.S. dollar, with a fair value of $209.8 million
($160.2 million in 2006).
Investment agreements may include clauses providing for conversion and redemption options.
Interest rate risk
Loans and Advances at Fair Value
Maturity
(In thousands)
2007
Unsecured
Average effective rate
Secured
Unsecured
Secured
Variable Rates
$
Fixed Rates
Less than
1 year
$
1 to
5 years
$
Total
5 years and more
$
$
1,281
6.3%
260,003
1.8%
132,073
9.5%
382,780
9.0%
776,137
2,252
7.9%
5,850
10.9%
4,827
11.2%
695
8.0%
13,624
1,479 4.0%
226,388 1.8%
169,708 8.6%
203,739 8.1%
601,314
2,245 7.7%
4,760 14.0%
4,547 10.6%
1,999 10.1%
13,551
2007 ANNUAL REPORT
41
As at May 31, 2007 and 2006
4 . I n vestments (continued)
Maturity
(In thousands)
Less than
6 months
$
6 months
and more
$
Total
$
2007
Fair value1
Stock option contracts
Written call options
Purchased put options
Written put options
Bond futures
(8,084)
(10,160)
36
1,344
(6)
(347)
4,770
(3,284)
(9,163)
Notional amount
Written put options
Bond futures
33,939
58,633
30,733
53,080
25,575
43,260
100,000
Fair value1
Written put options
Bond option contracts
Written put options
Notional amount
Written put options
Written put options
(472) 462 1,068 (894)
3,815
(381)
3,598
(18,244)
1,380
(353)
4,770
(12,447)
92,572
83,813
68,835
100,000
(2,020) 3,497 (1,305) (2,492)
3,959
(237)
172
(894)
3,815
(381)
3,770
23,953 19,911 20,646 21,131 17,912 13,750 45,084
37,823
34,396
100,000 100,000 100,000 100,000
100,000
100,000
1. The net fair value of derivative financial instruments is $–12.4 million ($3.8 million in 2006). The fair value of instruments with positive values is $6.2 million ($9.4 million
in 2006) and is included in Investments, whereas the fair value of those with negative values is $18.6 million ($5.6 million in 2006) and is included in Accounts payable.
42
2007 ANNUAL REPORT
4 . I n vestments (continued)
Breakdown of investments by industry segment and maximum risk
Industry Segment
Regional or
Manufacturing
Services local and real
Technology and primary and tourism estate funds
(In thousands)
$
$
$
$
2007
Investments at cost
Unrealized appreciation (depreciation)
Fair value
Allocation of investments made by the regional or local funds
Funds committed but not disbursed1
Guarantees and suretyships2
Maximum risk
Investments at cost
Unrealized appreciation (depreciation)
Fair value
Allocation of investments made by the regional or local funds
Funds committed but not disbursed1
Guarantees and suretyships2
Maximum risk
Total
$
803,456
(208,623)
594,833
576,375
(49,230)
527,145
925,301
310,350
1,235,651
619,494
79,711
699,205
2,924,626
132,208
3,056,834
8,062
257,440
860,335
56,728
144,819
5,673
734,365
36,667
197,743
1,500
1,471,561
(101,457)
56,427
21,500
675,675
—
656,429
28,673
3,741,936
736,903 (110,727) 626,176 535,494 (190,496) 344,998 904,251 162,949 1,067,200 590,674 64,657 655,331 9,576
280,164
915,916
58,413
103,071
8,678
515,160
32,707
178,635
300
1,278,842
(100,696)
50,692
27,271
632,598
2,767,322
(73,617)
2,693,705
—
612,562
36,249
3,342,516
1. Funds committed but not disbursed represent investments that have already been agreed to and for which amounts have been committed by the Fund but have not
been disbursed as at year-end.
2. Under Section 17 of its Incorporation Act, when the Fund makes an investment in the form of a guarantee or a suretyship, it must establish and maintain a reserve
equal to at least 50% of the guarantee or suretyship amount for the term thereof. This reserve has been established from Other investments.
The Fund granted guarantees and suretyships that do not generally include a specific maturity and that are irrevocable commitments
by the Fund to make the payments of partner companies that cannot meet their obligations to third parties for an undiscounted total
maximum amount and for the following purposes:
(In thousands)
Loans on real estate projects
Operating activities and operating lines of credit – without recourse
Maximum amount
2007
$
21,500 7,173 28,673 2006 ( Restated – Note 3b)
$
27,271
8,978
36,249
As at May 31, 2007, there was no unrealized depreciation related to guarantees and suretyships ($3.6 million in 2006, included
in Accounts payable).
As well, in the normal course of business, the Fund enters into various indemnification agreements, usually related to transfers of
investments for the representations and warrantees made as well as to the liability of the Fund’s directors, officers or representatives
toward partner companies. The latter liability is covered by liability insurance. Due to the nature of these agreements, it is impossible
to reasonably estimate the maximum amount that the Fund may have to pay to counterparties. In management’s opinion, it is highly
unlikely that these commitments will result in material additional expenses, taking into consideration the provisions recorded.
2007 ANNUAL REPORT
43
As at May 31, 2007 and 2006
5 . Other in vestments
(In thousands)
Shares and units
Units of funds of hedge funds
Bonds
Money market securities
2007
Cost
$
1,048,467
93,917
3,114,550
7,810
4,264,744
(984)
4,263,760
Fair
value
Cost
$
$
1,219,156
102,411
3,100,648
7,829
4,430,044
46,740
4,476,784
841,786
98,117
2,695,239
359,720
3,994,862
(3,174)
3,991,688
Fair
value
$
992,843
98,861
2,691,967
359,760
4,143,431
31,836
4,175,267
Other investments include securities denominated in foreign currencies, mainly the U.S. dollar, with a fair value of $636.3 million
($211.3 million in 2006).
Breakdown by maturity
Bonds
Maturity
(In thousands)
2007
Fair value
Cost
Par value
Average nominal rate
2006
Fair value
Cost
Par value
Average nominal rate
Less than
1 year
$
1 to
5 years
$
5 to
10 years
$
10 to
20 years
$
20 to
30 years
$
30 years
and more
$
560,520
567,155
558,245
1,124,392
1,139,283
1,113,804
764,701
776,162
754,042
206,795
204,421
190,256
384,842
369,011
338,558
59,398
58,518
54,118
4.3%
5.7%
4.5%
5.1%
4.8%
5.1%
5.3%
6.0%
5.6%
6.2%
5.1%
5.6%
248,749 249,612 248,264 1,135,932 1,149,552 1,115,216 686,513 698,512 646,249 260,022 256,343 202,727 327,693 308,358 287,225 33,058 32,862 29,768 2.8%
3.5%
5.4%
8.0%
5.9%
6.4%
5.3%
6.0%
Total
$
3,100,648
3,114,550
3,009,023
4.8%
5.4%
2,691,967
2,695,239
2,529,449
4.2%
5.0%
4.9%
5.9%
4.6%
5.5%
3,437
4.2%
3,474
3.9%
918
4.2%
7,829
4.1%
334,993 4.1%
23,799 4.3%
968 4.1%
359,760
4.1%
Money market securities
Maturity
(In thousands)
2007
Fair value
Fair value
44
2007 ANNUAL REPORT
Less than
1 month
$
1 to
6 months
$
6 months
and more
$
Total
$
5 . Other in vestments (continued)
Breakdown by maturity (continued)
Maturity
(In thousands)
2007
Fair value1
Bond futures
Stock index option contracts
Written put options
Stock index futures
Foreign exchange contracts
Notional amount
Bond futures
Written put options
Stock index futures
2006
Fair value1
Written put options
Bond futures
Stock index futures
Written put options
Notional amount
Written put options
Bond futures
Stock index futures
Written put options
Less than
1 month
$
1 to
6 months
$
—
2,899
2,899
6 months
and more
$
—
1,321
Total
$
(13)
35,498
(13)
36,819
(6,017)
(2,544)
815
443
(359)
(149)
(377)
101
(4,516)
33,235
(8,561)
1,258
(508)
(377)
3,000
31,618
40,627
79,601
(94)
(413)
2,708
(935)
1,063
1,409
(1,751)
6,347
(2,139)
9,325
(2,164)
9,055
(3,074)
10,294
1,409
2,351
(3,085)
1,417
2,662
3,251
(18)
3,814
11,782
2,351
(3,085)
1,417
2,644
18,847
503,041
100,000
100,000
200,000
100,000
25,000
1,030,000
200,000
600,000
1,150,000
1,130,000
300,000
800,000
1,753,041
25,000
75,000
75,000
75,000
426,806
149,204
75,000
75,000
75,000
576,010
15,000
485,735
150,000
945,000
165,000
1,430,735
55,500
27,750
48,125
24,375
42,500
21,250
25,000
563,010
83,250
72,500
63,750
65,627
642,611
1. The net value of derivative financial instruments is $31.6 million ($18.8 million in 2006). The fair value of instruments with positive values is $46.7 million ($31.8 million
in 2006) and is presented under Other investments, whereas those with negative values is $15.1 million ($13 million in 2006) and is included in Accounts payable.
2007 ANNUAL REPORT
45
As at May 31, 2007 and 2006
5 . Other in vestments (continued)
Derivative financial instruments (continued)
The notional amount represents the determined theoretical value of the underlying principal of a derivative, set only to serve as a
reference for the application of an exchange rate, interest rate, stock market price or market index value. The notional amount does
not reflect the credit or market risk inherent to the contracts. Credit risk stems from the possibility that the other party involved in
the transaction will not honour its commitments. The Fund reduces this risk by dealing only with institutions that have a solid credit
rating, such as defined in the overall financial asset management policy approved by the Fund’s Board of Directors. Market risk relates
to potential losses resulting from interest rate, foreign exchange and stock market fluctuations. The Fund manages that risk by using
derivative financial instruments only in order to preserve the value of assets, to facilitate changes in asset allocation, to manage a
portion of its portfolio through indexing, to facilitate portfolio management and to enhance its yield within the allowed risk limits.
Breakdown of fair value by industry segment
SharesMoney market
Bonds
securities
and units
$
$
$
(In thousands)
2007
Government and government agencies
Financial institutions
Technology
Manufacturing and primary
Services and tourism
38,640
110,773
781,286
390,868
1,321,567
Government and government agencies
Financial institutions
Technology
Manufacturing and primary
Services and tourism
216
776,967
314,521
1,091,704
Total
$
1,550,226
2,807
1,031,616
4,913
52,246
201,523
265,037
109
3,100,648
7,829
1,621,553
539,611
68,566
192,948
269,289
2,691,967
3,909
355,751
100
359,760
1,553,033
1,075,169
163,019
982,809
656,014
4,430,044
1,625,462
895,362
68,782
969,915
583,910
4,143,431
1. This breakdown does not take into account changes in asset breakdown resulting from derivative financial intruments.
6 . S ecurities loans
In the normal course of business, the Fund engages in securities lending in order to generate additional revenue. These loans are
secured by guarantees or assets equivalent to the minimum percentage prescribed by law or to a percentage that may vary according
to best practices. As at May 31, 2007, this percentage was between 102% and 115%, (between 102% and 105% in 2006), and the fair
value of the securities loaned was $379 million ($536 million in 2006).
46
2007 ANNUAL REPORT
7. C ap ital assets
Accumulated
amortization
$
Cost
$
(In thousands)
2007
Buildings
Buildings
66,767
16,213
7,361
17,307
107,648
66,767
15,844
7,178
16,181
105,970
Net book
value
$
8,416
12,918
4,832
16,200
42,366
6,609
11,462
4,623
14,478
37,172
58,351
3,295
2,529
1,107
65,282
60,158
4,382
2,555
1,703
68,798
The net book value of the portion of building held for rental amounts to $26.4 million ($27.1 million in 2006).
8 . Loans
Interest on loans is determined based on the rate of return of Other investments. These loans are renewable monthly and repayable
on demand. Consequently, the fair value of these loans from the specialty and regional funds corresponds to their book value. As at
May 31, 2007, the interest rate was 4.75% (4.5% in 2006).
In addition, the Fund has credit facilities amounting to $40.0 million ($40.0 million in 2006 (Note 3b)), bearing interest at prime and
renewable annually. As at May 31, 2007 and 2006 these facilities had not been used.
9. N et A ssets
Share capital
Authorized
Class A shares
Unlimited number of Class A shares to be issued in Series 1 and 2, without par value, voting, redeemable and non-transferable
unless approved by a resolution of the Board of Directors.
Class A shares, Series 1 and 2, can be exchanged for shares of another series and rank pari passu. However, Class A shares,
Series 1, may be issued only to an individual requesting their transfer to a trustee under a registered retirement savings plan.
Class G shares
Unlimited number of Class G shares, without par value, non-voting, without dividends, non-transferable and non-redeemable. In the
event of a deficit, Class G shareholders must assume in priority the deficit up to the amount of the consideration paid for such shares
and, in the event of a dissolution, liquidation or distribution of the Fund’s asset in whole or in part, these shares grant their holders
the right to be reimbursed after all Class A shareholders have been reimbursed.
Class B shares
Unlimited number of Class B shares, without par value, non-voting, non-participating, entitled to a preferential dividend at the rate
determined by the Board of Directors. In the event of liquidation, the Class B shares rank prior to Class A and G shares.
2007 ANNUAL REPORT
47
As at May 31, 2007 and 2006
9. N et A ssets (continued)
Share capital (continued)
Subscribed
Subscribed capital is money cashed but for which no Class A share can be issued in consideration thereof pursuant to the Fund’s
purchase-by-agreement policy. These Class A shares will be issued at the time set out in the policy at the share price in effect at
that date.
Redemption terms
Class A shares are generally redeemable only when the shareholder who has purchased them from the Fund reaches the age of 55
and avails himself of his right to an early retirement or retirement, or has reached 65 years of age. The redemption price is determined
semi-annually based on the value of the Fund.
Shareholders may also withdraw their initial investment in the Fund within 60 days of the subscription date or the date of the first
payroll deduction. This withdrawal, however, cancels the right to the tax credit.
The Fund can redeem Class A shares only in cases provided under the purchase-by-agreement policy voted by the Board of Directors
and approved by the Minister of Finance.
Transfers
At the annual shareholders’ meeting held on November 8, 2003, the shareholders ratified Regulation No. 68, allowing directors, by
simple resolution, to increase or decrease the amount of issued and paid-up capital on outstanding Class A shares, Series 1, and
to use any contributed surplus to eliminate or reduce the deficit.
During the year, the Board of Directors approved resolutions to increase the issued and paid-up capital on Class A shares, Series 1,
by $100 million ($80 million in 2006) through transfers from retained earnings.
As at May 31, 2007, the Fund had transferred an aggregate of $1,124 million from retained earnings to share capital.
Issued, paid-up and subscribed capital
Share Capital
Issued
Subscribed
Class A
Series 1
Number
2007
Balance at beginning
of year
273,754
5,968,803
3,712
23,471
561,092
405
$
(16,293)
280,932
Class A
Number
and $
$
Series 2
(In thousands)
Share issues1
Net change in share subscriptions
Share redemptions
Transfers
Class G
Number
$
76,489
20,125
$
346
6,065,763
9,603
570,695
43
(357,594)
(421)
(8,766)
100,000
6,272,301
3,696
77,326
20,125
389
2006
Balance at beginning
of year
261,271 5,589,051 3,574 72,665 20,125 Share issues1
Share subscriptions
Share redemptions
Transfers
26,559
(14,076)
273,754
602,744
(302,992)
80,000
5,968,803
491
(353)
3,712
11,061
(7,237)
76,489
20,125
Total
346
346
43
(366,360)
100,000
6,370,141
5,681,841
613,805
346
(310,229)
80,000
6,065,763
1. Issues include $561,012,000 ($605,974,000 in 2006) in shares qualifying for tax credits, thus respecting the limit imposed by the 60% Rule, and $9,683,000 ($7,831,000
in 2006) in shares issued mainly to replace shares redeemed under the Home Buyers’ Plan.
48
2007 ANNUAL REPORT
9. N et A ssets (continued)
Contributed surplus
Contributed surplus results from a reduction in issued and paid-up capital and the excess of the average value of share capital over
the redemption price.
1 0 .Contingencies
In the normal course of business, the Fund is party to claims and litigations. The Fund records provisions for such contingencies
when necessary. Management believes that the potential liability, net of the provisions recorded, would not have a material adverse
effect on the Fund’s financial position.
1 1. Operating ex penses
(In thousands)
Salaries and benefits
Occupancy expenses and rent
Advertising and information
Professional fees
Management fees
Travel and entertainment
Stationery and office supplies
Fees and other income
Rental income
Capital tax
Amortization of information systems development
Amortization of other capital assets
2007
$
58,784
11,027
9,278
8,906
5,427
2,805
2,425
(6,588)
(3,328)
4,096
1,722
4,324
98,878
2006
$
57,041
8,608
8,558
6,468
5,219
2,393
2,262
(4,484)
(3,364)
4,782
2,584
4,384
94,451
Interest on loans amounting to $15.6 million ($15.0 million in 2006 (Note 3b)) is recorded against interest revenue and capitalized
to loans.
1 2 .I ncome taxes
Income taxes are as follows:
(In thousands)
Current
Future
2007
$
5,585 9,365 14,950 2006
$
9,373
(6,937)
2,436
2007 ANNUAL REPORT
49
As at May 31, 2007 and 2006
1 2 .I ncome taxes (continued)
The above income taxes are different from the amounts that would be obtained by applying the combined basic tax rate (federal and
provincial) to earnings before income taxes. The difference is explained as follows:
(In thousands)
Income taxes based on combined income tax rate of 45.7% (45.1% in 2006)
Non-taxable dividends
Capital gain or loss and change in unrealized appreciation or depreciation
Additional provincial income taxes
Rate difference and non-deductible (non-taxable) portion
Refundable federal tax
Provincial tax deduction
Refundable dividend tax on hand
Large corporations tax
Other items
2007
$
2006
$
223,928 (11,949) 166,370
(13,315)
18,394
(95,531)
(44,512)
(26,220)
(48,715)
(1,519)
1,074
14,950
16,991
(89,623)
(43,795)
(21,427)
(17,177)
3,000
1,412
2,436
Sources of future income tax assets are as follows:
(In thousands)
Capital assets
Investments and other
2007
$
557 163 720 2006
$
180
9,165
9,345
2006
$
Sources of future income tax liabilities are as follows:
(In thousands)
Capital assets
Investments and other
2007
$
397 343 740 —
—
—
At the federal level, the Fund is taxed according to the rules for mutual fund corporations. Income tax paid on capital gains is recoverable
following share redemptions or an increase in paid-up capital when a portion of retained earnings is transferred to issued and paidup capital. The balance of this tax paid on capital gains amounting to $16.9 million ($7.4 million in 2006) is included in Accounts
receivable and other assets.
As a private company, the Fund is eligible for the refundable dividend tax on hand (RDTOH). The RDTOH is recoverable by the Fund
through the increase in paid-up capital from transfers of a portion of retained earnings to issued and paid-up capital. Of the tax amount
of $33.6 million ($30.3 million in 2006), $33.3 million ($26.7 million in 2006) was applied to reduce the income taxes following
transfers approved by the Board of Directors during the year to recover this tax. The balance is included in Accounts receivable
and other assets.
1 3.E m p loyee future b enefits
On January 1, 2001, the Fund implemented funded and unfunded defined benefit pension plans, which guarantee pension benefits to
most of its employees. Pension benefits under these plans are based on years of service and average annual salary, which represents
the average annual salary over the period of 36 months of consecutive service, which results in the highest average.
Also, since July 1, 2003, the Fund has had an optional personal insurance plan for retired employees.
50
2007 ANNUAL REPORT
1 3.E m p loyee future b enefits (continued)
The accrued benefit obligation of these plans as determined by independent actuaries and the fair value of the plan assets are as
at March 31, 2007. The most recent actuarial valuation of the pension plans for funding purposes was as of January 1, 2007 and the
next valuation will take place as of January 1, 2010.
Information about the plans is as follows:
2007
(In thousands)
Pension
plans
$
Insurance
plan
$
Pension
plans
$
Accrued benefit obligation
Balance at beginning of year
Current service cost
Interest cost
Benefits paid
Past service cost (gain)
Actuarial loss
46,176
8,441
2,769
(1,233)
4,527
60,680
Plan assets
Employer contributions
Employee contributions
Benefits paid
Actual return on plan assets
Reconciliation of accrued benefit obligation and plan assets
Funded status – deficit
Unamortized transitional obligation
Unamortized net actuarial loss
Unamortized past service cost (gain)
Accrued benefit liabilities
2006
Insurance
plan $
1,741
135
98
(6)
(1,049)
362
1,281
34,049
10,513
2,190
(1,407)
23
808
46,176
37,920
3,788
6
3,221
(1,233)
(6)
3,978
47,674
—
26,522
3,097 5,855
(1,407) 3,853
37,920 (8,256)
3,485
67
(4,704)
(13,006)
6,637
61
(6,308)
(1,281)
572
(336)
(1,045)
1,361
119
85
(4)
180
1,741
4
(4)
—
(1,741)
784
213
(744)
These accrued benefit liabilities are included in Accounts payable.
Additional information about the plan assets
Funded plan assets are held in trust and their breakdown is as follows:
Equity mutual funds
Bond mutual funds
Cash and other
2007
%
59.6
39.8
0.6
100.0
2006
%
59.5
39.9
0.6
100.0
2007 ANNUAL REPORT
51
As at May 31, 2007 and 2006
1 3.E m p loyee future b enefits (continued)
Additional information about the plan assets (continued)
Pension plan expense for the year is as follows:
2007
Pension
plans
$
Insurance
plan
$
Pension
plans
$
(In thousands)
Current service cost net of employee contributions Interest cost
Actual return on plan assets
Past service cost (gain)
Actuarial loss
Cost before adjustments to recognize the long-term nature of employee future benefits
Difference between actual and expected return on plan assets
Difference between actuarial loss recognized and actual actuarial loss on accrued benefit obligation
Difference between amortization of past service cost or gain and actual plan amendments
Amortization of transitional obligation
Pension plan expense recognized
5,220
2,769
(3,978)
4,527
135
98
(1,049)
362
2006
Insurance
plan $
4,658 2,190 (3,853)
23
808 119
85
8,538
1,360 (454) 3,826 1,867
384
(4,512)
(359) (759) (180)
6
5,392
1,049 71 307 (17)
4,917 71
275
180
Cash payments for employee future benefits, which comprise contributions made by the Fund to these funded pension plans and
amounts paid directly to members under unfunded pension plans, totalled $3.8 million ($3.1 million in 2006).
Significant actuarial assumptions
The significant actuarial assumptions used to determine the accrued benefit obligation and the benefit plan expense are as follows:
2007
Pension
plans
%
Insurance
plan
%
Pension
plans
%
5.0
5.0 3.5 5.2
6.5 3.5 Accrued benefit obligation
Rate at end of year
Discount rate
Rate of compensation increase
Accrued benefit costs
Rate at end of previous year
Discount rate
Expected rate of return on plan assets
Rate of compensation increase
5.2 2006
Insurance
plan %
5.2 3.5
5.2
5.7 and 5.2 6.5
3.5
5.7
As at May 31, 2007, the Fund set a maximum annual insurance premium it will assume per retiree. This amount will not be increased
in the future.
52
2007 ANNUAL REPORT
1 4 .R elated Party T ransactions
In the normal course of business, the Fund conducts transactions with related companies that are either controlled by the Fund or
subject to significant influence by the Fund. Many of the investments that the Fund makes in enterprises are of such an amount and
nature that the investee is considered a related entity. These transactions consist predominantly of interest and dividend revenues
on investments and certain operating expenses, mainly premiums paid under insurance plans.
The Fund, of which a majority of directors are elected by the QFL, paid $1.3 million to the QFL in each year for the years ended
May 31, 2007 and 2006 under a protocol and agreements that call for compensation to be paid for services rendered in respect of
economic training, social audits, shareholder development, and support and guidance of certain entities. These transactions are
measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
The Fund incorporated the Fondation de la formation économique du Fonds de solidarité des travailleurs du Québec (F.T.Q.) (the
“Fondation”) under Part III of the Québec Companies Act and elects the members of the Fondation’s Board of Directors. The Fund
granted a loan of $5 million to the Fondation at a variable, contingent interest rate, with a fair value of $3.5 million ($3.4 million
in 2006).
The Fund granted non-interest bearing loans of $20 million with a fair value of $17.9 million ($17 million in 2006) to the Fonds
étudiants solidarité travail du Québec (FESTQ), considered related entities because the Fund elects some of the officers together
with the Government of Québec.
The loans are presented in the Balance Sheet under Accounts receivable and other assets.
1 5 .A dditional information
The Schedule of investments at cost and the List of investments at cost made by the specialty funds are available at the Fund’s head
office, on its website at www.fondsftq.com and on SEDAR at www.sedar.com.
2007 ANNUAL REPORT
53
schedule of inv estments at cost
Auditors’ re port
To the Directors of the
We have audited the schedule of investments at cost of the Fonds de solidarité des travailleurs du Québec (F.T.Q.) as at May 31, 2007.
This financial information is the responsibility of the management of the Fonds de solidarité des travailleurs du Québec (F.T.Q.).
Our responsibility is to express an opinion on this financial information based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial information is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial information. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial information.
In our opinion, this schedule presents fairly, in all material respects, the investments at cost of the Fonds de solidarité des travailleurs
du Québec (F.T.Q.) as at May 31, 2007 in accordance with Canadian generally accepted accounting principles.
June 21, 2007
54
2007 ANNUAL REPORT
S chedule of inv estments at cost
As at May 31, 2007
(In thousands $)
Unsecured
Investments
Year of
Initial Investment
1988
1989
1990
1991
1992
1993
1994
1995
1996
Listed
Shares
and Units
Industry
Segment
Fonds de développement emploi-Montréal inc.
F
Fonds de revenu TransForce
S
Les Nordiques de Québec 1988, société en commandite
S
Entreprises publiques québécoises à faible capitalisation
TI/M/P/S
Investissements Mauricie – Bois-Francs – Drummond, F
société en commandite
Bestar inc.
M
Hyprescon inc.
M
Transat A.T. inc.
S
B.M.B. (Îles-de-la-Madeleine) inc.
S
Société en commandite Baseball Montréal
S
l Société en commandite immobilière Solim
R
l SOLIDEQ, société en commandite
F
Polycor inc.
P
European Medical Ventures Fund S.C.A.
TI
Groupe Datamark Systems inc.
M
Groupe Robert inc.
S
Le Devoir inc.
S
Société d’investissements Capimont enr., F
l Société en commandite immobilière Solim II
R
SSQ, Société d’assurance-vie inc.
S
Corporation Financière Brome inc.
S
Groupe Pierre Belvédère inc.
S
Labopharm inc.
TI
Château M.T. inc.
S
CryoCath Technologies inc.
TI
l Fonds régional de solidarité Abitibi-Témiscamingue, société en commandite
F
l Fonds régional de solidarité Côte-Nord, société en commandite
F
l Fonds régional de solidarité Estrie, société en commandite
F
l Fonds régional de solidarité Île-de-Montréal, société en commandite
F
l Fonds régional de solidarité Lanaudière, société en commandite
F
l Fonds régional de solidarité Laurentides, société en commandite
F
l Fonds régional de solidarité Laval, société en commandite
F
l Fonds régional de solidarité Mauricie, société en commandite
F
Jonview Canada inc.
S
MethylGene inc.
TI
Mines Virginia inc.
P
RESO Investissements inc.
F
Société en commandite de placements TI
en logiciel Télésystème
3552853 Canada inc. (Les Enductions Répulpables Rétec)
M
l Fonds d’investissement de la culture et des communications, société en commandite
S
l Fonds régional de solidarité Bas-Saint-Laurent,
F
Secured
Investments
Unlisted
Shares Loans and Loans and
and Units Advances Advances
Total
18,839 1,338 1 1,338
18,839
1
286,493 286,493
1,499
6,020
7,470
1
3,002
750
7,000
28,975
30,000
68
10,975
1,315
725
215
13,071
8,500
1
2,224
3,002
6,020
965
7,000
28,975
30,000
13,071
68
7,470
19,475
1,315
16,166
4,638
1
25,000
29,413
1,591
313
3,000
16,100
3,000
1,400
1
25,000
45,513
4,591
1,713
16,166
3,000
4,638
13,105 13,105
12,985 20,114 12,985
20,114
25,090 25,090
12,587 12,587
21,532 18,524 21,532
18,524
12,708
3,156
16,651
186
1,251
16,651
186
12,708
1,251
3,156
4,279 823 4,279
823
20,000 20,000
13,160 13,160
2007 ANNUAL REPORT
55
S chedule of inv estments at cost ( c o n t i n u e d )
As at May 31, 2007
(In thousands $)
Unsecured
Investments
Year of
Initial Investment
1996 l Fonds régional de solidarité Chaudière-Appalaches,
l Fonds régional de solidarité Gaspésie–Îles-de-la-Madeleine, société en commandite
l Fonds régional de solidarité Montérégie, société en commandite
l Fonds régional de solidarité Outaouais, société en commandite
l Fonds régional de solidarité Québec, société en commandite
l Fonds régional de solidarité Saguenay–Lac-Saint-Jean, société en commandite
Gestion Renaud-Bray inc.
Groupe Bocenor inc.
Groupe Solmax inc.
Mines Richmont inc.
Roctest ltée
Stageline Scène Mobile inc.
Systèmes médicaux LMS (Canada) ltée
1997 Biorthex inc.
Corporation GMAT Capital
ESI Ecosystem International ltée
Fonds de capital de risque GeneChem Technologies, s.e.c.
Fonds d’investissement de Montréal (F.I.M.), société en commandite
l Fonds régional de solidarité Nord-du-Québec, société en commandite
Gespro Technologies inc.
Glendyne inc.
GSM Capital Limited Partnership
Infosoft société en commandite d’investissement
Les Mines McWatters inc.
Mines Aurizon ltée
Oxford Bioscience Partners II L.P.
Polyvalor, société en commandite
1998 3539491 Canada inc. (ADF industries lourdes)
Asia Equity Infrastructure Fund, L.P.
Biotechnologies ConjuChem inc.
Corporation d’exploitation minière Globestar
Corporation Eatsleepmusic.com
Exploration Azimut inc.
Fonds régional de solidarité Centre-du-Québec, société en commandite
Le Groupe Tecnum inc.
Madelimer inc.
Mines Dynacor inc.
Multi-Ind. Capital inc.
Niocan inc.
Société en commandite Manoir Richelieu
Tranzyme Pharma inc.
TSO3 inc.
56
2007 ANNUAL REPORT
Listed
Shares
and Units
Industry
Segment
Secured
Investments
Unlisted
Total
F 12,574 12,574
F 12,573 12,573
F 18,478 18,478
F 30,478 30,478
F 18,976 18,976
24,971
2,924
24,337
3,800
2,558
4,124
1,033
2,367
12,392
500
400
6,771
2,222
F
S
M
M
P
M
M
TI
TI
S
S
TI
R 24,337
2,558
4,124
2,367
24,971
1
3,800
12,392
500
200
6,771
2,170 2,923
1,033
200
52 F
TI
P
TI
TI
P
P
TI
TI
M
S
TI
P
TI
P
3,444
305
2,579
309
371
12,000
1,676
57
1,285
6,812
1,416
5,082
3,249
3,000
4,000
1,343
1,788
12,000
1,676
4,057
1,285
6,812
4,787
305
1,416
5,082
1,788
3,249
2,579
309
3,000
371
F
TI
M
P
S
P
S
TI
TI
52
339
6,321
6,616
1,750
522
2
40,339
6,585
1,177
253
464
6,616
2,003
2,163
52
2
339
40,339
6,585
6,321
Unsecured
Investments
Year of
Initial Investment
Industry
Segment
A. & R. Belley inc.
Advitech inc.
Æterna Zentaris inc.
l Capimex, société en commandite et autre
ForAction Chili inc.
Harmonium International inc.
La Financière des entreprises culturelles (FIDEC), société en commandite
Le Groupe Cambium inc.
Les Systèmes de gestion Raymark Xpert inc.
Manitoba Science & Technology Fund Limited Partnership
Minéraux Maudore ltée
Osisko Exploration ltée
Réseaux Simpler inc.
S N F inc.
Société en commandite ForAction Chili
Targanta Thérapeutiques inc.
2000 Alliances ArtQuest International inc.
l ARGO II : The Wireless-Internet Fund – Limited Partnership
BioArtificiel Gel technologies (Bagtech) inc.
Bioxel Pharma inc.
Cronus BioPharma inc.
De Marque inc.
FDJ Monde inc.
l Fonds de développement des exportations FODEX, société en commandite
Fonds de revenu Hélicoptères Canadiens
GeminX Biotechnologies inc.
Genopole 1er Jour S.A.
Groupe Riotel Hospitalité inc.
GTI V, société en commandite
Les Biotechnologies Atrium inc.
Les Entreprises Maska-Laforo inc.
Marketing Léger inc.
MSDS Solutions inc.
Placements Accu-Sol inc.
Planchers des Appalaches ltée
ProVance Technologies inc.
Réseau Gomedica inc.
Ressources Majescor inc.
Ressources Strateco inc.
Simard-Beaudry Construction inc.
l Société en commandite GeneChem Thérapeutique
Theratechnologies inc.
Yamana Gold inc.
2001 Aégera Thérapeutique inc.
Capimont Technologies, société en commandite
Cardianove inc.
Cleyn & Tinker inc.
Corporation DataCom Wireless
l Fonds Bio-Innovation, société en commandite
1999
Listed
Shares
and Units
Secured
Investments
Unlisted
Total
S
TI
TI
S
M
TI
1,904
30,488
392
12,671
1,304
390
1,078
375
296
330
1,470
2,279
30,488
12,967
1,304
720
S
M
TI
TI
P
P
TI
S
M
TI
TI
TI
TI
TI
TI
S
M
241
84
3,100
4,918
4,000
9,525
900
32,369
20,950
8,357
6,083
13,272
1,678
250
768
2,125
9,000
1,010
475
929
500
1,517
4,000
929
10,025
900
241
84
32,369
29,950
8,357
6,083
5,627
13,272
1,678
4,918
250
768
2,600
S
S
TI
TI
S
TI
TI
M
S
TI
S
M
TI
TI
P
P
S
TI
TI
P
TI
TI
TI
M
TI
TI
26,423
31,513
368
15
1,390
351
41,950
3,413
136
405
6,482
5,000
1,000
2,060
1
751
6,075
1
2,501
9,866
5,120
7,918
1,434
6,678
5,150
10,900
316
13,407
3,000
11,705
210
4,594
1,169
23,950
1,045
900
500
41,950
26,423
3,413
136
721
6,482
44,920
8,000
1,000
2,060
11,706
961
11,714
1,170
368
15
26,451
9,866
1,390
351
5,120
7,918
2,334
6,678
5,650
10,900
2007 ANNUAL REPORT
57
As at May 31, 2007
(In thousands $)
Unsecured
Investments
Year of
Initial Investment
2001 GSM Capital Annex Fund, L.P.
Investissement Premières Nations du Québec, société en commandite
Kruger Wayagamack inc.
Les Ressources Campbell inc.
Nanox inc.
l Novacap II, société en commandite
Partenaires MidCap
SBV Venture Partners L.P.
l SIDEX, société en commandite
Sofame Technologies inc.
SolaCom Technologies inc.
T²C²/Bio2000, société en commandite
Venture Coaches Fund LP
2002 Axcan Pharma inc.
BioAxone Thérapeutique inc.
Enerkem Technologies inc.
FinTaxi, s.e.c.
l Fonds immobilier du Fonds de solidarité FTQ inc.
Hydro Mobile inc.
Investissements BioCapital, société en commandite
Junex inc.
Le Holding Angelcare inc.
LxSix Photoniques inc.
MC2 Entertainment
l MDS Fonds de technologies des sciences de la vie II Québec
nStein Technologies inc.
Produits Intégrés Avior inc.
Réseaux Versatel inc.
S.G.D.L. Systèmes inc.
Technologies LTRIM inc.
Thermetco inc.
Topigen Pharmaceutiques inc.
TORR Canada inc.
Tricot Richelieu inc.
l Vimac Early Stage Fund L.P
.
2003 9096-2952 Québec inc. (Magnov)
Enobia Pharma inc.
Hexago inc.
IatroQuest Corporation
Joseph Ribkoff inc.
l Le Fonds Entrepia Nord, s.e.c.
Mines de la Vallée de l’or ltée
Planchers Ancestral inc.
Ressources Plexmar inc.
Solutions originales inc.
Sonaca Amérique du Nord inc.
Stella-Jones inc.
Technologies Harfan inc.
Technologies Microbridge Canada inc.
58
2007 ANNUAL REPORT
Listed
Shares
and Units
Industry
Segment
TI Secured
Investments
Unlisted
948 Total
948
F
M
P
TI
S
S
TI
P
M
TI
TI
TI
TI
TI
S
S
R
M
TI
P
S
TI
TI
1,421
275
9,742
636
1,660
2,100
14,701
1,106
6,805
15,000
750
8,159
3,870
3,000
4,252
6,800
1
2,500
2,004
4,877
6,005
11,500
2,500
22,110
3,750
27,200
227,364
167
1,660
11,500
1,421
2,100
14,701
1,106
6,805
15,000
275
3,250
8,159
3,870
31,852
6,750
4,252
34,000
227,365
2,500
2,004
636
167
4,877
6,005
TI
TI
M
TI
TI
TI
M
TI
TI
M
TI
M
TI
TI
TI
M
TI
P
M
P
TI
M
M
TI
TI
13,000
246
135
5,347
20,849
1,250
6,000
1,500
3,302
1,800
7,400
2,000
10,331
1
5,600
4,100
3,786
15,627
9,624
400
2,325
1
2,000
4,309
938
1,667
1,500
1,133
27
536
14,667
1,000
1,500
1,000
500
500
20,849
13,000
2,188
6,000
3,000
5,969
3,300
7,400
500
3,133
10,331
28
6,100
4,100
3,786
15,627
9,624
246
936
135
2,325
1
20,014
3,000
4,309
Unsecured
Investments
Year of
Initial Investment
Industry
Segment
TelcoBridges inc.
Tranzyme, inc.
Vimac Milestone Medica Fund North L.P.
3091779 Compagnie Nouvelle-Écosse (Laura Secord)
4262280 Canada inc. (Jonview Canada)
4268822 Canada inc. (Astroflex)
9143-4423 Québec inc. (Gestion MSBI)
Advantech technique de pointe pour faisceaux hertziens inc.
Alexis Minerals Corporation
Bois B.S.L. Matane inc.
Constructions C.D.P. inc.
Création VISU inc.
De Ball inc.
DK-SPEC inc.
Fonds Brightspark II, s.e.c.
l Fonds d’investissement en développement durable (FIDD), s.e.c.
l Fonds d’investissement MSBI, société en commandite
FRV Média inc.
Genizon Biosciences inc.
Groupe de scieries G.D.S. inc.
Groupe LAR inc.
Groupe Plafolift inc.
GrowthWorks Atlantic Ltd
ISACSOFT inc.
Le Groupe Blue Mountain Wallcoverings inc.
Le Groupe Cegerco inc.
Les Gestions Gastier inc.
Manac inc.
Matamec Explorations inc.
Octasic inc.
Omni-Med.com inc.
ORTHOsoft inc.
Ressources Metco inc.
Sciences de la vie Bioniche inc.
Sécurité Above inc.
Simpler Networks Corp.
Trencap s.e.c.
Vimac ESF Annex Fund L.P.
ViroChem Pharma inc.
Wavesat inc.
2005 3149773 Canada inc. (Les Cafés Vittoria)
l A.M. Pappas Life Science Ventures III, LP
Accovia inc.
Addenda Capital inc.
Air Data inc.
Allianz Madvac inc.
Bluestreak Network, inc.
Camoplast inc.
Canadian Royalties inc.
2003
2004
Listed
Shares
and Units
Secured
Investments
Unlisted
Total
TI
TI
TI
S
S
M
TI
TI
P
M
S
M
M
M
TI
115
1,125
1
1,992
2,000
4,647
1
154
600
3,150
3,951
2,550
5,000
12,844
300
1,610
219
690
3,848
3,156
4,000
3,675
1
1,992
7,000
4,647
1
154
16,844
415
1,610
219
1,290
3,848
6,306
3,951
S
TI
S
TI
M
M
M
S
TI
M
S
S
M
P
TI
TI
TI
P
TI
TI
TI
S
TI
TI
TI
M
TI
TI
S
TI
M
TI
M
P
2,000
2,775
158
2,000
194
14,655
472
1,718
4,914
4,750
10,001
169
11,000
6,250
1,242
2,647
12,000
2,250
1
132,250
1,194
6,949
3,144
2,322
1,487
3,500
1,200
1
32,950
552
4,000
500
76
13,149
2,325
1,750
20,998
5,567
986
1,517
1,386
1,500
7,800
6,827
1,718
4,914
2,552
4,750
16,828
4,000
669
76
2,775
24,149
2,325
1,750
27,248
158
6,809
3,633
2,000
194
12,000
2,250
1
132,250
1,194
6,949
3,144
1,517
2,322
2,873
14,655
5,000
9,000
1
32,950
472
2007 ANNUAL REPORT
59
As at May 31, 2007
(In thousands $)
Unsecured
Investments
Year of
Initial Investment
2005
2006
60
Château Bonne Entente inc.
FIER Partenaires, société en commandite
l Fonds d’opportunités canadiennes HRS, s.e.c.
Groupe C.N.P. inc.
Groupe Canatal inc.
IRphotonique inc.
Les Biotechnologies Océanova inc.
Les Réseaux Accedian inc.
Mecachrome international inc.
Média Groupe inc.
Metro inc.
l ProQuest Investments III, L.P
.
l Rho Fund Investors 2005, L.P
.
Ski-Mode Bernard Trottier inc.
Targanta Therapeutics Corporation
Technologie Bluestreak (Canada) inc.
Technologies Microbridge Canada inc.
Technologies Positron inc.
2023671 Ontario inc. (Acier Pointe-Claire)
6513557 Canada inc. (Fournitures d’hôtellerie Pascal)
6550568 Canada inc. (ConjuchemBio)
6569293 Canada inc. (Maison des Futailles)
9166-1165 Québec inc. (Maison des Futailles)
9178-6590 Québec inc. (Excavation René-St-Pierre)
BioSyntech, inc.
Bois B.S.L. Énergie inc.
Boulart inc.
Boutique Linen Chest (Phase II) inc.
Capital Financière Agricole inc.
Corporation développement Knowlton inc.
Corporation Financière L’Excellence ltée
Coveo Solutions inc.
Dismed inc.
Emerald Technology Ventures II
Entreprises SMD ltée
Équipements Comact inc.
Éthanol Greenfield inc.
Excavation René St-Pierre inc.
Exploration Dios inc.
l FCPR Aerofund
l Fiducie du chantier de l’économie sociale
l Fonds CTI Sciences de la vie, s.e.c.
Fonds ID s.e.c.
Fonds Propulsion III s.e.c.
l Garage Technologie Capital-Risque Canada, s.e.c.
Gestion Rivière du Diable inc.
Groupe CVTech inc.
Groupe environnemental Labrie inc.
Innodia inc.
J.L. Albright IV Venture Fund L.P.
l
2007 ANNUAL REPORT
Listed
Shares
and Units
Industry
Segment
S
F
S
M
M
TI
TI
TI
M
S
S
TI
TI
S
TI
TI
TI
M
M
S
TI
M
M
S
TI
M
M
S
S
M
S
TI
S
TI
S
M
M
S
P
S
S
TI
TI
TI
TI
S
S
M
TI
TI
28,000
4,000
Secured
Investments
Unlisted
3,200
2,990
1,501
2,500
111
2,347
50,001
1,000
5,633
1,337
1,000
1
8,562
2
8,001
1
6,598
1
25
371
2,366
9,249
6,500
2,000
3,352
1,251
3,500
500
4,533
1
477
1,700
2,150
2,188
1,995
10,000
1,018
331
1,500
1,625
888
1,000
99,930
3,750
4,500
15,000
650
1,667
3,000
13,873
12,000
3,000
50,000
4,000
200
900
9,000
5,000
1,500
1,675
1,500
Total
3,531
2,990
28,000
1,500
3,126
2,500
999
2,347
50,001
2,000
99,930
5,633
1,337
4,750
1
8,562
2
8,001
4,500
1,675
1
21,598
1
25
4,000
650
2,038
3,000
2,366
23,122
20,000
2,000
3,352
1,251
3,500
3,500
50,000
4,000
200
4,533
1
477
1,700
2,150
2,188
2,895
9,000
15,000
1,500
1,018
Unsecured
Investments
Year of
Initial Investment
Industry
Segment
Listed
Shares
and Units
Secured
Investments
Unlisted
TI 9,543 2006 Lab Recherche inc.
Les Aciers Blais Québec inc.
M 3,000 3,000 Les investissements IKE inc.
M 1,500 500 Les meubles Poitras (2002) inc.
M 350 650 Métal Perreault inc.
M 490 530 OZ (USA), inc.
TI 1 Oz Communications inc.
TI 5,965 Promobois G.D.S. inc.
M Ressources Cadiscor inc.
P 63 Ressources Cartier inc.
P 400 l Rho Canada Capital de Risque, s.e.c.
TI 3,100 l Soccrent 2006, société en commandite
F 5,017 2,200 l Société en commandite AgeChem
TI 3,000 SolVision inc.
M 3,000 Sonaca S.A.
M 5,950 l VantagePoint Venture Partners 2006 (Q), L.P
.
TI 1,148 2007 6705341 Canada inc. (North Country Slate)
P 1,950 9182-2031 Québec inc. (Fonds d’acquisition de Montréal)
R 1 Cellfish Media LLC
TI 11,785 Envivio inc.
TI 4,735 Exploration Midland inc.
P 400 Fonds d’acquisition de Montréal, société en commandite
R 5,000 GO Capital s.e.c.
TI 90 Groupe Bikini Village inc.
S 2,500 Groupe Investissement Responsable inc.
S 400 Investissements Astra inc.
S 1,500 500 Les Industries Spectra Premium inc.
M 10,000 10,000 MMV Financial inc.
S 5,685 22,740 Nexsan Corporation
TI 8,687 Portes et Fenêtres Lumico inc.
M 75 325 l ProQuest Investments IV, L.P
.
TI 739 Réseaux Trellia inc.
TI 2,363 Stedfast inc.
M 2,500 Thallion pharmaceutiques inc.
TI 8,275 l Vertex III (C.I.) Fund L.P
.
TI 3,471 Victhom Bionique Humaine inc.
TI 5,000 11 general partners of limited partnerships
S 1 Total 614,7151,457,019 826,251
l
Total
9,543
6,000
2,000
1,000
200 1,220
1
5,965
1,043 1,043
63
400
3,100
7,217
3,000
3,000
5,950
1,148
1,950
1
11,785
4,735
400
5,000
90
2,500
400
2,000
20,000
28,425
8,687
400
739
2,363
2,500
8,275
3,471
5,000
1
26,6412,924,626
The list of investments made by these specialty funds is shown in the List of investments at cost made by the specialty funds.
This schedule of investments at a total cost of $2,924,626,000 itemizes by company the amounts invested by the Fonds de solidarité des
travailleurs du Québec (F.T.Q.). This amount appears in Note 4 to the financial statements as at May 31, 2007.
Industry segment legend:
F: Regional or local funds
R: Real estate
M: Manufacturing (lumber and paper, food and beverage, steel, textile, other)
P: Primary
S: Services/tourism
TI: Technology investments (technology and data processing, telecommunications, life sciences and bio-food industry)
2007 ANNUAL REPORT
61
List of inv estments at cost made
by the s pecialty funds ( u n a u d i t e d )
As at May 31, 2007
(In thousands)
Information from Annual
Financial Report dated
12-31-06 A.M. Pappas Life Science Ventures III, LP
Anthera Pharmaceuticals, inc.
BioSyntech, inc.
BrainCells, inc.
CeNeRx BioPharma, inc.
Cequent Pharmaceuticals, inc.
Cerexa, inc.
CoLucid Pharmaceuticals, inc.
MethylGene inc.
Spherics, inc.
Syndax Pharmaceuticals, inc.
12-31-06 Argo II : The Wireless-Internet Fund–Limited Partnership
Amperion, inc.
ArgNor Wireless Ventures B.V.
Bytemobile, inc.
Calypso Wireless, inc.
Casero, inc.
Chinatron Group Holdings Limited
Digital Bridges Limited
Empower Interactive Group Limited
inCode Telecom Group, inc.
Innotech Industries Limited
IPeria, inc.
Narad Networks, inc.
Neomedia Technologies, inc.
NT Cubed Limited
OnMobile Systems, inc.
Q-go.com B.V.
RV Technology Limited
SurfKitchen, inc.
Sylantro Systems Corporation
uReach Technologies, inc.
Volubill SA
World Wide Packets, inc.
Funds committed but not disbursed
11-30-06 Capimex, société en commandite
Cadim Servotech B.V.
Kanada Polska Kabaty S.P. Z.O.O.
Orkiestra Development S.P. Z.O.O.
PIGC Empreendimentos Imobiliarios S.A.
Cornerstone Capital Fund I, L.P.
First fiscal year
62
2007 ANNUAL REPORT
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
Total
$
11.8
3.7
50.0
30.0
2,194
1,679
678
1,631
2,194
2,084
2,743
1,426
1,783
16,412
1,341
483
388
2,212
2,194
1,679
2,019
1,631
2,194
2,084
2,743
1,426
2,266
388
18,624
382
14,779
9,377
40
4,174
13,245
20,542
11,345
268
577
11,818
11,610
4,660
38,846
12,761
4,875
462
6,892
7,761
12,715
7,973
10,007
205,109
4,181
2,697
586
1,044
8,508
382
14,779
9,377
40
4,174
17,426
20,542
11,345
268
577
11,818
14,307
4,660
38,846
12,761
4,875
1,048
7,936
7,761
12,715
7,973
10,007
213,617
3,188
216,805
637
637
400
2,427
3,469
6,296
400
2,427
3,469
637
6,933
Equity Interest
of the Fund
%
12-31-06 FCPR Aerofund
Alyotech
JPR CAP
PIB Holding
Recaero
Fiducie du chantier de l’économie sociale
First fiscal year
20.0
12-31-06 FIER Partenaires, société en commandite
Fonds Brightspark II, s.e.c.
Fonds CTI Sciences de la vie, s.e.c.
Fonds Propulsion III s.e.c.
Garage Technologie Capital-Risque Canada, s.e.c.
Société en commandite AgeChem
03-31-07 Fonds Bio-Innovation, société en commandite
Ambrilia Biopharma inc.
Asmacure ltée
Biogentis inc.
CO2 Solution inc.
Créa Biopharma inc.
KCLM Recherche en Nutrition inc.
Les Biotechnologies Océanova inc.
Les Produits pharmaceutiques Ulysses inc.
Pegase Médical inc.
Planteck inc.
Prognomix inc.
Prophagia inc.
PureCell Technologies inc.
12-31-06 Fonds CTI Sciences de la vie, s.e.c.
No investment
27.8
12-31-06 Fonds de développement des exportations FODEX,
Alex Pneu et Mécanique (Canada) inc.
Bioetik inc.
Busch Marine inc.
Champlain Capital Partners LP
Corporation Nuvolt inc.
Groupe Pierre Belvédère inc.
Recy-Clone inc.
TDM International inc.
0.0
93.6
28.2
Shares
and Units
$
Loans and
Advances
$
Total
$
176
924
3,849
1,211
6,160
2,021
614
1,480
4,115
2,197
1,538
3,849
2,691
10,275
5,495
15,770
1,201
239
1,150
607
500
3,697
—
1,201
239
1,150
607
500
3,697
66,303
70,000
353
1,415
23
56
1,000
600
650
251
300
4,648
300
65
338
400
444
400
125
2,072
653
1,415
65
23
338
400
500
1,000
600
1,050
251
300
125
6,720
1,637
8,357
1,000
150
500
8,911
250
10,811
1,425
175
500
1,200
150
250
3,700
2,425
150
675
8,911
500
1,200
150
500
14,511
6,468
20,979
100.0
2007 ANNUAL REPORT
63
by the s pecialty funds ( u n a u d i t e d ) ( c o n t i n u e d )
As at May 31, 2007
(In thousands)
Equity Interest
of the Fund
%
03-31-07 Fonds d’investissement de la culture
et des communications, société en commandite
9052-0651 Québec inc. (Logistik 22)
9068-3848 Québec inc. (Les Productions Danse Sing)
9089-1193 Québec inc. (Caméra E-Motion)
9168-1478 Québec inc. (Laboratoire GSS)
Attraction Média inc.
Caméra E-Motion inc.
De Marque inc.
Distribution CMP Magada International inc. et Production Magada International inc.
Divertissements Séville inc.
Édifice Club Soda inc.
Éditions FICC s.e.n.c. (Viamédias)
FRV Média inc.
Groupe Phaneuf inc.
Groupe Star Suites inc.
Guides de Voyages Ulysse inc.
GVGS inc.
In Extremis Images inc.
ISACSOFT inc.
Jeux Alary inc.
LC Média inc.
Motorisés Star Suites inc.
Ryshco Média inc.
Sarbakan inc.
Toon Boom Animation inc.
Tribal Nova inc.
Vivavision inc.
Wilson & Lafleur, limitée
12-31-06 Fonds d’investissement en développement durable (FIDD), s.e.c.
Bioetik inc.
Busch Marine inc.
Chiiwedjin Shu Énergie Éolienne inc.
CO2 Solution inc.
TORR Canada inc.
Vaperma inc.
64
2007 ANNUAL REPORT
66.7
23.9
Shares
and Units
$
Loans and
Advances
$
Total
$
125
500
760
623
133
34
500
750
125
748
133
34
1,000
750
125
760
700
200
100
400
198
427
200
426
1,482
290
100
525
625
7,058
465
200
7
280
350
400
218
336
313
460
130
500
320
200
225
6,569
465
900
207
380
750
598
218
427
536
426
1,482
313
750
130
500
320
100
200
750
625
13,627
1,680
15,307
150
500
500
150
500
625
2,425
175
500
675
150
675
500
150
1,000
625
3,100
1,210
4,310
05-31-06 Fonds d’investissement MSBI, société en commandite
Callio Technologies inc.
CarboPur Technologies inc.
DFT Microsystems inc.
Iaculor Injection inc.
LegiTime Technologies
Médical Resonant inc.
Milestone Pharmaceutiques inc.
Mimetogen Pharmaceutiques inc.
MOXXI Médical inc.
QuantuModeling inc.
Réflex Photonique inc.
Silk Displays inc.
SiXtron Matériaux Avancés inc.
12-31-06 Fonds d’opportunités canadiennes HRS, s.e.c.
Amethyst Arbitrage Fund
CC&L Multi-Strategy Fund
Emerald Canadian Equity Market Neutral Fund
Epic Limited Partnership
Flatiron Market Neutral LP
Jemekk Long Short Fund Limited Partnership
Le Fonds Goodwood
LODH Opus Canadian Long/Short Equity Pooled Fund
Marret High Yield Hedge Limited Partnership
Parkwood Limited Partnership Fund
Rosseau Société en commandite
Sprott Opportunities Hedge Fund
Stornoway Recovery Fund
Vertex Fund
Waterfall Vanilla LP
03-31-07 Fonds régional de solidarité Abitibi-Témiscamingue,
9026-0357 Québec inc. (Société de gestion Mario Massé)
9074-1133 Québec inc. (Mécanicad)
9118-5066 Québec inc. (Les Ateliers Val d’Or)
Alexis Minerals Corporation
Bellerose Capital inc.
Corporation minière Rocmec inc.
Entretien M. Perron inc.
Entretien M. Perron inc. et 9165-6942 Québec inc.
Exploration Fieldex inc.
Exploration Typhon inc.
Forage G4 ltée
Gestion C.I.A. inc. et Centre d’informatique Abitibi inc.
Golden Valley Mines ltée
Groupe Canexfor inc. et 2734-1197 Québec inc.
Groupe Sogitex inc.
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
Total
$
32.0
99.9
99.9
548
1,099
842
1
1,851
2
308
791
770
6,212
273
362
1
127
118
170
516
205
1,772
821
1,099
1,204
1
1
1,851
2
308
918
118
940
516
205
7,984
3,466
11,450
2,289
2,621
2,814
1,500
1,750
1,200
1,853
1,129
2,100
1,100
997
1,550
750
1,628
1,300
24,581
—
2,289
2,621
2,814
1,500
1,750
1,200
1,853
1,129
2,100
1,100
997
1,550
750
1,628
1,300
24,581
29
75
17
49
11
150
124
500
100
450
200
200
282
662
525
287
62
450
500
100
450
229
75
200
282
662
17
49
11
150
525
287
124
62
450
2007 ANNUAL REPORT
65
As at May 31, 2007
(In thousands)
03-31-07 Fonds régional de solidarité Abitibi-Témiscamingue,
société en commandite (continued)
Industries Lignico inc.
J. Y. Moreau Électrique inc.
Les équipements de forage VersaDrill inc.
Machines Roger lnternational inc.
MasséNor inc.
Palmapor inc.
Ross Finlay 2000 inc.
03-31-07 Fonds régional de solidarité Bas-Saint-Laurent,
9003-4349 Québec inc. (Mode Ézé Plus)
AMH Canada ltée
Distributions Jacques-Cartier inc.
Érablières des Alléghanys inc.
Gagnon Image inc. et 9067-9408 Québec inc.
Gestion H. Dickner ltée
Glendyne inc.
Lang 2000 inc. et 9166-6743 Québec inc.
Le Groupe Cambium inc.
Menuiserie Roland Perreault inc.
Sanibelle inc. et Groupe Envirex inc.
St-Noël Express inc.
Topocom Technologie inc. et Asselin et Asselin, S.N.C.
03-31-07 Fonds régional de solidarité Chaudière-Appalaches,
9069-4654 Québec inc. (Supervac 2000)
9075-5349 Québec inc. (Fenêtres Météo)
Acier Picard inc.
Compositech inc.
Ébénisterie de la Chaudière inc.
Équipements récréatifs Jambette inc. et Gestion ParceQue inc.
Garage Redmond inc.
Gestion SIM inc.
Les Images Turbo inc.
Les Productions Horticoles Demers inc.
Menuiserox inc.
Métal Bernard inc.
Quartz Industrie inc.
Structures AmeriCan Industries inc.
66
2007 ANNUAL REPORT
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
Total
$
200
50
150
387
1,242
92
100
550
611
801
146
6,018
92
100
550
811
851
296
387
7,260
50
418
283
50
14
815
145
61
300
193
220
150
189
300
1,000
100
129
2,787
50
563
344
300
193
270
14
150
189
300
1,000
100
129
3,602
200
3,802
150
460
610
34
147
67
155
130
360
310
300
142
250
1,237
133
205
3,470
34
147
67
155
130
360
310
300
142
400
460
1,237
133
205
4,080
200
4,280
99.9
99.9
Equity Interest
of the Fund
%
03-31-07 Fonds régional de solidarité Côte-Nord,
2947-5399 Québec inc. (Boutique Mobilité B-C)
6328989 Canada inc. et Boudreau Électrique ltée
9031-9898 Québec inc. (Micro Experts Canada)
9058-2222 Québec inc. (Club Cap Natashquan)
Air Saguenay (1980) inc.
Croisière 2001 inc.
Équipement et Outillage Côte-Nord inc.
Gestion S.S.G. inc.
Hôtel du Havre inc.
Lajoie Réfrigération inc.
Les Pétroles Paul Larouche inc.
Maintenance Sept-îles inc.
Pec-Nord inc.
Rechapage Longue-Rive inc.
Scierie Norbois inc.
03-31-07 Fonds régional de solidarité Estrie, société en commandite
Ani-Mat inc.
Beckwith Bemis inc.
Café Faro inc.
Caoutchouc Pro-Flex inc.
Fontaine-Alliance inc.
Gestion Pro-Conversion inc.
GPM Ripe inc., Les Entreprises Martin Lajeunesse inc. et 6458408 Canada inc.
Groupe Lachar inc.
Kemestrie inc.
Les Industries Touch inc.
Motrec inc.
Polycor inc.
Remises Réal Lamontagne inc.
Signalisation de l’Estrie inc.
Stedfast inc.
Tekna Systèmes Plasma inc.
99.9
99.9
Shares
and Units
$
Loans and
Advances
$
Total
$
78
433
100
25
125
300
150
602
1,813
164
678
96
33
17
300
3
95
264
87
121
58
1,916
164
678
96
111
433
117
325
125
3
95
264
87
300
121
150
660
3,729
1
367
416
400
389
500
367
416
400
389
500
1
600
211
812
750
500
670
185
383
650
875
440
6,525
750
500
600
670
185
211
383
650
875
440
7,337
1,150
8,487
2007 ANNUAL REPORT
67
As at May 31, 2007
(In thousands)
Equity Interest
of the Fund
%
03-31-07 Fonds régional de solidarité Gaspésie–Îles-de-la-Madeleine,
9011-6641 Québec inc. (Riôtel Percé)
9089-9238 Québec inc. (Pétoncles 2000)
Atkins et frères inc.
B.M.B. (Îles-de-la-Madeleine) inc.
Construction L.F.G. inc.
Fabrication Delta inc.
Gaspésie Diésel inc.
Junex inc.
Les entreprises Léo Leblanc & fils inc.
Les Moules de Culture des îles inc.
Les Reboiseurs de la Péninsule inc.
Madelimer inc.
Pêcheries Vilo inc.
Philippe Day inc.
Serres Jardins-Nature inc.
03-31-07 Fonds régional de solidarité Île de Montréal,
BGT Biographic Technologies inc.
Cardianove inc.
Dynamiques Cowan inc.
Dynapix Intelligence Imaging inc.
Ferox inc.
Groupe de mode Inizio inc.
Impression Paragraph inc.
Les Industries Flexipak inc.
Niram-Fab inc.
Prochaps équipement équestre inc.
Serti informatique inc.
Unitrail inc.
03-31-07 Fonds régional de solidarité Lanaudière,
2954-7490 Québec inc. (Excel Technologies)
2973-8648 Québec inc. (Le Groupe R.G.F.M.)
9111-5675 Québec inc. et Écono-Porte inc.
9177-0651 Québec inc. (Enceintes acoustiques Unisson)
Centre de transformation de véhicules Lanaudière inc.
Champions Consultants inc.
Les Emballages Trium inc.
Les Industries Harnois inc.
Triotech Amusement inc.
68
2007 ANNUAL REPORT
Shares
and Units
$
Loans and
Advances
$
Total
$
99.9
33
176
524
213
61
60
157
15
278
1,517
250
64
129
300
731
282
25
443
177
250
2,651
250
97
176
524
129
300
731
213
282
61
85
600
15
177
528
4,168
722
488
1,210
43
70
250
190
300
181
150
250
213
200
1,847
43
722
70
250
190
300
488
181
150
250
213
200
3,057
71
75
12
158
77
461
60
25
215
15
200
230
84
1,367
148
461
60
25
215
90
200
242
84
1,525
99.9
99.9
Equity Interest
of the Fund
%
03-31-07 Fonds régional de solidarité Laurentides,
119803 Canada inc. (BMI Canada)
2959-8828 Québec inc. (Palettes St-Janvier)
Aéroport International de Mont-Tremblant inc.
Boulangerie Les Moulins La Fayette inc.
Centre d’équipement orthopédique St-Eustache inc.
Complexe Hôtelier St-Jovite/Mont-Tremblant inc.
Fondrinor inc. et Fonderie des Appalaches inc.
Groupe Star Suites inc.
La Petite Bretonne inc.
Le Groupe Logitrans inc.
Le Maître Saladier inc.
Les Entreprises d’hôtellerie Duquette inc.
Motorisés Star Suites inc.
Papiers Domco inc. et 9115-1589 Québec inc.
Placements les Mélèzes inc.
Placements Yves St-Onge inc.
Service Alimentaire Desco inc.
Ventilex inc.
Vision Villégiature inc.
03-31-07 Fonds régional de solidarité Laval, société en commandite
6545921 Canada inc. (Les Bouteilles Recyclées du Québec (B.R.Q.))
Aliments Imex inc. et 4169794 Canada inc.
Auvents Multiples (2002) inc.
CVC / RDS inc. et 9136-7748 Québec inc.
Europe Cosmétiques inc., Europelab inc. et 4190777 Canada inc.
Globale Géomatique inc.
Gomark Corp.
Le Paradis des Orchidées inc.
Les Bouteilles Recyclées du Québec (B.R.Q.) inc.
Les Productions Diamant ltée
S.R.A.D. Communications inc., 9047-6227 Québec inc., Basicom inc., Gestion Lessard Samson inc. et Numéricom inc.
Stylo Bankers (1991) inc.
03-31-07 Fonds régional de solidarité Mauricie, société en commandite
Concept Éco-Plein-Air Le Baluchon inc.
Produits Pylex inc., Pylex International inc. et 9143-8010 Québec inc.
Tuyauterie Borgia ltée
Shares
and Units
$
Loans and
Advances
$
Total
$
99.9
99.9
250
750
300
1,300
108
417
250
303
313
587
218
165
333
83
73
124
47
180
1,300
500
417
5,418
108
417
250
553
313
750
587
218
165
333
83
73
124
47
180
1,300
500
417
300
6,718
400
7,118
1
100
70
1,000
316
1,520
163
441
338
102
11
490
1
316
1,620
163
441
338
102
81
1,000
490
220 475 4,076 220
475
5,247
500
533
1,033
672
500
533
1,705
1,171 99.9
672
672
2007 ANNUAL REPORT
69
As at May 31, 2007
(In thousands)
Equity Interest
of the Fund
%
03-31-07 Fonds régional de solidarité Montérégie,
3523462 Canada inc. (Délices de la forêt)
Acier Picard inc.
Atelier d’usinage Quenneville inc.
Audisoft Technologie inc.
Bousquet Frères Limitée, B.M.B. Technologie du bâtiment inc.
et Technologies échangeurs gaz-air (TEGA) inc.
Colorex inc. et 171279 Canada inc.
Esthétique sans frontières inc., Distri-Pro inc. et 6257917 Canada inc.
Geo-3D inc.
Gestion Nouveau Départ inc.
LC Média inc.
Les armoires de cuisines Denis Couture (2002) inc.
Les Brosses Lacasse inc.
Les installations sportives Defargo inc.
M.G.B. Électrique inc. et Gestion M.G.B. inc.
Martin inc.
Multi-Portions inc.
Plombco inc.
Réseau Telmatik inc.
Secco Plastique inc.
Service sérigraphique professionnel S.S.P. inc.
Soya Excel inc.
Techno P.O.S. inc.
TelcoBridges inc.
Transformateur Bemag inc.
Transport Ray-Mont (1992) inc.
Transport S.R.S. inc. et Les Placements Maudrey inc.
03-31-07 Fonds régional de solidarité Nord-du-Québec,
Allégorie Marketing inc.
Blais & Langlois inc.
Cogitore Resources inc.
Forage Eenou inc.
Les Consultants de l’Arctique inc.
Les Ressources d’Arianne inc.
Lucien Senneville (2002) inc.
Mines Virginia inc.
Pourvoirie Mirage inc.
Ressources Beaufield inc.
Ressources Everton inc.
Ressources MSV inc.
Ressources Sirios inc.
70
2007 ANNUAL REPORT
Shares
and Units
$
Loans and
Advances
$
Total
$
99.9
725
400
67
310
400
67
310
725
290
250
195
375
1,835
900
130
925
29
225
460
324
353
700
233
224
483
151
102
213
68
500
300
117
500
550
8,264
900
130
925
29
225
750
324
353
700
233
224
250
483
151
102
213
263
500
675
117
500
550
10,099
300
10,399
433
135
130
135
93
91
390
218
114
101
96
82
300
110
100
165
340
667
433
82
300
135
130
135
110
100
93
165
91
730
218
114
101
667
96
99.9
Equity Interest
of the Fund
%
03-31-07 Fonds régional de solidarité Nord-du-Québec,
société en commandite (continued)
Ressources Strateco inc.
St-Félicien Diesel (1988) inc.
Superior Diamonds inc.
03-31-07 Fonds régional de solidarité Outaouais, société en commandite
3484734 Canada inc. (Les Pâtisseries de l’Outaouais)
9052-2756 Québec inc. (ProVance Technologies)
Aupel inc. et Reliure Unirel inc.
Cactus Commerce inc.
Corporation EEDO Knowledgeware
iMPath Networks inc.
Les Aliments Chebly inc.
Multicorpora R&D inc.
ProVance Technologies inc.
Restaurations Sélect inc. et Steamatic of Ottawa-Carleton Ltd
Services de Pneus Lavoie Outaouais inc.
SiteBrand.com inc.
SolaCom Technologies inc.
Tomoye Corporation
Zeligsoft inc.
03-31-07 Fonds régional de solidarité Québec, société en commandite
9099-7768 Québec inc. (E.B.M. Laser)
Aéro Technique Canadien R.M. inc.
Aventures Norpaq inc.
Connexion Technic inc.
Corporation Eatsleepmusic.com
DK-SPEC inc.
Gentec Électro-Optique inc.
Groupe C.D.P. inc. et Transport C.D.P. inc.
Groupe Qualinet inc.
Les Vêtements Perlimpinpin inc.
Load Systems International inc.
Métafab (1996) inc.
Mode Avalanche inc.
Novik inc.
Polycor inc.
Pro Aviation inc.
Réfrigération Noël inc. et 2422-8827 Québec inc.
Savard Ortho confort inc. et Gestion Anira inc.
Service Acier Inoxydable C. inc.
Systèmes de Rechapage Ardon Canada inc.
Systèmes Pran inc.
Usital Canada inc.
99.9
99.9
Shares
and Units
$
Loans and
Advances
$
Total
$
14
131
2,081
459
2,223
14
459
131
4,304
250
1,000
550
926
750
500
500
550
1,250
6,276
83
231
500
500
250
750
450
457
500
200
3,921
83
250
231
1,500
500
550
250
926
1,500
450
457
500
1,000
750
1,250
10,197
100
10,297
200
150
150
460
150
400
100
319
208
307
190
200
300
3,134
69
220
600
165
1,619
426
93
367
400
187
383
417
500
294
67
240
6,047
269
150
150
220
460
750
565
1,619
426
193
367
400
319
187
208
307
383
417
500
484
267
540
9,181
200
9,381
2007 ANNUAL REPORT
71
As at May 31, 2007
(In thousands)
03-31-07 Fonds régional de solidarité Saguenay–Lac-Saint-Jean,
2861-0467 Québec inc. (Notre Hôtel)
9052-0651 Québec inc. (Logistik 22)
Cam-Trac Sag-Lac inc.
Centre de Suspension des Routiers inc.
Excavation Michel Paradis inc.
Gro-Mec inc.
Groupe E.D.S. inc.
Industrie Bois Lamontagne inc.
Isumi Précision ltée
Les Canneberges St-Augustin inc.
Les Jardins du Saguenay inc.
Les Pétroles R.L. inc.
Les Placements G.M.R. Maltais inc.
Les Séchoirs Ste-Monique inc.
Nolicam Location de camions inc.
Novabrik International inc.
Oxygène Dolbeau inc.
Pétrolex St-Félicien inc.
Précicast ltée
Remac innovateurs industriels inc.
Scierie Thomas-Louis Tremblay inc.
SCP 89 inc.
Société de gestion Trois-Trois-Trois inc.
Tuyauterie LG. 4 inc.
11-30-06 Garage Technologie Capital-Risque Canada, s.e.c.
No investment
12-31-06 Le Fonds Entrepia Nord, s.e.c.
Achronix Semiconductor Corporation
ArchPro Design Automation, inc.
Aura Communications Technology, inc.
Business Search Technologies Corporation
Corporation Vantrix
HelloSoft, inc.
Net Intégration Technologies (Québec) inc.
NetContinuum, inc.
SolVision inc.
StrataLight Communications, inc.
World Wide Packets, inc.
72
2007 ANNUAL REPORT
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
Total
$
99.9
40.0
260
75
433
300
58
242
345
460
900
559
297
350
4,279
96
54
9
221
392
546
150
403
85
158
600
246
903
375
389
500
195
88
351
2,100
58
7,919
356
129
433
309
221
392
546
150
403
58
327
158
600
591
903
835
1,289
500
195
647
351
2,100
297
350
58
12,198
1,154
1,384
1,384
1,541
1,384
1,038
1,422
760
2,077
2,105
14,249
123
1,384
1,384
2,891
1,154
1,384
1,507
1,541
1,384
1,038
1,384
1,422
2,144
2,077
2,105
17,140
36.2
Equity Interest
of the Fund
%
12-31-06 MDS Fonds de technologie des sciences de la vie II Québec
ActivBiotics, inc.
Alexza Molecular Delivery Corp.
Alveolus inc.
Archemix Corp.
Guava Technologies, inc.
KAI Pharmaceuticals inc.
Mako Surgical Corp.
Médical Resonant inc.
Morphotek, inc.
Pharmasset inc.
RenaMed Biologics inc.
Replidyne inc.
Saegis Pharmaceuticals inc.
Spinal Kinetics inc.
TransMolecular, inc.
U-Systems, inc.
12-31-06 Novacap II, société en commandite
Corporation de Développement MCL inc.
Corporation de Développement Tradition inc.
Corporation Développement Knowlton inc.
Développement Demers Ambulances inc.
Groupe CorActive inc.
Groupe Emballages Rosmar inc.
Groupe Royal Mat inc.
Holding LiquidXStream inc.
Les Systèmes LiquidXStream inc.
Octasic inc.
Paul Demers & Fils inc.
Pneumat inc.
Royal Mat inc.
Ryma Solutions Technologiques inc.
Scies B.G.R. inc.
Tenrox inc.
ViXS Systems inc.
Novacap Industries III, s.e.c.
First fiscal year
Novacap Technologies III, s.e.c.
First fiscal year
Shares
and Units
$
Loans and
Advances
$
Total
$
90.9
9.6
10.0
1,858
783
2,005
1,201
1,053
1,617
1,317
1,172
2,057
2,063
1,418
1,850
1,211
1,825
872
295
22,597
—
1,858
783
2,005
1,201
1,053
1,617
1,317
1,172
2,057
2,063
1,418
1,850
1,211
1,825
872
295
22,597
970
11,250
23,284
4,644
2,000
1,119
680
100
1,340
2,987
2,593
4,578
6,819
62,364
18,950
2,250
11,127
26,868
15,400
2,328
7,390
1,000
1,500
400
87,213
19,920
13,500
34,411
4,644
2,000
27,987
16,080
100
2,328
8,730
1,000
1,500
400
2,987
2,593
4,578
6,819
149,577
8.0
2007 ANNUAL REPORT
73
As at May 31, 2007
(In thousands)
12-31-06 ProQuest Investments III, L.P.
Agile Therapeutics, inc.
Aires Pharmaceuticals, inc.
BioSyntech, inc.
Cadence Pharmaceuticals, inc.
Cytogen Corporation
Gloucester Pharmaceuticals inc.
Mersana Therapeutics, inc.
MethylGene, inc.
NovaDel Pharma inc.
Palkion, inc.
Sopherion Therapeutics, inc.
Tragara Pharm, inc.
Ziopharm Oncology, inc.
ProQuest Investments IV, L.P.
First fiscal year
12-31-06 Rho Canada Capital de Risque, s.e.c.
AlleWin Technologies inc.
HR Alloy (USA), inc.
Lasers Pyrophotonics inc.
12-31-05 Rho Fund Investors 2005, L.P.
Columbia Capital Equity Partners IV (QP), L.P.
HealthCare Ventures VIII, L.P.
03-31-07 SIDEX, société en commandite
Canadian mining companies securities
12-31-06 Soccrent 2006, société en commandite
2064812 Canada inc. (Groupe Spectal-Spectube)
2846-3065 Québec inc. (Giroux-Maçonnex)
3886298 Canada inc. (Usine de congélation de Newport)
9120-7993 Québec inc. (Groupe Sotrem-Maltech)
9143-8945 Québec inc. (Giroux-Maçonnex)
Bleuetière Nord-Est inc.
Dynaplast Extruco inc.
Industries Spectal inc.
Intercalaire Inex inc.
Les Conseillers Trigone inc.
Les Consultants Olympe inc.
Les Fruits Bleus inc.
Les Industries G.R.C. inc.
Les Ressources d’Arianne inc.
Novabrik International inc.
74
2007 ANNUAL REPORT
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
Total
$
5.0
3.3
6,992
3,496
6,093
14,064
5,720
8,157
3,787
8,049
5,408
725
5,826
5,827
74,144
2,816
3,496
6,312
6,992
3,496
6,093
14,064
5,720
10,973
3,787
8,049
5,408
725
5,826
3,496
5,827
80,456
713
723
2,598
4,034
—
713
723
2,598
4,034
1,216
5,250
557
66
623
—
557
66
623
28,063
28,686
16,311 16,311 510 510 16,821
16,821
7,271
43
595
3,199
2,316
149
1,081
111
89
6,795
682
105
259
30.9
9.2
30.0
30.0
100
54
100
270
250
124
157
222
7,371
97
595
3,199
2,316
100
419
250
1,081
235
246
6,795
682
105
481
12-31-06 Soccrent 2006, société en commandite (continued)
Produits Alba inc.
Services Nolitrex inc.
Société Partition Manufacturiers Associés (PMA) inc.
12-31-06 Société en commandite AgeChem
No investment
12-31-06 Société en commandite GeneChem Thérapeutique
Aégera Thérapeutique inc.
Ambit Biosciences Corp.
Argos Therapeutics, inc.
Avalon Pharmaceuticals, inc.
BioVex Ltd
Chromos Molecular Systems inc.
Cyclacel Pharmaceuticals inc.
Kiadis Pharma Canada inc.
Koronis Pharmaceuticals inc.
LymphoSign inc.
Osprey Pharmaceuticals Limited
Paratek Pharmaceuticals, inc.
Scion Pharmaceuticals inc.
Xanthus Life Sciences inc.
08-31-06 SOLIDEQ, société en commandite
SOLIDE Ahuntsic-Cartierville
SOLIDE Centre-Sud/Plateau-Mont-Royal
SOLIDE Chibougamau
SOLIDE Côte-des-Neiges/Notre-Dame-de-Grâce
SOLIDE de Gatineau
SOLIDE de la Basse Côte-Nord Kégaska-Blanc-Sablon
SOLIDE de la MRC d’Abitibi
SOLIDE de la MRC d’Abitibi-Ouest
SOLIDE de la MRC d’Acton
SOLIDE de la MRC d’Argenteuil
SOLIDE de la MRC d’Avignon
SOLIDE de la MRC de Beauce-Sartigan
SOLIDE de la MRC de Beauharnois-Salaberry
SOLIDE de la MRC de Bécancour
SOLIDE de la MRC de Bellechasse
SOLIDE de la MRC de Bonaventure
SOLIDE de la MRC de Caniapiscau
SOLIDE de la MRC de Charlevoix
SOLIDE de la MRC de Charlevoix-Est
SOLIDE de la MRC d’Autray
SOLIDE de la MRC de Desjardins
SOLIDE de la MRC de Drummond
SOLIDE de la MRC de Francheville
Equity Interest
of the Fund
%
30.5
Shares
and Units
$
Loans and
Advances
$
Total
$
1,692
644
25,031
13
1,290
1,692
644
13
26,321
5,071
3,626
3,133
6,652
6,869
4,460
5,521
4,893
4,492
7,139
3,055
4,784
3,353
6,594
69,642
245
321
2,121
2,687
5,071
3,626
3,378
6,652
7,190
4,460
5,521
4,893
4,492
7,139
5,176
4,784
3,353
6,594
72,329
1,398
73,727
10
10
5
10
10
10
169
10
10
20
130
225
10
95
30
10
10
55
202
10
10
310
250
10
10
5
10
10
10
169
10
10
20
130
225
10
95
30
10
10
55
202
10
10
310
250
11.0
99.9
2007 ANNUAL REPORT
75
As at May 31, 2007
(In thousands)
08-31-06 SOLIDEQ, société en commandite (continued)
SOLIDE de la MRC de Joliette
SOLIDE de la MRC de la Côte-de-Beaupré
SOLIDE de la MRC de la Haute-Côte-Nord
SOLIDE de la MRC de la Jacques-Cartier
SOLIDE de la MRC de la Matapédia
SOLIDE de la MRC de la Mitis
SOLIDE de la MRC de la Nouvelle-Beauce
SOLIDE de la MRC de la Rivière-du-Nord
SOLIDE de la MRC de la Vallée-du-Richelieu
SOLIDE de la MRC de Lac-Saint-Jean-Est
SOLIDE de la MRC de l’Amiante
SOLIDE de la MRC de l’Île d’Orléans
SOLIDE de la MRC de L’Islet
SOLIDE de la MRC de Lotbinière
SOLIDE de la MRC de Maria-Chapdelaine
SOLIDE de la MRC de Maskinongé
SOLIDE de la MRC de Matane
SOLIDE de la MRC de Mékinac
SOLIDE de la MRC de Memphrémagog
SOLIDE de la MRC de Minganie
SOLIDE de la MRC de Montmagny
SOLIDE de la MRC de Nicolet-Yamaska
SOLIDE de la MRC de Pontiac
SOLIDE de la MRC de Rimouski-Neigette
SOLIDE de la MRC de Rivière-du-Loup
SOLIDE de la MRC de Roussillon
SOLIDE de la MRC de Sept-Rivières
SOLIDE de la MRC de Témiscamingue
SOLIDE de la MRC de Vaudreuil-Soulanges
SOLIDE de la MRC des Basques
SOLIDE de la MRC des Collines-de-l’Outaouais
SOLIDE de la MRC des Etchemins
SOLIDE de la MRC des Îles-de-la-Madeleine
SOLIDE de la MRC des Jardins-de-Napierville
SOLIDE de la MRC des Laurentides
SOLIDE de la MRC des Pays-d’en-haut
SOLIDE de la MRC du Bas-Richelieu
SOLIDE de la MRC du Domaine-du-Roy
SOLIDE de la MRC du Fjord-du-Saguenay
SOLIDE de la MRC du Haut-Saint-François
SOLIDE de la MRC du Rocher-Percé
SOLIDE de la MRC du Val-Saint-François
SOLIDE de la MRC Le Centre-de-la-Mauricie
SOLIDE de la MRC Les Maskoutains
SOLIDE de la Ville de Longueuil
SOLIDE de Laval
SOLIDE de Lebel-sur-Quévillon
SOLIDE de l’Est de la Ville de Québec
SOLIDE de Lévis
SOLIDE de l’Ouest de la ville de Québec
SOLIDE de Matagami
76
2007 ANNUAL REPORT
Equity Interest
of the Fund
%
Shares
and Units
$
Loans and
Advances
$
10
112
10
10
40
112
25
110
250
92
425
10
10
180
250
60
470
370
250
10
60
50
10
85
10
125
185
10
223
10
10
92
99
10
10
110
110
270
165
100
10
10
90
40
325
80
5
10
100
5
5
Total
$
10
112
10
10
40
112
25
110
250
92
425
10
10
180
250
60
470
370
250
10
60
50
10
85
10
125
185
10
223
10
10
92
99
10
10
110
110
270
165
100
10
10
90
40
325
80
5
10
100
5
5
08-31-06 SOLIDEQ, société en commandite (continued)
SOLIDE de Mercier/Hochelaga-Maisonneuve
SOLIDE de Rosemont/Petite-Patrie
SOLIDE de Villeray/St-Michel/Parc-Extension
SOLIDE du Centre de la ville de Québec
SOLIDE du Sud-Ouest de Montréal
SOLIDE Rivière-des-Prairies/Pointe-aux-Trembles
SOLIDE Ville-Marie
12-31-06 VantagePoint Venture Partners 2006 (Q), L.P.
Chemrec AB
Cobalt Technologies, inc.
I/PRO Corporation
Mascoma Corporation
VantagePoint International SRL
VP Alpha 2006, L.L.C.
Zvents, inc.
Vertex III (C.I.) Fund, LP
First fiscal year
12-31-06 Vimac Early Stage Fund L.P.
Atlantis Components, inc.
Corporation DataCom Wireless
GEOCOMtms, inc.
iMPath Networks inc.
Megawheels Technologies inc.
MessageOne inc.
Natural Convergence, inc.
Net Integration Technologies inc.
Pragmatech Software, inc.
Seniorlink inc.
Signiant inc.
Spectalis Corp.
TKS, inc.
webHancer Corp.
Equity Interest
of the Fund
%
2.0
5.8
Shares
and Units
$
Loans and
Advances
$
Total
$
—
10
177
10
10
115
140
10
7,313
10
177
10
10
115
140
10
7,313
16,162
23,475
1,641
1,748
2,331
3,496
3,059
2,335
5,477
20,087
—
1,641
1,748
2,331
3,496
3,059
2,335
5,477
20,087
7,265
1,600
2,324
951
4,103
1,698
3,884
574
3,653
6,678
5,028
3,081
9,336
84
50,259
100
50
43
15
208
7,265
1,700
2,324
1,001
4,146
1,698
3,884
574
3,653
6,693
5,028
3,081
9,336
84
50,467
9.4
2007 ANNUAL REPORT
77
As at May 31, 2007
(In thousands)
Equity Interest
of the Fund
%
12-31-06 Fonds immobilier du Fonds de solidarité FTQ inc.
100.0
875 Charest s.e.c.
Bio Sherbrooke Phase I s.e.c.
Brossard-sur-le-Fleuve s.e.c.
Centre de développement des Biotechnologies de Laval s.e.c.
Condominiums Le George V s.e.c.
Côte de Terrebonne s.e.c.
Développements Wilfrid-Carrier s.e.c.
Les Condos Laurin/St-Louis s.e.c.
Montée des Pionniers Phase I s.e.c.
Montée des Pionniers Phase II s.e.c.
SEC Laurin/St-Louis
Société en commandite 1111 Saint-Laurent
Société en commandite 668 De Courcelle
Société en commandite Angus s.e.c. Phase II
Société en commandite Bourassa-Pelletier
Société en commandite C.V.L.
Société en commandite Château Hymus
Société en commandite Clairevue
Société en commandite Condos Laurin St-Louis
Société en commandite Édifice Le Soleil
Société en commandite Héritage Pointe-Claire
Société en commandite Le Sanctuaire de la Rive
Société en commandite Rose de Lima
Société en commandite Viau Ontario
Total funds disbursed by the Partnership for these investments is $168,335,773.
12-31-06 Société en commandite immobilière Solim
99.9
C.C.L. II, Société en commandite
C.C.L. Société en commandite
Centre de Ressources du Parc Technologique du Québec Métropolitain inc.
Édifice 255 Saint-Jacques Société en commandite
Édifice 261 Saint-Jacques Société en commandite
La société en commandite Godefroy de Lintôt
Société en commandite Alphonse T. Lépine
Société en commandite Claude Baillif
Société en commandite de La Dauversière
Société en commandite Inspecteur-William
Société en commandite Les Tours des Terrasses du Golf
Société en commandite Milton
Société en commandite Place Dunant
Terrains de stationnement de Montréal
78
2007 ANNUAL REPORT
Share in Real Estate Property and
Property Under Development
$
2,702
13,547
10,876
16,975
8,242
2,588
8,442
21,343
2,257
4,264
6,918
2,776
1,024
33,698
18,873
3,210
13,570
504
627
26,030
16,766
1,192
6,666
9,141
232,231
1,615
1,306
2,700
968
2,023
516
1,729
3,511
6,551
3,990
238
2,037
2,393
3,524
33,101
Equity Interest
of the Fund
%
12-31-06 Société en commandite immobilière Solim II
99.9
Hôtel Particulier : Le Ste-Hélène s.e.c.
Immeuble 9001 L’Acadie, Société en commandite
Société en commandite 75 boulevard Québec
Société en commandite African
Société en commandite Cavelier de LaSalle
Société en commandite CDTI de Hull
Société en commandite du 1400
Société en commandite JBSL
Société en commandite Mansfield
Société en commandite RMI
Trois A, Société en commandite
Share in Real Estate Property and
Property Under Development
$
2,672
11,327
1,006
871
6,013
1,458
1,802
3,606
2,047
216
2,718
33,736
This unaudited list provides details of the investments made by the specialty funds in which the Fonds de solidarité des travailleurs du
Québec (F.T.Q.) has invested more than $10,000,000.
2007 ANNUAL REPORT
79
F ondation de la formation économique du
F onds de solidarité des travailleurs du Qué bec (F.T.Q.)
Auditors’ R eport
To the Directors of the
Fondation de la formation économique du Fonds de solidarité des travailleurs du Québec (F.T.Q.)
We have audited the statements of financial position of the Fondation de la formation économique du Fonds de solidarité des travailleurs
du Québec (F.T.Q.) as at May 31, 2007 and 2006 and the statements of operations and changes in net assets for the years then ended.
These financial statements are the responsibility of the Fondation’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fondation as at May 31, 2007
and 2006, and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted
accounting principles.
80
2007 ANNUAL REPORT
Statements of F inancial Position
As at May 31
Assets
Current assets
Cash
Accounts receivable
233,136 286,600 519,736 293,999
159,559
453,558
Investments (Note 3)
Capital assets (Note 4)
5,157,516 3,158 5,680,410 5,125,137
3,947
5,582,642
Liabilities
Current liabilities
Accounts payable and accrued expenses
Fonds de solidarité des travailleurs du Québec (F. T.Q.)
Other
358,643 111,762 470,405 223,432
149,205
372,637
Loan – Fonds de solidarité des travailleurs du Québec (F. T.Q.) (Note 5)
5,000,000 5,470,405 5,000,000
5,372,637
Net assets
Net assets invested in capital assets
Unrestricted net assets
3,158
206,847
210,005
5,680,410
3,947
206,058
210,005
5,582,642
2007
$
2006
$
On behalf of the Board of Directors,
Denis Leclerc, Director
2007 ANNUAL REPORT
81
F onds de solidarité des travailleurs du Qué bec (F.T.Q.) ( c o n t i n u e d )
Statements of Operations
Revenues
Financial contributions
Interest
Government agency and other bonds
Other
Expenses
Education and training expenses
Education and training – enterprises
Education and training – other
Administrative expenses
Salaries and benefits
Rent and occupancy costs
Advertising and information
Professional fees
Travel and entertainment
Office supplies
Education and training
Amortization of capital assets
Financing costs
Interest on loan (Note 5)
Fonds de solidarité des travailleurs du Québec (F. T.Q.)
Excess of revenues over expenses
82
2007 ANNUAL REPORT
2007
$
2006
$
921,914 868,594
122,957
141,391
26,066
1,159,008
765,735 19,658 785,393 713,241
73,701
786,942
48,202
10,920
2,033
70,122
6,089
4,364
—
789
142,519
42,281
10,920
—
72,822
5,130
3,539
2,520
987
138,199
233,867
1,159,008
—
121,512
149,232
19,562
1,212,220
284,308 1,212,220 — Statements of Ch ang es in Net Assets
2007
Excess of revenues over expenses (expenses over revenues)
2006
Excess of revenues over expenses (expenses over revenues)
Net assets
invested in Unrestricted
net assets
capital assets
$
$
Total
$
3,947
206,058
210,005
(789)
3,158
789
206,847
—
210,005
4,934 205,071 210,005
(987) 3,947 987 206,058 —
210,005
2007 ANNUAL REPORT
83
F onds de solidarité des travailleurs du Qué bec (F.T.Q.) ( c o n t i n u e d )
N otes to th e F inancial Statements
As at May 31, 2007 and 2006
1. I ncorporation and nature of operations
The Fondation is incorporated under Part III of the Québec Companies Act. The main purpose of the Fondation is to collect and manage
financial contributions from various social and economic groups in order to promote the education and economic training of the working
people of Québec.
2 . S ignificant accounting policies
Measurement of investments
The demand promissory note is recorded at cost and its fair value approximates its carrying amount since the interest rate it bears
is equivalent to the rate the Fondation would receive on investments with similar terms and conditions and maturity.
Bonds are recorded at unamortized cost and valued based on prices at market close.
Capital assets
Office furniture and equipment are stated at cost and amortized over their estimated useful life using the diminishing balance method
and a rate of 20.0%.
Revenue recognition
Premiums and discounts
Premiums and discounts on fixed-term investments are amortized as revenue using the effective interest method up to their
maturity date.
Financial contributions
Financial contributions are recognized as revenue when received or receivable if the amount can be reasonably estimated and
collection is reasonably assured.
3. I n vestments
Demand promissory note of Fonds de solidarité des travailleurs du Québec (F.T.Q.), at cost
Government agency bonds, at unamortized cost
Accrued interest
2007
$
2,673,548
2,425,288
5,098,836
58,680
5,157,516
2006
$
2,602,035
2,464,422
5,066,457
58,680
5,125,137
Interest on the promissory note, renewed monthly at a variable rate, is based on the rate of return of Other investments of the Fonds
de solidarité des travailleurs du Québec (F.T.Q.). As at May 31, 2007, the interest rate was 4.75% (4.5% in 2006) and the interest
amounted to $121,512 ($122,957 in 2006). The average interest rate for the year was 4.58% (4.84% in 2006).
The government agency bonds, which had average nominal rates and yields to maturity of 8.23% and 5.52%, respectively, in 2007
(8.23% and 5.49% respectively, in 2006) mature on various dates between 2012 and 2035. As at May 31, 2007, the fair value of the
bonds was $2,634,577 ($2,633,470 in 2006).
84
2007 ANNUAL REPORT
4 . C ap ital assets
Cost
$
2007
19,092
2006
19,092 Accumulated
amortization
$
Net book
value
$
15,934
15,145 3,158
3,947
5 . Loan – F onds de solidarité des travailleurs du Qué bec (F.T.Q.)
The loan from Fonds de solidarité des travailleurs du Québec (F.T.Q.) is repayable on demand and bears an interest rate equal to the
Laurentian Bank prime rate, as determined from time to time, plus two percent (2%). At no point should the payment of such interest
cause expenses to exceed revenues.
6 . F inancial instruments
Given the short-term maturity of these financial instruments, the fair value of cash, accounts receivable and accounts payable and
accrued expenses approximates their carrying amount.
The fair value of the loan cannot be determined as it has no fixed repayment terms.
7. C ash flows
No statements of cash flows were prepared since the required information on cash flows is available from other financial statements
and notes thereto.
8 . R elated party transactions
The Fonds de solidarité des travailleurs du Québec (F.T.Q.) appoints the Directors of the Fondation and manages the Fondation’s
investments.
The majority of the expenses incurred and other revenues earned by the Fondation stem from transactions with the Fonds de
solidarité des travailleurs du Québec (F.T.Q.). These transactions are measured at the exchange amount, which represents the
consideration established and agreed to by the related parties.
9. comparati ve figures
Certain comparative figures have been reclassified to conform with the current year’s presentation.
2007 ANNUAL REPORT
85
G lossary
Appreciation (depreciation)
Appreciation (depreciation) is the increase (decrease) of the value of an asset or a portfolio in relation to its reference value.
Average assets (or average net assets)
Total of the averages of assets (or average net assets) of the beginning and end of each six-month period, divided by two.
Assets under management and average assets under management
Assets under management refers to the fair value of the assets managed by the investment and other investments sectors and used to generate income for the
Fund. The average assets under management are calculated by adding the average assets at the beginning and end of each six-month period and dividing by two.
Derivative financial instrument or derivative product
Financial instrument whose price or return is tied to an underlying product. The most common derivative instruments are swaps, forwards, futures and options.
Derivative instruments are used to limit market risk and to preserve asset value, to facilitate changes in asset allocation, to manage an indexed strategy for part of
the portfolio, to facilitate portfolio management, and to improve returns within established risk limits.
Direct jobs
Jobs held by workers working directly in the Fund’s, the regional funds’, the local funds’ or the specialty funds’ partner companies or their subsidiaries.
Disbursed funds
Investments for which authorized, committed amounts were paid to a partner company. Disbursed funds exclude funds committed but not disbursed as well as
guarantees and suretyships.
Equity loan
Unsecured loan of up to $2 million treated as quasi-equity by most financial institutions. This loan is offered with fixed or variable rate and does not require capital
reimbursement for a period of 3 to 5 years.
FIER
Regional economic intervention fund (FIER) set up by the Government of Québec, the Solidarity Fund QFL, Fondaction and Desjardins. With a capitalization
of $180 million, FIER is committed to creating sector-based and seed funds as well as financing structuring projects.
Fixed-income security
Security that pays a pre-determined fixed income until maturity. Fixed-income securities comprise bonds, mortgages, preferred shares and money
market securities.
Forward or futures contract
Commitment to buy or sell a security (short term security, bond, share, stock index, currency) on a pre-determined date and price.
Investments agreed to by the Fund and for which the funds have been committed but not yet disbursed.
Fund return
Result of the calculation taking the average return of each asset class, weighted to account for their relative weight in relation to the average assets under
management, less operating expenses, income taxes and capital tax expressed as a percentage of average net assets.
Growth loan
Unsecured loan of up to $500,000, available at any time, that is flexible, fast and easy to use since it only requires 15 business days to process. Offered
at competitive rates, this loan is designed to increase working capital or to complete a financing phase.
Hedge fund
Investment fund with long and short positions on securities, markets, etc. These positions reflect the manager’s opinion on probable securities price or market
trends. A fund of hedge funds is a fund mostly made up of investments in hedge funds.
Hedging strategy
Strategy used to reduce variations in the Fund’s return resulting from changes in interest rates, exchange rates or stock market prices.
Income trust
Legal structure allowing an enterprise to raise capital by publicly offering trust units. An income trust is a transfer mechanism generally structured so that its
earnings are attributed to unitholders and the trust therefore does not pay income tax. However, the amounts attributed to unitholders are subject to income tax.
It is important to note that the federal government announced on October 31, 2006 changes to the tax treatment of income trusts.
Indirect jobs
Jobs associated with economic spin-offs generated by partner companies located in Québec. The number of indirect jobs is calculated by taking the number of
direct jobs, and applying a factor based on the co-efficient of indirect jobs by productive sector published by the Institut de la statistique du Québec. The factor
depends on the industry in which the partner company operates.
Induced jobs
Jobs created, maintained or preserved as a result of spending by workers holding direct and indirect jobs. The calculation of consumer spending takes tax collection
and the level of workers’ savings into account. The number of induced jobs is a function of personal disposable income spent, to which a ratio of 904 jobs for each
$100 million is applied, based on the intersectoral model developed by the Institut de la statistique du Québec.
86
2007 ANNUAL REPORT
Investment
Acquisition of securities or commitment to acquire securities, generally from Québec SMEs, and purchased as part of the Fund’s mission. Most investments are
eligible under the 60% rule set out in the Fund’s incorporating act.
Limited partnership
Partnership consisting of two types of partners: limited partners and a general partner. Only the general partner is authorized to manage and represent the
partnership. As a director, the general partner’s liability is unlimited with regards to the partnership’s debts and obligations. Limited partners provide the capital
required for the partnership to operate and are liable for its debts up to the amount committed and to be disbursed to the partnership. The limited partnership is
a legal structure designed to meet specific needs and to separate investment from the partnership’s management.
Local representative (LR)
The Fund has created a network of LRs within the unions affiliated with the QFL (and in unions with which the Fund has concluded agreements) who work
as volunteers to promote the Fund in their workplace. These LRs’ main task is to explain the Fund’s objectives and to promote share purchases by union members.
Money market security
Security with a pre-determined return that matures in less than one year. Easily marketable, and highly liquid, these securities include T-bills, bankers’ acceptances
and commercial paper.
Option
Contract that gives the holder the right to buy or sell a security (short-term security, bond, share, stock index, currency and futures) at a pre-determined price.
The seller or writer of the option must buy or sell the security if the option holder exercises his right.
Other investments
Invested capital consisting mainly of large-cap securities acquired on organized markets, i.e., money market securities, bonds, shares acquired as part
of the sector-based strategy, funds of hedge funds and the high-revenue portfolio (preferred shares, high-dividend shares and income trust units).
Overall financial assets management
Financial asset management principle with the objective of diversifying the risks borne by the Fund while allowing it to fully achieve its mission.
Private security
Direct investment in an unlisted company or in a listed company whose stock price exceptionally does not reflect its fair value at the time of its valuation.
Productivity loan
Unsecured loan for a minimum of $2 million, offered at a competitive rate and designed to back companies with projects to improve productivity, set up or develop
management information systems or set up systems to obtain and maintain certification or to achieve regulatory compliance.
Swap
Agreement used to exchange a security, an income or a currency for another security, income or currency at pre-determined conditions and for a given period.
The parties sign an agreement that respects international standards for this type of transaction.
Specialty or private fund
Investment company in which the Fund invests as a limited partner or a shareholder. The company’s general partner or administrators manage the invested funds
on behalf of the limited partners or shareholders.
Trademark loan
Unsecured loan for a minimum of $2 million offered at a competitive rate and aimed at helping companies maintain a trademark or prepare and implement
a marketing plan.
2007 ANNUAL REPORT
87
B OARD O F D I RECT O RS
As at May 31, 2007
FROM LEFT TO RIGHT
MICHEL ARSENAULT F
Director, United Steel Workers
of America, and Vice-President
of the QFL
RÉJEAN PARENT
President, Centrale des syndicats
du Québec (CSQ)
LOUISE ST-CYR A, B
Chairholder, Chair of Small
and Medium-Sized Businesses,
HEC Montréal
RENÉ ROY A, C
General Secretary, QFL,
and Secretary of the Board
of Directors of the Fund
MICHEL POIRIER
Québec Director, Canadian Union
of Public Employees (CUPE),
and Vice-President of the QFL
HENRI MASSÉ A, D
President, QFL, and Chairman
YVON BOLDUC A, E
President and Chief Executive Officer,
Fonds de solidarité FTQ
88
2007 ANNUAL REPORT
A B S E N T F R O M P H O T O,
FROM TOP TO BOTTOM
DENISE MARTIN A, B, D
Vice-President and General Manager
of McMahon Distributeur
pharmaceutique inc., and Vice-Chair
JEAN LAVALLÉE
General Director and Secretary
of Finance, Inter-Provincial
Brotherhood of Electrical Workers
(FIPOE), and Vice-President
of the QFL
ROLAND ROBICHAUD B, E
Corporate Director
ALAIN deGRANDPRÉ
President of Joint Council 91,
Teamsters Canada, and
Vice-President of the QFL
PIERRE-MAURICE VACHON B, D
Corporate Director
JÉRÔME TURCQ
Regional Executive Vice-President,
Québec Region, Public Service
Alliance of Canada (PSAC), and
RAYMOND FORGET E
President, Québec Service Employee
Union (QSEU), Local 298, and
LOUIS BOLDUC D
Québec Assistant to the Canadian
Director, United Food and
Commercial Workers International
Union CLC, ASL-CIO, and
LUC DESNOYERS
Québec Director, National
Automobile, Aerospace,
Transportation and General Workers
Union of Canada (CAW-Canada),
and Vice-President of the QFL
MICHEL OUIMET
Québec Region, Communications,
Energy and Paperworkers Union
of Canada (CEP), and
A Member of the Executive Committee
B Member of the Audit Committee
C Member of the Technology
Investment Special Board
D Member of the Turnaround
SPECIAL BOARD
E Member of the Financial Assets
F Member of the Mining Portfolio
STEERING COMMITTEE
MA N AGEME N T C O MM I TTEE
As at May 31, 2007
FROM LEFT TO RIGHT
GAÉTAN MORIN B
Investments
JANIE C. BÉÏQUE
Vice-President, Legal Affairs,
and Corporate Secretary
MARIO TREMBLAY
Vice-President, Public Affairs
and Communications
YVON BOLDUC A, B
President and CEO
DANNY LE BRACEUR
Vice-President, Human Resources
DENIS LECLERC
Shareholder Services
and President, Fondation
de la formation économique
A Member of the Executive Committee
B Member of the Financial Assets
MICHEL PONTBRIAND B
Executive Vice-President, Finance
S P EC I AL B OARDS
As at May 31, 2007
C O MM I TTEES
As at May 31, 2007
UNION
As at May 31, 2007
T echnology I n v estments
F inancial A sset S
M anagement C ommittee
Unionized employees of the Solidarity
Fund QFL are members of the Service
Employees Union, Local 800 (QFL).
Fund director and advisors
René Roy (President), Jean Martin, Jean Perron
Outside representatives
J.V. Raymond Cyr, Chairman of the Board, Polyvalor Inc.,
and Corporate Director
Fund directors, officers and advisor
Yvon Bolduc (President),
Raymond Forget, Pierre Genest,
Gaétan Morin, Michel Pontbriand,
Roland Robichaud
EXECUTIVE COMMIT TEE
Guy Trépanier, President
Gilles Mourette, Senior Vice-President, Technologies, SSQ Groupe financier
Marie-Claude Rouleau,
First Vice-President
Jacques Simard, Professor, Department of Anatomy and Physiology,
Laval University, and Director, Cancer Genomic Laboratory,
CHUQ/CHUL Research Centre
Michel Thérien, Strategic Advisor and Corporate Director
Robert Charpentier,
Second Vice-President
Nycole Turmel, Corporate Director
David Boucher, Treasurer
André Monette, Management Advisor
T urnaround
Fund directors and advisor
Henri Massé (President), Louis Bolduc, Denise Martin,
Jean Martin, Pierre-Maurice Vachon
Outside representative
Michel M. Lessard, Corporate Director
M ining Portfolio
S teering C ommittee
Director
Michel Arsenault (President)
Pierre Boudreault,
Strategic Advisor
Michel Gauthier,
Strategic Advisor
Julie Proulx, Secretary
LABOUR COUNCIL
A N D S H O P ST E WA R D S
Louise Bergeron, Nathalie Bilodeau,
Gilles de Montigny, Linda Di Quinzio,
Michel Desjardins, Johanne Dupont,
Daniel Gilbert, Jacques Grégoire
Claude Grenier, Marie-Thérèse Hébert
Valérie Morin, Michèle Péloquin,
Danielle Pigeon, Pierre Thompson
2007 ANNUAL REPORT
89
P ERMA N E N T EM P L OYEES
AS AT MAY 31, 2007
Nathalie Albert / Daniel Allaire / Claudette Allard / Jean Archambault / Luc Archambault / Dominique Arsenault / Pierre Arseneault / Danielle Asselin / Raynald Aubin / Louis
Aubuchon / Danielle Auclair / Gilles Audette / Bruno Baril / Michel A. Bastien / Georges Bazinet / Annie Beaudry / Johanne Beauparlant / Rosage Beauzil / Monique Bédard /
Steves Bégin / Janie C. Béïque / Nicole Béland / Christian Bélanger / Normand Bélanger / Suzanne Benoit / Louise Bergeron / Luc Bergeron / Marie Bergeron / Conrad
Bernadel / Natacha Bernier / Délisca Berthelot / France Berthiaume / Josée Bilodeau / Nathalie Bilodeau / Nathalie Bilodeau / Pierre Blaising / Simon Blanchard / Josée
Bolduc / Julie Bolduc / Yvon Bolduc / Philippe Bonin / Fabien Bouchard / David Boucher / André Bougie / Claudine Boulais / Normand Boulay / Daniel Bourcier / Sylvie
Boutet / Charles Boutin / Guy Boutin / Jean-Claude Brault / Hélène Brien / Guylaine Brousseau / François Brulotte / François Caisse / Linda Call / Johanne Carignan / Lise
Carignan / Hubert Carrier / Robert Charpentier / Frédérique Chatain-Collinet / Normand Chouinard / Marie-Claude Clermont / Mireille Cliche / Mathieu Cloutier / Richard
Cloutier / Ina Corbin / Jean-Sébastien Cossette / Gilles Côté / Line Côté / Lise Côté / Michel Coulombe / Roland Courtois / Louise Cousineau / Manon Cousineau / Éric Coutu /
Luc Couture / Guy Croteau / Aubin D’Amours / Tania D’Anjou / Jocelyne Dansereau / Joanne Daviault / Daniel David / Danielle Day / Anne De Bellefeuille / Gilles
de Montigny / Denis Dean / Claude Delâge / Nathalie Denommée / Yves Derosby / Martine Desforges / Maryse Deshaies / Marie-Josée Desjardins / Michel Desjardins /
Nathalie Desjardins / Sylvie Deslières / Alain Desrochers / Lisette Dezainde / Chantal Dionne / Linda Di Quinzio / Chantal Doré / Michel Dorion / Sylvie Drouin / Diane
du Tremble / Louise Dubreuil / Jean-Denis Dufort / Isabelle Duguay / Karyn Duguay / Isabelle Duhaime / Hélène Dumont / France Dumontier / Jocelyne Dupont / Johanne
Dupont / Francine Dupuis / Roch Dutil / Roxanne Émond / Ricardo Espera / Chantale Favreau / Christian Fecteau / Sylvain Flynn / Alain Foisy / Carole Forget / Daniel Fortier /
Manon Fortier / André Fortin / Hélène Fortin / Martin Fournier / Louise Fréchette / Danny Gagné / Gérard Gagné / André Gagnon / Jocelyne Gagnon / Lucie Gagnon / Mireille
Gagnon / Véronique Gagnon / Louise Galipeau / Nathalie Gallant / Christiane Gamache / Marie-Josée Gamache / Benoît Gariépy / Ginette Gaudreau-Lessard / Alain Gauthier /
Serge Gauthier / Louis Gendron / Gilles Genest / François Geoffrion / Jean Germain / Carole Gignac / Carole Giguère / Guylaine Giguère / Alain Gilbert / Daniel Gilbert /
Louise Gingras / François Girard / Manon Girard / Dominique Glass / Diane Gosselin / Marie-Hélène Gosselin / Nancy Goudreau / Louis Gourdeau / Gaétan Gravel / Jacques
Grégoire / Claude Grenier / Suzanne Grenier / Francine Grenon / Jean-Pierre Guay / Marie-Noëlle Guertin / Gilles Guilbault / Louise Hamel / Suzanne Hamel / Lucie Hamiaux /
Louise Harvey / Daniel Hébert / Éric G. Hébert / Marie-Thérèse Hébert / Daniel Hinse / Alain Houle / Angèle Houle / Camyl Huot / Claude Jarret / Guy Jasmin / Sylvie
Jeannotte / Gilles Jolivet / Patrice Jolivet / Colette Julien / Sophie Julien / Jean-Pierre Khlot / Michel Kirouac / René Kurth / Marc La Grenade / Linda Lachance / Josée
Lachapelle / Josée Lachapelle / Diane Lacharité / Jodi A. Lackman / Hugues Lacroix / Diane Ladurantaye / Sylvie Laferrière / Daniel Lafrenière / Josée Lagacé / Michel
Lagueux / Dominic Lainesse / Alain Lamanque / Marie-Josée Lamarche / Pascal Lamarche / Michel Lambert / Odile Landry / Véronique Landry / Yvan Landry / Gaétan
Langlois / Julie Langlois / Monique Langlois / Denis Lapalme / Jean-François Laplante / Serge Lapointe / Daniel Laporte / Martin Latreille / Michèle Laurion / Michel Lauzon /
Réjean Lavigne / Hubert Lavigueur / France Le Bourdais / Danny Le Braceur / Éric Lebel / Lucie Lebeuf / Réjean Leblanc / Anne Leclerc / Chantal Leclerc / Denis Leclerc /
Diane Lecompte / Ginette Lecours / Chantal Leduc / Liette Leduc / Chantal Lefebvre / Hélène Lefebvre / Jean-François Legault / Josée Legault / Sylvain Lemarbre / Christian
Lemay / Claudine Lemay / Sylvie Lemay / Fabiola Lépine / Martin Lépine / Élise Lessard / Jocelyn Levasseur / Sonia Lévêque / Mario Lévesque / Michel Lévesque / Michèle
Levesque / Rollande Lévesque / François L’Heureux / Stéphane Lortie / Sylvie Losier / Hafida Lounis / Manon Lussier / Yves Mackay / Grazia Maion / André Mallet / Madeleine
Manseau / Diane Marcotte / Suzel Marcotte / Carole Marcoux / Nathalie Marino / Stéphan Marois / Jean Martel / Benoit Martin / Nathalie Martin / Mélanie Martineau / Sylvain
Masse / Thierry Masse / André McDonald / Louise McQuillan / Chantal Ménard / Élaine Ménard / Marie-Claude Ménard / Pascale Ménard / Frédéric Mercier / Michel Messier /
Steve Messier / Marie-Claude Michaud / Serge Michaud / Julie Migneault / Paul-André Moisan / Chantal Mongeau / Lyne Mongeau / Robert Montpetit / Nathalie Morand /
Jocelyn Moreau / Thérèse Morel / Gaétan Morin / Jean Morin / Normand Morin / Guylaine Morneau / Richard Moss / Noël Nadeau / François Nadon / Gabriel Nadon /
Jean-Claude Nadon / Yvan Nantel / Diane Nother / Martin Ostiguy / Chantal Ouellet / Georges Panitchersky / Annick Paquet / Laurent Paquette / Luce Paquette / Monique
Paquette / Lyne Paquin / Antoinette Paradis / Robert Paradis / Sylvain Paré / Carole Parent / Daniel Pelletier / Dany Pelletier / Nathalie Pelletier / Michèle Péloquin / Lise
Perreault / Marie-Noëlle Perrier / Brigitte Perron / Joan Pierre / Danielle Pigeon / Gisèle Pigeon / Claire Pitre / Michel Pontbriand / Nicole Potvin / Julie Poudrette / Gilles
Poulin / Marco Poulin / Martine Pratte / Julie Proulx / Steve Rayes / Andréa Raymond / Isabelle Raymond / Marie-Josée Reed / Johanne Rémillard / Mario Renaud / Claire
Richard / Manon Riendeau / Suzanne Rippeur / Marie-Claude Rivest / Martin Rivest / Sylvie Robitaille / Nicole Rochon / Éric Roger / Marie-Claude Rouleau / Suzanne
Roussel / Lise Routhier / André Roy / Colette Roy / Sébastien Roy / Sylvain Roy / Manon Royal / André Rudnicki / Carole Ruel / Michel Sabourin / Nathalie Sabourin / Guy
Sanscartier / Lorraine Saumure / Sébastien Sauvageau / Louise Sauvé / Renée Sauvé / Lina Scarpellini / Daniel Schneider / Patrick Schumann / Carmen Shaw / Dany Sirois /
Pierre Soulière / Annie St-Arnaud / Patricia Ste-Marie / Éric St-Jacques / Manon St-Jean / Roch St-Louis / Miville St-Onge / Mélanie St-Pierre / Julie Marie Strutt / Pierre
Surprenant / André Sylvain / Jean Sylvestre / Geneviève Tanguay / Michel Taylor / Pierre Tellier / Laurent Themens / Francine Théorêt / Johanne Thériault / Josée Théroux /
Denis Thibault / Johanne Thibault / Jean Thifault / Pierre Thompson / Éric Tourangeau / Quang Xuan Tran / Bruce Tremblay / Élyse Tremblay / Jean-Denis Tremblay / Mario
Tremblay / Monique Tremblay-Côté / Guy Trépanier / Louise Trudeau / Sylvie Trudeau / Christine Turcotte / Céline Turgeon / Michèle Vachon / Yolande Vaillancourt / Nathalie
Vallières / Hélène Valois / Gilles Veilleux / Mireille Verret / Hélène Vézina / André Viau / Madeleine Vignola / Jean-Marc Wassef / Jean Wilhelmy / Joanne Zakaïb.
The Fund also owes its success to its part-time and former employees as well as to all its outside partners.
ED I TO RS
Suzanne Hamel
André McDonald
WR I TERS
Suzanne Hamel
Sylvain Paré
C O LLAB O RATO RS
Roch Dutil
Sylvain Masse
Louise Sauvé
90
2007 ANNUAL REPORT
DES IGNER
AND P RO DUCER
We would like to thank everyone who contributed to the production of this
annual report.
Gauthier Designers
Printed by the unionized workers of komunikdatamark on paper made in Québec
by Cascades using biogas energy, Eco-Logo certified and containing recycled
post-consumer fibre.
P H OTO GRA P HERS
Jean-François Bérubé
Jean-Sébastien Cossette
Harold Fortin
Tango photographie
Legal Deposit – 3rd Quarter 2007, Bibliothèque nationale du Québec,
National Library of Canada
Ce document est également disponible en français.
B-08-00-0189
Mission
Create, maintain or protect jobs
Invest in companies impacting the Québec economy and
offer them services to further their development and create,
maintain or protect jobs.
Train workers
Promote economic training for workers so they can increase
their influence on the economic development of Québec.
Develop the Québec economy
Stimulate the Québec economy through strategic investments
that benefit both Québec workers and companies alike.
Prepare for retirement
Make workers aware of the need to save for retirement
and encourage them to do so, as well as encourage them
to participate in the development of the economy by
purchasing Fund shares.
Go i n g Carbon- Neutral
1
6
17
89
Highlights
Shareholder Base
Financial Information
2
10
86
Message from the Chairman
of the Board OF DIRECTORS
Training
glossary
Special Boards
Committees
Union
12
88
90
Investments
Board of Directors
Permanent Employees
4
Message from the President
and Chief Executive Officer
At the Annual General Meeting and the national local representative meeting preceding it, the Solidarity Fund QFL decided to
adhere to the principles of a conference encouraging the reduction of polluting emissions. Therefore, to reduce greenhouse
gas emissions (GGE), we encouraged the participants of these meetings to use public transportation.
The Fund also hired Planetair, a not-for-profit organization, to calculate the GGE generated by these two meetings
(transportation, meal preparation, etc.). Once the results are final, the Fund will remit to Planetair a compensatory amount in
keeping with current practice. This money will be invested in renewable energy or energy efficiency projects that will reduce
GGE at their source in developing countries.
Our capital starts with people
2 0 0 7 A N N U A L R E P O R T _ f o n d s d e s o l i d a r i t é FT Q
S uite 200
545 Crémazie Blvd. East
Montréal, Qué b ec H2 M 2W4
Teleph one: 514 383-8383
Fax: 514 383-2502
Toll free: 1 800 361-5017
www.fondsftq.com
2007
ANNUAL REPORT
fonds de
s o l i d a r i t é FT Q

160.107 EF RA 2007 FTQ ANG.indd

Transcription

Similar documents

cadastre - Shawville

Registre du Domaine de l`État, Cadastre 2014 and LADM

Utilisation de lÌnternet pour la Recherche dèmploi et lÒffre de service

Corner Unit with Plenty of Natural Light

Le Registre du domaine de l`État

Nature and culture for all tour – 2 days

LANAUdIèRE

québec city - La Route accessible

Cahier à colorier - Sûreté du Québec