Explanatory Notes
Transfer of Assets to Transveer B.V.
As part of the rationalization of the FGH
portfolio, assets amounting to NLG 1.33 billion
were transferred to Transveer B.V in 1986. This
transfer took place at book value as per January 1,
1986, and was made up as follows
(NLG x 1,000):
Mortgages 777,873
Participating interests 4,167
Real estate development projects 46,520
Real estate operated by the company 354,766
Other assets 146,674
1,330,000
Consideration receivable:
Subordinated loäns to Transveer 100,000
Cash payment 1,230,000
1,330,000
These transactions do not affect the size and
composition of the visible equity as per January 1,
1986. This transfer of assets should be taken into
account, however, when considering the com
parative figures included as per December 31,
1985.
As part of the transaction, FGH stood
surety for the loans contracted by Transveer B.V
This guarantee commitment is included in Com
mitments on guarantees granted, to which the
explanatory notes can be found on pages 33 and
43.
Consolidation Principles
The consolidated financial statements represent
the figures of the Friesch-Groningsche
Hypotheekbank N.V and its majority participat
ing interests. Participating interests which can be
regarded as joint ventures are proportionately
consolidated.
Equity and Result Determination Principles
Marketable securities are stated at their quoted
prices on the balance sheet date, except for
bonds which form part of the investment
portfolio. These are stated at their redemption
value less an amount equivalent to any diminu
tion in value. Unquoted securities are included at
their estimated market value as per balance sheet
date.
Receivables are included at face value less
deductions for uncollectability of certain items.
Additionally a reserve, which is included in Pay
ables, has been formed to cover risks inherent in
the granting of credit (Section 11 (2) of the
Credit Industry Supervision Act).
Participating interests are stated at their net
asset values, applying the valuation principles
used by Friesch-Groningsche Hypotheekbank
N.V Movements in net asset value due to the
results achieved are shown in Results of par
ticipating interests, as are results on sales of par
ticipating interests.
Real estate development projects are
included at cost including interest during the
construction period, as well as a margin to cover
the overhead involved in the project concerned,
up to the date of completion. Real estate under
development is not stated at more than its mar
ket value, however. Results on sales are recog
nized in the year in which projects are com
pleted, or, if the sales result is known, in the year
in which parts of projects are completed. Pur
chase sums received are applied against the cost
of development projects. A reserve is formed to
cover the risk of vacancy during the period be
tween completion and first lease of development
projects.
Work in progress of the construction com
pany is included in development projects after
deduction of installments received. Valuation is at
cost including a margin for overheads. Results are
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