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CORPORATE GOVERNANCE
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Report of the Chairman of the Supervisory Board
The two asset management companies have each appointed
a Compliance and Internal Control Officer. The Code of Ethics
is an integral part of the Rules of Procedure. The Compliance
and Internal Control Officers have opted to outsource second-
level controls relating to compliance and internal control of
the management companies to PCI. This assistance falls under
Articles 313-72 to 313-76 of theAMFGeneral Regulation applying
to management companies that delegate or outsource certain
functions.
B) EXTERNAL ACCREDITATIONS
Apax Partners SA and Apax Partners MidMarket SAS are AMF-
approved portfolio management companies. They are members
of AFIC, a French professional association for private equity
companies. AFIC has published a Code of Ethics and reference
guides.Moreover, ApaxPartnersSA/ApaxPartnersMidMarket SAS
and consequently Altamir comply with the International Private
Equity and Venture Capital Valuation Guidelines developed by
AFIC, EVCA, BVCA and others, and the COSO internal control
framework.
Apax Partners LLP is regulated by the FCA and is a member of
the British Venture Capital Association (BVCA), whose rules and
codes are equivalent to AFIC’s. It also belongs to the European
private equity association Invest Europe (Regime for partnerships
limited by shares).
C) PREPARING FINANCIAL AND ACCOUNTING REPORTS
FOR SHAREHOLDERS
Systems and processes for preparing accounting and financial
statements
Since2014, two software tools havebeenused tomanage financial
and accounting data:
Sage 100Comptabilité, developedbySage andused for general
accounting and payroll;
Capital Venture 3 (CV3), developed by Klee group to manage
FPCI and Altamir securities, and to prepare financial and
analytical statements.
CV3 has been usedwith a CRM interface and outsourced hosting.
All Altamir’s data since its inception have been migrated into
the new software, and customised reports have been developed.
The consolidated (IFRS) financial statements are generated
using the statutory financial statements produced by Sage, but
via
Excel spreadsheets. A meticulous process is used to convert
the statutory financial statements into consolidated financial
statements and to carryout compliance analyses. TheCompany is
considering thepurchaseof softwarededicated to theproduction
of IFRS statements.
All the systems have a significant user base. The accounting
system is used in France, and CV3 is used throughout the world.
They are well documented.
The two transaction processing systems are used independently
of eachother. The accountingdepartment uses SageComptabilité
100whereas fundadministrationusesCV3. As a result, information
must be reconciled and checked during reporting.
Once the Audit Committee has completed its investigations, it
addresses its comments and recommendations to theSupervisory
Board.
Valuation of the securities in the portfolio
For a portfoliomanagement firm, reporting is based in particular
on the valuation of the securities in its portfolio.
A half-yearly valuation is prepared by each partner in charge of
an equity investment held by the Apax France VII fund.
Their proposals are reviewed and may be amended during the
meetings of all the partners. Altamir’s Audit Committeemay also
question a valuation.
The valuations derived from financial models (for securities
acquired in LBOs) are checked by the finance department, which
carries out tests of consistency with past valuations.
As indicated above, the process of preparing and checking
valuations has been improved to include measures such as an
analysis of the value created over time.
The Statutory Auditors and the finance department review the
valuations with the sector teams.
For the Apax France VIII-B, Apax France IX-B, Apax VIII LP and
Apax IXLP funds, the finance department and StatutoryAuditors
rely on the reviews performed by the Statutory Auditors of those
entities, as well as on interviews directly with the investment
teams.
B. Summary of the internal control procedures
implemented by the Company
The full set of procedures can be found in the internal control
guidelines.
Thepresentationof theparties involved inoperations andcontrols
hasalreadyservedtodescribehowthespecificcommitteescontrol
and monitor investments/divestments (Approvals Committee,
Investment Committee, Portfolio Monitoring Committee).
Transactions and assets are controlledby segregating the tasks of
the accounting department and fund administration, centralising
signatures and reconciling transactions with the custodian.
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