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Another Levelin real estate
Annual Report 201 4
OVG Real Estate B.V.Wilhelminakade 300 ––– 3072 AR RotterdamP.O. Box 23413 ––– 3001 KK Rotterdam ––– The Netherlands+31 10 290 87 [email protected]
Another Level in real estate
Annual Report201 4
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OVG real estate Another Level in real estate Annual Report 201 4
5.0 –– Financial Statements 2014page 26
5.1 Consolidated Balance Sheet (after appropriation of result)
5.2 Consolidated Income Statement5.3 Consolidated Cash
Flow Statement5.4 Notes to the Consolidated
Financial Statements5.5 Notes to the Consolidated
Balance Sheet5.6 Notes to the Consolidated
Income Statement5.7 Company Balance Sheet
(after appropriation of result)5.8 Company Income Statement5.9 Notes to the Company
Balance Sheet
6.0 –– Other Informationpage 57
6.1 Statutory Rules concerning Appropriation of Result
6.2 Appropriation of Results for the Financial Year 2013
6.3 Appropriation of Results for the Financial Year 2014
6.4 Independent Auditor’s Report
–– Colophonpage 60
1.0 –– To Another Levelpage 04
2.0 –– When delight is the flavor, the essence is ambitionpage 06
3.0 –– Key Statisticspage 20
4.0 –– Management Boardpage 22
4.1 Management Board4.2 Advisory Board
Contents ––
5
OVG real estate B.V.
OVG IS FUNDAMENTALLY CURIOUS
1.0 –– To Another Level
Being a succesfull developer, re-developer and investor, OVG is now moving to Another Level. Significant events such as the handover of the most sustainable office building in the world, our permanent presence at the World Economic Forum and the affiliation with Philips’ smart technologies, have defined 2014 as the start of a new era. A new era that will bring OVG and the world of real estate to Another Level. Constantly driven by innovation and self-reinvigoration, OVG is discovering new territories and never ceases to amaze clients. OVG dares to run in front of trends, within and outside her own sector. Fundamentally curious and utilizing every bit of knowledge, OVG ensures that real estate will be brought to the next step in terms of sustainability, modernization and change: Healthier, smarter, more efficient, using advanced technology: this is playing on Another Level.
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OVG real estate Another Level in real estate Annual Report 2014
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OVG real estate Another Level in real estate Annual Report 201 4
Firmly rooted in Real EstateOVG was founded in 1997 and is now firmly rooted in real estate as a developer, re-developer and investor. With entrepreneurship in her DNA, OVG always looks beyond borders and impossibilities. In recent years the crisis has set the tone for the global economy. While many colleagues have been forced to pull out, OVG has remained standing and her health remains undiminished. How did OVG do it? By being adaptive and making the necessary adjustments to keep in line with the circumstances. OVG continues to move forward with her strength and resilience.Continuously looking for ways to improve, OVG is able to better serve clients not only nationally but also internationally. As demonstrated by the creation of OVG Deutschland in 2012, borders do not restrict OVG. Excellence, entrepreneurship and sustainability have ensured that the OVG brand is recognized by tenants, cities, capital markets and the world of real estate.In 2013 OVG entered the Investment Management sector with the acquisition of an exceptional real estate portfolio together with Goldman Sachs. This portfolio is managed by OVG with an approach in which the end-user is leading. The combination with a proactive attitude makes OVG stand out in this sector as well.
–– OVG continuesto move forward with herstrength and resilience.
2.0 –– When delight is the flavor, the essence is ambition
De Rotterdam – This multifunctional building is a boost for the Wilhelminapier giving new energy to the city. Here is where authentic meets modern.
OVG IS DISCOVERING NEW TERRITORIES AND NEVER CEASES TO AMAZE CLIENTS
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OVG real estate Another Level in real estate Annual Report 201 4
The organization and the three branches 2014OVG is a healthy and robust company with the opportunity to make decisions in a calm and well-considered manner. OVG used 2013 as a preparatory year in order to move on to Another Level. OVG is solid, substantial and has sufficient facilities for new investments. Even during the crisis OVG always had access to capital due to her reliable reputation. OVG’s team is superb with offices as her explicit expertise. OVG creates the workplace of the future. Last year sixteen people, who complement OVG’s versatility, were taken on. In 2014 the board comprised Coen van Oostrom, Alex Kompier and Jeppe de Boer. Jan Hein Tiedema was in charge of OVG Nederland as director. OVG Deutschland was strengthened and reorganized by the newly appointed director Martin Rodeck. In 2015 Jeppe de Boer left OVG after accomplishing his task. OVG is now an established name with international investors as a result of which a bridge has been built to the international capital market. The Green Brick award for the ‘most sustainable real estate investor of the
Coen van Oostrom – Founder and CEO of OVG Real Estate B.V.
Sustainability Project Ratings 2014 registered for assessment
Cumulative Completed real estate in Gross Floor Area 2015 showing the expected sqm to be completed
Investment persustainability level
BREEAM Good: 1 Greencalc+ C: 2
BREEAM Good: 2.17% Greencalc+ C: 2.55%
BREEAM Very Good Bespoke: 1BREEAM Very Good: 2
Greencalc+ B: 3
BREEAM Very Good Bespoke: 3.47%BREEAM Very Good: 7.37%
Greencalc+ B: 11.41%
BREEAM Excellent: 4 Greencalc+ A: 1 DGNB Gold: 2 LEED Platinum: 1
BREEAM Excellent: 7.52% Greencalc+ A: 28.12% DGNB Gold: 16.16% LEED Platinum: 5.73%
BREEAM Outstanding: 2
BREEAM Outstanding: 15.50%
2011
2009
2010
2012
2013
2014
2015
800,000
1.000,000
200,000
0
400,000
600,000
Year
2011
2012
2013
2014
2015
2009
2010
800,000
1.000,000
200,000
0
400,000
600,000
Cumulative Signed Rental Agreements in Gross Floor Area 2015 showing the expected sqm to be signed
Year
10 11
OVG real estate Another Level in real estate Annual Report 201 4
year’ from JLL shows that OVG also has a decisive and social impact in the investment sector. OVG’s drive for constant renewal, innovation and increased efficiency indeed makes a difference.
It is full steam ahead for the three branches of OVG. OVG Nederland, OVG Deutschland and Investment Management. The entrepreneurship and adaptive power of OVG comes forward in all three branches. Each of the three branches is equally important to OVG. The quest for new ways of working in order to amaze clients in the fields of sustainability and innovation can be seen everywhere. Sustainability has meanwhile become mainstream for OVG: while sustainable buildings are no longer anything unusual, OVG’s aim is to use new technologies to raise sustainability and the workplace to a higher level.
OVG NederlandFor OVG Nederland the handover of The Edge, the new head office for Deloitte in Amsterdam was a significant event in the field of new buildings in 2014. BRE awarded it a BREEAM “Outstanding” certification with a score of 98.36%. This makes the building not only the first intelligent office building in the world but also world's most sustainable building. A huge milestone. All the technologies in this building enable OVG to better understand the behaviour of the building and the people in it. Big data collection provides unlimited possibilities in relation to sustainability and building management.
OVG is also engaged with improving sustainability in redevelopment. How can existing buildings be made more efficient and intelligent? The Fellenoord project in Eindhoven can be seen as an example of this. This project is being redeveloped for Rabobank Nederland, an office for approximately 2,000 employees. Here too, the end-user’s requirements are leading.
Jan Hein Tiedema – Managing Director OVG Nederland.
The Edge – World’s most sustainable building.
–– The partnership with Royal Philips and the unique LED-system is an example of the unconventional way of thinking within OVG.
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OVG real estate Another Level in real estate Annual Report 201 4
OVG DeutschlandOur second domestic market is Germany, where OVG has a strong team that has been reinforced with six new experts in the last year. Distinctive projects, such as HumboldtHafenEins that reached its highest point this year, have shown that OVG is established in Germany. HumboldtHafenEins will be completed in 2015 as one of five most sustainable office buildings in Germany, defining new standards for energy-efficient and sustainable projects. In 2014 we also acquired important land holdings in the upcoming Friedrichshain-Kreuzberg district of Berlin as well as one of the last remaining construction locations in central Berlin-Mitte. In the near future OVG shall develop new, distinctive office buildings with OVG's characteristic stamp of sustainability.
Investment ManagementThe Investment Management branch consists of investment and real estate management. In 2013 OVG purchased a portfolio of eight existing office buildings together with Goldman Sachs. Only after a short period of time OVG renegotiated and refreshed a quarter of the portfolio. OVG has also made a new investment, the Strawinsky house on the Zuidas in Amsterdam. The purchase of this building fits with OVG’s strategy of acquiring and sustainably redeveloping existing office buildings. The Investment Management team has grown and is now in a position to work on valuable partnerships and investments.
HumboldtHafenEins – This building is surrounded by the Spree, the Reichstag and the European political center.
Risk Management OVG is well known for its development based on a signed lease agreement. Her business model is built on the financial stability of the tenant in combination with the preferred location of the assets. In Germany OVG acts according to the standards of the German market in which she operates. Naturally OVG is always led by solid risk analysis. OVG has the best advisors in the market who undertake an extensive spatial planning analysis prior to every binding lease agreement in order to limit spatial planning risks. OVG strategically works together with financial strong contractors in order to limit construction risks with regard to schedule, price and supply reliability to a minimum. By working together with these parties, OVG reduces the risk of main contractor bankruptcies and the consequent risks that can be involved. Knowledge exchange and innovative contracting with these preferred suppliers also enables OVG to increase the supply reliability and innovation of its buildings for her clients. The new developments must be carefully thought through since they are measured against a combination of OVG’s own risk/reward analysis and the strict requirements put on projects by financial parties.Overall the financial model for OVG’s developments is depending on extensive external financing, which ensures a large degree of external control.
Martin Rodeck – Managing Director OVG Deutschland.
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OVG real estate Another Level in real estate Annual Report 201 4
Interest risks on loans with variable interest rates are no longer mitigated by use of interest swap instruments, as the expectation is that the interest rates will not increase significantly in the near future.The company trades only with creditworthy parties and has implemented procedures to check the creditworthiness and moral behaviour of parties. The company applies strict credit control and reminder procedures. Due to these measures the credit risk for the company is minimal.
Awards & Nominations 2014– March: Winner of healthiest work environment 2014– June: ABN AMRO Social Involvement Award– June: De Rotterdam named Best Tall Building 2014 by CTBUH– July: De Rotterdam nominated for the FGH Real Estate prize 2014– September: Green Brick 2014 Award– December: BREEAM officially designates The Edge as the World’s
Most Sustainable Office Building
Forecasting from Another LevelIn the future OVG will utilize new challenges and opportunities: OVG thinks like the end-user and utilizes the latest technology. For all projects, redevelopments and investments, the core question is: how can it be made more efficient and sustainable? OVG strives to ensure that every office building will be intelligent. Ready to facilitate staff requirements and simultaneously achieve a huge leap in sustainability.
Advanced technology already enables us to measure air quality per m2. OVG can therefore exactly calculate how much oxygen is needed for an employee to reach optimum productivity and thus rectify the sick building syndrome that is linked to air quality. This enables OVG to ensure the building functions more efficiently: heating and lighting are only switched on when necessary, based on the data collected from the many measuring instruments in a building. Constant feedback from the user provides our input for a step towards Another Level in real estate. The adaptation of existing buildings to meet the requirements of intelligent sustainability is another development that OVG will pursue. This involves all sorts of challenges, since an existing building naturally has its limitations. For the precise purpose of being the leader in this field, OVG will appoint a Chief Technology Officer (CTO) to extend her expertise at board level. By doing so, OVG is vigorously stating and spreading the word within the sector that the future is technology: utilizing big data for both the sustainable development and the use of buildings.OVG wants to deploy her expertise and skills everywhere needed. The market OVG wants to be involved in is wherever the clients needs. And OVG is ready: OVG is a healthy company with staff that has the right spirit of entrepreneurship and the desire to go the extra mile to amaze clients. Ready for the future, ready for Another Level.
Strawinskyhuis – This transaction strengthens OVG’s position as developer and investor at the Zuidas in Amsterdam.
–– In 2015 a Chief Technology Officer will be appointed to the board.
Rabobank Eindhoven Fellenoord – OVG’s latest development in the Netherlands.
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OVG real estate Another Level in real estate Annual Report 201 4
Year
Year
Year
2.1 Major Developments in 2014Revenue for 2014 was € 191.709 million which is in line with the average revenue during the crisis (2009 – 2013: € 182.486 m). The volatility of project development however shows in net earnings rather than revenue and in 2014 OVG was able to generate a net profit of € 11.9 million whereas the crisis years generated a combined positive result of € 6.2 million. The shareholders equity shows an increase of 6% that is the result of the net proceeds combined with a dividend payout and a buy back share. During 2014, staff numbers increased from 37 FTE in January 2014 to 45 as of December 31, 2014, the increase was mainly driven by the growth of the German team. The average number of FTE in 2014 was 39. All figures stated in this report are in thousands of €’s unless stated otherwise.The main risks and uncertainties for the year 2014 were managing the cash flow and securing new projects. During the year the cash position improved. The company is focussed on selecting the best opportunities in the acquisition of profitable projects or standing assets. For this the investment selection criteria’s are reviewed and adjusted accordingly.
Year
Revenue (Euro x 1,000)
Year
2009
2010
2011
2012
2013
2014
200,000
100,000
0
300,000
400,000 30,000 80,000
Total Assets (Euro x 1,000)
2009
2010
2011
2012
2013
2014
200,000
100,000
0
300,000
400,000
Operating Result (Euro x 1,000)
2009
2010
2011
2012
2013
2014
0
-10,000
10,000
20,000
Net Earnings (Euro x 1,000)
0
20,00020,000
-20,000
-10,000
10,000
Year
2009
2010
2011
2012
2013
2014
Earnings before tax (Euro x 1,000)
2009
2010
2011
2012
2013
2014
0
-20,000
-10,000
10,000
Shareholders’ Equity (Euro x 1,000)
2009
2010
2011
2012
2013
2014
40,000
20,000
10,000
0
60,000
70,000
50,000
30,000
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Another Level in real estate Annual Report 201 4 OVG real estate B.V.
Jul8th OVG takes over shares in MAB
project Fellenoord Eindhoven 16th De Rotterdam nominated for the
FGH Real Estate prize 2014
Sep4th OVG sells ExtraVerde to Standard
Life Investments
9th Martin Rodeck appointed Managing Director OVG Deutschland
16th OVG Investment Management and IVG Institutional Funds sell Pollux building to Blackstone Group
16th OVG wins Green Brick 2014
18th HumboldtHafenEins in Berlin reaches highest point of construction
29th OVG buys prime property on Amsterdam – Zuidas – Strawinskyhuis
Oct1st OVG hands over The Edge to
Deloitte and AKD
2nd OVG acquires Grand Central Berlin plot
7th OVG attends EXPO REAL 31st OVG commits to Green Deal
Circular Buildings
Dec11th The Edge is officially the World’s
Most Sustainable Office Building
18th OVG announces departure of board member Jeppe de Boer
31st OVG Investment Management
leases over 13,100 m2 real estate in 2014
Jan9th Jan Hein Tiedema appointed
Commercial Director OVG Nederland
22nd OVG attends World Economic Forum in Davos
Feb13th OVG Sells TNT office to AM alpha
GmbH
Mar6th OVG joins ABN AMRO Green Light
campaign for investing in sustainable real estate
7th Municipality of Amsterdam and OVG take initiative to make site huts more circular
Apr29th OVG purchases real estate parcel
in Berlin Anschutz area
May8th OVG winner of healthiest work
environment 2014
19th OVG completes European Head Office and R&D Centre Avery Dennison
28th OVG starts construction of Van Oord office phase 2
Jun5th OVG wins ABN AMRO Social
Involvement Award
19th De Rotterdam named Best Tall Building 2014 by CTBUH
27th OVG sells building The Edge to Deka Immobilien
2014 In Brief –– Calendar
Another Level in real estate Annual Report 201 4OVG real estate
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OVG real estate Another Level in real estate Annual Report 201 4
Consolidated Income Statement (x1,000 euros) 2014 2013 2012 2011 2010 2009
Revenue 191,709 146,252 134,784 188,066 160,737 282,592
Operating result 28,921 (1,399) 5,831 9,832 5,478 232
Financial expenses 5,139 4,215 1,208 1,831 564 833
Earnings before tax 13,401 (12,654) 2,685 9,861 5,310 1,754
Net earnings 11,929 (8,259) 1,650 7,471 3,899 1,469
Consolidated Balance Sheet (x1,000 euros) 31-12-14 31-12-13 31-12-12 31-12-11 31-12-10 31-12-09
Total fixed assets 57,821 78,133 83,479 56,402 24,980 22,841
Work in progress 138,358 178,551 138,747 101,984 187,364 148,386
Group equity 53,788 50,493 58,752 57,599 50,128 46,229
Long term liabilities 49,623 48,622 42,989 26,702 5,625 11,036
Balance sheet total 255,816 292,904 243,533 200,398 244,454 211,847
Ratios 31-12-14 31-12-13 31-12-12 31-12-11 31-12-10 31-12-09
Average # staff 39 41 44 51 41 42
Operating result / revenues 15.1% (1.0%) 4.3% 5.2% 3.4% 0.1%
Net earnings / revenues 6.2% (5.6%) 1.2% 4.0% 2.4% 0.5%
Revenues / average # staff 4,916 3,567 3,063 3,688 3,920 6,728
Solvency* 21.0% 17.2% 24.1% 28.7% 20.5% 21.8%
Working capital** 57,852 30,572 25,705 39,679 45,763 48,143
Net earnings / average shareholders’ equity 22.9% (15.3%) 3.0% 13.9% 8.1% 3.2%
* Represents shareholders’ equity devided by total assets** Represents current assets minus current liabilities
3.0 –– Key Statistics OVG is proud to present the financial results achieved in 2014 since she demonstrated the result of her efforts over recent years. 2014 has produced the output OVG expected and perhaps even exceeded it. It shows that her predicted next round has actually started. OVG’s investments, combined with her entrepreneurship and clients, have culminated in taking OVG to Another Level. The company’s cash position is the best in 5 years and therefore expects 2015 to see further investments in addition to the necessity of acquiring new development business. OVG has invested in her German team to support the strategy of growth and also to prepare for new projects in Germany. OVG sees sufficient potential in these new initiatives to cover the additional costs associated with the growth.
The main reason for the reduction of 37 million on the balance sheet is a consequence of the fall of work in progress, mostly as a result of the sale of The Edge in Amsterdam. OVG will proceed with acquiring land positions in Germany, continuing her strategy in development. There are a significant number of projects in the pipeline that will enable OVG to achieve positive year-ends over the coming years. As OVG faces significant shifts in her portfolio during 2015, it is expected that the work in progress at year-end will be lower compared to 2014.
The equity position of the company has improved. Solvency increased from 17.2% to 21.0%. This can be explained by a reduction of work in progress in combination with an improvement of the equity position. OVG expects major shifts with respect to her ratios in 2015 as the level of the balance sheet is expected to drop. OVG foresees a further improvement of equity.
Staffing has increased as the company needs to strengthen the team in Germany in line with the strategy and its focus. As new business opportunities are foreseen in Germany the number of staff is likely to increase further.
For 2015 the company remains interested to find alternative financing to increase the financial position and to support the growth in investment and developments. Furthermore the company remains focussed on research and development activities for real estate.
OVG appointed a special team for innovation in the field of healthy and sustainable workplaces, both for new build as well as redevelopment and transformation of old buildings. OVG believes that innovation is the key to sustainability. This team has had a great impact in all OVG’s concepts providing her with new insights. It also underlines OVG’s value of company excellence as OVG strives to do better each time and keep innovating.
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OVG real estate Another Level in real estate Annual Report 201 4
4.1 Management BoardThe Management Board is responsible for OVG policy. Under the chairmanship of Chief Executive Officer Coen van Oostrom, the Board comprised three Board Members (Coen van Oostrom, Alex Kompier and Jeppe de Boer) in 2014 each with joint responsibility for running the company, implementing its strategy and achieving its objectives and results. In addition to their joint responsibility each Board Member has different core tasks.
As of February 1st 2015, Jeppe de Boer decided to pursue his career outside OVG. Jeppe de Boer's responsibilities have been divided and taken over by Coen van Oostrom and Alex Kompier. OVG is very grateful to Jeppe de Boer for his efforts and contribution with regard to setting up OVG’s Investment Management activities.
OVG Nederland
OVG Deutschland
OVG Investment Management
JOINOntwikkelingby OVG & Triodos
Management Board
Sustainability Centre
Marketing
Finance, Tax & Accounting
HRM & Office
Organizational Structure –– 4.0 –– Management Board
OVG REAL ESTATE HAS THREE COMPONENTS: OVG NEDERLAND, OVG DEUTSCHLAND AND OVG INVESTMENT MANAGEMENT
THEY ALL SHARE THE SAME VALUES: ENTREPRENEURSHIP AND SUSTAINABILITY
The OVG board – From 2015 on the board comprises of two members: Coen van Oostrom and Alex Kompier.
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OVG real estate Another Level in real estate Annual Report 201 4
25 Coen van Oostrom ––Chief Executive OfficerResponsibilities and core tasks include: – Chairman of the Executive Board – Chairman of OVG Nederland – Chairman of OVG Deutschland – Chairman of OVG Investment Management (per 2015) – Managing Director of JOIN Ontwikkeling (OVG/Triodos joint venture) – Company Strategy
Alex Kompier –– Chief Financial OfficerResponsibilities and core tasks include: – Finance, Tax and Accounting – Risk Management – Statutory Director of De Rotterdam II CV (NHOW Hotel, 2014) – Human Resource Management – Information Communication Technology Management – Fund Management (per 2015) – Corporate Finance (per 2015)
Coen van Oostrom is the only statutory director on the Management Board. With respect to the Management Board the new legislation regarding diversity will be taken into account when new Management Board members are appointed. As there is only one statutory director, diversity is not possible.
4.2 Advisory BoardIn 2014 the Advisory Board comprised two members: Mr. Joost H. van Heijningen Nanninga and Mr. Dick P.P Verbeek.
Mr. Joost H. van Heijningen Nanninga ––Current posts: Partner of Egon Zehnder International, Member of the Advisory Board, CVC Benelux, Member of the Supervisory Board of Breevast, ZBG Group, Member of INSEAD Dutch Council, Member of Advisory Board of Rotterdam School of Management.
Mr. Dick P.M. Verbeek ––Current posts: Vice Chairman Emeritus of Aon Group, Chairman of the Supervisory Board of Robeco Group N.V., Member of the Supervisory Boards of Aegon N.V. and Aon Groep Nederland B.V., Chairman of Benelux Advisory Committee Leonardo & Co., Member of the Advisory Board, CVC Benelux, Chairman of the INSEAD Dutch Council, Chair of the Board of Diergaarde Blijdorp, Board Member of the Stichting Administratiefonds Rotterdam.
The Edge atrium – The north-facing atrium allows daylight to permeate workspace.
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Another Level in real estate Annual Report 201 4
26
OVG real estate
5.1 Consolidated Balance Sheet (after appropriation of result)*
Note 31 December 2014 31 December 2013
Tangible fixed assets 1 495 707
Investment property 2 49,366 44,405
Financial fixed assets 3 7,960 33,021
Total fixed assets 57,821 78,133
Work in progress 4 32,483 94,847
Construction contracts 5 105,875 83,704
Accounts receivables 6 1,446 1,606
Affiliated company 7 5 119
Other receivables and prepayments 8 8,816 5,877
Total receivables 10,267 7,602
Cash and cash equivalents 9 49,370 28,618
Total current assets 197,995 214,771
Total assets 255,816 292,904
Note 31 December 2014 31 December 2013
Shareholders’ equity 10 53,632 50,493
Minority interest 156 845
Group equity 53,788 51,338
Provisions 11 12,262 8,745
Loans and borrowings 12 49,623 48,622
Long term liabilities 49,623 48,622
Project financing 13 98,008 161,822
Accounts payables 20,424 8,100
Affiliated companies 14 1,966 -
Tax payables and social charges 15 2,893 -
Accruals and other payables 16 16,852 14,277
Current liabilities 140,143 184,199
Total equity & liabilities 255,816 292,904
* All amounts are in 1,000 euro’s
5.0 –– Financial Statements 2014
“The secret of getting ahead is getting started.” Mark Twain – American author and humorist –––
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OVG real estate Another Level in real estate Annual Report 201 4
5.3 Consolidated Cash Flow Statement*
FY 2014 FY 2013
Operating result 28,921 (1,399)
Adjustments for:Depreciation tangible fixed assets 260 289
(Increase)/decrease provisions 3,471 3,597
Revaluation investment property and ground positions
(3,620) 5,126
Changes in working capital:(Increase)/decrease in inventory 40,193 (39,804)
Decrease in other current assets (excl. cash) (2,665) 4,197
(Increase)/decrease in current liabilities (excl. financing credit institutions) 19,760 (15,714)
57,288 (15,714)
Cash flow from business activities 86,320 (43,707)
Interest (3,918) (1,843)
Taxation (1,414) 2,600
Cash flow from operating activities 80,988 (48,150)
Investments tangible fixed assets (48) (14)
Investment in investment property (22,845) (469)
Disposals/(investments) in participations (incl. loans to participations, nett) 20,113 (5,898)
Disposals in investment property 14,650 -
Investments/(disposals) in minority interest (703) 700
Dividend received 200 429
Cash flow from investment activities 11,367 (5,252)
Dividends paid (6,590) -
Buy back shares (2,200) -
Additions/(repayment) long term liabilities 1,001 5,633
Movement projectfinancing (63,814) 65,564
Cash flow from financing activities (71,603) 71,197
Increase / (decrease) cashflow 20,752 17,795
Opening cash 28,618 10,823
Movement cash 20,752 17,795
Closing Cash 49,370 28,618
5.2 Consolidated Income Statement*
Note FY 2014 FY 2013
Revenue from projects A 188,317 143,976
Other revenue B 3,392 2,276
Total revenue 191,709 146,252
Direct project costs 145,105 135,714
Salaries & pensions C 10,183 6,281
Depreciation & amortisation 260 289
Other operating expenses D 7,240 5,367
Total operating expenses 162,788 147,651
Operating Result 28,921 (1,399)
Financial income 1,221 2,372
Financial expenses (5,139) (4,215)
Result from participations E (4,748) (4,755)
Result from revaluation F (6,854) (4,657)
(15,520) (11,255)
Earnings Before Tax 13,401) (12,654)
Company Tax G (1,486) 4,376
Result third party interest 14) 19
Net Result 11,929) (8,259)
Other comprehensive income - -
Total result of the legal entity 11,929) (8,259)
* All amounts are in 1,000 euro's
* All amounts are in 1,000 euro’s.
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OVG real estate Another Level in real estate Annual Report 201 4
Entities Established in % Shareholders Shareholder(s)
OVG Real Estate B.V. Rotterdam 91.0% C.P.G. van Oostrom Beheer B.V.
9.0% Stichting ESA
OVG Projectontwikkeling B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten II B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten V B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten VI B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten VII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XI B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XII B.V. Rotterdam 100% OVG Real Estate B.V.
Laan op Zuid B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XVIII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XIX B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XX B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXI B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXIII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Landbank B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXV B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXVI B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXIX B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXXIV B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXXV B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXXVI B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXXVII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Projecten XXXVIII B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Nederland B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Property Investments B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Infrastructure Development B.V. Rotterdam 100% OVG Real Estate B.V.
OVG International B.V. Rotterdam 100% OVG Real Estate B.V.
OVG Maatschappelijke Projecten B.V. Rotterdam 100% OVG Nederland B.V.
OVG IM Holding B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten III B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten IV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten VIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten IX B.V. Rotterdam 100% OVG Nederland B.V.
5.4 Notes to the Consolidated Financial StatementsAll amounts are stated in thousands of Euros unless indicated otherwise.
ActivitiesOVG Real Estate B.V. having its legal seat at Wilhelminakade 300 in Rotterdam, is engaged in development of real estate, mainly in the commercial market. In this respect OVG Projectontwikkeling B.V. represents the service organization for the projects of OVG Real Estate B.V.
Group structureFinancial information relating to subsidiaries within the group is included in the consolidated financial statements. The consolidated financial statements have been prepared in accordance with the accounting principles regarding valuation and profit recognition of OVG Real Estate B.V.
Minority interests in equity and results of group companies are separately disclosed in the consolidated financial statements.
The results of subsidiaries acquired during the year are consolidated from the date of acquisition. At acquisition the assets, provisions and liabilities are valued at fair values. Goodwill paid is capitalized. The results of subsidiaries sold during the year are consolidated until the movement of leaving the group.
Consolidation principlesThe consolidated financial statements include the accounts of OVG Real Estate B.V. and all legal entities in which a direct controlling interest exists. All intercompany balances and transactions have been eliminated in the consolidated financial statements.
Cooperations with joint control are presented as a financial asset at equity value and are not consolidated proportionally.
The consolidated companies in the report are:
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Entities Established in % Shareholders Shareholder(s)
OVG Projecten LXVII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXVIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXIX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXXI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXXII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXXIV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXXV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXXVI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Investment Management B.V. Rotterdam 100% OVG International B.V.
OVG Deutschland B.V. Rotterdam 100% OVG International B.V.
OVG Humboldthafen Eins SE Berlin 100% OVG Deutschland B.V.
OVG Real Estate GmbH Berlin 100% OVG Deutschland B.V.
OVG Humboldthafen Verwaltungs GmbH Berlin 100% OVG Deutschland B.V.
OVG MK6 GmbH Berlin 100% OVG Deutschland B.V.
OVG Cloud GmbH Berlin 100% OVG Deutschland B.V.
OVG A2 Maastricht B.V. Rotterdam 100% OVG Infrastructure Development B.V.
OVG Maasboulevard B.V. Rotterdam 100% OVG Infrastructure Development B.V.
BAM-Huis Den Haag Beheer B.V. Rotterdam 70% OVG Projecten XXI B.V.
BAM-Huis Den Haag C.V. Rotterdam 69.3% OVG Projecten XXI B.V.
Rotterdam 1% BAM-Huis Den Haag Beheer B.V.
Stichting OVG I Rotterdam 100% OVG Projecten XXXVIII B.V.
Sirius C.V. Rotterdam 100% OVG Projecten XXXVIII B.V.
OVG IM Beheer B.V. Rotterdam 100% OVG IM Holding B.V.
IM NHS B.V. Rotterdam 100% OVG IM Holding B.V.
Stichting Bewaarder NHS Rotterdam 100% OVG IM Holding B.V.
NHS CV Rotterdam 100% OVG IM Holding B.V.
Join Ontwikkeling B.V. Rotterdam 70% OVG Real Estate B.V.
Join Projecten 1 B.V. Rotterdam 100% Join Ontwikkeling B.V.
Join Projecten 2 B.V. Rotterdam 100% Join Ontwikkeling B.V.
Join Projecten 3 B.V. Rotterdam 100% Join Ontwikkeling B.V.
Join Projecten 4 B.V. Rotterdam 100% Join Ontwikkeling B.V.
Join Projecten 5 B.V. Rotterdam 100% Join Ontwikkeling B.V.
REF Kantoor C.V. Rotterdam 99% OVG Projecten LXX B.V.
Rotterdam 1% REF Kantoor B.V.
REF Kantoor B.V. Rotterdam 100% OVG Projecten LXX B.V.
Stichting Bewaarder REF Kantoor Rotterdam 100% REF Kantoor C.V.
Entities Established in % Shareholders Shareholder(s)
OVG Projecten X B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XIV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XVII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXVII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXVIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Lansingerpoort B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXXI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXXII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXXIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XXXIX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XL B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLIV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLVI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLVII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLVIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten XLIX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten L B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LVI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LVII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LVIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LIX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LX B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXI B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXIII B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXIV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXV B.V. Rotterdam 100% OVG Nederland B.V.
OVG Projecten LXVI B.V. Rotterdam 100% OVG Nederland B.V.
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Companies mentioned below are not consolidated in the report, because OVG Real Estate B.V. does not hold, directly or indirectly, more than half of the voting capital and does not have a decisive influence on these companies.
Entities Established in % Shareholders Shareholder(s)
Businesspark Gouda B.V. Rotterdam 50% OVG Property Investments B.V.
Stadsherstel Historisch Rotterdam N.V. Rotterdam 1% OVG Real Estate B.V.
Parrot B.V. Amsterdam 10% OVG Venture Nederland I B.V.
Entities Established in % Shareholders Shareholder(s)
OVG Ventures Nederland B.V. Rotterdam 100% OVG IM Holding B.V.
OVG Ventures Nederland I B.V. Rotterdam 100% OVG Ventures Nederland B.V.
OVG Asset Management Nederland B.V. Rotterdam 100% OVG Ventures Nederland B.V.
GENERAL ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
The financial statements are prepared in accordance with generally accepted accounting principles in the Netherlands and Title 9, Book 2 of the Netherlands Civil Code.
Valuation of assets and liabilities and determination of the result takes place under the historical cost convention. Unless presented otherwise at the relevant principle for the specific balance sheet item, assets and liabilities are presented at face value.Income and expenses are accounted for on accrual basis. Profit is only included when realized on the balance sheet date. Losses originating before the end of the financial year are taken into account if they have become known before preparation of the financial statements.
The management of the group makes various judgments and estimates when applying the accounting policies and rules for preparing the financial statements. Significant judgments are, amongst others, made regarding the valuation of investement properties and ground positions.These judgments and estimations are made, taking into account the present market conditions and market volatility. The principal judgmentsand estimates, including underlying assumptions, are set out below.
ImpairmentAt each balance sheet date the Company tests whether there are indications of assets being subject to impairment. If any such indications exist, the recoverable amount of the assets is determined. An asset is subject to impairment if its carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use.An impairment loss is directly expensed under the heading 'amortization and depreciation' or included in the line item it concerns in the profit and loss account. If it is established that a previously recognized impairment loss no longer applies or has declined, the carrying amount is increased proportionally and this will be reflected in the profit and loss account
The financial information relating to OVG Real Estate B.V. is included in the consolidated financial statements. Accordingly, in accordance with Article 402, Book 2 of the Netherlands Civil Code, a company profit and loss account has been presented in condensed form.
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investment portfolio once a year. Any gain or loss arising from a change in fair value is recognized in the income statement as result from revaluation.
Financial fixed assetsThe (non-consolidated) participations are – on the basis of the share in the equity of the company – valued at net asset value and if applicable less impairments in value. The net asset value is based on the latest available financial statements of the company. With the valuation of participations any impairment in value is taken into account. The results are accounted for in profit and loss according to the interest held. A provision is recorded for the negative fair value of an embedded option.
Participations with a negative equity are valued at nihil and to the amount of the negative equity a provision is made. In case of loans to or receivables on the participation, the provision will be charged to the receivables. In case a balance remains, a provision for participations is made.
Work in progressWork in progress is the unsold construction of an asset or combination of assets whose performance generally extends over several reporting periods.
Project costs are the direct project costs, interest on loan capital, the mark-up for costs attributable to project activities in general and can be allocated to the project based on the normal level of project activity, and other costs that can be attributed to the principal under the project. A provision for expected losses on a project is charged to the item work in progress.
Construction contractsA construction contract carried out at the instruction of a third party is a contract entered into with a third party for the construction of assets whose performance generally extends over several reporting periods. Contract revenue and contract costs from the construction contract are taken to the profit and loss account pro rata to the extent of the work performed at the balance sheet date, because the outcome of a construction contract can be reliably estimated (percentage of completion method).
Contract costs are the direct contract costs, interest on loan capital, the mark-up for costs attributable to contract activities in general and can be allocated to the contract based on the normal level of contract activity, and other costs that can be attributed to the principal under the contract.
A provision for expected losses on a contract is charged to the item construction contracts. In addition, instalments already invoiced are set off against the item construction contracts. The net amount for each construction
Financial InstrumentsThe information included in the notes for financial instruments is useful in estimating the extent of risks relating to both on-balance-sheet and off-balance-sheet financial instruments. The group applies hedge accounting based on individual documentation per individual hedge relationship.The company’s primary financial instruments, not being derivates serve to finance the company’s operating activities or directly arise from these activities. The company’s policy is not to trade in financial instruments. The effective part of financial instruments designated for cost price hedge accounting is valued at cost. Ineffectiveness is only recorded in the profit and loss account insofar as it concerns a(n) (accumulated) loss.The principal risks arising from the company’s financial instruments are interest rate risks and credit risks.
Interest rate riskThe company hedges this risk by entering into an interest rate swap contract to cover expected significant increases in market interest rates. Per 2014 the company no longer hedges the risk for significant increases in market interest rates.
Credit riskThe company trades only with creditworthy parties and has implemented procedures to check the creditworthiness of parties. The company applies strict credit control and reminder procedures. The company’s credit risk is minimal due to the above measures. In addition, there are no significant concentrations of credit risk within the company.
PRINCIPLES OF VALUATION OF ASSETS AND LIABILITIES
Tangible fixed assetsTangible fixed assets are presented at cost less accumulated depreciation and, if applicable, less impairments in value. Depreciation is charged to the income statement based on the estimated useful life and calculated as a fixed percentage of cost, taking into account any residual value. Depreciation is provided from the date an asset comes into use. Tangible fixed assets relate to properties not held for development or investment purposes.
Investment propertyInvestment properties are those that are held either to earn rental income or for capital appreciation or for both and those properties are stated at fair value without depreciation. External, independent valuation companies, having an appropriate recognized professional qualification and recent experience in the location and category of property being valued, value the
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contract is recognised as an asset or a liability where the balance of the construction contract is positive or negative, respectively.
ReceivablesReceivables are included at face value, less any provision for doubtful accounts. These provisions are determined by individual assessment of the receivables.
Cash and cash equivalentsThe cash and cash equivalents are valued at face value.
ProvisionsProvisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The provision for rental guarantees for completed projects is recorded on behalf of the estimated costs expected to arise from the current rental guarantees.
A provision is recorded for changes in fair value of ineffective hedges.
The provision for rental guarantees for completed projects is recorded on behalf of the estimated costs expected to arise from the current rental guarantees.
Other provisions are provisions for incentives to be paid according to signed rental agreements and for other amounts to be paid.
Long term provisions are valued at net present value.
Dutch pension plansContributions payable to the pension plan administrator are recognized as an expense in the profit and loss account. Contributions payable or prepaid contributions as at year-end are recognized under accruals and deferred income, and prepayments and accrued income, respectively.
A provision is formed for liabilities other than the contributions payable to the pension plan administrator if, as at the balance sheet date, the group has a legal or constructive obligation towards the pension plan administrator and/or to its own employees, if it is probable that settlement of these liabilities will entail an outflow of resources and if a reliable estimate can be made of the amount of the liabilities. The provision for
additional liabilities to the pension plan administrator and/or the employees is based on a best estimate of the amounts required to settle these liabilities concerned at the balance sheet date. The provision is carried at present value if the effect of the time value of money is material (with the discount rate before taxation reflecting the market interest rate for high-quality corporate bonds).
Financial liabilitiesFinancial liabilities are recognized initially at fair value plus, in case of liabilities not at fair value through profit or loss, directly attributable transaction costs.The companies’ financial liabilities, within the scope of the Dutch Accounting Standard 290 financial instruments, comprise loans, interest rate swaps and current liabilities.
Principles for the determination of the resultsAll initial start-up costs for potential projects are expensed. Rental guarantees are expensed as part of the estimated profit upon completion.
Revenue from projects is recognized as actual costs plus mark-up. The mark-up is quarterly recognized by the formula: calculated profit end of work multiplied by the percentage of the stage of completion minus profit already accounted for. The stage of completion is determined by the number of days under construction divided by the total number of construction days. Profit mark-up commences in the case that the project is sold at the start of the construction period. Losses are recognized in the year in which they become foreseeable.Expenses are determined with due observance of the aforementioned accounting policies and allocated to the financial year to which they relate. Foreseeable and other obligations as well as potential losses arising before the financial year-end are recognized if they are known before the financial statements are prepared and provided all other conditions for forming provisions are met.Dividends from participations stated at cost price are recognized when the company’s right to reserve the payment is established. Other income, costs and expenses are allocated to the year to which they relate.
Interest income and expensesInterest income is recognized pro rata in the profit and loss account, taking into account the effective interest rate for the asset concerned, provided the income can be measured and the income is probable to be received.Interest expenses are allocated to successive financial reporting periods in proportion to the outstanding principal. Period interest charges and similar charges are recognized in the year in which they fall due.
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Corporate income taxCorporate income tax is calculated at the applicable rate on the profits for the financial year, taking into account deductible costs and permanent differences between profit calculated according to the profit and loss account and profit calculated for taxation purposes.
Financial derivates and hedge accountingThe company uses interest rate swaps to hedge its risks associated with interest rate fluctuations. The hedges are recognized on the basis of cost hedge accounting if the conditions for hedge accounting are met. The fair value of these hedges is disclosed in the notes to the consolidated balance sheet.
Other income and expensesAll costs which can not directly be allocated to a project are expensed. The lease income from investment properties is taken evenly to the profit and loss account over the term of the lease.
LeasingUnder operating leases, the lease payments are charged to the profit and loss account on a straight-line basis over the term of the lease.
Under operating leases, the lease income is taken evenly to the profit and loss account over the term of the lease. Initial direct costs are amortized over the term of the lease against the lease income.
TaxFor amounts of taxation payable in the future, due to differences between the valuation principles in the annual report and the valuation for taxation purposes of the appropriate balance sheet items, a provision has been formed for the aggregate of these differences multiplied by the future tax rate. OVG Real Estate B.V. is the head of a fiscal unity for the value added tax and the corporate income tax and for that reason it is, jointly and severally liable for the tax liabilities of the whole fiscal unity. Tax liabilities of the subsidiary companies are presented under the tax payables in the balance sheet.
Principles for preparation of the consolidated cash flow statement
The cash flow statement is prepared according to the indirect method. The funds in the cash flow statement consist of cash, cash equivalents and bank facilities.
Corporate income taxes, issuances of share capital, interest received and dividends received are presented under the cash flow from operating activities. Interest paid and dividends paid are presented under the cash flow from financing activities.
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PublicationOVG Real Estate B.V.P.O. Box 234133001 KK RotterdamThe Netherlands+31 10 290 87 [email protected]
Chamber of Commerce RotterdamRegistration number 24291656
Copy and EditingFinancial Department OVG Corporate Communications OVG Femme VertaalKi2 organisatieadvies
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Photography/Renderingscover, page 7 Ossip van Duivenbodepages 4-5 Wilco Schipperspage 9 Karen Veldkamp page 10, 12, 22 Pim Toppages 11, 25 Ronald Tillemanpages 13 Christian Kruppapage 14 BCA Brand Compartimentering en Afdichtingen B.V.page 15 UN Studio
© OVG Real Estate B.V. 2014
All rights reserved. Reproduction in whole or in part is prohibited without the prior written consent of the copyright owner. The information presented in this document does not form part of any quotation or contract, is believed to be accurate and reliable and may be changed without notice. No liability will be accepted by the publishers for any consequence of its use. Publication thereof does not convey nor imply any license under patent - or other industrial or intellectual property rights.
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