Michelin Luxembourg SCS
Société en Commandite Simple
Non audited accounts
as of and for the period ended June 30th, 2014
69, Boulevard de la Pétrusse
L-2320, Luxembourg
R.C.S. - B96.546
Table of Contents
Half-yearly management report 4
Balance sheet 5
Profit and loss account 6
Notes to the half-yearly unaudited accounts 7-13
Michelin Luxembourg SCS
Declarations
COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" a « société en commandite par actions » under Swiss law, with its registered office at 1763 Granges-Paccot (Switzerland), Rte Louis-Braille 10, duly represented by Mr. Georges-Henri BARRAS , Executive Vice-President, sole Managing Partner of the company MICHELIN Luxembourg SCS, a « société en commandite simple » under Luxembourg law, with its registered office at 2320 Luxembourg (Luxembourg), 69 Bvd de la Pétrusse, registered with the Registre du Commerce et des Sociétés in Luxembourg under number B 96.546 (hereinafter « the Issuer »);
state that to the best of their knowledge, the financial statements prepared in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the annual accounts give a true and fair view of the assets, liabilities, financial position and profit or loss of the Issuer and that the management report includes a fair review of the development and performance of the business and the position of the Issuer, together with a description of the principal risks and uncertainties that it faces.
| COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" Signed by Georges-Henri BARRAS, Executive Vice-President | |
Half-yearly management report for the financial
period ended June 30th, 2014
Michelin Luxembourg SCS (« the Partnership ») principal activity is the provision of loans to affiliated undertakings within the Michelin group of companies. These loans have been financed by the issue of guaranteed bonds on the Luxembourg Stock Exchange and by the issuing of short term promissory notes and Commercial Papers.
Developments:
During the period ended June 30th, 2014, operation and activities were determined by the repayment of the remaining amount of the 8,625% guaranteed bonds 2014 on April 24th, 2014 of EUR 401'503'000.
Same date COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" repaid the remaining amount of the EUR 750'000'000 borrowing of EUR 401'503'000.
During the period, the Partnership has registered a total interest charge of EUR 16'187'870 on the guaranteed bonds and an interest income of EUR 16'721'174 on the loans to COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie".
The Partnership has also registered a charge of EUR 161'399 linked to the guarantee granted by COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" on the bond issues and EUR 152'127 linked to the Commercial Paper Dealer Agreements.
The Partnership also continued with the "US Commercial Papers program". During the first six months of the year the Partnership issued USD 616'000'000 in USCP while USD 575'000'000 was reimbursed.
Risks
The risk on the operations of the Partnership is considered low, the main income being generated by the loans to COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie", a group company.
Result
The Annual General Meeting held on April 3rd, 2014 approved the loss for the year 2013, being EUR 6'065'817,49 and the contribution by the Partners on a pro-rata basis of their participation in the Partnership.
The corresponding amounts have been paid by the Partners on January 20th, 2014.
The result for the period ended June 30th, 2014 is a loss of EUR 176'808,64.
Others
For the second half year 2014 we do not foresee any new operations or actions.
The Management,
| ASSETS | Note(s) | 30.06.2014 | 31.12.2013 | |||||
| '000 EUR | '000 EUR | |||||||
| C. Fixed assets | ||||||||
| III. Financial assets | ||||||||
| 2. Loans to affiliated undertakings | 3 | 400'000 | 400'000 | |||||
| 400'000 | 400'000 | |||||||
| D. Current assets | ||||||||
| II. Debtors | 4 | |||||||
| 2. Amounts owed by affiliated undertakings | ||||||||
| a) becoming due and payable after less than one year | 80'239 | 483'728 | ||||||
| IV. Cash at bank and in hand | 14 | 40 | ||||||
| 80'253 | 483'768 | |||||||
| E. Prepayments | 5 | 989 | 1'182 | |||||
| Total Assets | 481'242 | 884'950 | ||||||
| LIABILITIES | ||||||||
| A. Capital and Reserves | ||||||||
| I. Subscribed capital | 6 | 1'000 | 1'000 | |||||
| IV. Reserves 1. Legal reserve | 7 | 100 | 100 | |||||
| 4. Other reserves | 6'066 | |||||||
| VI. Result for the financial year | 8 | (177) | (6'066) | |||||
| 923 | 1'100 | |||||||
| D. | Non-subordinated debts | |||||||
| 1. Debenture loans | ||||||||
| b. Non-convertible loans | ||||||||
| i. becoming due and payable after less than one year | 9 | 0 | 433'470 | |||||
| ii. becoming due and payable after more than one year | 9 | 400'000 | 400'000 | |||||
| 2. Amounts owed to credit institutions | ||||||||
| a. Becoming due and payable after less than one year | 9 | 79'965 | 49'125 | |||||
| 6. Amounts owed to affiliated undertakings | ||||||||
| a. becoming due and payable after less than one year | 9 | 343 | 1'245 | |||||
| 9. Other creditors | ||||||||
| a. becoming due and payable after less than one year | 11 | 10 | ||||||
| 480'319 | 883'850 | |||||||
| Total liabilities | 481'242 | 884'950 | ||||||
Note(s) | 30.06.2014 | 31.12.2013 | ||
| '000 EUR | '000 EUR | |||
| A. CHARGES | ||||
| 2. Other external charges | 33 | 196 | ||
| 8. Interest payable and similar charges | ||||
| a. concerning affiliated undertakings | 9 | 474 | 1'799 | |
| b. other interest payable and similar charges | 5,9 | 16'000 | 59'423 | |
| Total charges | 17'007 | 61'418 | ||
| B. INCOME | ||||
| 6. Income from financial fixed assets | ||||
| a. derived from affiliated undertakings | 3 | 5'653 | 25'635 | |
| 7. Income from financial current assets | ||||
| a. derived from affiliated undertakings | 4 | 11'177 | 29'717 | |
| 10. Loss for the financial year | 177 | 6'066 | ||
| Total income | 17'007 | 61'418 | ||
1 General Information
Michelin Luxembourg SCS ("the Partnership") is a limited liability Partnership ("société en commandite simple") incorporated under the laws of the Grand-Duchy of Luxembourg on October 31st, 2003.
The Partnership is established for an unlimited period.
The Partnership's financial year starts on January 1st and ends on December 31st of each year.
The principal activity of the Partnership is the provision of loans to affiliated undertakings within the Michelin group of companies. These loans have been financed by the issue of guaranteed bonds on the Luxembourg Stock Exchange. On April 2nd, 2009, the Partnership set up a Euro Medium Term Note Programme registered with the Luxembourg Stock Exchange, which was completely repaid on April 24th, 2014. The Partnership launched a Bond issue on June 20th, 2012 at the Luxembourg Stock Exchange and issued on April 12th, 2012 a US Commercial Paper Programme. The US Commercial Papers are being issued for an average term of one month at an average interest rate of 0,31 fixed. The US Commercial Papers Programme is also guaranteed by COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie".
The principal activities of Michelin Group companies include the manufacture and distribution of vehicle tyres and the publication of travel guides and maps.
The registered office of the Partnership is established at 69, boulevard de la Pétrusse,
L-2320, Luxembourg. The Partnership is registered with the Registre de Commerce of Luxembourg under the section B Number 96 546.
98% of the share capital of the Partnership is held by COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" ("CFM") and the remaining 2% is held by Nitor S.A. (together the "Partners"). These companies are both subsidiaries of Compagnie Générale des Etablissements Michelin. The registered office of CFM and Nitor S.A. is at Route Louis-Braille 10 CH-1763 Granges-Paccot, Switzerland.
The Partnership is included in the consolidated accounts of CFM, which is the undertaking which draws up the consolidated accounts of the smallest and the largest body of undertakings of which the Partnership forms a part as a subsidiary undertaking. The consolidated accounts are available at CFM's registered office.
2 Summary of significant accounting policies
2.1 Basis of preparation
The accounts of the Partnership have been prepared in accordance with Luxembourg legal and regulatory requirements under the historical cost convention.
Accounting policies and valuation rules are, besides the ones laid down by the Law of 19th December 2002, determined and applied by the Management.
2.2 Financial fixed and current assets
Financial fixed assets consist of loans to affiliated undertakings bearing accrued interest are valued at their nominal value.
If the Management determines that a durable impairment has occurred in the value of a financial fixed asset, a value adjustment is made in order to reflect that loss.
These value adjustments are not continued if the reasons for which they were made have ceased to apply.
Current assets consist of amounts owed to affiliated undertakings becoming due and payable after less than one year and are recorded at their nominal value.
A value adjustment is made when their recovery is partly or completely in doubt.
These value adjustments are not continued if the reasons for which they were made have ceased to apply.
2.3 Foreign currencies translation
The Partnership maintains its financial records in euros ("EUR"). Assets and liabilities denominated in other currencies are translated into EUR at the rate effective at the balance sheet date. Income and expense transactions are recorded at the rate effective at the date of the transactions. Realized exchange gains and losses, and unrealized exchange losses, are recorded in the profit and loss account.
Currently the Partnership has an asset of USD 108'857'837,02 on CFM and a liability of USD 108'500'000 on the US Commercial Papers.
2.4 Prepayments
Prepayments represent costs associated with the issuance of the guaranteed bonds which are amortized to the profit and loss account over the contractual term of the bonds, and the interest paid in advance on the US Commercial Papers.
2.5 Debts
Debts are recorded at their reimbursement value.
Loans and amounts owed to affiliated undertakings bear interests which are accrued on a pro rata temporis basis.
2.6 Non-convertible loans
Non-convertible loans are represented by guaranteed bonds such are valued at their nominal value and bear interests which are accrued on a pro rata temporis basis.
2.7 US Commercial Papers
US Commercial Papers ("USCP") are recorded at their reimbursement value. Where the amount repayable is greater than the amount received, the difference is shown as an asset and is written off over the period of the debt.
The movements for 2014 were as follows:
| USD | EUR | ||
| Openings balance | 67'500'000 | 49'124'880 | |
| Amount issued | 616'000'000 | 452'526'531 | |
| Amount reimbursed | 575'000'000 | 422'018'378 | |
| Balance at June 30, 2014 | 108'500'000 | 79'633'033 | |
| The maximum outstanding amount at any time is USD 700'000'000. The Partnership has no commitment to perform monthly issuance of USCP, issuances are performed only upon Partnership request. | |||
3 Financial assets
Amounts owed by affiliated undertakings represent interest bearing loans made to finance the development of the Michelin group's operations. Movements for the year are as follows:
| '000 EUR ) | |||
| Book value-opening balance | 400'000 | ||
| Book value closing balance | 400'000 | ||
Financial assets
| Within one year | After one year and within five years | After five year | Total 30.06.2014 | Total 31.12.2013 | |
| '000 EUR | '000 EUR | '000 EUR | '000 EUR | '000 EUR | |
| Compagnie Financière du Groupe Michelin, "Senard et Cie" 8.87% Repayable on April 24th , 2014 | 0 | 0 | 403'562 | ||
| Compagnie Financière du Groupe Michelin, "Senard et Cie" 2.85% Repayable on June 20th, 2019 | 400'000 | 400'000 | 400'000 | ||
| Reclassified to current (note 4) | |||||
| Total | 0 | 400'000 | 400'000 | 803'562 |
4 Debtors
| 30.06.2014 | 31.12.2013 | |||
| '000 EUR | '000 EUR | |||
| Debtors are mainly composed of amounts owed by affiliated undertakings becoming due and payable within one year | ) | ) | ||
| Amounts owed by affiliated undertakings | 79'895 | 452'924 | ||
| Interest receivable | 344 | 30'804 | ||
| 80'239 | 483'728 | |||
5 Prepayments
| 30.06.2014 | 31.12.2013 | |||
| '000 EUR | '000 EUR | |||
| Prepayments are mainly composed of issuance costs relating to the guaranteed bonds | ||||
| Opening net book value | 1'182 | 2'281 | ||
| Issuing costs new bond | - | - | ||
| Amortization for the year | 195 | 1'101 | ||
| Closing net book value | 987 | 1'180 | ||
| Advance interest payment USCP | 2 | 2 | ||
| Total prepayments | 989 | 1'182 | ||
6 Subscribed Capital
The Partnership's subscribed capital is set at EUR 1'000'000 divided into two classes of Partnership units, comprising 98'000 unlimited Partnership units (parts commanditées) and 2'000 limited Partnership units (parts commanditaires) with a par value of EUR 10 per unit, each one of them fully paid up.
Each class of Partnership units entitles the same rights and privileges.
The authorized capital amounts to EUR 1'000'000.
The unlimited Partnership units are owned by CFM and the limited Partnership units by Nitor S.A.
No movement in the subscribed capital during the current period occurred.
7 Legal reserve
The Partnership is required to allocate to a legal reserve a minimum of 5% of the annual net income, until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.
8 Result for the financial year
The Annual General Meeting held on April 3rd, 2014 approved the loss for the financial year 2013, being EUR 6'065'817,49 and the contribution by the Partners on a pro rata basis. The Partnership's result for the period ended June 30th, 2014 is a loss of EUR 176'808,64.
| Legal reserve (EUR) | Other reserves (EUR) | Result for the financial year (EUR) | |
| As at December 31st, 2013 | 100 | (6'066) | |
| Movements for the year: | |||
| 6'066 | ||
| |||
| (177) | ||
| |||
| As at June 30th , 2014 | 100 | (177) |
9 Non-subordinated debts
The loans to COMPAGNIE FINANCIERE DU GROUPE MICHELIN, "Senard et Cie" are being financed by guaranteed bond issuances and by USCP totaling EUR 479'633 as per June 30th, 2014.
Non-convertible guaranteed bonds/amounts owed to credit institutions.
| Within one year | After one year and within five years | After five year | Total 30.06.2014 | Total 31.12.2013 | |
| '000 EUR | '000 EUR | '000 EUR | '000 EUR | '000 EUR | |
| 750 million bond - 8.625% guaranteed bonds repayable on April 24th, 2014 | 0 | 0 | 403'562 | ||
| 400 million bond - 2.75% guaranteed bonds repayable on June 20th, 2019 | 400'000 | 400'000 | 400'000 | ||
| Interest payable on bonds | 332 | 332 | 29'908 | ||
| Amounts owed to credit institutions | 79'633 | 79'633 | 49'125 | ||
| Total | 79'965 | 400'000 | 479'965 | 882'595 | |
The total interest payable on the above guaranteed bonds amounts to EUR 16'187'870 for the period January 1st, 2014 up to June 30th, 2014.
The accrued interest payable as at June 30th, 2014 amounts to EUR 331'506.
On April 24th, 2014 the 8,625% bond, issued on April 24th, 2009 was completely repaid.
On June 20th, 2012, the Partnership issued the 2.75% bonds of EUR 400'000'000 due June 20th, 2019.
On April 12th, 2012, the Partnership started issuing US Commercial Paper. As per June 30th, 2014 the total debt amount to USD 108'500'000 equivalent to EUR 79'633'033.
The 2019 bond is listed on the Luxembourg Stock Exchange and guaranteed by CFM.
Amounts owed to affiliated undertakings
| Total | Total | ||
| 30.06.2014 | 31.12.2013 | ||
| Within one year '000 EUR | '000 EUR | '000 EUR | |
| Compagnie Financière du Groupe Michelin, 'Senard et Cie' | 343 | 343 | 1'245 |
| Total | 343 | 343 | 1'245 |
10 Staff
The Partnership does not have any employee, same in 2013.
11 Related parties transactions
During the financial year, the transactions entered with related parties, described in the previous notes, have been carried out at arm's length.
