Source - RNS
RNS Number : 6044I
HT1 Funding GmbH
31 August 2016
 

Six-month Financial Statements

 

as at 30 June 2016


and

 

Interim Management Report

 

of

 

HT1 Funding GmbH

Bad Soden am Taunus

 

 

 

 

 

 

 

 

 

 

 

 

List of annexes:

 

Annex 1: Balance Sheet as at 30 June 2016

Annex 2: Income Statement for the Period 1 January to 30 June 2016

Annex 3: Notes to the Half-yearly Financial Statements as at 30 June 2016

Annex 4: Interim Management Report for the First Six Months of 2016

Annex 5: Responsibility Statement for the Half-yearly Financial Statements as at 30 June 2016

 

 

 

 

 

 

 

 

 

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Balance Sheet as at 30 June 2016

Assets

 

 

 

 

30 June 2016

31 Dec. 2015

 

 

 

 

€ thousand

 

 

 

 

 

A.       

Fixed assets

 

 

 

 

I.       

Long-term financial assets

 

 

 

 

 

1.     

Long-term securities

6,866,713.00

 

6,867

 

 

2.     

Other loans

415,885,000.00

 

415,885

 

 

 

 

 

422,751,713.00

422,752

 

 

 

 

 

 

B.       

Current assets

 

 

 

 

I.       

Receivables and other assets

 

 

 

 

 

1.     

Other assets

8,436,095.81

 

30,207

 

II.     

Cash-in-hand, bank balances

25,089.78

 

25

 

 

 

 

8,461,185.59

30,232

 

 

 

 

 

 

C.       

Deferred income

 

0.00

5

 

 

 

 

 

D.       

Deferred tax assets

 

352,519.00

560

 

 

 

 

 

 

E.        

Deficit not covered by equity

 

7,882,342.59

8,603

 

 

 

 

 

 

 

 

 

 

439,447,760.18

462,152

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Balance Sheet as at 30 June 2016

Equity and Liabilities

 

 

 

 

30 June 2016

31 Dec. 2015

 

 

 

 

€ thousand

 

 

 

 

 

 

A.        

Equity

 

 

 

 

I.         

Subscribed capital

25,000.00

 

25

 

II.        

Accumulated losses brought forward

-8,628,231.91

 

-9,139

 

III.       

Net income/net loss for the financial year

720,889.32

 

511

 

IV.       

Deficit not covered by equity

7,882,342.59

 

8,603

 

 

 

 

0.00

0

 

 

 

 

 

 

B.        

Provisions

 

 

 

 

1.         

Provisions for taxes

644,859.74

 

396

 

2.         

Other provisions

105,725.00

 

110

 

 

 

 

750,584.74

506

 

 

 

 

 

 

C.        

Liabilities

 

 

 

 

1.         

Bonds

415,885,000.00

 

415,885

 

2.         

Liabilities to banks

22,807,955.42

 

17,922

 

3.         

Trade payables

3,604.21

 

2

 

4.         

Other liabilities

of which taxes:
€615.81 (previous year: €1 thousand)

615.81

 

13,318

 

 

 

 

438,697,175.44

447,127

 

 

 

 

 

 

D.        

Deferred income

 

0.00

14,519

 

 

 

 

 

439,447,760.18

 

 

 

 

462,152

 

 

 

 

 

 

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Income Statement for the Period
1 January to 30 June 2016

 

 

 

 

 


1 Jan. - 30 June 2016

1 Jan. - 30 June 2015

 

 

 

 

€ thousand

1.         

Income from silent partnership

 

14,518,830.20

0

2.         

Interest expense on securities issued

 

-13,099,944.52

-13,028

3.         

Other operating income

 

0.00

13,028

4.         

Personnel expenses

 

 

 

 

a)        

Wages and salaries

-13,500.00

 

-14

 

b)        

Social security, post-employment benefit and other employee benefit costs


-2,890.65


-16,390.65


-2

5.         

Other operating expenses

 

-115,387.11

-99

6.         

Income from other securities and long-term loans

 

431,441.23

429

7.         

Interest and similar expenses

 

-202,451.75

-209

8.         

Taxes on income

of which expenses from the reversal of deferred taxes:
€207,253.00 (previous year: €17 thousand)

 

-795,208.08

-383

9.         

Profit after tax

 

720,889.32

-278

10.       

Net income/net loss for the period

 

720,889.32

-278

 

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus
Königstein im Taunus Local Court, HRB 6791

Notes to the Half-yearly Financial Statements as at 30 June 2016

 

A.         General information

The half-yearly financial statements as at 30 June 2016 were prepared in accordance with the provisions of the Handelsgesetzbuch (HGB - German Commercial Code) and the supplementary requirements of the GmbH-Gesetz (German Private Limited Companies Act).

Notes that are required by the classification provisions to be reported for individual items in the balance sheet or the income statement, or that may optionally be presented either in these items or in the notes to the financial statements, are reported in some cases directly below the balance sheet items and otherwise disclosed in the notes to the financial statements.

The prior-period disclosures relate to 31 December 2015.

The Company is a large corporation as defined by section 267(3) sentence 2 of the HGB.

 

B.         Accounting policies

The half-yearly financial statements continued to be prepared on the basis of the going concern assumption despite the technical overindebtedness, because the existing agreements relating to the issuance of the securities safeguard the Company's long-term liquidity and the existing planning for the next five years expects positive business growth.

Long-term financial assets are carried at the lower of cost or market value.

 

 

The silent partnership in COMMERZBANK AG, Frankfurt am Main, (hereinafter referred to as Commerzbank AG) is not impaired. Commerzbank AG may only terminate the silent partnership agreement if the carrying amount of the silent contribution in Commerzbank AG's annual financial statements is equal to the nominal amount of the contribution at the date on which notice of termination is given and there is therefore no permanent impairment. Since Commerzbank AG generated a distributable profit within the meaning of the partnership agreement in 2015, a profit participation was paid out for that year.

In financial year 2011, the Company repurchased own bonds with a principal amount of €13,697 thousand at a purchase price of €6,867 thousand and intends to hold them until maturity. The repurchased securities must be recognised at cost and carried at the lower of cost or market value. For this reason, they contain hidden reserves of €6,830 thousand, which will be recognised on maturity at the latest.

Other assets and cash funds are carried at their principal amount.

Deferred tax assets were recognised for tax loss carryforwards which can be expected to be offset within the next five years. Measurement was based on the expected individual tax rates for the companies concerned at the time when the differences will reverse.

The subscribed capital is recognised at its principal amount and is fully paid-up.

The provisions take into account all recognisable risks and uncertain obligations and are recognised in the settlement amount dictated by prudent business judgement.

Liabilities are recognised at their settlement amount.

The income statement was prepared using the total cost (nature of expense) format.

In contrast to the classification format prescribed by law, the "Income from silent partnership" and "Interest expense on securities issued" items have been moved to the top of the income statement, since these items constitute the Company's material income and expenses.

 

 

 

C.         Balance sheet disclosures

The aggregate amount of the restricted distribution items in accordance with section 268(8) of the HGB is as follows:

 

30 June 2016

31 Dec. 2015

 

€ thousand

€ thousand

Deferred tax assets in respect of tax loss carryforwards

353

560

 

A statement of changes in fixed assets has been attached as an appendix to these Notes. The cost of the silent partnership has changed as follows over time:

 

 

 

Original cost

1,000,000,000.00

Share of loss for 2008

-157,526,174.98

Carrying amount 31 Dec. 2008

842,473,825.02

Write-down of silent contribution in 2012

-492,101,598.30

Write-up of silent contribution in 2012

65,512,773.28

 

415,885,000.00

 

Deferred tax assets were recognised for tax loss carryforwards in the amount of €2,228 thousand. They were calculated on the basis of a 15.825% corporation tax rate including the solidarity surcharge.

The other provisions mainly relate to DCIA fees (for Allianz SE's contingent indemnity) amounting to €33 thousand, the cost of auditing the annual financial statements amounting to €54 thousand and membership fees for the Industrie- und Handelskammer (Chamber of Industry and Commerce) amounting to €11 thousand.

 

 

The terms of the liabilities are as follows:

 


< 1 year


1 - 5 years


> 5 years


Total

 

Bonds

0.00

415,885,000.00

0.00

415,885,000.00

Liabilities to banks

22,807,955.42

0.00

0.00

22,807,955.42

Trade payables

3,604.21

0.00

0.00

3,604.21

Other liabilities

615.81

0.00

0.00

 615.81

 

22,812,175.44

415,885,000.00

  0,00

438,697,175.44

 

The bonds are perpetual. Taking into account the bank's first call right, the bonds have a remaining term of less than five years.

There are no liabilities secured by liens or similar rights.

D.         Income statement disclosures

All income was generated in Germany.

E.         Other disclosures

The Managing Director is the Company's sole employee.

Mr Sebastian Kasperkowitz, lawyer, is the Company's sole Managing Director in financial year 2016, as in previous years. He has been exempted from the restrictions of section 181 of the Bürgerliches Gesetzbuch (BGB - German Civil Code).

The exemption allowed by section 286(4) of the HGB has been applied to the disclosure of the remuneration of the Managing Director.

The Company incurred expenses for payments to its auditors totalling €18 thousand. These payments relate exclusively to the audit of financial statements.

There were no significant events after the end of the reporting period.

 

 

With respect to the appropriation of net profit, the Management will propose to the shareholders' meeting that the net accumulated losses be carried forward to new account.

No audit committee in accordance with section 324 of the HGB was established because the Company is a publicly traded company whose sole purpose is to issue securities.

The half-yearly financial statements and interim management report were neither reviewed by auditors nor audited.

 

Bad Soden am Taunus, 12 August 2016

 

Sebastian Kasperkowitz

Managing Director

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Appendix to the Notes to the Half-Yearly Financial Statements as at 30 June 2016
Statement of Changes in Fixed Assets

 

 

 

 

Long-term financial assets

 

Total

 

 

 

Long-term securities

Other loans

 

 

 

 

 

 

Cost

 

 

 

 

 

 

Balance at 1 Jan. 2016

 

 

6,866,713.00

415,885,000.00

 

422,751,713.00

Additions

 

 

0.00

0.00

 

0.00

Disposals

 

 

0.00

0.00

 

0.00

Balance at 30 June 2016

 

 

6,866,713.00

415,885,000.00

 

422,751,713.00

 

 

 

 

 

 

 

Cumulative depreciation and write-downs

 

 

 

 

 

 

Balance at 1 Jan. 2016

 

 

0.00

0.00

 

0.00

Additions

 

 

0.00

0.00

 

0.00

Disposals

 

 

0.00

0.00

 

0.00

Balance at 30 June 2016

 

 

0.00

0.00

 

0.00

 

 

 

 

 

 

 

Carrying amounts

 

 

 

 

 

 

Balance at 30 June 2016

 

 

6,866,713.00

415,885,000.00

 

422,751,713.00

Balance at 31 Dec. 2015

 

 

6,866,713.00

415,885,000.00

 

422,751,713.00

 

 

 

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Interim Management Report for the First Six Months of 2016

 

A.    The Company's business model

This interim management report is part of HT1 Funding GmbH's half-yearly financial report for the period from 1 January 2016 to 30 June 2016 (section 37w of the Wertpapierhandelsgesetz (WpHG - German Securities Trading Act).

HT1 Funding GmbH, Bad Soden am Taunus (hereinafter referred to as HT1 Funding GmbH) was formed on 23 May 2006 under the name "Opal 90. GmbH" and registered in the commercial register of the Local Court in Frankfurt am Main under the number HRB 77249 on 29 May 2006. The company changed its name to HT1 Funding GmbH, relocated its registered office to Bad Soden am Taunus and is now registered in the commercial register of the Local Court in Königstein under the number HRB 6791. HT1 Funding was formed for an indefinite period. The sole shareholder of HT1 Funding GmbH is Sanne Trustee Services Limited, St Helier, Jersey, in its capacity as the trustee for and in the name of HT1 Funding GmbH Charitable Trust, St Helier, Jersey.

In accordance with Article 2 of its Articles of Association dated 16 June 2006, the corporate purpose of HT1 Funding is to invest in the commercial operations of Dresdner Bank AG, Frankfurt am Main, as a silent partner, to refinance the investment by issuing bonds and to perform certain related activities. HT1 Funding GmbH is also authorised to implement transactions and measures that are suited to serving the above-mentioned corporate purpose.

Since 13 July 2006, HT1 Funding GmbH has invested in the commercial operations of Dresdner Bank AG as a typical silent partner by way of a contribution of assets ("silent contribution") amounting to €1,000,000,000. COMMERZBANK AG, Frankfurt am Main (hereinafter referred to as Commerzbank AG) completed the acquisition of all the shares of Dresdner Bank AG previously held by Allianz SE, Munich, on 12 January 2009. The option to reduce the silent contribution was agreed by way of an amending agreement to the agreement establishing a silent partnership dated 15 April 2009. The merger of Dresdner Bank AG with Commerzbank AG became effective on 11 May 2009. In the course of universal succession, the silent partnership was transferred when Dresdner Bank AG was merged with Commerzbank AG.

HT1 Funding GmbH refinances this silent contribution in full by way of the bonds issued on 20 July 2006 with an aggregate principal amount of €1,000,000,000 (Tier 1 Capital Securities). Additional borrowings serve to provide bridge finance for the Company, whereby bridge finance includes in particular the prefinancing of the expected refund of investment income tax plus the solidarity surcharge, as well as the costs required to operate HT1 Funding GmbH. HT1 Funding GmbH entered into an agreement with Commerzbank AG on 22 February 2012 that obliges HT1 Funding GmbH to reduce HT1 Funding GmbH's silent contribution to Commerzbank AG in the amount by which Commerzbank AG makes Tier 1 Capital Securities available to HT1 Funding GmbH. HT1 Funding GmbH also undertook in this agreement to ensure the reduction of the principal amount of the Tier 1 Capital Securities in this amount. The decline in the margin resulting from the reduction in the silent contribution will be offset by adjusting the profit participation payments on the silent contribution in favour of HT1 Funding GmbH.

This Management Report follows on from the annual report as of 31 December 2015.

 

B.    Report on economic position

I.       Macroeconomic environment

The trend in the German economy's performance is clearly positive, buoyed by strong domestic growth in the country. The Deutsche Bundesbank's monthly report for June 2016 expects real GDP growth, adjusted for working day variations, of 1.6% in 2016 and 2017.

However, the market environment in the financial sector remains challenging. The main negative impacts are due to the continuing low level of interest rates. Given the European Central Bank's expansionary monetary policy, no short-term change is expected here.

 

 

 

II.      Course of business and net assets, financial position and results of operations

1.       Results of operations

Distributions on the silent contribution depend on Commerzbank AG's business performance. Since Commerzbank AG generated a distributable profit in financial year 2015, a profit participation was due on the silent contribution in the reporting period. A profit participation of €29,278,304 was paid as at 30 June 2016 on the basis of Commerzbank AG's annual financial statements for financial year 2015. As a result, income of €14,518,830 from the silent partnership was realized in H1 2016 for the months of January - June 2016. This corresponds to a return of 7.04%.

In the event that Commerzbank AG does not make a payment on the silent contribution or does not do so in full, or if no payment was permitted to be made because this had been prohibited by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin - Federal Financial Supervisory Authority), among other reasons, HT1 Funding GmbH has a claim for an indemnity payment for the relevant financial year (profit period) under the contingent indemnity agreement with Allianz SE, provided that the conditions for payment are met.

In the prior-year period, an indemnity payment in the amount of €13,027,569 was made by Allianz SE in lieu of a distribution on the silent contribution. As a result, HT1 Funding GmbH generated additional income of €1,491,261.

Conversely, interest expenses for the bonds issued amounted to €13,099,944 (previous year: €13,027,569), while liabilities to banks amounted to €202,451 (previous year: €209,263).

The improved earnings position led to net income for the period of €720,889, compared with a net loss of €278,035 for the prior-year period. The increase in net income amounted to €998,924.

 

2.       Financial position

The Company's financial position is satisfactory despite its overindebtedness.

The silent contribution was refinanced by the bonds issued on 20 July 2006. The other funds needed to finance the investment income tax and solidarity surcharge payable on the distribution on the silent contribution and ongoing expenses are provided by way of a liquidity facility furnished by Commerzbank AG.

As a result of the liquidity facility agreed between Commerzbank AG and HT1 Funding GmbH in the liquidity facility agreement, all of HT1 Funding GmbH's payment obligations, including trade tax, are secured for the next 12 months. Repayment of these funds may only be demanded if and when HT1 Funding GmbH has sufficient funds at its disposal after the amounts payable on the bonds it has issued have been serviced.

Bank balances including cash in hand amounted to €25,089 as at the balance sheet date, while liabilities to Commerzbank AG amounted to €22,807,955.

The profit participation of €29,278,304 paid by Commerzbank AG as at 30 June 2016 is subject to 25% investment income tax plus the solidarity surcharge of 5.5%. The net amount of €21,556,151 was transferred to the trustee, HSBC Trustee (CI) Ltd.

The investment income tax plus solidarity surcharge in the amount of €7,722,153 was remitted by Commerzbank AG to the fiscal authorities and refunded by HT1 Funding GmbH to HSBC Trustee (CI) Ltd. to service the bondholders.

The refund led to increased utilisation of the liquidity facility compared to 31 December 2015. Once the tax assessment has been performed, the tax refunds will be used to repay the liquidity facility.

The trustee, HSBC Trustee (CI) Ltd., passed on interest of €26,417,015 on the bonds issued as of 30 June 2016 to the investors in the Tier 1 Capital Securities and refunded €2,861,289 to HT1 Funding GmbH. HT1 Funding GmbH's claims for payment under the profit participation have been assigned to the trustee, HSBC Trustee (CI) Ltd., to secure the claims of the bondholders.

 

3.       Net assets

The silent contribution to Commerzbank AG continues to be the key asset item.

As part of the capital management transaction launched and implemented by Commerzbank AG on 23 February 2012, Commerzbank AG acquired Tier 1 Capital Securities in the principal amount of €584,115,000. These were transferred to HT1 Funding GmbH on 13 June 2012. Both the principal amount of the Tier 1 Capital Securities and the principal amount of the silent contribution to Commerzbank AG held were reduced by this amount following the transfer.

The silent contribution to Dresdner Bank AG held by HT1 Funding GmbH participated in the net accumulated losses of Dresdner Bank AG for the period ended 31 December 2008 reported in the annual financial statements prepared in accordance with the Handelsgesetzbuch (HGB - German Commercial Code) (single-entity financial statements) by way of a write-down of the carrying amount of the silent contribution in the amount of €157,526,175. On 17 March 2009, the carrying amount of the silent contribution was written down to €842,473,825, effective 31 December 2008. The write-down of the carrying amount of the silent contribution was reversed to the full principal amount of €415,885,000 effective 31 December 2012.

Long-term securities are the result of own bonds bought back in 2011. The intention is to hold the securities to maturity. The hidden reserves, i.e. the difference between cost and par, amount to €6,830,287. They will be recognised on maturity of the securities.

The bonds item reported in the amount of €415,885,000 was unchanged compared to 31 December 2015 and relates to the bonds issued. Liabilities to banks rose by €4,885,590 to €22,807,955. 

 

III.    Overall assessment

The positive development in the results of operations led to an increase in indebtedness as a result of the prefinancing of the investment income tax and the solidarity surcharge payable on the distributions on the silent contribution. HT1 Funding GmbH's liquidity is ensured by its existing credit facilities and and its tax claims against the fiscal authorities.

For more information on Commerzbank AG's net assets, financial position and results of operations, please refer to the Commerzbank AG annual report. This can be accessed on Commerzbank AG's website at

https://www.commerzbank.de/media/en/aktionaere/haupt/2016_5/ag_bericht_2015.pdf

 

 

 

C.    Internal control and risk management system

HSBC Trustee (CI) Ltd, St Helier, Jersey, was appointed as the security trustee to which all future claims for payment under the silent partnership agreement, the loan agreement, the indemnity agreement and the contingent indemnity agreement were assigned as security on issue of the Tier 1 Capital Securities by HT1 Funding GmbH. The security trustee ensures compliance with the contractual arrangements and assumes supervisory duties in the interests of the investors.

In order to ensure proper accounting, HT1 Funding GmbH has engaged unitreu GmbH Wirtschaftsprüfungsgesellschaft to perform the accounting. This external service provider performs the entire asset and financial accounting and prepares the annual financial statements. There is no additional internal control system.

The Management supervises the activities of the security trustee and the external service providers.

 

D.    Report on expected developments

Management expects positive net income of approximately EUR 737,000 in financial year 2016. The expected profit participation in the amount of €27,848,000 will cover the interest expenses of €26,417,000 for the bonds issued. In addition, the Company is expecting interest expenses for the credit facility utilised of €460,000, other operating expenses of €133,000 and personnel expenses of €31,000, as well as tax expenses of €942,000; these will be partially offset by interest income on own bonds held in the amount of €872,000.

Based on its current cash flow forecast and on the continued existence of the contingent indemnity agreement with Allianz SE and the liquidity facility agreement with Commerzbank AG, the Management assumes that the Company will continue to exist as a going concern in financial year 2016.

 

E.    Report on opportunities and risk

Attention is drawn to the fact that actual events may differ materially from expected future developments.

 

The silent partnership originally agreed between HT1 Funding GmbH and Dresdner Bank AG remains effective after Dresdner Bank AG's acquisition by Commerzbank AG and relates by virtue of this acquisition to a silent partnership in Commerzbank AG.

Insofar as neither Commerzbank AG nor Allianz SE is in a position to make payments in relation to the claim to profit from the silent partnership or the indemnity payment, there is a risk that HT1 Funding GmbH may not be able to meet its payment obligations to bondholders.

Commerzbank AG generated positive net income in financial year 2015. This includes the interest payable on all Commerzbank AG's profit-based capital instruments. Based on the outlook in Commerzbank AG's annual financial statements and management report for financial year 2015 and the interim report as at 30 June 2016, the Company expects the banking sector to see stable development in financial year 2016. However, banks' results of operations are being impacted among other things by the European Central Bank's expansionary monetary policy.

At €615 million, Commerzbank AG operating profit for H1 2016 is below the figure for the prior-year period of €1,089 million. Due to this decrease, there is a risk that no distributable profit will be available for financial year 2016. In this case, HT1 Funding GmbH would not receive a margin on the indemnity payment that would then need to be requested from Allianz SE.

Commerzbank AG can regularly terminate the silent partnership agreement with HT1 Funding GmbH relating to the silent contribution for the first time effective 31 December 2016 and thereafter as at 31 December of each subsequent year.

The assignment of HT1 Funding GmbH's claims for payment under the profit participation to the trustee, HSBC Trustee (CI) Ltd., secures the claims of the bondholders with respect to risks relating to HT1 Funding GmbH.

 

Bad Soden am Taunus, 12 August 2016

 

Sebastian Kasperkowitz

Managing Director

 

 

 

 

 

 

 

 

 

HT1 Funding GmbH

Bad Soden am Taunus

Responsibility Statement for the Half-yearly Financial Statements as at 30 June 2016
(pursuant to section 264(2) sentence 3 and section 289(1) sentence 5 of the German Commercial Code)

 

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim financial statements of HT1 Funding GmbH, Bad Soden am Taunus, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company, and the management report of the company includes a fair review of the development and performance of the business and the position of the company, together with a description of the material opportunities and risks associated with the expected development of the company during the rest of the financial year.

 

Bad Soden am Taunus, 12 August 2016

 

 

Sebastian Kasperkowitz

Managing Director

 

This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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