4finance Holding S.A. Société anonyme. Annual accounts For the financial year ended 31 December (with the Report of Independent Auditors)

Transcription

1 Annual accounts For the financial year ended 31 December 2016 (with the Report of Independent Auditors) Registered office: 9, Allée Scheffer L-2520 Grand Duchy of Luxembourg Luxembourg Trade and Companies Register number: B

2 Table of Contents Page Annual accounts Balance Sheet 2 Profit and loss account Independent Auditors Report 21 1

3 Annual Accounts Helpdesk: Tel. (+ 352) : centralebilans@statec.etat.lu JYSFRSP T _001 RCSL Nr.: B Matricule: I ecdf entry date : BALANCE SHEET Page l/s Financialyearfrom 01 01/01/2016 to 02 31/12/2016 (in 03~ 4finance Holding S.A. 9, Allee Scheffer L-2520 Luxembourg ASSETS Reference(s) Current year Previous year A. Subscribed capital unpaid I. Subscribed capital not called ) 100! II. Subscribed capital called but unpaid IOS 106 B. Formation expenses IOI c. Fixed assets , ,72 I. Intangible assets 1. Costs of development 2. Concessions, patents, licences, trade marks and similar rights and assets, if they were l \11' 111 IU a) acquired for valuable consideration and need not be shown under C b) created by the undertaking itself Goodwill, to the extent that it was acquired for valuable consideration II. 4. Payments on account and intangible assets under development Tangible assets S l2l 12S Land and buildings Plant and machinery uo The notes in the annex form an integral part of the annual accounts

4 JYSFRSP T _001 Page 2/S I RCSL Nr.: I Matricule : Reference(s) Current year Previous year 3. Other fixtures and fittings, tools and equipment 1131 UI Payments on account and tangible assets in the course of construction llll 133 IM Ill. Financial assets 11}5 3 us , ,72 1. Shares in affiliated undertakings , ,72 2. Loans to affiliated undertakings 1U7 ll Participating interests ,00 4. Loans to undertakings with which the undertaking is linked by virtue of participating interests 11'-J 14 3 I.. 5. Investments held as fixed assets 1'4S , ,00 6. Other loans 11'7 147 IA& D. Current assets , ,46 I. Stocks 11SJ Raw materials and consumables USS Work in progress Finished goods and goods for resale 1159 IS Payments on account II. Debtors 116) , ,00 1. Trade debtors 116i a) becoming due and payable within one year U b) becoming due and payable after more than one year Amounts owed by affiliated undertakings , ,00 a) becoming due and payable within one year , ,00 b) becoming due and payable after more than one year , ,00 3. Amounts owed by undertakings with which the undertaking is linked by virtue of participating interests a) becoming due and payable within one year b) becoming due and payable after more than one year Other debtors 111) , ~ a) becoming due and payable within one year , ,00 b) becoming due and payable after more than one year && The notes in the annex form an integral part of the annual accounts

5 NSFRSP TI _001 Page 3/5 I RCSL Nr.: I Matricule : Reference(s) Current year Previous year Ill. Investments Shares in affiliated undertakings Own shares Other investments 119S 19S 196 IV. Cash at bank and in hand , ,46 E. Prepayments , ,44 TOTAL (ASSETS) ~, 2_2~8.~63~7-.7~3~2~,2_ _1._77-'5' "".S""'S..;. 8""',6""" 2 The notes in the annex form an integral part of the annual accounts

6 JYSFRSP T _001 Page 4/5 l RCSL Nr.: I Matricule : CAPITAL, RESERVES AND LIABILITIES Reference(s) Current year Previous year A. Capital a nd reserves , ,74 I. Subscribed capital 1303 lcll ,00 :ID' ,00 II. Share premium account , ,44 Ill. Revaluation reserve JOI IV. Reserves , ,00 1. Legal reserve Reserve for own shares Reserves provided for by the articles of association )16 4. Other reserves, including the fair value reserve , ,00 a) other available reserves , ,00 b) other non available reserves 14)) U 4)8 v. Profit or loss brought forward , ,35 VI. Profit or loss for the financial year ,21! ,35 VII. Interim dividend s 1321 m 12 VIII. Capital investment subsidies ms m 326 B. Provisions Provisions for pensions and similar obligations llll ))3 3)8 2. Provisions for taxation 1l3S lls Other provisions 13)7 ll7 ))8 c. Cred it ors , ,88 1. Debenture loans \'17 4)7 4)8 a) Convertible loans i) becoming due and payable within one year 1441 "' ii)... becoming due and payable after more than one year 1"'43 "'4l b) Non convertible loans "'46 i) becoming due and payable within one year 1"' $ ii) becoming due and payable after more than one year !>0 2. Amounts owed to credit institutions USS m 356 a} becoming due and payable within one year 1lS SI b) becoming due and payable after more than one year 1) && The notes in the annex form an integral part of the annual accounts

7 JYSFRSP T10214S01 _001 Page S/5 RCSL Nr.: Matricule: Payments received on account of orders in so far as they are Reference(sl Current year Previous year shown separately as deductions from stocks llil a) becoming due and payable within one year 1l6l l6l 364 bl becoming due and payable after more than one year 1365 )65 l66 4. Trade creditors 1l67 8 ) , ,80 al becoming due and payable within one year 1369 ) , ,80 b) becoming due and payable after more than one year 1171 ) Bills of exchange payable 1373 l7l l7 al becoming due and payable within one year U1S l7s l76 bl becoming due and payable after more than one year 1) Amounts owed to affiliated undertakings 1) ,08 l ,08 al becoming due and payable within one year llal , ,08 b) becoming due and payable after more than one year <1 7. Amounts owed to undertakings with which the undertaking is linked by virtue of participating interests 1l8S 38S l84 a) becoming due and payable within one year l88 b) becoming due and payable after more than one year 1389,., l!io 8. Other creditors , ,00 a) Tax authorities 1J9J ,00 ) b) Social security authorities 1395 l9s 196 c) Other creditors i) becoming due and payable within one year 119' ii) becoming due and payable after more than one year D. Deferred income TOTAL (CAPITAL, RESERVES AND LIABILITIES) 40S ~----=2~28~ ~63~7~.7 ~3:;..;;2~,2;;...; ;4...:..1;.;...7.;..; 75:;.;;.5:;..;;S;.;;8~,6"'2 The notes in the a n nex form an integral part of the annual accounts

8 JYSFRSP T _001 Page 1/2 Annual Accounts Helpdesk: Tel. : (+352) centralebilans@statec.etat.lu RCSLNr.: B Matricule: I ecdf e ntry date : PROFIT AND LOSS ACCOUNT Financialyearfrom /01/2016 to 02 31/12/2016 {in ol 4finance Holding S.A. 9, Allee Scheffer L-2520 Luxembourg PROFIT ANO LOSS ACCOUNT Reference(s) Current year Previous year 1. Net turnover Variation in stocks of finished goods and in work in progress 1703 IOJ 70< 3. Work performed by the undertaking for its own purposes and capitalised S Other operating income s. Raw materials and consumables and other external expenses , ,25 a) Raw materials and consumables b) Other external expenses ) ) , ,25 6. Staff costs a) Wages and salaries I b) Social security costs i) relating to pensions ii) other social security costs Sl ' 656 c) Other staff costs U Value adjustments a) in respect of formation expenses and of tangible and intangible fixed assets b) in respect of current assets Other operating expenses The notes in the annex form an integral part of the annual accounts

9 JYSFRSP T _001 Page 2/2 I RCSL Nr.: I Matricule: Reference(s) Current year Previous year 9. Income from participating interests 171S , a) derived from affiliated undertakings 17l , ,00 b) other income from participating interests ) 1 O. Income from other investments and loans forming part of the fixed assets a) derived from affiliated undertakings b) other income not included under a) Other interest receivable and similar income , ,66 a) derived from affiliated undertakings 172, 72' , 18 7)0 0,00 b) other interest and similar income , Share of profit or loss of undertakings accounted for under the equity method Value adjustments in respect of financial assets and of investments held as current assets S Interest payable and similar expenses ,76 a) concerning affiliated undertakings ' , ,00 b) other interest and similar expenses , ,76 1 S. Tax on profit or loss , Profit or loss after taxation , Other taxes not shown under items 1to , , Profit or loss for the financial year , ,35 The notes in the annex form an integral part of the annual accounts

10 Denominated in NOTE 1 GENERAL INFORMATION 4finance Holding S.A., hereinafter the "Company", was incorporated on July 24, 2012 and is organised under the laws of Luxembourg as a "société anonyme" for an unlimited period. The registered office of the Company is established in Luxembourg City. On 1 December 2016, the registered office of the Company was moved from 6, rue Guillaume Schneider, L-2522 Grand Duchy of Luxembourg to 9, Allée Scheffer, L-2520 Grand Duchy of Luxembourg. The financial year of the Company starts on January, 1 and ends on December, 31 of each year. The object of the Company is the acquisition of participations, in Luxembourg or abroad, in any companies or enterprises in any form whatsoever and the administration, management, control and development of such participations. The Company may in particular acquire by way of subscription, purchase, exchange or in any other manner any stock, shares and/or other participation securities, bonds, debentures, certificates of deposit and/or other debt instruments and more generally any securities and/or financial instruments issued by any public or private entity whatsoever. It may participate in the creation, development, management and control of any company or enterprise. It may further make direct or indirect real estate investments and invest in the acquisition and management of a portfolio of patents or other intellectual property rights of any nature or origin whatsoever. The Company may borrow and raise money in any form and in particular by way of private or public offer. It may issue notes, bonds and debentures and any kind of debt which may be convertible and/or equity securities, in particular by way of private or public placement. The Company may lend funds including the proceeds of any borrowings and/or issues of debt securities to its subsidiaries, affiliated companies or to any other company. It may also give guarantees and grant security interests in favour of third parties to secure its obligations or the obligations of its subsidiaries, affiliated companies or any other company. The Company may further mortgage, pledge, and transfer, encumber or otherwise hypothecate all or some of its assets. The Company may generally employ any techniques and instruments relating to its investments for the purpose of their efficient management, including techniques and instruments designed to protect the Company against credit, currency exchange, interest rate risks and other risks. The Company may generally carry out any operations and transactions, which directly or indirectly favour or relate to its object. The Company also prepares consolidated accounts as of December 31, 2016, which is subject to publication in Luxembourg. 4finance Holding S.A. and its subsidiaries are a part of a wider group and are also included in the consolidated accounts of 4finance Group S.A. which is the Company's parent. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation These annual accounts 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 December 19, 2002, as amended by the law of December 10, 2010 (the "Law"), determined and applied by the directors of the Company (the "Board of Directors). 9

11 Denominated in The preparation of annual accounts requires the use of certain critical accounting estimates. It also requires Management to exercise its judgement in the process of applying the accounting policies. Changes in assumptions may have a significant impact on the annual accounts in the period in which the assumptions changed. Management believes that the underlying assumptions are appropriate and that the annual accounts therefore present the financial position and results fairly. The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company maintains its books and records in Euro ( ) and prepares its annual accounts in accordance with applicable laws and regulations in Luxembourg as well as with the generally accepted accounting principles in force in the Grand Duchy of Luxembourg. The annual accounts are prepared in accordance with the going concern principle. Presentation of comparative financial data The provisions of the law of December 18, 2015 on annual and consolidated accounts and the grandducal regulation of December 18, 2015 on the layout of balance sheet and profit and loss accounts, amending the law of December 19, 2002, have been followed in the preparation of these annual accounts. The layout and the headings of certain balance sheet and profit and loss account captions have been modified accordingly. Some comparative figures have been reclassified for the same reason. Going concern Management of the Company believe that, considering all factors including the financial resources and commitments of the Company, the Company will carry on its business as a going concern. The annual accounts are prepared on the going concern basis of accounting. Significant accounting policies The main valuation rules applied by the Company are the following: Financial assets Shares in affiliated undertakings or participating interests, investments held as fixed assets and loans to these undertakings are valued at purchase price and nominal value respectively, including the expenses incidental thereto. In case of durable depreciation in value according to the opinion of the Management, value adjustments are made in respect of financial assets, so that a lower value is attributed to them at the balance sheet date. These value adjustments are not continued if the reasons for which they were made have ceased to apply. 10

12 Denominated in Debtors Debtors are valued at their nominal value. They are subject to value adjustments where their recovery is uncertain. These value adjustments are reversed if the reasons for which they were recognised have ceased to apply. Foreign currency translation The Company maintains its accounting records in O () and the balance sheet and the profit and loss accounts are expressed in this currency. Transactions expressed in currencies other than are translated into at the exchange rate effective at the time of the transaction. Cash at bank is translated at the exchange rate effective at the balance sheet date. Exchange losses and gains are recorded in the profit and loss account of the year. In accordance with prudence principles found within generally accepted accounting principles in Luxembourg ("LuxGaap"), other assets are translated separately, at the lower of the value converted using the historical exchange rate and the value converted using the exchange rate at the balance sheet date. Conversely, other liabilities are translated separately, at the higher of the value converted using the historical exchange rate and the exchange rate at the balance sheet date. Consequently both realised and unrealised exchange losses are recorded in the profit and loss account while exchange gains are recorded in the profit and loss account at the moment of their realisation only. Where there is an economic link between an asset and a liability, these are valued in total according to the method described above and any net unrealised loss is recorded in the profit and loss account whilst any net unrealised exchange gains are not recognised. Prepayments This asset item includes expenditure incurred during the financial year but relating to a subsequent financial year. Provisions Provisions are intended to cover losses or debts, the nature of which is clearly defined and which, at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or as to the date on which they will arise. Provisions may also be created to cover charges which originate in the financial year under review or in a previous financial year, the nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise. Current tax provision Provisions for taxation corresponding to the tax liability estimated by the Company for the financial years for which the tax return has not yet been filed are recorded under the caption "Other creditors". 11

13 Denominated in Debts The advance payments are shown in the assets of the balance sheet under the "Other debtors" item. Debts are recorded at their reimbursement value. Where the amount repayable on account is greater than the amount received, the difference is shown as an asset and is written off over the period of the debt based on a linear method. The difference must be entirely written off when the debt is repaid. Debts are recorded under subordinated debts when their status is subordinated to unsecured debts. NOTE 3 FINANCIAL ASSETS a) The movements for the year are as follows: Affiliated undertakings Participating interests Investments held as fixed assets Total Shares Shares Gross book value -opening balance 41,675, ,675, Additions for the year 119,158, ,141, ,900, ,200, Disposals for the year Transfer for the year (7,866,414.00) - - (7,866,414.00) Gross book value -closing balance 152,967, ,141, ,900, ,009, Net book value -closing balance 152,967, ,141, ,900, ,009, Net book value -opening balance 41,675, ,675,

14 Denominated in b) Undertakings in which the Company holds interests in their share capital or in which it is a general partner are as follows: Undertaking's name Registered office Percentage of holding Last balance sheet date Net equity at the last balance sheet date Result for the last financial year Net book value 31/12/2016 Net book value 31/12/2015 4finance A/S Latvia % ,227, ,211, ,750, ,750, Zaplo SP Z.O.O Poland % , (139,141.95) 1,149, , SIA VIVUS Latvia % ,655, ,427, , , SIA ONDO Latvia % ,543, ,440, , , Finance IT SIA Latvia % (904,475.92) (750,632.25) 1,180, ,180, Zaplo IFN SA Romania 99.90% (3,615,084.32) (2,467,907.73) 203, , Intersale Services Gibraltar % (500,300.15) (712,716.72) Limited SIA 4Finance Media Latvia % , , , , GoodCredit Universal Credit Armenia % , (361,745.76) 1,624, ,300, Organizatoin CJSC Prestamo Movil S.A. Argentina 98.75% (1,219,308.06) (3,236,454.55) 2,907, ,613, Finance SA De C.V. Mexico 99.99% (4,534,615.23) (4,599,838.37) 473, , Sofom E.N.R. 4f Sales USA % (8,566,227.11) (4,278,793.37) 182, , Integrated Management Services Mexico 99.00% , , , Mexico S.A.de C.V. 4F Servicos de Correspondente Brazil 99.99% , (374,275.72) 430, Bancario Ltda. Vivus S.R.L. Dominican 99.90% (585,299.30) (1,000,447.26) 403, Credit Service UAB Lithuania % (2,178,157.42) (2,114,779.12) 56, Finansu administravimas Lithuania % , , , UAB Friendly Finance OU Estonia 80.00% ,683, ,726, ,800, TBIF Financial servicces B.V. Netherlands % ,329, ,294, ,947, ,967, ,675, The figures in relation to Net Equity and Result for the last financial year, presented in the table above are extracted from the consolidation table which formed part of the audit of the consolidated financial statements of the company as at 31 December

15 Denominated in NOTE 4 AMOUNTS OWED BY AFFILIATED UNDERTAKINGS This item is detailed as follows : Becoming due and payable after less than one year Interest from Loan to 4finance Group SA 48, Dividends receivable from 4finance AS 34,128, Total 34,176, Becoming due and payable after more than one year TBIF share capital decrease from previous shareholders 2,866, Loan to 4finance Group SA 31,522, Total 34,389, Loan to 4finance Group SA located in Luxembourg with interest 13.75% per year and maturity July 9, NOTE 5 OTHER DEBTORS Other debtors consist of Tax Advances amounting to 3, NOTE 6 PREPAYMENTS Prepayments are mainly composed of following expenses: Annual surveillance fee 28, , Communication advisors 12, , Liability insurance - 21, Consulting services , ,

16 Denominated in NOTE 7 CAPITAL AND RESERVES As at December 31, 2016 the share capital of the Company amounted to 35,751, and is represented by 3,575,100 shares fully paid up with a nominal value of 0.01 each. The movements on the "Subscribed capital item during the year are as follows: Number of Shares Total number of Shares Subscribed capital - opening balance 35,751, ,575,100 3,575,100 Subscriptions for the year Redemptions for the year Subscribed capital - closing balance 35,751, ,575,100 3,575,100 Share premium and similar premiums The movements on the "Share premium" item during the year are as follows: Share premium Share premium Share premium and similar premiums - opening balance 1,941, ,941, Additions for the year - - Reductions for the year - - Share premium and similar premiums - closing balance 1,941, ,941,

17 Denominated in Legal reserve As at the beginning of the year Movements for the year: - Appropriation to the legal reserve - Dividend Interim - Other movements - Result for the financial year - Reserve for own shares Other reserves Loss brought forward Profit or loss for the financial year Interim dividends - 177, (603,538.35) (1,963,751.35) (1,963,751.35) 1,963, ,783, As at the end of the year , (2,567,289.70) 49,783, NOTE 8 TRADE CREDITORS Trade creditors amounting to 176, mainly consist of auditor s services. NOTE 9 AMOUNTS OWED TO AFFILIATED UNDERTAKINGS Total 2016 Total Finance S.A. 141,969, ,851, Finance Group S.A. 975, Finance AS 392, Credit Service UAB 22, Integrated Management Services Mexico 2, Vivus S.R.L. 2, Finance IT SIA 1, Prestamo Movil S.A. 408, Total 143,366, ,260, NOTE 10 OTHER CREDITORS Other Creditors consist of Tax and social security debts amounting to 9,

18 Denominated in NOTE 11 OTHER EXTERNAL EXPENSES This item is detailed as follows : Legal fees 977, , Other fees 308, , Audit and other fees to auditors 258, , Other insurance fees 21, , Bank account charges 20, , Accounting fees 10, , Data processing 8, , Rental fees 3, Publications 3, Tax consultancy fees 1, , Luxembourg Chamber of Commerce contribution Maintenance contracts - 4, Total 1,614, ,666, NOTE 12 INCOME FROM PARTICIPATING INTERESTS This item is detailed as follows : Derrived from affiliated undertakings Dividends receivable from 4finance AS 58,428, ,428, NOTE 13 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME a) derived from affiliated undertakings Interest income on loan amounts from shareholder 321, Total 321,

19 Denominated in b) other interest and similar income Foreign currency exchange gains 221, , Total 221, , NOTE 14 INTEREST PAYABLE AND SIMILAR EXPENSES a) concerning affiliated undertakings Interest charge on loan amounts owed to affiliated undertakings 7,541, , ,541, , b) other interest and similar expenses Foreign currency exchange losses Bank interest 25, , , , , NOTE 15 TAXES The Company is subject to the general tax regulation applicable to the commercial companies residing in Luxembourg. 18

20 Denominated in NOTE 16 ADVANCES AND LOANS GRANTED TO THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BODIES During the year ended December 31, 2016 the Company did not grant any loans to the management or supervisory bodies (2015: nil). NOTE 17 OFF BALANCE SHEET COMMITMENTS AND CONTINGENCIES On 23 May 2016, the Company and the subsidiaries entered into an agreement whereby the Company and the subsidiaries guarantee the validity and enforceability of the indenture, issued 150,000, % Senior Notes due 2021 and the obligations of the issuer under the indenture. On 27 March 2015, the Company and the subsidiaries entered into an agreement whereby the Company and the subsidiaries act as a guarantor on behalf of the secured parties represented by Nordic Trustee & Agency AB up to a maximum amount of SEK 600,000, On 14 August 2014, the Company and the subsidiaries entered into an indenture according to the terms and conditions of which, the Company and the subsidiaries guarantee the validity and enforceability of the indenture, issued USD 200,000, % Senior Notes due 2019 and the obligations of the issuer under the indenture. The Company entered into following agreements whereby the Company acts as a guarantor for leases of office space: 1) Guaranty in respect of lease agreement concluded between SIA 4finance IT Branch in UK and Lawnpond Limited; 2) Guaranty in respect of lease agreement concluded between 4f Sales Inc. and Aventura Harbour Borrower LLC; 3) Guaranty in respect of lease agreement concluded between 4finance, S.A. de C.V., SOFOM E.N.R. and Banca Mifel, S.A.; 4) Guaranty in respect of lease agreement concluded between 4finance EOOD and Art Build-Up Ltd.; 5) Guaranty in respect of lease agreement concluded between VIVUS, S.R.L. and COLE, S.R.L. NOTE 18 SUBSEQUENT EVENTS As at December 31, 2016, the Company had an outstanding loan facility agreement with V7 Limited, a UK-based consumer lending company, for a maximum of GBP 30 million. On January 17, 2017 a new agreement was signed to restructure this loan. At the time of the agreement, the outstanding amount on this facility totalled GBP 14.7m principal plus GBP 1.5m in accrued interest. As part of the restructuring of this loan, this obligation was transferred from V7 Limited to 4finance Holding SA. The Company s subsidiary, 4finance S.A. s USD denominated senior notes maturing 2019 contained an embedded put option exercisable by bondholders in the summer of To address the potential exercise of this put option and to further strengthen its long-term capital structure, 4finance S.A. embarked on a refinancing and debt-raising exercise in the first quarter of On 13 April 2017, 4finance S.A. announced the pricing of a new issue of USD 325 million USD Notes due 2022, with a coupon of 10.75%, issued at par. These senior notes have a 5 year maturity with a 2 year non-call period. Closing is expected on 28 April finance S.A. also announced the successful result of a parallel tender process for its existing USD 2019 Notes. A total of USD 132 million in notional amount of USD 2019 Notes was validly tendered prior to the 19

21 Denominated in early participation deadline. This 66% tender result exceeds the 50% requirement for both the new issue to proceed and the associated consent solicitation to remove certain terms and covenants (including the put option) on the residual USD 2019 Notes, which remain outstanding. The previously announced conditional call of 4finance S.A. s SEK 2018 Notes will now also proceed, only subject to closing of the USD 2022 Notes. 20

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