Audited annual accounts for the year ended December 31, 2010
Michelin Luxembourg SCS
Société en Commandite Simple
Audited annual accounts
for the year ended December 31, 2010
69, Boulevard de la Pétrusse
R.C.S. - B96.546
COMPAGNIE FINANCIERE MICHELIN, 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 »);
Jean-Noël QUILLET, Chairman of the Supervisory Board of the Issuer. Professional address, 63040 Clermont-Ferrand (France), 23, Place des Carmes-Déchaux;
Marc HENRY, Member of the Supervisory Board of the Issuer. Professional address,
63040 Clermont-Ferrand (France), 23, Place des Carmes-Déchaux;
Bernard GERARDIN, Member of the Supervisory Board of the Issuer. Professional address, 63040 Clermont-Ferrand (France), 23, Place des Carmes-Déchaux,
state that to the best of their knowledge, the financial statements prepared in accordance with the applicable set of accounting standards 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 MICHELIN
For the Supervisory Board of
MICHELIN LUXEMBOURG SCS
Chairman of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
|'000 EUR||'000 EUR|
|Long term loans to affiliated undertakings||3||1'245'000||1'245'000|
| Amounts owed by affiliated undertakings |
becoming due and payable within one year
|Cash at bank||26||5|
|Capital and reserves|
|Result for the financial year||7||(1'169)||116|
|Partners' compensation reserve||7||1'169||-|
|Non-convertible guaranteed bonds|
|becoming due and payable after more than one year||8||1'227'693||1'250'000|
|Amounts owed to affiliated undertakings|
|becoming due and payable within one year||26'172||3'588|
|Interests accrued on guaranteed bonds|
|becoming due and payable within one year||66'779||67'812|
|becoming due and payable within one year||14||14|
|'000 EUR||'000 EUR|
|Interest payable and similar charges|
|. charges in relation with the guarantee of the bonds||989||1'172|
|. interest on guaranteed bonds||8||96'609||85'446|
|. debt issuance costs||4||2'062||1'716|
|. loss on bond partial repurchase||8||1'684||-|
|Profit for the financial year||-||116|
|Income from loans forming part of fixed assets|
|. derived from affiliated undertakings||3||100'263||79'687|
|Income from loans forming part of current assets|
|. derived from affiliated undertakings||-||8'846|
|Other interest receivable and similar income||-||1|
|Loss for the financial year||1'169||-|
1 Status and principal activities
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 31, 2003.
The Partnership is established for an unlimited period.
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.
The Partnership's financial year begins on the first day of January and terminates on the last day of December.
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 Financière Michelin ("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
The Partnership is included in the consolidated accounts of CFM. The consolidated accounts are available at CFM's registered office.
2 Summary of significant accounting policies
2.1 Basis of presentation
The annual accounts of the Partnership are prepared in accordance with Luxembourg legal and regulatory requirements.
2.2 Accounting convention
The annual accounts have been prepared under the historical cost convention.
2 Summary of significant accounting policies (cont.)
2.3 Financial assets
Financial assets are recorded at cost. Value adjustments are recorded at the end of the financial year if the net realizable value of any asset is lower than the book value. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply.
2.4 Foreign currencies
The Partnership maintains its financial records in euros ("EUR"). Assets and liabilities denominated in other currencies are translated into EUR at the rates prevailing at the balance sheet date. Income and expense transactions are recorded at the rate prevailing on the date of the transactions. Realized exchange gains and losses, and unrealized exchange losses, are reflected in the profit and loss account.
The Partnership does not currently maintain any material assets or liabilities in foreign currencies.
Prepayments represent costs associated with the issuance of the guaranteed bonds. They are amortized to the profit and loss account over the contractual term of the bonds.
2.6 Loans and amounts owed by/to affiliated undertakings
Loans and amounts owed by/to affiliated undertakings are valued at their nominal value. Loans and amounts owed by affiliated undertakings are subject to value adjustments where their recovery is compromised. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply.
Loans and amounts owed by/to affiliated undertakings bear interests which are accrued on a pro rata temporis basis.
2.7 Guaranteed bonds
Guaranteed bonds are valued at their nominal value and bear interests which are accrued on a pro rata temporis basis.
2.8 Law of 10 December 2010 on the introduction of international accounting standards for undertakings
In accordance with article 4 of the law dated December 10, 2010, on the introduction of international accounting standards for undertakings amending (i) the amended Law of December 19, 2002 on the register of the commerce and companies and the accounting and annual accounts of undertakings; (ii) the Law of August 10, 1915 on commercial companies as amended; and (iii) Article 13 of the Commercial Code, the Supervisory Board of the Partnership has resolved for the year ended December 31, 2010 not to implement the changes brought by this law to the content and the layout of the annual accounts, as well as to the related accounting principles and valuation policies.
3 Long term loans to affiliated undertakings
Long term loans to affiliated undertakings represent interest bearing loans made to finance the development of the Michelin group's operations. They comprise:
|'000 EUR)||'000 EUR)|
|Compagnie Financière Michelin/Michelin Invest Luxembourg SCS 8.87% repayable April 24, 2014*||750'000)||750'000)|
|Compagnie Financière Michelin/Michelin Invest Luxembourg SCS 6.83% repayable April 16, 2012**||495'000)||495'000)|
* On April 24, 2010 the debt was taken over by Compagnie Financière Michelin.
** On April 16, 2010 the debt was taken over by Compagnie Financière Michelin.
Total interest income for the year 2010 for both loans amounts EUR 100'263'394.
There is no guarantee attached to these loans.
|'000 EUR)||'000 EUR)|
|Issuance costs relating to the guaranteed bonds :|
|Opening net book value||7'613||1'949|
|Issuance costs on the 8.625% guaranteed bonds||-||7'380|
|Amortization for the year||(2'062)||(1'716)|
|Closing net book value||5'551||7'613|
5 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.
The unlimited partnership units are owned by CFM and the limited partnership units by Nitor S.A..
6 Legal reserve
Luxembourg companies are 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.
7 Profit for the financial year
The Annual General Meeting held on April 9, 2010 decided to distribute the profit of the financial year 2009, being EUR 116'189, to the Partners. The Partnership's result for the year ended December 31, 2010 is a loss of EUR 1'168'894.67.
According to art. 19 of the Articles of Association of the Partnership, the net result of the Partnership as reported in the annual accounts, be it a profit or a loss, will be automatically recorded in the profit and loss accounts of the Partners on a pro rata basis of their participation in the Partnership. The net profit will be distributed among the Partners, unless the Annual General Meeting of the Partners decides that the profit be either carried forward or transferred to a reserve. As of December 31, 2010, the net result of the Partnership being a loss of EUR 1'168'894.67 a compensation reserve for an equivalent amount has been recognized. This amount is owed by the Partners and recorded under the caption 'Amounts owed by affiliated undertakings becoming due and payable within one year'.
8 Guaranteed bonds
The loans to Michelin group companies are being financed by guaranteed bond issuances totaling EUR 1'227'693 as per December 31, 2010.
Details of the guaranteed bonds outstanding at December 31, 2010 are as follows:
|'000 EUR||'000 EUR|
|8.625% guaranteed bonds repayable on April 24, 2014 *||750'000||750'000|
|6.5% guaranteed bonds repayable on April 16, 2012 **||477'693||500'000|
* The coupon is due and payable annually on April 24
** The coupon is due and payable annually on April 16
The 6.5% guaranteed bonds were issued on April 16, 2002 by Michelin Invest Luxembourg SCS (formerly Michelin Finance Luxembourg S.A.) and are listed on the Luxembourg Stock Exchange. The bonds were transferred to the Partnership on December 4, 2003 and are irrevocably and unconditionally guaranteed by CFM. They are due on April 16, 2012.
In the course of 2010, the entity proceeded to four repurchases on the EUR 500 million bond, for a total of EUR 22'307'000, realizing a loss of EUR 1'684'138 on those repurchases.
8 Guaranteed bonds (cont.)
On April 24, 2009, under its Euro Medium Term Note Programme, the Partnership issued the 8.625% bonds of EUR 750'000'000 due April 24, 2014. These bonds are guaranteed by CFM.
These bonds are listed on the Luxembourg Stock Exchange.
Total interest charge for the year 2010 for both bonds amounts EUR 96'609'234.88.
The Partnership does not have any employee (2009: none).
10 Subsequent events
From January 1 until March 25, 2011, the Partnership proceeded to additional repurchases on the EUR 500 million bond. As a consequence, as at March 25, 2011, the outstanding amount of the EUR 500 million bond is EUR 454'870'000.
On February 1, 2011, Mr. Gérard CHAPIROT and Mr. Rudolf JURCIK have been substituted as Supervisory Board members by Mr. Marc HENRY and Mr. Bernard GERARDIN.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Michelin via Thomson Reuters ONE