consolidated annual report 2015 - banque … · consolidated annual report 2015. list of contents...

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CONSOLIDATED ANNUAL REPORT 2015

List of contents

CONSOLIDATED MANAGEMENT REPORT 3

AUDIT REPORT 6

CONSOLIDATED BALANCE SHEET 9

CONSOLIDATED OFF BALANCE SHEET 11

CONSOLIDATED PROFIT AND LOSS ACCOUNT 13

NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS 16

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CONSOLIDATED MANAGEMENT REPORT

The economic environment throughout

the year remained rather volatile starting

with the Swiss National Bank discontinuing

the floor in the exchange rate of CHF

1.20 per Euro and the move further into

negative interest rates in January 2015.

This unexpected event caused dislocation

in financial markets and the market

volatility of recent years has continued.

This has influenced our result on financial

operations of EUR 2.3m, which is EUR 3.6m

lower than last year.

2015 was characterized by the successful

consolidation and integration of the new

entities in Liechtenstein and Bahamas.

The latest investments into our staff and

infrastructure has positioned us well to

continue to consolidate through selective

acquisitions in existing and new markets. We

are also continuously investing to meet the new

regulatory challenges of the banking industry.

The balance sheet rose from EUR 1.3 bn to

EUR 1.4 bn as a consequence of the expansion

of the Group. Investments into fixed income

have seen an increase from EUR 554.9m to

EUR 654.5m following the appliance of our

prudent investment strategy across all group

entities. The low interest rate environment

has been and will be a challenge for the

banking industry as a whole.

The Group has therefore continued to

grow its loan portfolio from EUR 202.3m

to EUR 388.9m. Such lending activity is

always ancillary to our core private banking

business and is mainly focused on primary

residence mortgages and Lombard loans,

both at conservative loan to value levels.

This prudent and solid approach results

also in a very strong solvency ratio of 26.4%.

The organic growth of the private banking

business can be seen in the increase in client

deposits from EUR 866.3m to EUR 1.1 bn.

The total operating income of the Group

was broadly unchanged at EUR 38.6m

compared to EUR 37.4m for the previous

period. The total operating income was

driven by a strong net interest income of

EUR 21.8m (2014: EUR 12.1m), which is a

result of the shift from lower yielding fixed

income bonds to loans to customers. The

commission income increased by 62.8% to

EUR 11.6m, which can be largely attributed

to the first year of full consolidation of

Banque Havilland (Liechtenstein) AG and

Banque Havilland (Bahamas) Limited.

CONSOLIDATED MANAGEMENT REPORT

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In early 2015, the Group continued to

focus on its core business and sold

its participations in Blackfish Capital

Management Limited and Blackfish Capital

Holdings Limited. At the same time, the

Group has entered the Russian market

with the establishment of BH International

Limited Liability Company, which is acting

as a marketing office in Russia. In addition,

Kaupthing Life & Pension Luxembourg S.A.

entered into an agreement to transfer

its existing business to a professional

insurance partner. This transfer was

successfully closed at 30th June 2015. It

has been decided to return the licence

to the Commissariat aux Assurances in

Luxembourg and to liquidate the company.

The accounts have been prepared as

liquidation accounts.

The Group continues its existing strategy

of investing in systems and new personnel

to handle the increased assets under

management. This resulted in an increase

in staff cost from EUR 11.4m to EUR 17.4m.

The staff costs as well as other general

expenses of EUR 13.3m (2014: EUR 8.1m)

have also been strongly influenced by

one-off integration cost as well as by the

first year of full consolidation of Banque

Havilland (Liechtenstein) AG and Banque

Havilland (Bahamas) Limited.

The Group is pleased to report a profit of

EUR 2.5m despite numerous transition

costs and a rather volatile financial

environment throughout 2015.

CAPITAL AND RISK MANAGEMENT

The Group business is exposed to

several risks as customary for a banking

business, such as credit, market, liquidity,

operational and other business risks. The

Group continues to maintain a robust

approach to risk management with an

independent department reporting directly

to the Executive Management and the

Board of Directors. The Risk Management

Department ensures that each key risk

of the business is identified and properly

managed by applying a holistic view. Key risk

areas are managed through a framework of

policies, procedures and limits with regular

reviews of such framework. During 2015, the

Group has enhanced its control framework

both in terms of staff and technology to face

the increase in business. The Group has no

direct or indirect exposure towards sub-

prime credit or structured credit obligations

(such as CDOs, SIVs and CLOs) in its loan or

bond portfolios. Additional information on

risk management is available on request in

accordance with part 8 of the EU Regulation

No 575/2013 (CRR: “Capital Requirements

Regulation”). For further information on the

Group’s exposure to risks, please refer to

notes 7.3 and 7.4 of these annual accounts.

OUR PRIORITIES FOR 2016

In February 2016, Banque Havilland S.A.

acquired 100% of the share capital of

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Peter Lang Harley Rowland

Deputy CEO Member of the Board of Directors

Luxembourg, 4th April 2016

Banco Popolare Luxembourg S.A. and is

a consequence of our strategy to expand

our UHNW client base in Europe. Banco

Popolare Luxembourg S.A. has been

renamed Banque Havilland Institutional

Services S.A. and enhances the capabilities

of the Group in the shape of a platform to

service investment funds and institutional

clients. Banque Havilland Institutional

Services S.A. will be fully consolidated into

the Group from 29th February 2016.

The Group will also continue in 2016 to

seek potential bolt-on acquisition targets

to accelerate its expansion plans, based on

the opportunities arising from competitors

reducing their private banking exposures,

while continuing its low risk approach to the

management of the balance sheet and the

business generally. On behalf of the Group’s

Executive Committee and the shareholder,

we would like to express our deepest thanks

to the clients and employees of the Group.

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Audit reportTo the Board of directors of Banque Havilland S.A.

REPORT ON THE CONSOLIDATED

ANNUAL ACCOUNTS

We have audited the accompanying

consolidated annual accounts of Banque

Havilland S.A., which comprise the

consolidated balance sheet as at 31st

December 2015, the consolidated profit and

loss account for the year then ended and a

summary of significant accounting policies

and other explanatory information.

Board of Directors’ responsibility for

the consolidated annual accounts

The Board of Directors is responsible for

the preparation and fair presentation of

these consolidated annual accounts in

accordance with Luxembourg legal and

regulatory requirements relating to the

preparation of the consolidated annual

accounts, and for such internal control

as the Board of Directors determines is

necessary to enable the preparation of the

consolidated annual accounts that are free

from material misstatement, whether due

to fraud or error.

Responsibility of the “Réviseur

d’entreprises agréé”

Our responsibility is to express an opinion

on these consolidated annual accounts

based on our audit. We conducted our

audit in accordance with International

Standards on Auditing as adopted for

Luxembourg by the “Commission de

Surveillance du Secteur Financier”. Those

standards require that we comply with

ethical requirements and plan and perform

the audit to obtain reasonable assurance

whether the consolidated annual accounts

are free from material misstatement.

An audit involves performing procedures

to obtain audit evidence about the amounts

and disclosures in the consolidated

annual accounts. The procedures

selected depend on the judgment of the

“Réviseur d’entreprises agréé”, including

the assessment of the risks of material

misstatement of the consolidated annual

accounts, whether due to fraud or error.

In making those risk assessments, the

“Réviseur d’entreprises agréé” considers

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internal control relevant to the entity’s

preparation and fair presentation of the

consolidated annual accounts in order

to design audit procedures that are

appropriate in the circumstances, but not

for the purpose of expressing an opinion

on the effectiveness of the entity’s internal

control. An audit also includes evaluating

the appropriateness of accounting policies

used and the reasonableness of accounting

estimates made by the Board of Directors, as

well as evaluating the overall presentation

of the consolidated annual accounts.

We believe that the audit evidence we have

obtained is sufficient and appropriate to

provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated annual

accounts give a true and fair view of the

consolidated financial position of Banque

Havilland S.A. as of 31st December 2015, and

of the consolidated results of its operations

for the year then ended in accordance

with Luxembourg legal and regulatory

requirements relating to the preparation of

the consolidated annual accounts.

Report on other legal and regulatory

requirements

The consolidated management report,

which is the responsibility of the Board

of Directors, is consistent with the

consolidated annual accounts.

PricewaterhouseCoopers, Société coopérative

Luxembourg, 4th April 2016

Represented by

Cyril Lamorlette

PricewaterhouseCoopers Société coopérative2, Rue Gerhard MercatorB.P. 1443L-1014 LuxembourgTelephone +352 494848-1Facsimile +352 494848-2900www.pwc.lu

Cabinet de révision agréé. Expert-comptable(autorisation gouvernementale n°10028256)R.C.S. Luxembourg B 65 477Capital social EUR 516 950TVA LU25482518

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BANQUE HAVILLAND S.A.CONSOLIDATED BALANCE SHEET AS AT 31st DECEMBER 2015 (EXPRESSED IN EURO)

ASSETS NOTES 31/12/2015 31/12/2014

Cash in hand, balances with central banks and post

office banks 4.1,7.1 127 021 096 95 527 254

Loans and advances to credit institutions

- repayable on demand

- other loans and advances

4.2, 7.1, 7.3119 819 597

4 750 000209 441 092

45 681 659

124 569 597 255 122 751

Loans and advances to customers 2.4.3, 4.3, 7.1, 7.3 388 977 645 202 288 741

Bonds and other fixed-income transferable securities

- Issued by public bodies

- Issued by other borrowers

2.4.1, 4.4, 7.1, 7.351 703 154

602 859 01825 098 241

529 838 543

654 562 172 554 936 784

Shares and other variable-yield transferable securities 2.4.2, 4.5,7.1, 7.3 47 172 108 44 239 435

Shares in affiliated undertakings 3 80 290 -

Intangible assets 2.3.1, 4.6 3 062 494 4 678 106

Goodwill of first consolidation 2.2, 4.6 10 576 734 13 598 659

Tangible assets 2.3.2, 4.6 12 506 132 10 992 618

Other assets 4.7 14 767 231 71 160 110

Prepayments and accrued income 5 067 746 4 272 413

TOTAL ASSETS 4.8 1 388 363 245 1 256 816 871

The accompanying notes form an integral part of these consolidated annual accounts.

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LIABILITIES NOTES 31/12/2015 31/12/2014

Amounts owed to credit institutions


- with agreed maturity dates or periods of notice

5.1, 7.184 329 72129 365 152

3 749 627107 804 633

113 694 873 111 554 260

Amounts owed to customers other debts


- with agreed maturity dates or periods of notice

5.2, 7.1945 078 359116 915 092

774 322 80691 974 114

1 061 993 451 866 296 920

Other liabilities 5.3 26 016 274 90 840 615

Accruals and deferred income 947 312 4 705 657

Provisions

- provisions for taxation

- other provisions 6.24 703 8854 712 568

2 744 8755 038 011

9 416 453 7 782 886

Fund for general banking risks 2.5 16 768 791 16 088 653

Subscribed capital 5.4, 5.6 130 000 000 130 000 000

Share premium account 5.6 1 260 709 1 260 709

Reserves 5.5, 5.6 1 913 954 4 018 770

Profit or loss brought forward 5.6 7 786 782 5 350 537

Profit for the financial year attributable to the Group 5.6 2 489 346 2 777 397

Minority interests 5.6 16 075 300 16 140 467

TOTAL LIABILITIES 5.7 1 388 363 245 1 256 816 871


BANQUE HAVILLAND S.A.CONSOLIDATED BALANCE SHEET AS AT 31st DECEMBER 2015 (EXPRESSED IN EURO)

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BANQUE HAVILLAND S.A.CONSOLIDATED OFF BALANCE SHEET FOR THE YEAR ENDED 31st DECEMBER 2015

(EXPRESSED IN EURO)

OFF BALANCE SHEET NOTES 31/12/2015 31/12/2014

Contingent liabilities

of which: Guarantees and assets pledged as collateral

security

6.1, 7.1, 7.3 14 746 303

14 746 303

5 374 162

5 374 162

Fiduciary transactions - 130 718

Commitments - -


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NOTES 2015 2014

Interest receivable and similar income

of which: arising from fixed-income transferable

securities

Interest payable and similar charges

8.1 24 122 487

10 431 527(2 302 624)

13 405 454

7 225 767(1 333 466)

Net interest income 21 819 863 12 071 988

Income from transferable securities

Income from shares and other variable-yield securities 2 346 1 042

Commission receivable

Commission payable

8.1 19 803 115(8 204 712)

9 966 874(2 843 378))

Net commission income 11 598 403 7 123 496

Net profit or net loss on financial operations 8.1 2 291 849 5 946 598

Other operating income 8.2 1 686 358 13 488 189

Total operating income 37 398 819 38 631 313

General administrative expenses

Staff costs

of which:

- wages and salaries

- social security costs

of which: social security costs relating to pensions

Other administrative expenses

9.3, 9.4

9.5

(17 411 990)

(14 248 220)(2 048 289)

(821 673)(13 328 532)

(11 461 721)

(9 340 181)(1 136 995)

(378 176)(8 050 150)

(30 740 522) (19 511 871)

Value adjustments in respect of tangible and

intangible assets (4 715 508) (3 877 361)

Other operating charges 8.3 (2 738 894) (12 371 163)

Value adjustments in respect of loans and advances and

provisions for contingent liabilities and for commitments8.4

(825 840) (387 085)


BANQUE HAVILLAND S.A.CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2015

(EXPRESSED IN EURO)

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NOTES 2015 2014

Value re-adjustments in respect of loans and

advances and provisions for contingent liabilities

and for commitments 8.4 1 892 800 442 398

Value re-adjustment in respect of securities held

as financial fixed assets, participating interests

and shares in affiliated undertakings (209 970) -

Income from the reversal of amounts included in

the fund for general banking risks (299 493) -

Profit before tax (238 608) 2 926 231

Taxes on profit on ordinary activities 8.5 (26 750) (76 013)

Profit or loss on ordinary activities after tax (265 358) 2 850 218

Extraordinary income 8.6 1 480 403 -

Other taxes not shown in the preceding items (524 555) (508 610)

Profit or loss for the financial year 690 490 2 341 608

Thereof minority interests (1 798 856) (435 789)

Profit for the financial year attributable to the Group 2 489 346 2 777 397


BANQUE HAVILLAND S.A.CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2015

(EXPRESSED IN EURO)

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1 GENERAL

Banque Havilland S.A. (the “Bank”) was incorporated in the Grand-Duchy of

Luxembourg on 10th July 2009 as a limited liability company (“Société Anonyme”).

The Ministry of Finance granted the company a banking licence on 25th June 2009.

The Bank was created through a non-cash contribution of assets and liabilities from

a former bank. This non-cash contribution was calculated as the lower of net book

value or fair value as at the date of the contribution. As a consequence, the Bank is

now carrying all former assets and liabilities at its historical cost and accumulated

depreciation.

The Bank is registered at the Luxembourg “Registre du Commerce et des Sociétés”

under the number B0147.029. The head office is located 35a, Avenue J.F. Kennedy,

L-1855 Luxembourg.

The share capital of the Bank is expressed in Euro (EUR) and the accounting records

are prepared and maintained in this currency. The Bank’s accounting year is defined

as the calendar year.

The Bank is permitted to carry out all banking activities. Its principal activity is

private banking.

The Bank and the subsidiaries described in note 3 are referred to as the “Group”.

BANQUE HAVILLAND S.A.Notes to the consolidated annual accounts as at 31st DECEMBER 2015

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND VALUATION RULES

The Group prepares its consolidated accounts using the historical cost principle, in

accordance with the laws and regulations in force in the Grand Duchy of Luxembourg

and on the basis of accounting principles generally accepted by the banking sector in

the Grand Duchy of Luxembourg. The accounting policies and the valuation principles

are determined and applied by the Board of Directors, apart from those which are

defined by law and by the Commission de Surveillance du Secteur Financier.

2.1 CONSOLIDATION METHOD

The Group has adopted the full consolidation method for its subsidiaries (direct or

indirect holding of more than 50%).

2.2 DIFFERENCES ON FIRST CONSOLIDATION

Differences on first consolidation represent the difference between the cost of the

parent company’s investment in the consolidated subsidiaries and its share of the

net assets of these companies as at the date of acquisition of its investment.

Positive differences on first consolidation are disclosed on the asset side of the

balance sheet (as goodwill of first consolidation) and amortized over 5 years on a

linear basis.

Negative differences on first consolidation are shown on the liabilities side of the

consolidated balance sheet.

BANQUE HAVILLAND S.A.Notes to the consolidated annual accounts as at 31st DECEMBER 2015

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2.3 FIXED ASSETS

2.3.1 Intangible assets

Intangible assets are included at purchase price less accumulated depreciation.

Intangible assets consist of software amortized over 4 years on a linear basis.

Formation expenses and costs in relation to capital increases are directly expensed

when incurred. Other intangible assets consist of leasehold right and are not amortized.

Goodwill acquired for valuable consideration is amortised over 4 years on a linear basis.

In case of durable reduction in value, intangible assets are subject to value

adjustments regardless of whether their utilisation is limited. The valuation of the

inferior value is not maintained if the reasons for which the value adjustment were

made no longer exist.

2.3.2 Tangible assets

Tangible assets are included at purchase price less accumulated depreciation.

Tangible assets are depreciated over their expected useful life.

The rates and methods of depreciation are as follows:

RATES METHOD

Office equipment, fixtures & fittings 25.0% linear

Company cars 25.0% linear

Building 2.5% linear

BANQUE HAVILLAND S.A.Notes to the consolidated annual accounts as at 31st DECEMBER 2015 (CONTINUED)

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Fixtures and fittings costing less than EUR 867 or whose expected useful life does

not exceed one year are charged directly to profit and loss account for the year.

In case of durable reduction in value, tangible assets are subject to value adjustments

regardless of whether their utilisation is limited. The valuation of the inferior value is not

maintained if the reasons for which the value adjustment were made no longer exist.

2.3.3 Shares in affiliated undertakings

Shares in affiliated undertakings are recorded at purchase price expressed in

denomination currency. Value adjustments are made when the Board of Directors

considers that there exists a durable reduction in their value at the balance sheet

date. The value adjustment is not maintained if the reasons for which it was recorded

no longer exist.

2.4 CURRENT ASSETS

2.4.1 Debt securities and other fixed-income securities

Debt securities and other fixed-income securities are recorded at purchase price.

Value adjustments are made for securities in the structural portfolio for which the

valuation is lower than the purchase price.

The valuation is the market value on the balance sheet date or the estimated

realisable value or the quotation which best represents the inherent value of the

securities held.

2.4.2 Shares and other variable-yield securities

Shares and other variable-yield securities are recorded at purchase price. At the balance

sheet date, they are valued at the lower of purchase price or market value. A value

adjustment is recorded when the market value is lower than the purchase price.


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2.4.3 Loans and advances

Loans and advances are disclosed at their nominal value. Accrued interests are

recorded under the heading “Prepayments and accrued income” on the asset side

of the balance sheet.

2.4.4 Value adjustments in respect of current assets

The policy of the Group is to establish specific provisions to cover the risk of loss and

of the non-recovery of debtors.

Value adjustments are deducted from the relevant current assets.

2.4.5 Provision for assets at risk

A tax free lump-sum provision is accounted for based on the Group’s assets at

risk. These assets are determined in accordance with the regulatory provisions

governing the computation of the capital adequacy ratio. The lump-sum provision

is split between the relevant assets at risk in accordance with the provisions of the

Luxembourg Monetary Institute circular letter dated 16th December 1997. The portion

related to the assets at risk is deducted from these assets.

2.5 FUND FOR GENERAL BANKING RISKS

The Group has established a fund for general banking risks to cover the particular

risks associated with banking. Transfers to this fund are booked from income

after tax, but before determination of net income. This fund is not subject to any

quantitative limit.


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2.6 PURCHASE PRICE OF FUNGIBLE ASSETS

The Group values fungible assets by the weighted average price method.

2.7 VALUATION OF FOREIGN CURRENCY BALANCES AND TRANSACTIONS

2.7.1 Foreign currency

The share capital of the Group is expressed in Euro (“EUR”) and the accounting

records are maintained in that currency.

Shares in affiliated undertakings included in fixed assets are converted at the spot

rate prevailing at the balance sheet date.

Intangible and tangible assets are converted at the historic rate. All other assets and

liabilities denominated in a currency other than EUR are converted into EUR at the

rate of exchange ruling at the balance sheet date.

Income and charges in foreign currencies are converted into EUR at the rate of

exchange ruling on the date of the transaction.

Foreign currency differences arising from these valuation principles are taken to the

profit and loss account.

The annual accounts of subsidiaries whose operating currency is not EUR are

converted using the closing rate method. Under this method, all assets, liabilities

and result brought forward, both monetary and non-monetary, are converted using

the spot exchange rate at the balance sheet date. Income and expense items are

converted at the average rate for the year.


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2.7.2 Valuation of transactions not subject to currency risk

Swap transactions not linked to balance sheet items

The spot result realised in cash terms is offset by the result arising from the

revaluation of the forward leg. The premium/discount is spread prorata temporis.

Over-the-counter closed forward transactions

Future profits that are certain to arise are deducted from future losses that are

certain to arise in the same currency.

A provision is created for any excess losses; any excess profits are deferred.

2.7.3 Valuation of transactions subject to currency risk

Over-the-counter speculative forward transactions

Provision is made for unrealised losses on forward transactions, which do not

represent the hedging of a spot position. Unrealised gains are not accounted for.

The Group only enters into financial instruments for hedging purposes.


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3 SCOPE OF CONSOLIDATION

NAME OF THE COMPANY REGISTERED OFFICE

PROPORTION OF THE CAPITAL HELD BY THE PARENT COMPANY

31/12/2015 31/12/2014

Parent company

Banque Havilland S.A.

Luxembourg

Full consolidation

Banque Havilland (Monaco) S.A.M. Monaco 100.0% 100.0%

Kaupthing Life and Pension S.A. (“KLP”)* Luxembourg 100.0% 100.0%

Blackfish Capital Management Limited (1) United Kingdom 0.0% 100.0%

Blackfish Capital Holdings Limited (1) United Kingdom 0.0% 100.0%

Banque Havilland (Liechtenstein) AG Liechtenstein 52.5% 52.5%

Banque Havilland (Bahamas) Ltd. Bahamas 100.0% 100.0%

Out of consolidation scope

BH International Limited Liability Company Russia 100.0%** N/A

(1) Sold in March 2015

(*) 2015 annual accounts established on liquidation basis (impact of this valuation method is not significant on the

consolidated annual accounts).

(**) 99.5% held by Banque Havilland S.A. and 0.5% by Banque Havilland (Liechtenstein) AG.

Please also refer to note 9.6.


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4 DETAILED DISCLOSURES RELATING TO ASSET HEADINGS

4.1 CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICE BANKS

In accordance with the requirements of the European Central Bank, the Central

Bank of Luxembourg implemented effective 1st January, 1999, a system of mandatory

minimum reserves which applies to all Luxembourg credit institutions. The reserve

balance as at 31st December 2015 held by the Group with the Central Bank of

Luxembourg amounted to EUR 82 015 465 (2014: EUR 15 089 695). The Group has

no overnight deposit at the Central Bank of Luxembourg as at 31st December 2015

(2014: 55 000 000). The reserve balance as at 31st December 2015 held by the Group

with the Banque de France amounted to EUR 9 372 651 (2014: EUR 1 351 609). The

reserve balance as at 31st December 2015 held by the Group with the Swiss National

Bank amounted to EUR 33 746 405 (2014: EUR 19 996 484). The reserve balance

as at 31st December 2015 held by the Group with the Central Bank of the Bahamas

amounted to EUR 416 186 (2014: EUR 0).

4.2 LOANS AND ADVANCES TO CREDIT INSTITUTIONS

As at 31st December 2015, the Group has not granted any loan to affiliated credit

institutions (2014: EUR 0).


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4.3 LOANS AND ADVANCES TO CUSTOMERS

As at 31st December 2015, loans and advances to related parties amount to

EUR 111 014 944. (2014: EUR 36 835 537).

4.4 TRANSFERABLE SECURITIES

This heading includes debt securities, whether quoted on a recognised market or

not, issued by public bodies, credit institutions or other issuers and which are not

included under another balance sheet heading.

Quoted and non-quoted securities are analysed as follows:

2015 EUR

2014 EUR

Securities quoted on a recognised market 638 559 896 537 849 322

Securities not quoted on a recognised market 16 002 276 17 087 462

TOTAL 654 562 172 554 936 784

Debt securities and other fixed-income securities held are included in the structural

portfolio. The Group uses the European Central Bank Monetary Policy Operations to

finance a part of its eligible securities portfolio.

As at 31st December 2015, the Group is committed in sale and repurchase agreements

with a firm repurchase obligation. These securities still appear on the balance sheet of

the Group for a total amount of EUR 120 059 549 (2014: EUR 118 787 246).


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4.5 SHARES AND OTHER VARIABLE-YIELD TRANSFERABLE SECURITIES

This heading includes shares, holdings in investment funds and other variable-yield

securities whether quoted on a recognised market or not which are not included in

fixed asset investments.

Quoted and non-quoted shares and other variable-yield securities are analysed as follows:

2015 EUR

2014EUR

Securities quoted on a recognised market

47 167 503 44 230 791

Securities not quoted on a recognised market 4 605 8 644

TOTAL 47 172 108 44 239 435

All shares and other variable-yield securities held are included in the structural portfolio.

As at 31st December 2015, the Group holds shares and other variable-yield

transferable securities amounting to EUR 29 744 589 for hedging purposes in the

frame of contracts for differences (“CFD”) with clients (2014: EUR 30 766 627).


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4.6 MOVEMENTS IN FIXED ASSETS

(*) Including lump sum provision.

(**) Please refer to note 3.

FIXED ASSETS (IN EUR)

GROSS VALUE AT THE

BEGINNING OF THE

FINANCIAL YEAR

ADDITIONS DISPOSALS / ADJUST-

MENTS

GROSS VALUE AT

THE END OF THE

FINANCIAL YEAR

CUMULATIVE VALUE

ADJUSTMENTS AT THE BEGINNING

OF THE FINANCIAL YEAR

CUMULATIVE VALUE

ADJUSTMENT(*)

NET BOOK VALUE AS AT

31/12/2015

NET BOOK VALUE AS AT

31/12/2014

1. Goodwill of first

consolidation 15 109 620 - - 15 109 620 (1 510 961) (4 532 886) 10 576 734 13 598 659

2. Shares in affiliated

undertakings** - 262 050 - 262 050 - (181 760) 80 290 -

3. Intangible assets

of which:

- Goodwill acquire for

valuable consideration

- Software

- Other intangible assets

13 875 637

4 258 5158 923 002

694 120

305 624

-305 624

-

(2 151 136)

(1 383 157)(767 979)

-

12 030 125

2 875 3588 460 647

694 120

(9 197 531)

(1 091 573)(8 105 958)

-

(8 967 631)

(1 161 519)(7 806 112)

-

3 062 494

1 713 839654 535694 120

4 678 106

3 166 942817 044694 120

4. Tangible assets

of which:

- Office equipment,

fixtures and fittings

- Company cars

- Building

28 594 157

13 625 894210 822

14 757 441

2 335 173

571 651123 110

1 640 412

(406 576)

(284 375)(122 201)

-

30 522 754

13 913 170211 731

16 397 853

(17 601 539)

(13 326 419)(110 834)

(4 164 286)

(18 016 622)

(13 308 968)(104 132)

(4 603 522)

12 506 132

604 202107 599

11 794 331

10 992 618

299 47599 988

10 593 155

TOTAL 57 579 414 2 902 847 (2 557 712) 57 924 549 (28 310 031) (31 698 899) 26 225 650 29 269 383


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4.7 OTHER ASSETS

This heading consists of the following:

2015 EUR (*)

2014 EUR (*)

Investment for the benefit of life insurance policyholders

who bear the investment risk** - 63 373 353

Tax advances 3 431 152 1 425 994

Guarantee called 300 558 1 105 684

Management and performance fees receivable 714 883 783 749

Margin calls on contracts for differences with clients 9 917 442 3 338 068

Invoices issued 145 226 60 231

Other receivables 257 970 1 073 031

TOTAL 14 767 231 71 160 110

(*) Including lump-sum provision

(**) KLP has transferred its insurance business (policies and staff) to another Luxembourg insurance company.

4.8 ASSETS DENOMINATED IN FOREIGN CURRENCIES

Assets denominated in currencies other than EUR have a total value of EUR 851 251 351

(2014: EUR 544 063 596) as at 31st December 2015. The gap between non EUR

denominated assets and non EUR denominated liabilities is covered by exchange

rates derivatives instruments.


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5 DETAILED DISCLOSURES RELATING TO LIABILITY HEADINGS

5.1 AMOUNTS OWED TO CREDIT INSTITUTIONS

As at 31st December 2015, the Group has no amount owed to affiliated credit

institutions (2014: EUR 0).

5.2 AMOUNTS OWED TO CUSTOMERS

As at 31st December 2015, amounts owed to related parties amount to EUR 66 294

111 (2014: EUR 54 409 967).

5.3 OTHER LIABILITIES

2015 EUR (*)

2014 EUR (*)

Technical provisions for life insurance policies where the

investment is borne by the policyholders*

- 63 373 353

Invoice payable 2 018 558 2 506 308

Guarantee payable 119 050 1 244 782

Payable on sales of securities 17 755 221 16 758 134

Business introducers commissions payables 1 006 586 474 869

Issued cheques 170 550 2 349 311

Other payable 3 830 549 3 250 430

Preferential creditors 1 115 760 883 428

TOTAL 26 016 274 90 840 615

(*) KLP has transferred its insurance business (policies and staff) to another Luxembourg insurance company.


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5.4 SUBSCRIBED CAPITAL

As at 31st December 2015, the subscribed and fully paid share capital of the Group is

EUR 130 000 000 made up of 130 000 shares with a nominal value of EUR 1 000 each.

5.5 LEGAL RESERVE

In accordance with article 72 of the Luxembourg company law, an amount of 5%

of net profits should be allocated to a non distributable legal reserve, until this

reserve reaches 10% of the subscribed capital. As a result, the annual general

meeting of Banque Havilland S.A. held on 20th April 2015 has allocated an amount of

EUR 341 152 to the legal reserve, in respect of the 2014 financial year.


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5.6 CHANGES IN SHAREHOLDERS’ EQUITY

The movements of shareholders’ equity of Banque Havilland S.A. may be summarised

as follows:

5.7 LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

Liabilities denominated in currencies other than EUR have a total value of

EUR 837 434 957 (2014: EUR 527 819 293) as at 31st December 2015. The majority of

the gap between non EUR denominated assets and non EUR denominated liabilities

is covered by exchange rates derivative instruments.

SUBSCRIBED CAPITAL

EUR

SHARE PREMIUM

EUR

LEGALRESERVE

EUR

OTHERRESERVES

EUR

MINORITYINTERESTS

EUR

PROFIT BROUGHT FORWARD

EUR

PROFIT OF THE YEAR

(GROUP) EUR

TOTAL OWN

FUNDS EUR

Balance at

31st December 2014 130 000 000 1 260 709 1 525 658 2 493 112 16 140 467 5 350 537 2 777 397 159 547 880

Transfer to legal

reserve - - 341 152 - - - (341 152) -

Translation impact on:

- group reserves

- minority interests

--

--

--

(2 445 968)-

-1 733 689

--

--

(2 445 968)1 733 689

Profit brought forward - - - - - 2 436 245 (2 436 245) -

Current year profit - - - (1 798 856) - 2 489 346 690 490

BALANCE AT 31ST DECEMBER 2015

130 000 000

1 260 709

1 866 810

47 144

16 075 300

7 786 782

2 489 346

159 526 091


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6 CONTINGENT LIABILITIES AND COMMITMENTS

6.1 CONTINGENT LIABILITIES

Contingent liabilities consist of guarantees and other direct substitutes for loans.

6.2 DEPOSIT GUARANTEE AND INVESTOR COMPENSATION SCHEME

The Bank is member of the Association pour la Garantie des Dépôts, Luxembourg

(“A.G.D.L.”). The sole purpose of the AGDL is to establish a system of mutual

guarantee for cash deposits and receivables from investment operations made

by individuals and small companies with the members of the AGDL regardless of

nationality or residence.

The AGDL will reimburse the deposit holder the amount of his guaranteed cash

deposits and to the investor the amount of his guaranteed receivable up to

EUR 100 000 per guaranteed cash deposit and up to EUR 20 000 per guaranteed

receivable arising from investment operations other than that relating to a cash deposit.

As at 31st December 2015 a provision of EUR 261 541 has been made in respect of

specific liabilities arising under this scheme (2014: EUR 125 000).

6.3 INTRODUCTION OF THE NEW BANK RESOLUTION SCHEME AND DEPOSIT

GUARANTEE SCHEME

The law related to the resolution, reorganisation and winding-up measures of credit

institutions and certain investment firms and on deposit guarantee and investor

compensation schemes (the “Law”), transposing into Luxembourgish law the directive

2014/59/EU establishing a framework for the recovery and resolution of credit


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institutions and investment firms and the directive 2014/49/EU related to deposit

guarantee and investor compensation schemes, was passed on 18th December 2015.

The deposit guarantee and investor compensation scheme currently in place through

the “Association pour la Garantie des Dépôts Luxembourg” will be replaced by a new

contribution based system of deposit guarantee and investor compensation. This

new system will cover eligible deposits of each depositor up to an amount of EUR

100 000 and investments up to an amount of EUR 20 000. The Law also provides that

deposits resulting from specific transactions or fulfilling a specific social or other

purpose are covered for an amount above EUR 100 000 for a period of 12 months.

The provisions which have been created in the past by credit institutions for the

purpose of AGDL in their annual accounts will be used/released (depending on the

accounting treatment chosen) according to the contributions of the banks to the

new Luxembourg banking resolution fund Fonds de resolution Luxembourg (‘‘FRL’’),

respectively to the new Luxembourg deposit guarantee fund Fonds de garantie des

dépôts Luxembourg (‘‘FDGL’’), which is still to be established.

The funded amount of the FRL shall reach by the end of 2024 at least 1% of covered

deposits, as defined in article 1 number 36 of the Law, of all authorized credit

institutions in all participating Member States. This amount will be collected from

the credit institutions through annual contributions during the years 2015 to 2024.

The target level of funding of the FGDL is set at 0.8% of covered deposits, as defined

in article 163 number 8 of the Law, of the relevant credit institutions and is to be

reached by the end of 2018 through annual contributions. The contributions are to

be made in the form of annual payments during the years 2016 to 2018. For 2015,

the credit institutions have reflected a provision of 0.2% of covered deposits in order

to anticipate these contributions, using/releasing (depending on the accounting

treatment chosen) the existing AGDL provision in their annual accounts.


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When the level of 0.8% is reached, the Luxembourgish credit institutions are to

continue to contribute for 8 additional years in order to constitute an additional safety

buffer of 0.8% of covered deposits as defined in article 163 number 8 of the Law.

6.4 OPEN FORWARD AGREEMENTS AT THE BALANCE SHEET DATE

The Group is engaged in forward foreign exchange transactions (swaps, outrights)

in the normal course of its business. A significant portion of these transactions has

been contracted to hedge the effects of fluctuations in exchange rates.

6.5 MANAGEMENT AND FIDUCIARY SERVICES

The Group’s services to third parties consist of:

• Management and advice on asset management;

• Safekeeping and administration of marketable securities;

• Credit activities;

• Insurance services;

• Fund administration.


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7 INFORMATION RELATING TO FINANCIAL INSTRUMENTS

7.1 DISCLOSURES RELATING TO PRIMARY FINANCIAL INSTRUMENTS IN

RELATION TO NON-TRADING ACTIVITIES

The following tables provide an analysis of the carrying amount of primary financial

assets and financial liabilities of the Group into relevant maturity groupings based

on the remaining periods to repayment.

As at 31st December 2015, primary financial assets and liabilities are analysed as

follows (in EUR):

FINANCIAL ASSETS

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR

BETWEEN ONE YEAR AND FIVE

YEARS

MORE THAN FIVE

YEARS

NO MATURITY

TOTAL

Cash, balances with central

banks and post office banks 127 021 096 - - - - 127 021 096

Loans and advances to

credit institutions 119 819 597 - 4 750 000 - - 124 569 597

Loans and advances to

customers 196 582 766 64 252 210 123 604 739 4 537 930 - 388 977 645

Debt securities

and other fixed-income

securities

25 661 676 62 814 936 466 644 488 91 101 643 8 339 429 654 562 172

Shares and other variable-

yield securities - - - - 47 172 108 47 172 108

TOTAL 469 085 135 127 067 146 594 999 227 95 639 573 55 511 537 1 342 302 618


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FINANCIALLIABILITIES

LESS THAN THREE

MONTHS

BETWEEN THREE MONTHS AND ONE YEAR

BETWEEN ONE YEAR AND

FIVE YEARS

MORE THAN FIVE YEARS

TOTAL

Amounts owed to

central banks 80 000 000 - - - 80 000 000

Amounts owed to

credit institutions 33 694 873 - - - 33 694 873

Amounts owed to

customers 1 054 867 830 7 125 621 - - 1 061 993 451

TOTAL 1 168 562 703 7 125 621 - - 1 175 688 324

The maturity mismatch between the assets and the liabilities of the Group are mainly

related to the Group’s bond portfolio. This portfolio mainly comprises of floating rate

notes indexed on the 3 or 6 months Libor. A smaller portion relates to fixed-coupon

bonds and structured-coupon bonds, which are interest sensitive. The duration of

this fixed and structured-coupon portfolio is 1.8 years. About one third of the funding

of the portfolio is made through the ECB Monetary Policy Operations via MRO’s and

LTRO’s (medium and long term refinancing operations).

A positive shift of 200 bps of the interest rate curve would mean a decrease of about

EUR 22 537 610 of the present value of our assets and liabilities. The portfolio is

therefore slightly sensitive to the fluctuation of short term rates. These bonds are

deemed sufficiently liquid should the Group decrease its ECB funding.


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As at 31st December 2014, primary financial assets and liabilities are analysed as

follows (in EUR):

FINANCIAL ASSETS

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR


YEARS

MORE THAN FIVE

YEARS

NO MATURITY

TOTAL

Cash, balances with

central banks and

post office banks 95 527 254 - - - - 95 527 254

Loans and advances

to credit institutions 250 372 751 - 4 750 000 - - 255 122 751

Loans and advances

to customers 61 959 409 29 363 041 103 939 844 7 026 447 - 202 288 741

Debt securities and

other fixed-income

securities 5 665 336 73 766 134 429 826 057 36 414 793 9 264 464 554 936 784

Shares and other

variable-yield

securities - - - - 44 239 435 44 239 435

TOTAL 413 524 750 103 129 175 538 515 901 43 441 240 53 503 899 1 152 114 965

FINANCIALLIABILITIES

LESS THAN THREE

MONTHS

BETWEEN THREE MONTHS AND ONE YEAR

BETWEEN ONE YEAR AND

FIVE YEARS

MORE THAN FIVE YEARS

TOTAL

Amounts owed to

central banks 80 000 000 - - - 80 000 000

Amounts owed to

credit institutions 31 471 825 82 435 - - 31 554 260

Amounts owed to

customers 840 630 604 25 496 641 169 675 - 866 296 920

TOTAL 952 102 429 25 579 076 169 675 - 977 851 180


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7.2 DISCLOSURES RELATING TO DERIVATIVE FINANCIAL INSTRUMENTS

The following tables provide an analysis of the derivative financial assets and liabilities

of the Group into relevant maturity groupings based on the remaining periods to

repayment. As at 31st December 2015, over-the-counter derivative financial assets

and liabilities are analysed as follows (in EUR):

FINANCIAL ASSETS

(notional amounts)

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR


YEARS

TOTAL POSITIVE FAIR VALUE

Instruments linked to

exchange rates

- forward currency contracts

- currency swap contracts

10 636 088117 766 471

-568 344

--

10 636 088118 334 815

80 627474 770

TOTAL 128 402 559 568 344 - 128 970 903 555 397

FINANCIAL LIABILITIES

(notional amounts)

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR


YEARS

TOTAL NEGATIVE FAIR VALUE


exchange rates



14 080106 867 411

-184 450

--

14 080107 051 861

635664 462

TOTAL 106 881 491 184 450 - 107 065 941 665 097


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As at 31st December 2014, over-the-counter derivative financial assets and liabilities

are analysed as follows (in EUR):

FINANCIAL ASSETS

(notional amounts)

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR


YEARS

TOTAL POSITIVE FAIR VALUE


exchange rates



3 135 02038 466 034

--

--

3 135 02038 466 034

42 158567 139

TOTAL 41 601 054 - - 41 601 054 609 297

FINANCIAL LIABILITIES

(notional amounts)

LESS THAN THREE

MONTHS

BETWEEN THREE

MONTHS AND ONE YEAR


YEARS

TOTAL NEGATIVE FAIR VALUE


exchange rates



4 458 44840 745 013

3 323 254-

--

7 781 70240 745 013

160 034467 960

TOTAL 45 203 461 3 323 254 - 48 526 715 627 994


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7.3 DISCLOSURES RELATING TO CREDIT RISK

The Group is exposed to credit risk mainly through its lending, investing and

hedging activities and in cases where the Group acts as an intermediary on behalf of

customers and issues guarantees.

The Group’s primary exposure to credit risk arises from its loans and advances and

debt securities. The credit exposure in this regard is represented by the carrying

amounts of the assets in the balance sheet.

The Group is also exposed to off-balance sheet credit risk through guarantees

issued and instruments linked to exchange, interest and other market rates

(forward transactions, swap and option contracts). The credit exposure in respect

of instruments linked to exchange, interest and other market rates are equal to the

equivalent at risk according to the initial risk approach.

The credit risk exposure can be analysed as follows (in EUR):

2015 GROSS RISK EXPOSURE

2014 GROSS RISK EXPOSURE

Loans and advances to credit institutions 124 569 597 255 122 751

Loans and advances to customers 388 977 645 202 288 741

Debt securities and other fixed-income securities 654 562 172 554 936 784

Shares and other variable-yield securities 47 172 108 44 239 435

Contingent liabilities 14 746 303 5 374 162

Instruments linked to exchange rates 4 721 005 2 427 992

TOTAL 1 234 748 830 1 064 389 865


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Loans and advances to customers are usually secured by cash, listed investments,

third party guarantees and mortgage on real estate property.

Credit risk concentrations on total on and off balance sheet are analysed as follows:

2015 EUR

2014 EUR

Corporates 651 530 014 313 819 612

Credit institutions 484 288 483 658 505 488

Individuals 57 540 562 66 065 667

Public sector 41 389 771 25 999 098

TOTAL 1 234 748 830 1 064 389 865

Credit institutions, corporates, individuals and public sector are essentially issued

from OECD countries.

7.4 INFORMATION ON THE MANAGEMENT OF OTHER RISKS

Liquidity Risk

A cash management system enables the Group to achieve a daily automatic “vostro-

nostro” reconciliation of its main correspondent accounts.

The Group is able to identify possible cash flow errors, to determine adjusted

opening balances and generate an accurate liquidity gap to better channel short-

term liquidity needs.

The Asset and Liability Committee (“ALCO”) receives a daily report on the overall

liquidity situation of the Group, the upcoming liquidity risks and the cash buffer.


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Interest Rate Risk

The Group monitors its interest rate risk by analysing the different maturity gaps in

the balance sheet.

The Group is not exposed to interest rate risks due to the nature of its business. Less

than 10% of the assets are fixed rate denominated.

Stress tests are performed quarterly by analysing parallel curve shifts.

Exchange Rate Risk

The Group’s main exposure to foreign exchange risk (“FX”) arises from USD, CHF,

DKK, GBP, SEK, NOK and ISK.

A foreign exchange position system provides an overall view of the currency risk and

related profit or loss impact by business line, turnover and margins.

The implementation of a Value at Risk (“VaR”) model gives a view of the potential loss

of the overnight position.

The ALCO members monitor and control the exchange rate risk through the daily

report received from the Treasury department.


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Market Risk

The Group’s Market Risk is managed in both a qualitative and a quantitative manner.

The profit and loss of the Group’s investment and FX book is reported daily by the

Treasury to the ALCO members. An in-depth analysis of the Group’s investment

portfolio is performed twice a month in terms of geographic segmentation, sector

segmentation, type of products, latest important news on the issuer, yield analysis,

rating agency’s views, liquidity, issuer’s healthiness, etc... The FX overnight risk is

computed daily through a 99% Expected Shortfall. These documents are sent to the

ALCO. All the investment decisions are subject to ALCO approval and need to be

compliant with the Investment Guidelines as agreed by the Board of Directors.

The monitoring and control of CFD positions is operationalized, among others,

through the production of two daily reports: a CFD control report and a CFD

statement report. The details for each position, corresponding margin call, profit

and loss, computed VaR are indicated in these documents.

In case of any breach the Relationship Manager of the client and the Credit

Department are immediately informed. The Credit Department with the support of

the Relation Manager has to resolve the breach whether by margin calling the client,

or by closing the CFD contract.

The Treasury of the Group can hedge the client’s CFDs either by backing the CFD on

the market with a CFD provider, or by taking positions on the underlying. In any case,

the Group’s book has to be delta neutral.


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8 INFORMATION ON THE PROFIT AND LOSS ACCOUNT

8.1 GEOGRAPHICAL ANALYSIS INCOME

Interest receivable and similar income, commission receivable and net profit on

financial operations mainly originate from Western Europe.

8.2 OTHER OPERATING INCOME

Other operating income are analysed as follows:

2015EUR

2014EUR

Provisions reversed

545 662

18 833

Rental income 37 330 18 000

Income on insurance activities* 418 574 10 164 023

Fee re-invoicing 236 741 240 595

Gain on sale of fixed assets - 710 175

Gain on deals/claims settled 64 808 1 113 362

Gain on sale of building held as fixed assets - 1 083 483

Other 383 243 139 718

TOTAL 1 686 358 13 488 189



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8.3 OTHER OPERATING CHARGES

Other operating charges are analysed as follows:

2015 EUR

2014EUR

Impairment of loans to customers 1 514 373 85 556

Administrative fees reinvoiced 218 489 266 640

Restructuring costs - 250 000

Expenses on insurance activities* 29 766 10 138 463

AGDL provision 170 484 62 500

VAT expenses - 1 089 770

Other 805 782 478 234

TOTAL 2 738 894 12 371 163



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8.4 NET VALUE ADJUSTMENTS IN RESPECT OF LOANS AND ADVANCES AND

PROVISION FOR CONTINGENT LIABILITIES AND FOR COMMITMENTS

This heading is analysed as follows:

2015EUR

2014EUR

Specific value adjustments on loans to customers

- Additions

- Reversals

425 840(104 390)

387 085(398 785)

Loan to customers fully impaired

Reversal of value adjustment on loan to customers fully impaired

400 000(1 788 410)

-(43 613)

TOTAL (1 066 960) (55 313)

As at 31st December 2015, the lumpsum provision amounts to EUR 2 491 893

(2014: EUR 2 491 893).

8.5 TAX INFORMATION

The parent company is liable to taxes on income and net assets in line with

Luxembourg legislation.

8.6 EXTRAORDINARY INCOME

Extraordinary income is related to the gain realised by the Group on the transfer of

the insurance business of KLP to another Luxembourg life insurance company.


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9 OTHER INFORMATION

9.1 COUNTRY BY COUNTRY INFORMATION

According to Article 38-3 of the law of 5th April 1993 as amended by the law of 23th

July 2015, credit institutions, financial holding companies and investment companies

must publish information on their locations and activities, included in their scope of

consolidation in each state or territory.

As at 31st December 2015, country by country information are analysed as follows (in EUR):

EU MEMBER COUNTRIES

STATUTORY OPERATING

INCOME

STATUTORY PROFIT OR LOSS BEFORE

TAX

STATUTORY TAX ON PROFIT OR

LOSS

NUMBER OF EMPLOYEES (FTE)

Luxembourg* 29 813 339 5 026 160 (531 710) 77

United Kingdom* 1 423 290 (992 083) - 13

NON-EU MEMBER COUNTRIES

STATUTORY OPERATING

INCOME


TAX


LOSS


Bahamas 2 795 869 (1 287 515) (18 472) 11

Liechtenstein 3 890 023 (3 785 943) (1 123) 36

Monaco 3 333 072 141 530 - 14

(*) Audited

No public subsidies have been received by the Group during the year that ended

31st December 2015.


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As at 31st December 2014, country by country information are analysed as follows (in EUR):

EU MEMBER COUNTRIES

STATUTORY OPERATING

INCOME


TAX


LOSS


Luxembourg* 34 534 583 8 365 558 (551 410) 64

United Kingdom* 862 642 (1 660 130) - 2

NON-EU MEMBER COUNTRIES

STATUTORY OPERATING

INCOME


TAX


LOSS


Bahamas 578 916 (1 209 655) - 1

Liechtenstein 838 015 (884 238) (33 213) 6

Monaco 3 490 320 (174 341) - 11

No public subsidies have been received by the Group during the year that ended

31st December 2014.

9.2 RETURN ON ASSETS

The return on assets of the Group for the year ended 31st December 2015 stands at

0.18% (0.22% for the previous year). The return on assets is calculated as being the

net profit divided by the total balance sheet.


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9.3 PERSONNEL EMPLOYED

The average number of persons employed during the financial year was as follows:

2015 2014

Management

16 8

Employees 130 76

TOTAL 146 84

9.4 MEMBERS OF THE ADMINISTRATION, MANAGERIAL AND SUPERVISORY

BODIES

Remuneration paid to the various bodies of the Group during the financial year was

as follows:

2015EUR

2014EUR

Management

3 130 432 1 421 586

Supervisory body 209 040 248 750

TOTAL 3 339 472 1 670 336

There are no loans and advances granted to members of the Management and the

Board of Directors as at 31th December 2015 (2014: EUR 0).

As at 31st December 2015, no guarantee has been issued in favour of members of the

Management and the Board of Directors.

It was decided at the Annual General Meeting held on 20th April 2015 that three

Board members of the Bank in Luxembourg received emoluments in respect of their

duties for a total gross amount of EUR 195 000 related to the fiscal year ended

31st December 2015 (2014: EUR 211 250).


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9.5 INDEPENDENT AUDITOR’S FEES

Fees billed (excluding VAT) to the Group by PricewaterhouseCoopers, Société

coopérative, Luxembourg and other member firms of the PricewaterhouseCoopers

network during the year are as follows:

2015EUR

2014EUR

Audit services

672 811 377 770

Tax services 22 496 -

Other services 562 743 256 671

TOTAL 1 258 050 634 441

Such fees are presented under other administrative expenses in the consolidated

profit and loss account.

Other services are mainly related to due diligence work performed on acquisitions.

9.6 SUBSEQUENT EVENT

On 29th February 2016 Banque Havilland S.A. acquired 100% of the share capital

of Banco Popolare Luxembourg S.A. Following the acquisition Banco Popolare

Luxembourg S.A. has been renamed Banque Havilland Instutitional Services S.A.

For the year 2016, this subsidiary will be included in the scope of consolidation under

the full consolidation method.


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129_1w. banquehavilland.com

BANQUE HAVILLAND S.A.

35a, avenue J.F. Kennedy • L-1855 Luxembourg • t. +352 463 131 • f. +352 463 132 • R.C.S. Luxembourg B 147029 T.V.A. LU23366742

BANQUE HAVILLAND S.A. (UK BRANCH)

5 Savile Row • London • W1S 3PB • United Kingdom • t. +44 20 7087 7999 • f. +44 20 7087 7995 • Company Registration N° BR014651 • V.A.T. N° GB167 1621 10Supervised by the Financial Conduct Authority and Prudential Regulation Authority in UK and regulated by the Commission de Surveillance du Secteur Financier in Luxembourg

BANQUE HAVILLAND (MONACO) S.A.M. Société Anonyme Monégasque au capital de 20.000.000 euros

Le Monte Carlo Palace • 3-7, Boulevard des Moulins • MC-98000 Monaco • t. +377 999 995 00 • f. +377 999 995 01 R.C.I. 08s04856 • T.V.A. FR 00 00008050 6

BANQUE HAVILLAND (LIECHTENSTEIN) AG

Austrasse 61 • LI - 9490 Vaduz • Liechtenstein • t. +423 239 33 33 • f. +423 239 33 00 • Handelsregister Nr. FL-1.542.492-8 • MWST. Nr. 53652

BANQUE HAVILLAND (BAHAMAS) LTD.

Unit 1 Western New Providence • Mt. Pleasant Village, Western Road • P.O. Box AP-59241 • Nassau • Bahamas t. +242 702 2900 • f. +242 362 6186 • Company Registration N° 39 268

BH INTERNATIONAL LLC

Lotte Business Centre • Novinsky boulevard 8 • 121099 • Moscow • t. +7 495 969 27 53 • f. +7 495 969 27 53 OGRN 1157746372574 • TIN 9705037292

BANQUE HAVILLAND INSTITUTIONAL SERVICES S.A.

26, Bd. Royal • L-2449 Luxembourg • B.P.555 L-2015 Luxembourg • t. +352 46 57 57 1 • f. +352 47 01 70R.C.S. Luxembourg B 47796 • T.V.A. LU16027373

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