MCI Interim Financial Statement, June 30Th 2017
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okt.22 Municipality Credit Iceland Translation of condensed Interim Financial Statements for the period 1 January through 30 June 2017 This condensed interim financial statements are translated from the original which is in Icelandic. Should there be discrepancies between the two versions, the Icelandic version will take priority over the translated version. Index Page Report of the Board of Directors and the Managing Director .................................................................................... 2 Independent Auditor's Report ................................................................................................................................... 3 Income Statement and Statement of Comprehensive Income .................................................................................. 4 Statement of Financial Position ................................................................................................................................ 5 Statement of Changes in Equity ................................................................................................................................ 6 Statement of Cash Flows .......................................................................................................................................... 7 Notes to the Financial Statements ............................................................................................................................ 8-24 Municipality Credit Iceland Plc. Identity number 580407-1100 Borgartun 30, P.O. Box 8100 128 Reykjavik Report of the Board of Directors and the Managing Director Municipality Credit Iceland Plc. (MCI) is a statutory limited liability company owned by the Icelandic municipalities. MCI is a financial institution, and operates pursuant to Act no. 1450/2006 on the incorporation of Municipality Credit Iceland as a statutory limited liability company; Act No. 161/2002 on Financial undertakings; cf. The Companies Act No. 2/1995 and is supervised by the Icelandic Financial Supervisor. MCI´s main function is to secure favorable funding to the municipalities and related organisations and enterprises. MCI is by law only allowed to fund municipal projects that are of general economic interest. MCI had three employees at period end, the same as in the year before. Operating results and financial position The profit for the period amounted to ISK 432 million, as compared to ISK 700 million the same period previous year. Total assets at the end of the period amounted to ISK 77.007 million, as compared to ISK 78.024 million the previous year. Total outstanding loans amounted to ISK 69.179 (at the end of the period as) compared to 71.175 the previous year. Shareholder equity amounted to ISK 17.114 million as compared to ISK 17.172 million at year end 2016 which is a decrease of 0,3% during the period. Dividend of ISK 491 million was paid out to shareholders in the period. The CAD ratio, based on Basel II, was 99% at period end and increased from 85% at year end 2016. MCI is owned by the 74 municipalities in Iceland. Reykjavik city holds 17.5% share and is the only shareholder with a total share above 10%. The ten largest shareholders hold in total 56% of the company´s shares. A detailed shareholder list can be found in note 27. MCI´s Governance MCI´s board of directors aim to maintain good corporate governance and to follow "Management governance directions for public companies" published in 2015 by Iceland Chamber of Commerce, Nasdaq Iceland and SA-Confederation of Icelandic employers. In March 2013 The Center of Corporate Governance provided MCI with a certification as Exemplary company in corporate governance. This certification was updated in March 2016. Further information can be found in the Annual Report. Statement The interim financial statements for the period ending 30 June 2017 have been, to the best knowledge of the board of directors, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Icelandic disclosure requirements in Act No. 3/2006. According to our best knowledge it is our opinion that the interim financial statements give a true and fair view of the financial performance of MCI for the period of 1 January through 30 June 2017, its assets, liabilities and financial position at end of the period. The Board of Directors of Municipality Credit Iceland and the Managing Director hereby confirm the interim financial statements on 30 June 2017 with their signatures. Reykjavik, 23 August 2017 Magnús B. Jónsson Chairman Arna Lára Jónsdóttir Kristinn Jónasson Elliði Vignisson Helga Benediktsdóttir Óttar Guðjónsson Managing Director MCI Plc. Interim Financial Statement 1 January - 30 June 2017 2 Report on Review of Interim Financial Information To the Board of Directors and Shareholders of Municipality Credit Iceland LLC. Introduction We have reviewed the accompanying condensed balance sheet of Municipality Credit Iceland LLC. as of 30 June 2017 and the related condensed consolidated statements of report of the board of directors, income, changes in equity and cash flows for the six-month period then ended. Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with International Accounting Standard 34, "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with International Standards on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting". Reykjavik, 23 August 2017 PricewaterhouseCoopers ehf Arna G. Tryggvadóttir CPA MCI Plc. Interim Financial Statement 1 January - 30 June 2017 3 Income Statement and Statement of Comprehensive Income 1 January through 30 June 2017 2017 2016 Notes 1.1.-30.06. 1.1.-30.06. Net interest income Interest income and CPI linked revenue ......................................... 2.222.615.253 2.409.909.470 Interest expenses and CPI linked expenses ................................... (1.705.491.545) (1.877.277.366) Total net interest income 5 517.123.708 532.632.104 Other operating income Net gain on fin. assets designated at FV through P&L ................... 6 14.363.120 11.446.515 Net foreign exchange (loss) gain .................................................... 7 (11.136.370) (5.795.231) Total other operating income 3.226.750 5.651.284 Net operating income 520.350.458 538.283.388 Operating expenses Salaries and related expenses ........................................................ 8 38.448.564 47.049.093 Cost of bond issuance ..................................................................... 9 22.199.993 22.704.256 FSA's annual fee and monitoring fee .............................................. 5.750.000 4.904.000 Other operating expenses ............................................................... 10 23.923.786 28.909.252 Depreciation .................................................................................... 17 597.811 597.814 Total operating expenses 90.920.154 104.164.415 Income from bankrupt financial institutions ..................................... 16 2.871.460 265.677.517 Profit for the period and comprehensive income 432.301.764 699.796.490 Earnings per share Basic and diluted earnings per share .............................................. 11 0,09 0,14 MCI Plc. Interim Financial Statement 1 January - 30 June 2017 4 Statement of financial position 30 June 2017 Notes 30.6.2017 31.12.2016 Assets Cash and term deposits with Central bank ..................................... 12 7.220.208.335 5.626.071.452 Cash deposits with credit institutions .............................................. 13 261.078.810 249.936.916 Loans and receivables .................................................................... 14 69.139.349.134 70.510.956.942 Short term loans .............................................................................. 15 40.126.667 663.848.611 Fin. assets designated at fair value through profit or loss ............... 16,18 300.171.031 927.919.306 Property, plant and equipment ........................................................ 17 43.640.401 44.238.212 Other assets .................................................................................... 2.434.850 1.205.704 Total assets 77.007.009.228 78.024.177.143 Liabilities Debt securities in issue ................................................................... 19 56.949.012.426 57.058.760.797 Other borrowed funds ...................................................................... 20 2.275.638.223 3.175.802.373 Short term borrowings