secucor finance 2013-i designated activity ...2018/05/24 · the disclosures in relation to the...
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SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY
Annual Report
For the financial year 31 January 2017
Registered nuniber: 528739
SECUCOR FINANCE 20134 DESIGNATED ACTIVITY COMPANY
Contents Page(s)
Directors and other information
Directors report 2-4
Statement of directors responsibilities
Independent auditor's report 6-7
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements 12-22
Page 1 SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY
Directors and other information
Directors Ross Burns Aisling McNicholas
Registered office Pinnacle 2 Eastpoint Business Park Dublin 3 Ireland
Corporate Services Provider Deutsche International Corporate Services (Ireland) Limited & Company Secretary Pinnacle 2
Easipoint Business Park Dublin 3 Ireland
Trustee Deutsche Trustee Company Ltd Winchester House I Great Winchester Street London EC2N 2DB United Kingdom
Independent Auditor PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm One Spencer Dock North Wall Quay Dublin I Ireland
Solicitors McCann FitzGerald Riverside One 37-42 Sir Rogerson's Quay Dublin 2 Ireland
Principal Paying Agent, Agent Deutsche Bank AG London Bank, Calculation Agent & Winchester House Cash Administrator I Great Winchester
London EC2N 2DB United Kingdom
Seller & Servicer Financiera El Corte tnglés E.F.C., S.A. Hermosilla 112 28009 Madrid Spain
Back-Up Servicer Santander Consumer Finance, S.A. Ciudad Grupo Santander Avda.de Cantabria s/n 28660 Boadilla del Monte Madrid Spain
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 2
Directors' report
The directors present their annual report and audited financial statements of Secucor Finance 2013-1 Designated Activity Company ("the Company"), for the financial year 31 January 2017.
Principal activities and business review
The Company is a special purpose Company incorporated and registered in Ireland with limited liability on 11 June 2013, under registered number 528739.
The Company has been duly authorised to issue 3 tranches of Notes to an initial principal amount of EUR 2,600,000,000. The initial Notes issued are EUR
550,000,000 Class A-I Asset Backed Floating Rate Notes due November 2020, EUR 50,000,000 Class A-2 Asset Backed Floating Rate Notes due
November 2020 and up to EUR 2,000,000,000 Class B Variable Funding Note ("VFN") due November 2020, The Notes represent limited recourse
obligations of the Company. The Notes proceeds have been used to purchase a portfolio of consumer loans ("credit card receivables") ("loan") from the
Financiers El Corte Ingles E.F.C., S.A ('Seller') ('FEC!'). The Seller has not derecognised the credit card receivables included in this securitisation as it was
deemed to have retained control of these assets. The Company has recognised equivalent Loans and Receivables due from FEC! to the extent of its continued
involvement with these assets, and in particular, reflecting its right to receive certain cash flows from these credit card receivables. FEC! continues to service
the receivables on behalf of the Company.
Pursuant to the Global Deed of Amendment dated 30 October 2015, the following amendments have occurred: * the final maturity date of Class Al Notes and Class A2 Notes was amended to November 2023; • interest rate in respect of each class of Notes for each Interest Period will be the higher of:
(a) the Reference Rate plus: (i) I per cent, in the case of the Class At Notes; (ii) I per cent, in the case of the Class A2 Notes; and (iii) 2.2 per cent, in the case of the Class B VFN;
(b) zero (0).
The Class A Notes are listed on the Irish Stock Exchange,
The Seller can offer to sell to the Company, within the Revolving Period, additional portfolios of Eligible Receivables, New additions purchased during the financial year are set Out in Note 9. These additional portfolios of Eligible Receivables were funded by further Class B VFN Subscriptions, New Class B VFN subscriptions issued during the year are set out in Note 12.
Future developments
The directors continue to seek new opportunities for the future growth and development of the Company.
Risk management objectives and policies
The disclosures in relation to the Company's policies for financial risk management, including market risk, credit risk, interest rate risk and liquidity risk, and the nature of financial instruments used during the financial year to mitigate exposure to these risks are shown in Note 17 to the financial statements.
Results and dividends for the financial year
The results for the financial year are outlined on page 8 of the financial statements. No dividends are recommended by the directors for the financial year under review (2016: nil).
Key performance indicators During the financial year, the Company: • made a profit of EUR 750 (2016: EUR 750), • net income on loans and receivables was EUR 111,214,527 (2016: EUR 121,900,306) • net finance expense on debt securities issued was FUR 105,005,342 (2016: EUR 107,615,708) • issued EUR 5,446,141,112(2016: EUR 5,446,591,787) of Class B VFN and; • redeemed EUR 5,422,334,080 (2016: FUR 5,474,333,897) of Class B VFN.
Going concern
Given the non-recourse nature of the notes in issue and the fact that repayment of principal and interest on the notes in issue is restricted to the income and caslsflow generated from the financial assets, the directors are satisfied that it remains appropriate to prepare the Company's financial statements for the financial year ended 31 January 2017 on a going concern basis.
Change in directors, secretary and registered office
The directors and company secretary of the Company are listed on page 1 and have served for the entire financial year. There have been no changes in
directors, secretary or registered office during the financial year suitor since the financial year end up to the date of signing this report.
Directors, secretary and their interests
At 31 January 2017, Castlewood CS Holdings Limited held I share of the Company in trust for charity. Neither the secretary, Deutsche International Corporate Services (Ireland) Limited nor the directors who held office at any time during the financial period held any share in the Company or any Santander Group Company at that date or at any stage during the financial year.
Directors fees are disclosed in Note 7.
There were no contracts of any significance in relation to the business of the Company in which the directors have any interest, as defined in the Companies Act 2014, at any time during the financial year.
Shares and shareholders
The authorised share capital of the Company is €1,000 divided into 1,000 shares of€l each (the "Shares") of which I is issued and unpaid and are directly or indirectly held by Castlewood CS Holdings Limited (the "Share Trustee') under the terms of a declaration of trust (the "Declaration of Trust") under which the Share Trustee holds the benefit of the shares on trust for charitable purposes. There are no other rights that pertain to the shares and the shareholders.
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 3
Directors' report (continued)
Corporate Governance Statement Introduction
The Company is subject to and complies with the Companies Act 2014 and the Listing rules of the Irish Stock Exchange. The Company does not apply additional requirements in addition to tlsose required by the above. Each of the service providers engaged by the Company is subject to their own corporate governance requirements.
Financial Reporting Process
The Board of Directors ("the Board") is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company's financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financial reporting process. These include appointing the Administrator, Deutsche International Corporate Services (Ireland) Limited, to maintain the accounting records of the Company independently of the Servicer (Financiera El Corte Inglds E,F.C,, S.A.). The Administrator is contractually obliged to maintain adequate accounting records as required by the corporate administration agreement. To that end the Administrator performs reconciliations of its records to those of the Servicer, The Administrator is also contractually obliged to prepare for review and approval by the Board the annual report including financial statements intended to give a true and fair view.
The Board evaluates and discusses significant accounting and reporting issues as the need arises. From time to time the Board also examines and evaluates the Administrator's financial accounting and reporting routines and monitors and evaluates the external auditors' performance, qualifications and independence. The Administrator has operating responsibility for internal control in relation to the financial reporting process and the Administrator is responsible to the Board in this respect.
Risk Assessment
The Board is responsible for assessing the risk of irregularities whether caused by fraud or error in financial reporting and ensuring the processes are in place for the timely identification of internal and external matters with a potential effect on financial reporting. The Board has also put in place processes to identity changes in accounting rules and recommendations and to ensure that these changes are accurately reflected in the Company's financial statements. More specifically;
The Administrator has a review procedure in place to ensure errors and omissions in the financial statements are identified and corrected. Regular training on accounting rules and recommendations is provided to the accountants employed by the Administrator.
Control Activities
The Administrator is contractually obliged to design and maintain control structures to manage the risks which the Board judges to be significant for internal control over financial reporting. These control structures include appropriate division of responsibilities and specific control activities aimed at detecting or preventing the risk of significant deficiencies in financial reporting for every significant account in the financial statements and the related notes in the Company's annual report.
Monitoring
The Board has an annual process to ensure that appropriate measures are taken to consider and address the shortcomings identified and measures recommended by the independent auditors.
Given the contractual obligations on the Administrator and the limited recourse nature of the securities issued by the Company, the Board has concluded that there is currently no need for the Company to have a separate internal audit fisnciion in order for the Board to perform effective monitoring and oversight of the internal control and risk management systems of the Company in relation to tlse financial reporting process.
Capital Structure
No person has a significant direct or indirect holding of securities in the Company. No person has any special rights of control over thse Company's share capital.
Tlsere are no restrictions on voting rights,
With regard to the appointment and replacement of directors, the Company is governed by its Constitution, the Companies Act 2014. The Constitution itself may be amended by special resolution of the shareholders.
Powers of Directors
use Board is responsible for managing the business affairs of the Company in accordance with the Constitution, The directors may delegate certain Ilinctions to the Administrator and oilier parties, subject to the supervision and direction by the directors. The directors have delegated the day to day administration of the Company to the Administrator.
SEC( (OR FINA NCE 2013-1 DEMG ([0 ACTIVIFYCONIPANY
Directors' report (cunlintied) tndll cninniiflce
Under Section I 15 1 (1) oithe Fat oar iii 4 Stt tot) \tali tIn ccitt e 20014 C at an eiidcd hi Dirnatise lit 14 50 LI and flegolation I II '014 Regitttitfons 20 f ,, I 12 it I he Ft ha a I. such at ('oatpann attn anal Itself of an exemption liotu the rep it toatite to
rain an ititlit esittntllea, a a as t!, obligv a minnstrator tintS the lititited recite nitare if the ccli tics Issued by die Company, die 1 lltrecta ii— diat dccc i iitneitttn no it, apitas to hate it sepatata ititilti c Ininittee at lit den lair he hoai d lit per10nn CffLW L' :IKa' b it nip and I 1 i it annail control and no. in I ten ,s icttts ofthe Campatly at relattoi to the linautcail tpontno process and the nail tot tag of ttte stiitttt II and Ibe, independence ad li Ia auditorii. hecaslitigh the 4 ntttpntt. tins In ailed itself of, tIe exemption under ptttWiaptt Itite) orihe Rats
Accounting raniela
Hie diiect a ne i ,-purisible ion anita [equate itceotiantip I s it aititlttel In nit 25110 2115 of the Companies Act- 1011 are kept ha the onpatta h, iii. attiCS taken IIp dii at 'S ii) ettsae ciitpatticea' the aintpltna net to LCC1t ttl ttsi accounting, icicinIs it e tint tic of
ta in and )iri)iedttiea and I caatirtttia that It ciitit L a I prot ider is I tIe atklil antI aininleatince of the accounting I as aa tinting tccotdn are kept UcilaCitO IttietitaItt,nitl (orpots a tinnicet i helatid ttitd Pinitad tstpotat littainas tank llttblin 3
1)iriatiiii' coutpliance attifrntent
the directors eoii him that titet ltatn, to tIe heat of their ktton ti , iit I, d tilt tts tIei nat ebltgtttoitp as delittetl itt aectioit 225 if tint I iii p tia 5 ltd ie1vttttt atnitttgelitetili nd sinicuiv, a a e been i titi place that trotted a reasonable assurance el cotipilitnea in all nt roil ishiects Its die Cottipant an hit its redi alIt ilthigttittns "bah itt a a 1 an citites tita> (the ilirectot a so decide ittelittle teiitrnce on the at nice ol attic on none thiait one 1terstat en doa ed Its the (unthiatta oi i II a under a contract ft en tees hietttg a person in Ito appears to die directors to haver the requisite
tal a perience to advise the I . ilpait t i iltttttee with its retitittit obhitntttttns and the .ata inettis and stnatdttres it) ptttce at,: t at I ch 111 ittitintI litton
Statement at radii tint audit inlormatlitit
In Itrepanitg mid apprtwtttg this Direcow-4 report nutS littaticitt sitttenteatn etud in accordance Mill Sctitsta 330 iii of that Cotitpttrnea Act 2011 each of the
current director, of the ('otnpaias rottltttti tlutt
ill k tar as Ilte Otriclors are aware, dine is Ito nalesitti attdtt tttlhtattatioti ofis hidi file stiuttItit andinirs are titian ire and
in I I be Directors liaise taken all steps that tIles ottgltl Itt hate taken to tittke titeittehtes inane of any reinnatut audit ititittinatluit and tIes have estitbitalted
that the stitittias- autlittirs art are sifitiat titlist ttiatttan
Subsequent events tt)ttittiCttti attltnettutetit St ettis are sat out in octe too the tittattetal simvinents,
Independent udittir Pnitea tttecltottae( ixipers tine appointed tin the tttdpcitkatt aalttot danittp 201& tl ',x-,pers teas indicated Ilictc it tllttigtcso in cintittitte in ailitce in acctirdttnce in ith tettintit 383)2) of the koittItitittes Act 20 14 ,
hinEthelt I
Riioi Iturns hklltig hkNkl,oltit Director Director
lIttle
SE( FCOR I t' \'t( l 2013-1 DESIGNATED AC[INTI (OiIP%Vl Pagc5
Sntcnu,nl oft toru' rmn,dIIitka
The Iireeloru are tesponable for preparing di., directors report end the Ii imetal htatcurcriti it) accoldance with lriah law.
isit jaiv requires the (III ectoru to Intpare financial satiteincliti di each Iii anwi ear, islet that hili, tim da ectoti have prellared the itiancitil matealents 01 cottluace with httieritation inalicial llepttrtitiiz standards as ti tty dt I urtipetiti I ttkiit I iII.
tider Irish law the ti r tot approve the httanutd slakillimis .i line saId 1 1 th e a true and Pitt N iew of Pc ttin1patt assets, liabilities and titiatictab p at the nd ot the 11i15nctii1 year and w dLe pw!t or au of the the financial etr,
di preparing the 'it tie dii ectori are required it select co,tc .i. so ' t'aiid ilten ttppls them eonsistettth make iii I tMd - its that are reasonable and Prudent:-
i ci the tit . tteinenis have been prepared in aeciadance is Sit HAS and citsat ii that titer conttttt the addtlionai ittlittitaitrin rsqtihretl by the l i, afld prepot he tittatictal sititinteittu on dii going concern, harts unless itic irappi e to prcsiine that the eotttpani it ill Continue ill businesir
rite thirectorti ate lespoircible tim keeping ittlaqitate accoitntttiu tecortic thairn • con eetiv record and explain tile transactions tuf the conipatis • sitabie. at anr duti, the assets, liabilities, ihttancitd poaution attd grout or lois i' ci rounptmv to he dettiritittued with reasonable accutracvatid
,ntibic the directors to ettsuue that 11w tiitaueiai statenuents coitipli w tilt tIre ('onipatuie-i Act 2014 and enitbk' iltiuse rinaiutaI statements to be audited
Iii ihtiechors ate also tespotisible for sitldpmmaieiittg the assets of tire company and hence ftr taking teasotiable steps km the presetitton and detection of timid
will other trregulattttes
tlte durectrs c'ontiotm titat tIter lituse conmphted as tb tile abote teqiultritutcutta in prelituritip tile hit'ancttuh stttieitleiti't
On It all of the Itotird
Ittiar Eturno Unhuig \l\icliolutt Director Director
Dote: \-
[am
Independent auditors' report to the members of Secucor Finance 2013-I DAC
Report on the financial statements
Our opinion In our opinion, Secucor Finance 2013-I DAC's financial statements (the "financial statements"):
• give a true and fair view of the company's assets, liabilities and financial position as at 31 January 2017 and of its profit and cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union; and
• have been properly prepared in accordance with the requirements of the Companies Act 2014.
What we have audited The financial statements comprise:
• the statement of financial position as at 31 January 2017;
• the statement of comprehensive income for the year then ended;
• the statement of changes in equity for the year then ended;
• the statement of cash flows for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements is Irish law and IFRSs as adopted by the European Union.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
Matters on which we are required to report by the Companies Act 2014
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
• In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited.
• The financial statements are in agreement with the accounting records.
• In our opinion the information given in the Directors' Report is consistent with the financial statements.
• In our opinion, based on the work undertaken in the course of our audit of the financial statements, the description of the main features of the internal control and risk management systems in relation to the financial reporting process included in the Corporate Governance Statement, is consistent with the financial statements and has been prepared in accordance with section 1373(2)(c) of the Companies Act 2014.
• Based on our knowledge and understanding of the company and its environment, obtained in the course of our audit of the financial statements, we have not identified material misstatements in the description of the main features of the internal control and risk management systems in relation to the financial reporting process included in the Corporate Governance Statement.
Independent auditors' report to the members of Secucor Finance 2013-I DAC- continued
Matter on which we are required to report by exception
Directors' remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors' remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
• whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed;
• the reasonableness of significant accounting estimates made by the directors; and
• the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
TIvan McLoughlin for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin 17 May 2018
SECUCOR FINANCE 2013-1 DESIGNATED ACTIVITY COMPANY Page 8
Statement of comprehensive income For the financial year 31 January 2017
Net income on loans and receivables Net finance expense on debt securities issued Loan impairment provision
Operating profit
Other income Other expenses
Profit on ordinary activities before taxation
Tax on profit from ordinary activities
Profit for the financial year
Other comprehensive income
Total comprehensive income for the financial year
Financial year Financial year Note ended ended
31-Jan-17 31-Jan-16 FUR EUR
4 111,214,527 121,900,306 5 (105,005,342) (107,615,708)
17 (5,617,772) (13,770,038)
591,413 514,560
6 1,000 1,000 7 (591,413) (514,560)
1,000 1,000
8 (250) (250)
750 750
750 750
The accompanying notes on pages 12 to 22 form an integral part of these financial statements
SlX'l (OR FINANCE 29134 DESIGNATED ACTIVITY (PN'
Statement of financial position As at 31 January 21117
ssFJs Finnudal annaLs Luaw malmm"Ne, Other rvabke
od anit cadt eqrtisalentn Intat assets
(ABIliTIES AND KQt1T liabilIties 1)eht necuntkn issued Uther p1den total liahilitlet
EquIty (a1(enl up share capital presented as eqwty Retained earninga TaInt equity
Fatal liabilities and equity,
Page 9
Nate 3Ilan.17 3EJan-16 EUR FUR
91,1,.157
19 l:F 1.501
"71 13
12 8h'.7
fl 1981
ih 13.9001 2 7919
OlLOS -IJISt 9020
On behalf at tlte tat
Itoss tIaras MOM MeNichnlan Director Dirtnr
Date:
1 he mxmMmmug flues on pages 12 to 22 tOnti an integral girt f these financial statements
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY
Statement of changes in equity For the financial year 31 January 2017
Balance as at 31 January 2015
Total comprehensive income for the financial year
Profit for the financial year
Other comprehensive income
Balance as at 31 January 2016
Total comprehensive income for the financial year
Profit for the financial year
Other comprehensive income
Balance as at 31 January 2017
Page 10
Retained Share Capital Earnings Total
EUR EUR EUR
1,500 1 ,501
- 750 750
2,250 2,251
- 750 750
3,000 3,001
The accompanying notes on pages 12 to 22 form an integral part of these financial statements
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page I
Statement of cash flows For the financial year 31 January 2017
Cash flows from operating activities Profit on ordinary activities before taxation Adjustments for:
Interest expense on debt securities issued Interest income on loans and receivables Discount on acquisition of loans Amortisation of discount Impairment provision Increase in other receivables (Decrease)/ increase in other payables ('ash generatedfrorn operations
Interest paid Interest received Tax paid
Net cash (used in)/ generated from operating activities
Cash flows from investing activities Investment on loans and receivables Proceeds from disposals of loans and receivables Increase in restricted cash Net cash (used in)/ generated from investing activities
Cash flows from financing activities Proceeds from issuance of debt securities Principal repayment on debt securities
Net cash generated from/ (used in) financing activities
(Decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at start of the financial year
Cash and cash equivalents at end of the financial year
Financial Financial year ended year ended 31-Jan-17 31-Jan-16
Note EUR FUR
1,000 1,000
105,005,342 107,615,708 4 (25,364,857) (27,482,785)
85,575,114 93,319,730 4 (85,849,670) (94,417,521) 17 5,617,772 13,770,038
(12,118) (1,501) (17,501) 10,119
84,955,082 92,814,788 (116,168,578) (111,105,105)
25,364,857 27,482,785 (500) (500)
(5,849,139) 9,191,968
9 (5,531,716,224) (5,538,201,398) 9 5,503,027,602 5,556,834,769 II (9,000,000) -
(37,688,622) 18,633,371
12 5,446,141,112 5,446,591,787 12 (5,422,334,080) (5,474,333,897)
23,807,032 (27,742,110)
(19,730,729) 83.229
26,443,968 26,360,739
II 6,713.239 26,443,968
The accompanying notes on pages 12 to 22 form an integral part of these financial statements
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 12
Notes to the Financial Statements For the financial year 31 January 2017
General information
The Company is a special purpose Company incorporated and registered in Ireland with limited liability on II June 2013, under registered number
528739. The Company has been duly authorised to issue 3 tranches of Notes to an initial principal amount of EUR 2,600000,000. The initial Notes
issued are EUR 550,000,000 Class A-I Asset Backed Floating Rate Notes due November 2020, EUR 50,000,000 Class A-2 Asset Backed Floating Rate
Notes due November 2020 and up to EUR 2,000,000,000 Class B Variable Funding Note ("VFN") due November 2020, The Notes represent limited
recourse obligations of the Company. The Notes proceeds have been used to purchase a portfolio of consumer loans ("credit card receivables") ("loan")
from the Financiera El Corte Ingles E.F.C., S.A ('Sellet) ('FECI'). The Seller has not derecognised tlse credit card receivables included in this
securitisation as it was deemed to have retained control of these assets. The Company has recognised equivalent Loans and Receivables due from FECI
to the extent of its continued involvement with these assets, and in particular, reflecting its right to receive certain cash flows from these credit card
receivables. FECI continues to service the receivables on behalf of the Company.
Pursuant to the Global Deed of Amendment dated 30 October 2015, the following amendments have occurred: • the final maturity date of Class Al Notes and Class A2 Notes was amended to November 2023; • interest rate in respect of each class of Notes for each Interest Period will be tlse higher of
(a) the Reference Rate plus: (i) 1 per cent, in the case of the Class Al Notes; (ii) I per cent, in the case of the Class A2 Notes; and (iii) 2.2 per cent, in the case of the Class B VFN;
(b) zero (0).
The Class A Notes are listed on the Irish Stock Exchange.
2 Basis of preparation (a) Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union and those parts of the Companies Act 2014 applicable to companies reporting under IFRS.
The accounting policies set out below have been applied in preparing the financial statements for the financial year ended 31 January 2017. The comparative information for the financial period ended 31 January 2016 presented in tlsese financial statements has been prepared on a consistent basis.
The financial statements have been prepared the going concern basis and under the historical cost convention. Given the non-recourse nature of the notes in issue and the fact that repayment of principal and interest on the notes in issue is restricted to the income and caslsflow generated from the financial assets, the directors are satisfied that it remains appropriate to prepare the Company's financial statements for the financial year ended 31 January 2017 on a going concern basis.
(b) New standards, amendments or interpretations New and amended standards adopted by the company Amendments to lAS I, 'Presentation of financial statements': The amendments clarity guidance in lAS I on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.
There were no other new standards adopted by the Company for the first time for the financial year ended 31 January 2017
New standards and interpretations not yet adopted A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 01 February 2016, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Company, except the following set out below:
IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was
issued in July 2014 and is effective for financial periods beginning on or after I January 2018. It replaces the parts of lAS 39 that relate to the
classification and measurement of financial instruments. IFRS 9 replaces LAS 39 in its entirety. This final version of IFRS 9 includes requirements
on the classification and measurement of financial assets and liabilities; it also includes an expected credit loss model that replaces the incurred loss
impairment model used today. IFRS 9 has three classification categories for debt instruments: amortised cost, fair value through other
comprehensive income and fair value through profit or loss. Classification under IFRS 9 for debt instruments is driven by the entity's business
model for managing the financial assets and whether the contractual cash flow represents solely payments of principal and interest. An entity's
business model is how an entity manages its financial assets in order to generate cash flows and create value for the entity. The Company is yet to
assess IFRS 9's EmIl impact and intends to adopt IFRS 9 when it becomes mandatorily applicable.
IFRS 15, 'Revenue from Contracts with Customers', establishes principles for reporting useful information to users of financial statements about
the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers, lime new standard is based
on the principle that revenue is recognised when control of a good or service transfers to customer. The standard permits either a full retrospective
or a modified retrospective approach for the adoption. IFRS IS is effective for financial periods beginning on or after I January 2018,
There are no other lFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.
Other than as indicated above, the directors anticipate that the adoption of those standards or interpretations will have no material impact on the
financial statements of the Company in the period of initial application
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 13
Notes to the Financial Statements (continued)
For the financial year 31 January 2017
2 Basis of preparation (continued)
(c) Changes in accounting policies
There were no changes to accounting policies which had an impact on the Company's financial statements during the financial year.
(d) Basis of measurement
The financial statements have been prepared on the historical cost basis.
(e) Functional and presentation currency
These financial statements are presented in Euro (EUR) which is the Company's functional currency. Functional currency is the currency of the
primary economic environment in which the entity operates. Debt securities issued and investment securities of the Company are primarily
denominated in EUR. The directors of the Company believe that EUR most faithfully represents the economic effects of the underlying
transactions, events and conditions.
(I) Use of estimates and judgements
The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that
may affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of
which form the basis of making the judgements about carrying values of assets and liabilities tltat are not readily apparent from other sources.
Actual results may differ from tlsese estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current
and future periods, Details of material judgements and estimates have been further described in accounting policy 3(d) "Financial instruments".
3 Significant accounting policies
(a) Interest income and interest expense
Interest income (which includes discount received on loan purchases) and interest expense are recognised in the statement of comprehensive
income, using the effective interest rate of the instrument calculated at the acquisition or origination date. The effective interest method is method
of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the
financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.
(b) Expenses
All expenses are accounted for on an accruals basis.
(c) Income tax expense
Income tax expense is recognised in the Statement of comprehensive income except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity consistent with the accounting for the item to which it is related.
Current tax is the expected tax payable on the taxable income for the financial year, using tax rates applicable to the Company's activities enacted
or substantively enacted at the reporting date, and adjustment to tax payable in respect of previous financial years.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted
by the date of the statement of financial position and are expected to apply when the related deferred tax asset is realised or the deferred tax liability
is settled.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related lax benefit
will be realised.
(d) Financial instruments
The financial instruments held by the Company include the following:
• Loans and receivables; and
Debt securities
Categorisation
The Company has designated its debt securities issued and its loans acquired at amortised cost.
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 14
Notes to the Financial Statements (continued) For the financial year 31 January 2017
3 Significant accounting policies (continued) (ii) Financial instruments (continued)
Initial recognition
The Company initially recognises all financial assets and liabilities on the date at which the Company becomes a party to the contractual provisions of the instruments.
Loans and receivables
Substantially all of the Company's receivables were originated in a securitisation transaction from a related undertaking, Financiera El Carte Ingles E.F.C., S.A ('Seller'). However, the Seller has not derecognised the credit card receivables included in this securitisation as it was deemed to have retained control of these assets, -Be Company has recognised equivalent Loans and Receivables due from FECI to the extent of its continued involvement with these assets, and in particular, reflecting its right to receive certain cash flows from these credit card receivables. FECl continues to service the receivables on behalf of the Company.
Loans and receivables are initially measured at fair value. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as loans and receivables and are carried at amortised cost, The amortised cost of the financial asset is the amount at which the financial asset is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount minus any reduction for impairment.
Debt securities issued
The debt securities issued are initially measured at fair value, being their issue proceeds (fair value of consideration received) net of issue costs incurred. They are subsequently stated at amortised cost: any difference between proceeds net of issue costs and the redemption value is recognised in the Statement of comprehensive income over the financial year of the debt securities issued using the effective interest method.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised in the net finance expense on debt securities issued.
The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.
Offsetting
Financial assets and liabilities are set off and the net amount presented in the Statement of financial position when, and only when, the Company has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by the accounting standards, or for gains and losses arising from a group of similar transactions.
isnpasrsnenl
Financial assets that are stated at amortised cost are reviewed at the date of each Statement of financial position to determine whether there is objective evidence of impairment. If any such indication exists, an impairment loss is recognised its the Statement of comprehensive income of the difference between the assets' carrying amount and the present value of estimated future cash flows discounted at the financial assets original effective rate.
The Servicer's internal models determine the impairment losses on financial assets stated at amortised cost by taking into account the historical experience of impairment and other circumstances known at the time of assessment For these purposes, impairment losses on loans are losses incurred at the reporting date, calculated using statistical methods. Loans which are 180 days overdue are considered flilly provided for.
The directors have considered the above approach and believe the provision adequately reflects the level of impairment in the loan portfolio.
(e) Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of less than three months, which are subject to insignificant risk of changes in their fair value, and are used by the Company in the management of its short term commitments.
Restricted cash comprises a Class A reserve fund which is required to be held by the company's governing documentation ass credit enhancement for the Class A notes. Should amounts be held in the Class A reserve find after the redemption of the Class A notes in fill, such amounts shall be distributed in accordance with the transaction agreements and priorities of payments. For presentation purposes, the restricted cash reserve amount has been excluded from the company's own (unrestricted) cash balances in the statement of cash flows for the financial year ended 31 January 2017.
Cash and cash equivalents are carried at amortised cost in the statement of financial position.
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 15
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
3 Significant accounting policies (continued)
(I) Called up share capital presented as equity
Share capital is issued in Earn. Dividends are recognised as a liability in the period in which they are approved.
(g) Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dales of the transactions. Monetary assets and liabilities denominated in foreign currencies at die reporting date are retranslated to the functional currency at the exchange rate at that date. Non monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the Statement of comprehensive income.
(h) Other income and expenses All other income and expenses are accounted for on an accruals basis.
(i) Other receivables
Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.
(j) Segment reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with oilier components of the same entity). use Company purchased a portfolio of consumer loans and as such, has only one business unit. All administration and operational functions are carried out and reviewed by the Administrator, Corporate Secretary (Deutsche International Company Services (Ireland) Limited) ("DtCSlL") and the Servicer.
Financial year Financial year 4 Net income on loans and receivables ended ended
31-Jan-17 31-Jan-16 FUR FUR
Interest income on loans and receivables 25,364,857 27,482,785 Discount amortised 85,849,670 94,417,521
111,214,527 121,900,306
Net income on loans and receivables includes the amortisation of the discount on purchase of Loans and Receivables from Financiers El Corte Inglds E.F.C., S.A.(FECt). The Company purchased an interest to receive certain cashflows from a portfolio of credit card receivables originated by FECI. The consideration is at a discount to the nominal carrying amount of the credit card receivables and this discount is amortised over the life of the receivables as interest income.
Financial year Financial year 5 Net finance expense on debt securities issued ended ended
31-Jan-17 31-Jan-16 FUR FUR
Net finance expense on debt securities issued - Class A (4,044,900) (13,721,217) Net finance expense on debt securities issued - Class B VFN (3,682,611) (6,555,761) Net finance expense on debt securities issued - Deferred consideration (97,277,831) (87,338,730)
(105,005,342) (107,615,708)
Financial year Financial year ended ended
31-Jan-17 31-Jan-16 FUR FUR
1,000 1,000 1,000 1,000
6 Other income
Corporate benefit
Page 16
Financial year Financial year ended ended
31-Jan-17 31-Jan-16
EUR EUR (238,738) (253,214) (144,200) (81,185) (118,469) (126,607) (39,360) (17,220) (25,103) (5,861) (16,123) (21,053) (4,920) (4,920)
- (4,500) (4,500) (591,413) (514,560)
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
7 Other expenses
Servicing fees
Legal and professional fees Backup Servicer fees Audit Fees Other expenses Administration fees Taxation fees Directors fees
The directors received EUR 4,500 (2016: EUR 4,500) as remuneration in respect of qualifying services, from the Company during the financial year, Other than this, any further required disclosures for Section 305 and 306 of the Companies Act 2014 are nil for both financial years.
The Company is administered by Deutsche International Corporate Services (Ireland) Limited and other significant services are contracted from third parties. Accordingly, the Company has no employees (2016: Nil).
Financial year Financial year ended ended
year ended year ended 31-Jan-17 31-Jan-16
Auditor's remuneration excluding Vat and including expenses in respect of the financial year EUR EUR Statutory audit (32,000) (14,000) Other assurance services
- -
Tax advisory services - (4,000)
Other non-audit services
(32,000) (18,000)
Financial year Financial year 8 Tax on profit from ordinary activities ended ended
31-Jan-17 31-Jan-16
Profit on ordinary activities before taxation EUR
1,000 EUR
1,000
Profit on ordinary activities multiplied by the standard rate of Irish corporation tax for the year of 12.5% 125 125
Effects of: Higher rate tax applicable under Section 110 TCA, 1997 125 125 Current tax charge for the financial year 250 250
The Company will continue lobe actively taxed at 25% in accordance with Section 110 of the Taxes Consolidation Act, 1997,
9 Loans and receivables 31-Jan-17 31-Jan-16 EUR EUR
Loans and receivables 899,257,457 875,912,051
Movement in investment securities At beginning of financial year 912,529,140 931,162,511 Additions during the financial year 5,531,716,224 5,538,201,398 Repayments, Redemptions and Disposals during the financial year (5,503,027,602) (5,556,834,769)
941.217,762 912,529,140 Total provision for impairment loss (27,924,256) (22,306,484)
913,293,506 890.222,656 Unsmortised discounts (14,036,049) (14,3 10,605) At end of the financial year 899257,457 875,9121051
SECUCOR FINANCE 2013-1 DESIGNATED ACTIVITY COMPANY Page17
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
9 Loans and receivables (Continued) Maturity analysis 31-Jan-17 31-Jan-16
EUR EUR Loans due within one financial year 869,906,724 862,865,767 Loans due after one financial year 71,311,038 49,663,373 Unamortised discounts (14,036,049) (14,310,605) Impairment provision (27,924,256) (22,306,484)
899.2 875,912,051 875.912.051.
All new additions and disposals during the financial year were transacted with Financiers El Corte Inglés E.F.C,, S.A. who are also servicer to the loans and receivables. Please see note 17(c) for movement in provision analysis during the tTnancial year.
10 Other receivables 31-Jan-17 31-Jan-16 EUR EUR
Prepayments 13,618 1,500 Unpaid share capital I _
13.619 1.501
11 Cash and cash equivalents 31-Jan-17 31-Jan-16 EUR EUR
Cash at bank 15,713,239 26,443,968 15,713.239 26.443,968
Cash and cash equivalents includes a restricted cash reserve balance of €9,000,000 (2016: €9,000,000) which is required lobe held by the company's governing documentation. For presentation purposes, the restricted cash reserve amount has been excluded from the company's own (unrestricted) cash balances in the statement of cash flows for the financial year ended 31 January 2017.
12 Debt securities issued 31-Jan-17 31-Jan-16 EUR EUR
Debt securities issued (906,595,088) (882,788.056) (906,595.088) (882,788,056)
Movement Balance at beginning of financial year Debt securities issued during the financial year Principal repayment on Notes issued during the financial year Balance at end of financial year
31-Jan-17 31-Jan-16 EUR EUR
882,788,056 910,530,166 5,446,141,111 5,446,591,787
(5,422,334.080) (5,474,333,897) 906,595,087 882,788.056
The nominal value and terms of the debt securities are as follows: Class Currency Nominal Nominal Interest rate basis Maturity date
31-Jan-17 31-Jan-16 A-I EUR 550,000,000 550,000,000 ]-month EURIBOR+I% November 2023 A-2 EUR 50,000,000 50,000,000 1-month EURlBOR+I% November 2023 B VFN EUR 306,595,087 282,788,056 1-month EURIBOR+2.2% November 2023
31-Jan-17 Class As at 01-Feb-16 Additions Repayments As at 31- Jan-17 A-1 550,000,000 - - 550,000,000 A-2 50,000,000 - - 50,000,000 B VFN 282,788,056 5.446,141,111 (5,422,334,080) 306,595.087
882,788,056 5,446,141,111 (5,422,334,080) 906,595,087
31-Jan-16 Class As at 01- Feb-15 Additions Repayments As at31- Jan-16 A-I 550,000,000 - - 550,000,000 A-2 50,000,000 - - 50,000,000 B VFN 310.530,166 5,446.591,787 (5,474,333,897) 282,788,056
910.530,166 5,446.591 ,787 (5.474.333.897) 882,788.056
Any amounts realised from the portfolio of loans and receivables in excess of that due to the providers of the funding of the Class A-I and Class A-2 notes, less any related administrative costs, will be payable to Financiera El Corte Ingles E,F.C., S.A. in the form of deferred consideration in accordance with the Receivable Sale Agreement.
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
13 Other payables
Interest payable on debt securities issued Deferred Consideration Accrued expenses Corporation tax payable
14 Share capital - presented as equity Authorised 1000 ordinary shares of Ear I each
Share capital Allotted, issued and unpaid I ordinary share of Eur I each
Page 18
31-Jan-17 31-Jan-16 EUR EUR
(523,131) (568,536) (7,783,683) (18,901,515)
(79,412) (96,913) - (250)
(8.386,226) (19,567,213)
31-Jan-17 31-Jan-16 EUR EUR 1.000 1.000
31-Jan-17 31-Jan-16 EUR EUR
15 Ownership of the Company Financiers El Code IngIds E.F.C., S.A. has significant influence over the Company as Arranger, Seller, Class B VFN holder and Servicer to the portfolio of loans and receivables. Financiers El Code Ingles E.F.C., S.A. is subsidiary of Santander Consumer Finance, S.A. and provides consumer finance services for acquisition of goods and services of the entities of the El Code Itsgles Group.
The ultimate controlling party is Banco Santander S,A.. The smallest group in which the results of the Company are consolidated is Santander Consumer Finance, S.A. The largest group in which the results of the Company are consolidated is Banco Santander S.A. The consolidated financial statements of Banco Santander are available from its registered office at Santander Group City, Av. de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain.
The Company is managed and administered by the board of directors. The principal shareholder of the Company is Castlewood CS Holdings Limited holding 100% of the issued shares in the Company. The share is held in trust for charity under the terms of declarations of trust.
16 Related party transactions
During the financial year the Company incurred a fee of EUR 16,123 (2016: EUR 21,053) relating to administration services provided by Deutsche International Corporate Services (Ireland) Limited.
Servicer fees of EUR 238,738 (2016: EUR 253,214) were payable to Financiera El Code lnglds E.F.C., S.A. during the financial year, of which €19,440 was payable as at 31 January 2017 (2016: €25,308).
The Company also purchased loans and receivables from Financiers El Code IngIes E.F.C., S.A. during tite financial year. Transaction details with the Financiers El Carte Ingles E.F.C., S.A including details of discount amortisation on purchase of receivables, is included in notes 4 and 9 respectively.
Under the terms of the Receivables Sale Agreement, the Company is required to pay the excess spread/net income as deferred consideration to Financiera El Code Inglds E.F.C., S.A in accordance with the priority of payments terms as set out in the securitisation programme documentation. Deferred consideration payable was €97,277,831 (2016: €87,338,730) during the financial year, of which €7,783,683 was payable as at 31 January 2017 (2016: €18,901,515).
Santander Consumer Finance, S.A. are holders of the Class Al notes, Santander Consumer Bank S.A/N.V. are holders of the Class A2 notes and Financiera El Code Ingles E.F.C., S.A are holders of the Class B VFN. Interest payable during the financial year and payable as at 31 January 2017 is set out in Notes 5 and 13 respectively.
As at 31 January 2017, the Company had accrued EUR 4,500 (2016: EUR 4,500) as Directors fees in relation to the services provided by Aisling McNicholas and Ross Bums. There were no other related party transactions during the financial year.
17 Financial risk management
The Issuer has been established for the purpose of purchasing a portfolio of consumer loans, issuing the Notes and entering into, inter ahia, the Transaction Documents to which it is a party.
The Notes are limited recourse secured obligations of the Issuer. All payment obligations of the Issuer under the Notes will be limited recourse obligations of the Issuer to pay only the amounts available for such payment from the Available Distribution Amount in accordance with the Priorities of
The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The risk profile of the Company is such that market, credit, liquidity and other risks of the investment securities are borne fully by the holders of debt securities issued.
The Company has exposure to the following risks from its use of financial instruments:
(a) Market risk; (b) Liquidity risk; (c) Credit risk; and (d) Operational risk.
This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk and the Company's management of capital.
SECUCOR FINANCE 20134 DESIGNATED ACTIVITY COMPANY Page 19
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
17 Financial risk management (continued)
(a) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's
income or value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures with acceptable parameters while optimising the returns on risk. -
Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
At the reporting date, the interest rate profile of the Company's financial assets and liabilities was:
Fixed rate Floating rate Non interest Total bearing
31-Jan-17 31-Jan-17 31-Jan-17 31-Jan-17 EUR EUR EUR EUR
Cash and cash equivalents - 15,713,239 - 15,713,239 Other receivables -
- 13,619 13,619 Loans and receivables 899,257,457 - - 899,257,457 Debt securities issued - (906,595,088) - (906,595,088) Other payables - (8.386,226) (8,386,226)
899,257.457 (890.881,849) (8,372,607) 3,001
At 31 January 2016, the interest rate profile of the Company's financial assets and liabilities was
Fixed rate Floating rate Non interest Total bearing
31-Jan-16 31-Jan-16 31-Jan-16 31-Jan-16 EUR EUR EUR EUR
Cash and cash equivalents - 26,443,968 - 26,443,968 Other receivables -
- 1,501 1,501 Loans and receivables 875,912,051 - - 875,912,051 Debt securities issued - (882,788,056) - (882,788,056) Other payables - (19.567,213) (19,567,213)
875.912.051 (856.344,088) (19,565,712) 2.251
Sensitivity analysis
The sensitivity analysis below has been determined based on the Company's exposure to interest rates for interest bearing assets and liabilities
(included in the interest rate exposure tables above) at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting year in the case of instruments that have floating rates.
Given the transaction structure, all excess spread (income in excess of expenditure) is payable in the form of deferred consideration to the seller or
if there were insufficient income, the priority of payments will be apply. All interest rate risk is therefore borne by the sellor and the noteholders and
there would he no impact to the Company from a change in interest rates.
Price risk
Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than
those arising from interest rate risk or currency risk) whether those changes are caused by factors specific to the individual financial instrument or
its issuer, or factors affecting all similar financial instruments traded in the market, The Company is not significantly exposed to price risk as all of its financial instruments are measured at amortised cost.
Currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The
majority of Company's balances and transactions are denominated in CUR, the reporting currency. 'flue total exposure to exchange rate fluctuations is therefore minimal.
Sensitivity analysis
All transactions of the Company are carried out in CUR which is the reporting currency. Only some professional fees are denominated in GBP, but
given that the transactions are not significant, the total exposure to exchange rate fluctuations is very minimal,
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 20
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
17 Financial risk management (continued) (b) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due,
The Company has managed its liquidity risk through long term debt funding matched against short term assets.
The maturity profile of the Company at 31 January 2017 is as follows: 31-Jan-17
Gross Carrying contractual Less than one Between Ito 2 Between 2 to 5 More than 5
amount cash flows financial year financial years financial years financial years EUR EUR EUR EUR EUR FUR
Notes issued (906,595,088) (971,385,281) (9,539,500) (9,539,500) (28,644,636) (923,661,645) Other payables (8,386,226) (8,386,226) (8,386,226) - -
(914,981,314) (979,771,507) (17,925,726) (9,539,500) (28,644,636) (923,661,645)
The maturity profile of the Company at 31 January 2016 is as follows
31-Jan-16 Gross
Carrying contractual Less than one Between ito 2 Between 2 to 5 More than S amount cash flows financial year financial years financial years financial years
EUR EUR EUR FUR FUR FUR Notes issued (882,788,056) (1,022,114,031) (12,039,581) (12,039,581) (998,034,869) -
Other payables (19,567,213) (19,567,213) (19,567,213) - - -
(902,355,269) (1,041,681.244) (31,606,794) (12,039,581) (998,034,869) -
Gross contractual cashflows are computed based on actual outstanding amounts of the Notes. The future interest rate is calculated by reference to the Euribor rate for the first interest payment date after the financial year end.
Other payables includes deferred consideration payable at year end. No future cashfiows have been included in respect of deferred consideration given that the amount represents the excess spread / net income and is dependent on future performance. To the extent that no excess net income is available under the priority of payments, no amounts are payable as deferred consideration.
(c) Credit risk
Credit risk is the risk of the financial loss to the Company if a counter-party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's financial assets. The Company's principal financial assets are cash and loans and receivables, which represent the Company's maximum exposure to credit risk in relation to financial assets.
The Company has limited exposure to credit risk, The payment obligations of the Company are restricted to the amounts collected from its loans and receivables. If the counterparty fails to meet its obligations, the Company is not required to repay its liabilities as they fall due. However, the Company has outsourced its collections procedure to the servicer who has rigorous controls in place for a timely receipt of the amounts due from the debtors.
Loans and receivables that are neither impaired nor past due Loans and receivables tlsat are past due and impaired Loans and receivables that are fully provided for
Carrying amounts Carrying amounts 31-Jan-17 31-Jan-16
FUR FUR 915,236,589 890,222,654
5,538,433 6.464.047 20.442,739 15.842,439
941,217,761 912.529,140
The below tables provides the credit risk analysis for Loans and Receivables that are neither impaired nor past due and Loans and Receivables that
are past due and impaired, but excludes Loan and Receivables that are fully provided for,
Ageing analysis of overdue amounts for loans and receivables
I 31-Jan-17 I Past due period No. of Loans % of Total Current balance Aggregate Current Balance (Days) (Nominal)
FUR 0-29 5,648,692 99.40% 915.236,589 30 - 59 8,628 0.30% 2,770,934 60 - 89 3,026 0.12% 1,118,357 90 - 119 2,061 0.08% 778,007
20 - 149 1.224 0.06% 535,314 150- 180 779 0.04% 335.821
5.664,410 100.00% 920,775,022
SECUCOR FINANCE 2013-I DESIGNATED ACTIVITY COMPANY Page 21
Notes to the Financial Statements (continued) For the financial year ended 31 January 2017
17 Financial risk management (continued) (c) Credit risk (continued)
Ageing analysis of overdue amounts for loans and receivables
F7 31-Jan-16 Past due period No. of Loans % of Total Current balance Aggregate Current Balance (Days) (Nominal)
EUR 0-29 5,531,069 99.28% 890,222,654 30 - 59 8,670 0.30% 2,666,026 60 - 89 3,284 0.13% 1,189,137 90 - 19 2,781 0.12% 1,092,155 120 - 149 1,787 0.09% 771,769 150- 180 1,546 0.08% 744,960
5.549,137 100% 896,686,701
Impairment provision analysis 31-Jan-17 31-Jan-16 EUR EUR
At beginning of the financial year 22,306.484 8,536,446 Provisions/(write back)for the financial year 5,617,772 13,770,038 At the end of the financial year 27,924.256 22306,484 ,
The geographical classification of the loans and receivables are as follows: 31-Jan-17 31-Jan-16
EUR % EUR % Spain 905,252,829 98.31% 878,663,916 97.99% Portugal 510,405 0,06% 478,244 0,05% Rest of Europe 4,384,891 0.48% 4.314,661 0.48% Rest of die world 10.626,897 1.15% 13.229.879 1.48%
920.775,022 100.00% 896.686.700 100% The loans and receivables are geographically concentrated mostly in Spain. The loans and receivables are not rated
(d) Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company's processes, personnel and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatoty requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Company's operations.
All management and administration functions are outsourced to the Administrator and Servicer.
e) Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis. The directors consider the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.
Carrying Fair Carrying Fair value value value value
Levels 31-Jan-17 31-Jan-17 31-Jan-16 31-Jan-16 Financial assets EUR EUR EUR EUR Loans and receivables 3 899,257,457 899.257,457 875,912,051 875,912,051 Other receivables 2 13,619 13,619 1,501 1,501 Cash and cash equivalents I 15,713,239 15,713,239 26,443,968 26,443,968
Financial liabilities Debt securities issued 3 (906,595,088) (906,595,088) (882,788,056) (882,788,056) Other payables 2 (8.386.226) (8,386,226) (19,567.213) (19.567,213)
3.001 3.001 2251 2251
The table above provides an analysts of the basis of measurement used by the Company to fair value its financial instruments into the following categories:
- Level I: quoted prices (unadjusted) in an active market for identical assets or liabilities; - Level 2: inputs other than quoted prices within Level I that are observable for the asset or liability, either
directly (i.e.: prices) or indirectly (i.e.: derived from prices);
- Level 3: inputs for the asset or liabilities that are not based on observable market data (unobservable inputs).
SFCUCOR FINANCE 2013-I DESIGNATED AC'UVI'tV ('OM1'AN' Page 22
Notes to tIre Financial Statements (continued)
For the litirincial year ended 31 .Iaui,tiry 21117
Fair value of financial assets and financial liabilities that are not measured at fair value an a recurring basis - cm,:isiued The cash and cash equivalents has; heeti classified tinder level I considering die liquidity ofilte market.
• Other receivables mid oilier paymililes have Ihir values that ;ipprosiittaie to their canTing value because of their shoot turin nature thus have been
classified is Level 2.
• I stints and receivables are carried at atitortised cost and are classified within level 3 of tire fair value hierarchy. The directors consider ilia lair value of
these itt51riiiti5ti15 to not be materially dihuiuitt tiont their carrying value, based on ilia type of lie titidenhying assets and their short term nature.
• Debt securities arc carried at amortised Cost and are classified within level 3 oh' the litir value hierarchy. Given the noit recourse nature of the flutes in
'one and ilia tiiet dial repayment of principal and interest its the tories in issue is restricted in the income and cashtlory generated l'rnt the financial
assets. the directors consider the carrviitu value of these to approximate their thin value.
18 Capital risk management
lite Company OCWS the share C5pttttl its its capital. Ilia ('nitiprmny isa special purpose vehicle set tip to issue debt instrtiniettts lbir tIme purpose olitinkittg
nuvesmni cuts as defitietl under ilia Prospectus. Share capital of t nsa issued fit line with Irish Company Lair and is not used for financing tIme
iitve5titietit activities of the Cuutpmuty. The Company is not subtect to any oilier extcnmalt' imposed capital requirements.
tO Subsequent events
Fl1ctive Iroiti I Jutie 2017. the itt5)rpornted terms ntetnuranihttin was amended to Include some changes to the terms and conditions of the structure.
The ntost significant of,these changes is mite Interest one ott the notes.
Ellbctive trout I June 2017, tIme "Interest Rate" scans, in respect ofrmmtcli class ol' Notes for emtcht Interest period:
(a) 072 per ccitt, III the case of the ('lass At Notes; (h) 072 per ccitt, fit the case of the Class .'2 Notes: and
let 2per ccitt in the case of tIme Class B VFN,
There have been no oilier significant subsequent crests tip to the dole otaliprovttl ol'these IjuancirtI stmttetnents that require disclosures ill these financial
stittettiemmts,
20 Charges
'Ilia Notes issued Iry the Company are hitched by lie loans potlolio, purchased by tIre Company train Fittatieiern El Cone Imigles E.F.C.. SA. They
comtstitttle limited recourse olmiitiatmotms of, tltc Company.
21 i "L. 0 t The Board of Directors approved these financial slatcttietmts oil ... . .,....... 2018.