TransAlp 2 Securities Public Limited Company · London EC2N 2DB United Kingdom Independent Auditor...

TransAlp 2 Securities Public Limited Company

Directors' report and audited financial statements

Registered number: 436853

Financial year ended 31 December 2019

DocuSign Envelope ID: 8973D7E3-3F0D-495B-BE6E-8874AF2B05CC

TransAlp 2 Securities Public Limited Company

Contents Page (s)

Directors and other information 1

Directors' report 2 - 3

Statement of directors' responsibilities in respect of the directors' report and the financial statements 4

Independent auditors' report 5 - 7

Statement of comprehensive income 8

Statement of financial position 9

Statement of changes in equity 10

Statement of cash flows 11

Notes to the financial statements 12 - 17


TransAlp 2 Securities Public Limited CompanyPage 1

Directors and other information

Directors Shengjie Xu (Irish) John Dunleavy (Irish)

Registered Office Block A, George's Quay PlazaGeorge's QuayDublin 2Ireland

Company Secretary and Vistra Alternative Investments (Ireland) LimitedAdministrator Block A, George's Quay Plaza

George's QuayDublin 2Ireland

Arranger UniCredit Bank AGArabellastraße 1281925 MunichGermany

Banker Deutsche Bank AG LondonWinchester House1 Great Winchester Street London EC2N 2DBUnited Kingdom

Independent Auditor KPMGChartered Accountants & Statutory Audit Firm1 Harbourmaster Place

International Financial Services Centre Dublin 1

Ireland

Solicitor A&L GoodbodyInternational Financial Services Centre

North Wall Quay Dublin 1

Ireland

Eimir McGrath (Irish) (Alternate director to John Dunleavy) (Appointed on 04 August 2020 and resigned on 05 August 2020)

John Paul Maguire (Irish) (Alternate director to John Dunleavy) (Appointed on 12 August 2019 and resigned on 13 August 2019)



Directors’ report

Principal activities and business review

Key performance indicators During the financial year:••

Future developments and going concern

Business risks and principal uncertainties

Novel Coronavirus COVID-19 Global Pandemic

Operational risk

Results and dividends for the financial year

Change in directors, secretary and registered office On 12 August 2019, John Paul Maguire was appointed as alternate director to John Dunleavy and resigned on 13 August 2019.

On 04 August 2020, Eimir McGrath was appointed as alternate director to John Dunleavy and resigned on 05 August 2020.

Directors, secretary and their interests

Shares and shareholders

There were no other change in directors, secretary and the registered office during the year and/or since the financial year end.

The directors are currently seeking new opportunities for the Company and consider it appropriate to prepare the financial statementson a going concern basis. Funding is received from UniCredit Bank AG (the "Arranger") to pay the expenses of the Company.

None of the directors who held office on 1 January 2019 and 31 December 2019 held any shares in the Company at that date or duringthe financial year. Except for the administration agreement entered into by the Company with VAIIL, there were no contracts of anysignificance in relation to the business of the Company in which the directors had any interest, as defined in Section 309 of theCompanies Act 2014 as amended (the "Act"), at any time during the financial year and/or since the financial year end.

The Company's total indebtedness was EUR 46,571 (2018: EUR 82,676).

The Company is subject to various risks.

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 andregulatory requirements and generally accepted standards of corporate behaviour.

The directors present the annual report and audited financial statements of TransAlp 2 Securities Public Limited Company (the“Company”) for the financial year ended 31 December 2019.

The Company is a special purpose vehicle (the "SPV") incorporated and registered in Ireland on 26 March 2007 under registerednumber 436853.

The Company established a EUR 10,000,000,000 Structured Note Programme (the "Programme") together with TransAlp 1 SecuritiesPublic Limited Company and TransAlp 3 Securities Public Limited Company, and it envisaged, amongst other things, that theCompany as the issuer under the Programme may, from time to time, issue, borrow, buy, sell or enter into secured obligations in theform of notes, loans, options, schedules or swaps under the Programme.

The Company currently has no series (the ''Series'') in issue. However, it is the intention of the directors for the Company to seekopportunities for the issuance of new Series in the future.

The Company made a profit of EUR 3,000 (2018: EUR 3,000); and

The authorised share capital of the Company is EUR 40,000 which has been fully issued and paid as per note 10. The issued shares areheld in trust by Vistra Capital Markets (Ireland) Limited ("VCMIL") (the "Share Trustee") in the Company under the terms of adeclaration of trust (the "Declaration of Trust") dated 28 March 2007 under which the Share Trustee holds the benefit of the shares ontrust for charitable purposes. The Share Trustee has no beneficial interest in and derive no benefit from its holding of the shares. Thereare no other rights that pertain to the shares and the shareholders.

Operational risk arises from all of the Company's operations. The Company was incorporated with the purpose of engaging in thoseactivities outlined in the preceding paragraphs. All management and administration functions are outsourced to Vistra AlternativeInvestments (Ireland) Limited ("VAIIL") (the "Administrator") which has years of experience in this field.

The results for the financial year are set out on page 8. The directors have not recommended payment of dividends for the financialyear under review (2018: EUR Nil).

The key risks facing the Company are set out in note 13 to the financial statements.

On 11 March 2020, the World Health Organisation officially declared COVID-19, the disease caused by the novel coronavirus, apandemic. The directors are closely monitoring the evolution of this pandemic, including on how it may affect the economy and thegeneral population.



Directors' report (continued)Audit committee

Political donations

Accounting records

Subsequent events

Independent auditors

there is no relevant audit information of which the Company’s auditors are unaware; and

Directors’ compliance statement

a)b)

c) the arrangements and structures in place, are reviewed on an annual basis.

Approved by the Board and signed on its behalf by

Shengjie Xu Eimir McGrathDirector Alternate director to John Dunleavy

Date:

The Electoral Act, 1997 (as amended by the Electoral Amendment Political Funding Act, 2012) requires companies to disclose allpolitical donations over EUR 200 in aggregate made during a financial year. The directors, on enquiry, have satisfied themselves thatno such donations in excess of this amount have been made by the Company during the financial year to 31 December 2019 (2018:Nil).

The directors believe that they have complied with the requirements of Sections 281 to 285 of the Act with regard to the keeping ofaccounting records by appointing an Administrator which employs accounting personnel with the appropriate expertise and byproviding adequate resources to the financial function. The accounting records of the Company are maintained at Block A, George'sQuay Plaza, George's Quay, Dublin 2, Ireland.

The board of directors (the "Board"), having given due consideration to Section 167(1) and Section 167(3) of the Act and noting thecontractual obligations of the Administrator and the limited recourse nature of the securities issued by the Company has concluded thatthere is currently no need for the Company to have an audit committee in order for the Board to perform effective monitoring andoversight of the internal control and risk management systems of the Company in relation to the financial reporting process and themonitoring of the statutory audit and the independence of the statutory auditors.

Subsequent events have been disclosed in note 15 to the financial statements.

So far as the directors are aware, each director at the date of approval of this report and financial statements confirms that:

as per Section 330 of the Act, the directors have taken all steps that they ought to have taken as a director in order to makethemselves aware of any relevant audit information and to establish that the Company’s auditors are aware of this information.

The directors confirm that:they have, to the best knowledge, complied with its relevant obligations as defined in section 225 of the Act;

KPMG, Chartered Accountants and Statutory Audit firm have signified their willingness to continue in office in accordance withSection 383(2) of the Act.

relevant arrangements and structures have been put in place that provide a reasonable assurance of compliance in all materialrespects by the Company with its relevant obligations, which arrangements and structures may, if the directors so decide, includereliance on the advice of one or more than one person employed by the Company or retained by it under a contract for services,being a person who appears to the directors to have the requisite knowledge and experience to advise the Company on compliancewith its relevant obligations; and


Aug-04-2020


Statement of directors' responsibilities in respect of the directors' report and the financial statements

On behalf of the Board


Date:

• use the going concern basis of accounting unless they intend to liquidate the Company or cease operations, or have no realisticalternative but to do so.

The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets,liabilities, financial position and profit or loss of the Company and enable them to ensure that the financial statements comply with theAct. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as arereasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The directorsare also responsible for preparing a directors report that complies with the requirements of the Act.

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRS as adopted by the EU;

• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

The directors are responsible for preparing the directors' report and financial statements, in accordance with applicable law andregulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to preparethe financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union("EU").

Under the company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fairview of the assets, liabilities and financial position of the Company and of its profit for 31 December 2019. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;


Aug-04-2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRANSALP 2 SECURITIES PUBLIC LIMITED COMPANY

Report on the audit of the financial statements

Opinion

We have audited the financial statements of TransAlp 2 Securities Public Limited Company (‘the Company’) for the year ended 31 December 2019, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Change in Equity, the Statement of Cash Flows and related notes, including the summary of significant accounting policies set out in note 3.The financial reporting framework that has been applied in their preparation is Irish Law andInternational Financial Reporting Standards (IFRS) as adopted by the European Union.

In our opinion, the accompanying financial statements:

• give a true and fair view of the assets, liabilities and financial position of the Company as at 31December 2019 and of its profit for the year then ended;

• have been properly prepared in accordance with IFRS as adopted by the European Union.; and

• have been properly prepared in accordance with the requirements of the Companies Act 2014.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We have nothing to report on going concern

We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least twelve months from the date of approval of the financial statements. We have nothing to report in these respects.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRANSALP 2 SECURITIES PUBLIC LIMITED COMPANY (CONTINUED)

Report on the audit of the financial statements (continued)

Other information

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the directors’ report. The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Based solely on our work on the other information, we report that:

• we have not identified material misstatements in the directors’ report;• in our opinion, the information given in the directors’ report is consistent with the financialstatements;• in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.

Opinions on other matters prescribed 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 and the financial statements are in agreement with the accounting records.

Matters on which we are required to report by exception

The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made. We have nothing to report in this regard.

Respective responsibilities and restrictions on use

Responsibilities of directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 4, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRANSALP 2 SECURITIES PUBLIC LIMITED COMPANY (CONTINUED)

Respective responsibilities and restrictions on use (continued)

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A fuller description of our responsibilities is provided on IAASA’s website at

https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf

The purpose of our audit work and to whom we owe our responsibilities

Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Date 04 August 2020

Shahnawaz Mirza

For and on behalf of

KPMG

Chartered Accounts, Statutory Audit Firm

1 Harbourmaster Place

IFSC

Dublin 1




Statement of comprehensive incomeFor the financial year ended 31 December 2019

Financial Financial year ended year ended

Notes 31-Dec-19 31-Dec-18 EUR EUR

Other income 4 80,363 52,510 Other expenses 5 (76,363) (48,510)

Profit before tax 4,000 4,000

Taxation 6 (1,000) (1,000)

3,000 3,000

Other comprehensive income - -

Total comprehensive income for the financial year 3,000 3,000

Net profit for the financial year

The Company had no recognised gains or losses in the financial year other than those dealt with in the Statement of comprehensiveincome.

The notes on pages 12 to 17 form an integral part of these financial statements



Statement of financial positionAs at 31 December 2019

31-Dec-19 31-Dec-18Notes EUR EUR

AssetsOther receivables 7 27,937 1,000 Cash and cash equivalents 8 72,518 132,560 Total assets 100,455 133,560

Liabilities and equityLiabilitiesOther payables 9 46,571 81,676 Corporate tax payable - 1,000 Total liabilities 46,571 82,676

EquityCalled up share capital presented as equity 10 40,000 40,000 Retained earnings 13,884 10,884 Total equity 53,884 50,884

Total liabilities and equity 100,455 133,560

On behalf of the Board


Date:



Aug-04-2020


Statement of changes in equityFor the financial year ended 31 December 2019

Share Totalcapital equity

EUR EUR EUR Balance as at 1 January 2018 40,000 7,884 47,884

- 3,000 3,000 - - -

- 3,000 3,000

Balance as at 31 December 2018 40,000 10,884 50,884

40,000 10,884 50,884

- 3,000 3,000 - - -

- 3,000 3,000

Balance as at 31 December 2019 40,000 13,884 53,884

Net profit for the financial yearOther comprehensive income

Total comprehensive income for the financial year


Retained earnings

Net profit for the financial yearOther comprehensive income


Balance as at 1 January 2019





Statement of cash flowsFor the financial year ended 31 December 2019

Financial Financial year ended year ended

Notes 31-Dec-19 31-Dec-18Cash flows from operating activities EUR EUR

4,000 4,000 Adjustment for:(Increase)/decrease in other receivables (26,937) 9,312 (Decrease)/increase in other payables (36,105) 14,822 Tax paid (1,000) (2,578)Net cash (used in)/ generated from operating activities (60,042) 25,556

Net (decrease)/increase in cash and cash equivalents (60,042) 25,556

Cash and cash equivalents at beginning of the financial year 132,560 107,004

Cash and cash equivalents at end of the financial year 8 72,518 132,560

Profit on ordinary activities before taxation




Notes to the financial statementsFor the financial year ended 31 December 2019

1. General information

2. Basis of preparation(a) Statement of compliance

(b) Functional and presentation currency

(c) Basis of measurement

(d) Use of estimates and judgements

3. Significant accounting policies (a) Foreign currency

(b) Income and expenses

(c) Taxation

The accounting policies set out below have been applied in preparing the financial statements for the financial year ended31 December 2019 and the comparative information presented in these financial statements are for the financial yearended 31 December 2018 and have been prepared on a consistent basis.

The directors are currently seeking for new opportunities for the Company and consider it appropriate to prepare thefinancial statements on a going concern basis. Funding is received from the Arranger to pay the expenses of the Company.

The Company established the Programme together with TransAlp 1 Securities Public Limited Company and TransAlp 3 SecuritiesPublic Limited Company, and it envisaged, amongst other things, that the Company as issuer under the Programme may, fromtime to time, issue, borrow, buy, sell or enter into secured obligations in the form of notes, loans, options, schedules or swapsunder the Programme.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that mayaffect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making the judgements about carrying values ofassets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Company meets the criteria for a “Section 110 vehicle” under the Taxes Consolidation Act, 1997 and is thereforesubject to a special tax regime which potentially allows the Company to be tax neutral. The tax expense represents the sumof the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the period ascalculated in accordance with Irish Tax Laws. Taxable profit may differ from profit before tax as reported in the Statementof comprehensive income because it excludes items of income or expense that are not taxable or deductible. TheCompany's liability for current tax is calculated using tax rates that has been enacted or substantively enacted by thereporting date.

The financial statements are presented in Euro (''EUR''), which is the Company’s functional currency. Functional currencyis the currency of the primary economic environment in which the entity operates. The issued share capital of theCompany is denominated in EUR. The directors of the Company believe that EUR most faithfully represents the economiceffects of the underlying transactions, events and conditions of the Company.

The financial statements have been prepared on the historical cost basis.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects only that period or in the period of the revision andfuture periods if the revision affects both current and future periods.

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the date ofthe transactions. Monetary items denominated in foreign currencies are retranslated to the functional currency at theexchange rate at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactionsand from the translation at financial year end of monetary items that are denominated in foreign currencies are recognisedin the Statement of comprehensive income.

All income and expenses are accounted for on an accruals basis.

The Company currently has no Series in issue. However, it is the intention of the directors for the Company to seek opportunitiesfor the issuance of new Series in the future.

The financial statements have been prepared in accordance with IFRS and its interpretations as adopted by the EU and inaccordance with the Act.

The Company is an SPV incorporated and registered in Ireland on 26 March 2007 under registered number 436853.



Notes to the financial statements (continued)For the financial year ended 31 December 2019

3. Significant accounting policies (continued)(d) Cash and cash equivalents

(e) Share capital

(f) Other receivables

(g) Other payables

(h) Equity instruments

(i) New standards, amendments or interpretations(i)

Description Effective date*1 January 20191 January 20191 January 20191 January 20191 January 20191 January 2019

(ii) Standards not yet effective, but available for early adoptionEffective date*

1 January 2020**1 January 2020**1 January 2020** 1 January 2020**1 January 2020*

1 January 2021**

** Not endorsed.

(j) Changes in accounting policiesThere were no changes to the accounting policies which had an impact on the Company’s financial statements during thefinancial year.

IFRS 3: Business CombinationsIAS 1: Presentation of Financial Statements IAS 8 Accounting Policies, Changes in Accounting Estimates and ErrorsAmendments to References to Conceptual Framework in IFRS Standards

IFRS 17 Insurance Contracts

There are no restrictions on cash and cash equivalents. Cash and cash equivalents are carried at amortised cost in theStatement of financial position.

Other receivables do not carry any interest and are short-term in nature. Other receivables are accounted for at amortisedcost.

IFRS 9: Prepayment features with negative compensation

Annual Improvements to IFRS Standards 2015–2017 Cycle – various standardsIAS 19: Employee Benefits

IFRS 16: Leases

IAS 28 Investments in Associates and Joint VenturesIFRIC Interpretation 23: Uncertainty over Income Tax Treatments

Cash and cash equivalents include cash held at bank, which is subject to insignificant risk of changes in its fair value andis used by the Company in the management of its short term commitments.

Other payables are accounted for at amortised cost.

Share capital is issued in EUR. Dividends are recognised as a liability in the period in which they are approved.

Equity instruments are classified according to the substance of the contractual arrangements entered into. An equityinstrument is any contract that evidences a residual interest in the assets of the Company after deducting all of itsliabilities. Equity instruments are recorded at the proceeds received, net of issue costs.

*Where new requirements are endorsed, the EU effective date is disclosed. For un-endorsed standards andinterpretations, the IASB’s effective date is noted. Where any of the upcoming requirements are applicable to theCompany, it will apply them from their EU effective date.

The directors have considered the new standards, amendments and interpretations as detailed in the above table anddoes not plan to adopt these standards early. The application of all of these standards, amendments or interpretationswill be considered in detail in advance of a confirmed effective date by the Company.

Description

None of the above standards, amendments and interpretations had a significant impact on the company's financialstatements.

Standards effective for annual periods beginning on or after 1 January 2019

Amendments to IFRS 9, IAS 39 and IFRS 7: interest rate benchmark reform




4. Other income Financial Financial year ended year ended31-Dec-19 31-Dec-18

EUR EUROther income - arranger funding 76,363 48,510 Arranger income - Non-Series Subsidy* 4,000 4,000

80,363 52,510

5. Other expenses Financial Financial year ended year ended31-Dec-19 31-Dec-18

EUR EURProfessional fees (61,603) (31,290)Audit fees (9,840) (9,840)Tax fees (4,920) (7,380)

(76,363) (48,510)

Auditor's remuneration in respect of the financial year (excluding VAT): Financial Financial year ended year ended31-Dec-19 31-Dec-18

EUR EURAudit of individual company accounts (8,000) (8,000)Other assurance services - - Tax advisory services (4,500) (4,500)Other non-audit services - -

(12,500) (12,500)

6. TaxationFinancial Financial

year ended year ended31-Dec-19 31-Dec-18

EUR EURProfit before tax 4,000 4,000

1,000 1,000 1,000 1,000

7. 31-Dec-19 31-Dec-18EUR EUR

Receivable from Arranger 23,937 - Non Series Subsidy fees receivable* 4,000 - Preliminary tax - 1,000

27,937 1,000

*Non series subsidy fees is receivable from the Arranger.

Current tax at standard rate of 25%Current tax charge

Other receivables

Arranger funding is received from the Arranger to pay the expenses of the Company.

*Non-Series subsidy is a non-refundable fee amounting to EUR 4,000 for the financial year from 1 January 2019 to 31 December2019, which is taxable and which the Arranger agreed to pay to the Company on an annual basis to enable the Company to carryon its business and to remain financially capable to fulfil its obligations under the Programme.

The directors of the Company received no remuneration from the Company during the financial year (2018: EUR Nil). TheCompany has no employees and services required are contracted from third parties.

Pursuant to Section 305A(1)(a) of the Act, requires disclosure that VAIIL received EUR 1,000 (2018: EUR 1,000) per directorincluded in administration fees as consideration for the making available of individuals to act as directors of the Company. Theterms of the corporate services agreement in place between the Company and VAIIL provide for a single fee for the provision ofcorporate administration services (including the making available of individuals to act as directors of the Company). As a result,the allocation of fees between the different services provided is a subjective and approximate calculation. The individuals actingas directors do not (and will not), in their personal capacity or any other capacity, receive any fee for acting or having acted asdirectors of the Company. For the avoidance of doubt, notwithstanding that the directors of the Company are employees of VAIIL,they each do not receive any remuneration for acting as directors of the Company.

The Company will continue to be taxed at 25% (2018: 25%) in accordance with Section 110 of the Taxes Consolidation Act,1997.




8. Cash and cash equivalents31-Dec-19 31-Dec-18

EUR EURCash at bank 72,518 132,560

72,518 132,560

9. Other payables 31-Dec-19 31-Dec-18EUR EUR

Accrued expenses 45,571 60,770 Corporate tax payable to VAIIL 1,000 - Deferred income - 20,906

46,571 81,676 10. Called up share capital presented as equity

31-Dec-19 31-Dec-18Authorised EUR EUR40,000 ordinary shares of EUR 1 each 40,000 40,000

Issued and fully paid EUR EUR40,000 ordinary shares of EUR 1 each 40,000 40,000

EUR EURCalled up share capital presented as equity 40,000 40,000

11. Ownership of the Company

12. Transactions with related partiesTransactions with Administrator

Transactions with Arranger

13. Financial risk management

UniCredit Bank AG is the Arranger of the Company and paid the Company a fee for each new Series issued. In addition, all costsassociated with the Company are paid by the Arranger. All payments to and from the Arranger have been disclosed on theStatement of comprehensive income and related notes. During the financial year, a fee of EUR 9,840 (2018: EUR 9,840) relatingto audit fees, EUR 5,535 (2018: EUR 7,380) relating to tax advisory fees and EUR 61,603 (2018: EUR 31,290) relating toprofessional fees were incurred by the Company. As at 31 December 2019, an amount of EUR 27,937 was receivable from theArranger (2018: EUR Nil).

The Company had no other transactions with the Administrator or Arranger that require disclosure in the financial statements.

Introduction and overview

The Company is not engaged in any other activities.

The Company currently has no Series in issue. However, it is the intention of the directors for the Company to seek opportunitiesfor the issuance of new Series in the future.

The Administrator provides corporate administration services to the Company at commercial rates. The key managementpersonnel consist of two directors. Both directors are employees of VAIIL. Refer to note 5 for details of directors' remuneration.

A Board has been appointed to run the day-to-day activities of the Company. The Board have considered the issue as to who is thecontrolling party of the Company. It has determined that the control of the day-to-day activities of the Company rests with theBoard. The Board is composed of two directors, both are employees of VAIIL, being the entity that acts as the Administrator ofthe Company.

The Company has been established to trade under the Programme together with TransAlp 1 Securities Public Limited Companyand TransAlp 3 Securities Public Limited Company.

Presented as follows:

The shareholder of the Company is VCMIL holding 40,000 shares in the Company.

The Company's cash at bank is held with Deutsche Bank AG London (100%) (2018: 100%).




13. Financial risk management (continued)

(a)

31-Dec-19 31-Dec-18EUR EUR

72,518 132,560Other receivables 27,937 1,000

100,455 133,560

Long term Short term Long term Short term2019 2019 2018 2018

Standard & Poor's BBB+ A-2 BBB+ A-2Moody's A3 P-2 A3 P-2Fitch BBB+ F2 A- F2

Other receivables

(b)

(i)

(ii)

(iii)

(c)

Price risk

Market riskMarket risk embodies the potential for both losses and gains and includes interest rate risk, currency risk and price risk.The objective of market risk management is to manage and control market risk exposures within acceptable parameterswhile optimising the returns on risk.

Interest rate risk Interest rate risk is the risk that the Company does not receive interest from the underlying investments to secureinterest on the notes. The Company did not have any notes in issue as at 31 December 2019 and 31 December 2018and therefore is not exposed to any interest rate risk. Thus, no sensitivity analysis has been shown.

Currency riskCurrency risk relates to the risk of adverse fluctuations in the prevailing exchange rates of currencies in which theCompany maintains its assets and liabilities. The Company is not exposed to movements in exchange rates as allbalances held at 31 December 2019 and 31 December 2018 are in EUR.

Credit risk is the risk of the financial loss to the Company if a counterparty to a financial instrument fails to meet itscontractual obligations, and arises principally from the Company’s financial assets. The Company’s principal financialassets are cash and cash equivalents, which represents the Company’s maximum exposure to credit risk.

As at the reporting date, the Company's financial assets are as follows:

Cash and cash equivalents

(c) liquidity risk.(b) market risk; and(a) credit risk; The Company has exposure to the following risks from its use of financial instruments:

The Board has overall responsibility for the establishment and oversight of the Company’s risk management framework. The riskprofile of the Company is such that market, credit, liquidity and other risks of the investment securities are borne fully by theholders of loans issued.

Risk Management Framework

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financialliabilities that are settled by delivering cash or another financial asset and thus, the Company will not be able to meet itsfinancial obligations as they fall due. All costs associated with the Company are paid by the Arranger. The Company doesnot have any notes in issue as at 31 December 2019 and 31 December 2018. Therefore, no maturity profile has beendisclosed.

Liquidity risk

The Company has bank account with Deutsche Bank AG London which has the following ratings:

Credit risk

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to setappropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems arereviewed regularly to reflect changes in market conditions and the Company’s activities.

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies andprocesses for measuring and managing risk and the Company’s capital management.

Price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices(other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individualinvestment, its Company or all factors affecting all instruments traded in the market. The Company is not exposed toany price risk as at 31 December 2019 and 31 December 2018 since the Company did not hold any investments.

The Company has determined that the application of IFRS 9's impairment on other receivables results in an immaterialimpairment on other receivables. Other receivables include amount receivable from the Arranger and non-series subisdyfee as at the financial year end.




14. Capital disclosures

15. Subsequent eventsNovel Coronavirus COVID-19 Global Pandemic

16. Approval of financial statementsThe Board approved these financial statements on ……………………………………….

There were no other significant events after the financial year end up to the date of signing this report that require disclosureand/or adjustment in the financial statements.

The directors continue to assess the potential impact of the COVID-19 Global Pandemic on the Company. While the pandemic isdeveloping too quickly to allow for definitive conclusions, the directors currently believe that any impact on the operations of theCompany is likely to be limited as:

future notes issued will follow a similar structure to previous notes. The limited recourse nature of any future securitiesissued by the Company will limit the investors’ recourse to the underlying net assets of that particular debt securitiesissued. The investors will have no right to petition for insolvency proceedings against the Company in the event that theunderlying assets are insufficient to repay the principal amount of (or interest on) the debt securities issued. As peragreement, the Arranger has agreed to reimburse the Company against any costs, fees, expenses or out-goings incurred bythe Company. In light of this, the directors have concluded that the impact of the Coronavirus does not represent a material uncertainty in relation to the Company’s ability to continue as going concern through the date of the issuance of thesefinancial statements; andboth the Administrator and administrative agent have extensive business continuity plans, and should still be able toprovide services to the Company in the event of a prolonged pandemic.

The directors view the Company's share capital as its capital. The Company is an SPV which has been set up to issue debt for thepurpose of making investments as defined under the Programme memorandum and in each of the Series memorandumagreements. Share capital of EUR 40,000 was issued in line with Irish Company Law and is not used for financing the investmentactivities of the Company. The Company is not subject to any other externally imposed capital requirements.


Aug-04-2020

TransAlp 2 Securities Public Limited Company · London EC2N 2DB United Kingdom Independent Auditor...

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Transcript of TransAlp 2 Securities Public Limited Company · London EC2N 2DB United Kingdom Independent Auditor...