Unaudited interim financial statements for the six month period ended
30 June 2009 of J.P. Morgan St
(Thomson Reuters ONE) - J.P. MORGAN STRUCTURED PRODUCTS B.V.Amsterdam, the NetherlandsInterim report for the six month period ended 30 June 2009J.P. MORGAN STRUCTURED PRODUCTS B.V.Interim report for the six month period ended 30 June 2009Contents PageManagement report 1 - 4Financial statements: Balance sheet 5 Income statement 6 Statement of changes in equity 7 Cash flow statement 8 Notes to the financial statements 9 - 13J.P. MORGAN STRUCTURED PRODUCTS B.V.Management report for the six month period ended 30 June 2009The directors present their report and the financial statements ofthe Company for the six month period ended 30 June 2009.Principal activityThe Company's primary activity is the management and issuance ofsecuritised derivatives comprising certificates, warrants and notesincluding equity linked, reverse convertible and market participationnotes, and the subsequent hedging of those risk positions.Review of businessDuring the period, the Company continued to issue securities. Theproceeds of the sale of the securities were used to enter intocertain economic hedging arrangements with other JPMorgan Chase & Co.(the Group) companies. The principal purpose of the hedgingarrangements entered into between the Company and the relevant Groupcompanies is to hedge against various risks associated with thesecurities issuance activity. In 2009, the Company issued securitiesin the Asia Pacific region, in Europe, the Middle East, Africa and alimited number in the United States of America.Key performance indicatorsThe results are monitored against expectations of the businessactivities. A more detailed description of the Group key performanceindicators may be found withing the Group annual report.Business environment, strategy and future outlook for the next sixmonthsThe primary objective of the Company will be the continueddevelopment of securitised products to be offered and sold to retail,'high net worth' and institutional investors principally outside ofthe United States of America, linked to a range of underlyingreference assets including equity, credit, interest rates,commodities and so called 'alternatives' such as funds and hedgefunds.Results and dividendsThe results for the period are set out on page 6 and show theCompany's profit for the year after taxation is $731,000 (2008:$5,640,000).No dividend was paid or proposed during the period (2008: $nil).DirectorsThe directors of the Company who served during the period and up tothe date of signing the management report were as follows:J.P. EverwijnJ.C.W. van BurgJ.C.P. van UffelenB.P. von Gunten (Resigned 1 February 2009)J.P. MORGAN STRUCTURED PRODUCTS B.V.Management report for the six month period ended 30 June 2009(continued)Principal risks and uncertaintiesThe primary activity of the Company is the issuance and holding ofsecuritised derivatives comprising certificates, warrants and notesincluding equity linked notes, reverse convertible notes and marketparticipation notes, reported as financial liabilities designated atfair value through profit or loss.The market, credit and liquidity risks resulting from the issuance ofthese instruments, are matched by simultaneously entering into equaland offsetting over the counter (OTC) transactions, reported asfinancial assets held for trading, with internal group companies sothat all such risks are effectively hedged. Regular checks are madeon open OTC transactions to ensure the continued effectiveness of theeconomic hedges in place.To the extent that settlement-related timing differences betweenissuance and the OTC hedge may result in funding requirements, theseare funded by the JPMorgan Chase Group undertakings involved in thetransaction.Liquidity riskLiquidity risk arises from the general funding needs of the Company'sactivities and in the management of its assets and liabilities. TheCompany's funding needs are provided by JPMorgan Chase Bank, N.A. orother Group companies whose liquidity management frameworks areintended to maximise liquidity access. To accomplish this, Groupmanagement uses a variety of liquidity risk measures that take intoconsideration market conditions, prevailing interest rates, liquidityneeds and the desired maturity profile.The Group's funding strategy is to ensure liquidity and diversity offunding sources to meet actual and contingent liabilities throughboth stable and adverse conditions. The Group holds sizeable amountsof marketable securities that are readily converted to cash, andprovide a buffer for dramatic market conditions.The Group's Asset-Liability Committee approves and oversees theexecution of the Group's liquidity policy and contingency fundingplan while Corporate Treasury formulates the Group's liquidity andcontingency planning strategies and is responsible for measuring,monitoring, reporting and managing the Group's and the Company'sliquidity risk profile.Credit riskCredit risk represents the risk that one party to a financialinstrument will cause a financial loss for the other party by failingto discharge an obligation. Each business within the Group has itsown independent credit risk management function, reporting to theChief Risk Officer. These units are responsible for making creditdecisions on behalf of the Company. They approve significant newtransactions and product offerings and exercise on behalf of thedirectors' final authority over credit risk assessment. They are alsoresponsible for monitoring the credit risk profile of the portfolioand reporting monthly to the Group's Operating Committee. The Boardof Directors have final authority over credit risk assessment for theCompany.The Group has developed policies and practices that are designed topreserve the independence and integrity of the approval and decisionmaking of extending credit and are intended to ensure credit risksare assessed accurately, approved properly, monitored regularly andmanaged actively at both the transaction and portfolio levels.J.P. MORGAN STRUCTURED PRODUCTS B.V.Management report for the six month period ended 30 June 2009(continued)Principal risks and uncertainties (continued)Market riskMarket risk represents the potential loss in value of portfolios andfinancial instruments caused by adverse movements in market variablessuch as interest and foreign exchange rates, credit spreads, andequity and commodity prices. Market Risk (MR) is a corporate riskgovernance function within the Group that is independent of the linesof business and identifies, measures, monitors and controls marketrisk. MR works in partnership with the business segments within theGroup and the directors of the Company and seeks to facilitateefficient risk/return decisions, reduce volatility in operatingperformance and refine and monitor market risk policies andprocedures.Since no single measure can reflect all aspects of market risk andbecause of the complexity of the range of products traded orstrategically managed within the Group, a combination of riskmanagement and measurement tools are used to analyse the market riskas follows: * Statistical risk measures * Value-at-Risk (VAR) * Risk identification for large exposures (RIFLE) * Non-statistical risk measures * Economic value stress tests * Earnings-at-risk stress tests * Other measures of position size and sensitivity to market movementsThe Group's VAR statistical measure gauges the potential loss fromadverse market moves in an ordinary market environment. Through theGroup's RIFLE system, risk managers identify worst-case losses thatcould arise from an unusual or specific event, such as a potentialtax change, and estimate the probabilities of such a loss. Thisinformation is then communicated to the appropriate level ofmanagement, thereby permitting the Group and the directors of theCompany to identify further earnings vulnerabilities. MR regularlyreviews and updates risk limits, and the Group's Operating Committeereviews and approves risk limits at least twice a year.Operational riskOperational risk is the risk of loss resulting from inadequate orfailed processes or systems, human factors or external events. Tomonitor and control operating risk, the Group and the Companymaintain a system of comprehensive policies and a control frameworkdesigned to provide a sound and well-controlled operationalenvironment.Creditor payment policyAll invoices from suppliers are settled on the Company's behalf by anaffiliated Group company, JPMorgan Chase Bank, N.A.JPMorgan Chase Bank, N.A.'s policy is to pay invoices (includingthose in respect of the Company) upon presentation, except whereother arrangements have been negotiated with the supplier. It is thepolicy of the Company to abide by the terms of payment, provided thesupplier performs according to the terms of the contract.Registered addressStrawinskylaan 3105, Floor 71077 ZX Amsterdam,The NetherlandsJ.P. MORGAN STRUCTURED PRODUCTS B.V.Management report for the six month period ended 30 June 2009(continued)Expected development of the CompanyThe directors of the Company expect:- that the Company will continue to issue securities;- that the Company will not enter into investments; and- that the interest income will depend on market saving ratedevelopmentsStatement under Transparency Directive (as implemented in Dutch law).The directors confirm to the best of their knowledge that:a) the attached financial statements are prepared in accordance withInternational Financial Reporting Standards (IFRSs), give a true andfair view of the assets, liabilities, financial position and profitor loss of the Company for the six month period ended 30 June 2009,andb) the interim report for the six-month period ended 30 June 2009,consisting of the management report and the financial statements,gives a true and fair view of the position as per the balance sheetdate 30 June 2009 and of the development during the six month periodof the Company and of the expected development of the Company, and ofcircumstances on which the development of the profitability depend.By order of the Board__________________ __________________J.P. Everwijn J.C.W. van Burg__________________J.C.P. van UffelenDate: August 2009J.P. MORGAN STRUCTURED PRODUCTS B.V.Balance sheet as at 30 June 2009 Unaudited 30 June 31 December 2009 2008 Notes $'000 $'000AssetsCurrent assetsFinancial assets held for trading 4 24,957,411 17,002,231Trade and other receivables 5 167,100 123,702Current tax asset 5,051 3,991Cash and cash equivalents 6 564,041 571,429Total assets 25,693,603 17,701,353LiabilitiesCurrent liabilitiesFinancial liabilities designated at fair 7 24,957,411 17,002,231value through profit or lossTrade and other payables 8 130,378 24,689Bank overdraft 6 81,598 150,948Total liabilities 25,169,387 17,177,868EquityCapital and reserves attributable toequity shareholders of the CompanyShare capital 9 26 26Share premium reserve 499,997 499,997Legal reserve 2 2Retained earnings 24,191 23,460Total equity 524,216 523,485Total liabilities and equity 25,693,603 17,701,353By the order of the Board__________________ __________________J.P. Everwijn J.C.W. van Burg__________________J.C.P. van UffelenDate: August 2009The notes on pages 9 - 13 form an integral part of the financialstatements.J.P. MORGAN STRUCTURED PRODUCTS B.V.Income statement for the six month period ended 30 June 2009 Unaudited Unaudited 30 June 30 June 2009 2008 Notes $'000 $'000Trading profit - -Fee and commission income 10 2,385 2,279Fee and commission expense 10 (2,164) (2,120)Administrative expenses 135 -Net foreign exchange gain 74 -Operating profit 430 159Interest and similar income 11 531 7,412Profit before income tax 961 7,571Income tax expense 12 (230) (1,931)Profit for the period attributable to 731 5,640equity shareholders of the CompanyThe profit for the period resulted from continuing operations.The notes on pages 9 - 13 form an integral part of the financialstatements.J.P. MORGAN STRUCTURED PRODUCTS B.V.Statement of changes in equity for the six month period ended 30 June2009(unaudited) Share Share premium Legal Retained Total capital reserve reserve earnings equity $'000 $'000 $'000 $'000 $'000Balance at 1 January 2009 26 499,997 2 23,460 523,485Profit for the period - - - 731 731Balance at 30 June 2009 26 499,997 2 24,191 524,216Balance at 1 January 2008 26 499,997 4 14,275 514,302Share premium on issue of - - - - -ordinary sharesProfit for the period - - - 5,640 5,640Transfer from retained - - 2 (2) -earnings to legal reserveBalance at 30 June 2008 26 499,997 6 19,913 519,942The notes on pages 9 - 13 form an integral part of the financialstatements.J.P. MORGAN STRUCTURED PRODUCTS B.V.Cash flow statement for the six month period ended 30 June 2009 Unaudited Unaudited 30 June 30 June 2009 2008 Notes $'000 $'000Cash flow from operating activitiesProfit before income tax 961 7,571Income tax paid (1,290) (4,141)Interest income 11 (531) (7,412)Foreign exchange on operating (74) 12activities (934) (3,970)Changes in working capitalFinancial assets held for trading (7,955,180) (7,571,473)Trade and other receivables (43,398) (59,612)Financial liabilities designated at 7,955,180 7,571,473fair value through profit or lossTrade and other payables 105,689 782,865Net cash from operating activities 61,357 719,103Cash flow from investing activitiesInterest income 11 531 7,412Net cash generated from investing 531 7,412activitiesNet increase in cash and cash 61,888 726,515equivalentsCash and cash equivalents at the 420,481 519,517beginning of the periodEffect of realised exchange rate 74 12changes on cash and cash equivalentsCash and cash equivalents at the end of 6 482,443 1,246,020the periodThe notes on pages 9 - 13 form an integral part of the financialstatements.J.P. MORGAN STRUCTURED PRODUCTS B.V.Notes to the financial statements for the six month period ended 30June 20091. General informationJ.P. Morgan Structured Products B.V. (the "Company") was incorporatedon 6 November 2006 as a private company with limited liability underthe laws of The Netherlands. These interim financial statementsreflect the operations of the Company during the period from 1January 2009 to 30 June 2009. The interim financial statements haveneither been audited nor reviewed by the external auditors.The Company's main activity is the issuance of securitisedderivatives comprising certificates, warrants and notes includingequity linked, reverse convertible and market participation notes,and the subsequent hedging of those risk positions.2. Basis of preparationThis condensed interim financial information for the six month periodended 30 June 2009 has been prepared in accordance with IAS 34,'Interim financial reporting'. The condensed interim financialinformation should be read in conjunction with the annual financialstatements for the year ended 31 December 2008, which have beenprepared in accordance with International Financial ReportingStandards.3. Accounting PoliciesThe interim financial statements have been prepared on the goingconcern basis and under the historical cost convention as modified bythe revaluation of certain financial instruments. The interimfinancial statements have also been prepared using accountingpolicies consistent with those adopted by the Company in its annualfinancial statements for the year ended 31 December 2008.4. Financial assets held for trading Unaudited 30 June 31 December 2009 2008 $'000 $'000Financial assets held for trading 24,957,411 17,002,2315. Trade and other receivables Unaudited 30 June 31 December 2009 2008 $'000 $'000Amounts owed by Group undertakings 167,100 123,702J.P. MORGAN STRUCTURED PRODUCTS B.V.Notes to the financial statements for the six month period ended 30June 2009(continued)6. Cash and cash equivalents Unaudited 30 June 31 December 2009 2008 $'000 $'000Cash placed with Group undertakings 537,380 542,710Balances with third party 26,661 28,719Cash and cash equivalents 564,041 571,429Balances due to Group undertakings (60,529) (143,331)Balances due to third parties (21,069) (7,617) 482,443 420,4817. Financial liabilities designated at fair value through profit andloss Unaudited 30 June 31 December 2009 2008 $'000 $'000Financial liabilities designated at fair value 24,957,411 17,002,231through profit and lossIncluded within financial liabilities designated at fair valuethrough profit or loss are financial instruments for which fairvalues are derived in whole or in part from appropriate pricing orvaluation techniques that are not based on directly observable markettransactions. The directors consider that the Company is perfectlyhedged and that there would be no impact due to movement in the fairvalue of the financial liabilities held for trading to the results ofthe Company.For financial liabilities designated at fair value through profit orloss there is no difference between the carrying value and the amountrequired to pay at maturity to the holder of the obligation.8. Trade and other payables Unaudited 30 June 31 December 2009 2008 $'000 $'000Trade creditors 3,717 5,265Amounts owed to Group undertakings 126,661 19,424 130,378 24,689J.P. MORGAN STRUCTURED PRODUCTS B.V.Notes to the financial statements for the six month period ended 30June 2009(continued)9. Share capital Unaudited 30 June 31 December 2009 2008 '000 '000Authorised share capital90,000 Ordinary shares of ?1.00 each ? 90 ? 90Issued and fully paid share capital20,000 Ordinary shares of ?1.00 each $ 26 $ 2610. Fee and commissionAll fee and commission income is receivable from other Groupundertakings.All fee and commission expense are paid by other Group undertakingsand reimbursed by the Company.11. Interest and similar income Unaudited Unaudited 30 June 30 June 2009 2008 $'000 $'000Interest and similar income 531 7,412All interest income is receivable from other Group undertakings.12. Current income tax Unaudited Unaudited 30 June 30 June 2009 2008Income tax expense: $'000 $'000Current tax 230 1,931Tax on profit on ordinary activities 230 1,931Profit for the year before tax 961 7,571Tax calculated at applicable tax rates 230 1,931Income tax expense 230 1,931J.P. MORGAN STRUCTURED PRODUCTS B.V.Notes to the financial statements for the six month period ended 30June 2009 (continued)13. Related party transactionsRelated parties comprise:(a) Directors and shareholders of the Company and companies in whichthey have an ownership interest;(b) Group undertakings of the Company.The Company's parent undertaking is detailed in note 14. There wereno transactions with the parent undertaking during the period.Related party transactions, outstanding balances at period end, andincome and expenses for the period, relating to normal businessactivities are as follows:(i) Outstanding balances at period end Unaudited Unaudited Unaudited JPMorgan Chase Unaudited JPMorgan Chase Directors group Directors group undertakings undertakings 30 June 30 June 2009 31 December 31 December 2009 2008 2008 $'000 $'000 $'000 $'000Financial assets - 24,957,411 - 17,002,231held for tradingTrade and other - 167,100 - 123,702receivablesCash and cash - 537,380 - 542,710equivalentsBank overdraft (60,529) (143,331)Trade and other - (126,661) - (19,424)payables(ii) Income and Unaudited Unauditedexpenses Unaudited JPMorgan Chase Unaudited JPMorgan Chase Directors group Directors group undertakings undertakings 30 June 30 June 2009 30 June 30 June 2008 2009 2008 $'000 $'000 $'000 $'000Fees and - 2,385 - 2,279commission incomeFees and - (2,164) - (2,120)commissionexpenseInterest income - 531 - 7,412There was no remuneration paid to the directors of the Company.Included within fees and commission expenses was $1,017,275 (2008:$304,934) charged by Equity Trust Co. N.V., which share the followingdirector with the Company:J.C.W. van BurgThe Company had no employees, at any time during the period.J.P. MORGAN STRUCTURED PRODUCTS B.V.Notes to the financial statements for the six month period ended 30June 2009(continued)14. Parent undertakingThe Company's immediate parent undertaking is J.P. MorganInternational Finance Limited which is incorporated in the state ofDelaware in the United States of America.The Company's ultimate parent undertaking and the parent undertakingof the largest group in which the results of the Company areconsolidated, is JPMorgan Chase & Co., which is also incorporated inthe state of Delaware in the United States of America.The parent undertaking of the smallest group in which the Company'sresults are consolidated is J.P. Morgan International FinanceLimited.The largest and the smallest groups' consolidated financialstatements can be obtained from:The Company Secretary125 London WallEC2Y 5AJLondonThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 28.08.2009 - 14:01 Uhr
Sprache: Deutsch
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