TIDMFPEO TIDMFPEZ TIDMTTM
RNS Number : 1147C
F&C Private Equity Trust PLC
11 April 2013
To: Stock Exchange For immediate release:
11 April 2013
F&C Private Equity Zeros plc
Audited results for the year to 31 December 2012
Chairman's Statement
I am pleased to present the Company's Annual Report and Accounts
for the year ended 31 December 2012.
The Company is a wholly owned subsidiary of F&C Private
Equity Trust plc ('F&C PET') and was established solely for the
purpose of issuing and redeeming Zero Dividend Preference Shares
('ZDP Shares'). 30,000,000 ZDP Shares were issued on 14 December
2009 at 100 pence per share and will redeem on 15 December 2014 at
a price of 152.14 pence per ZDP Share, giving a redemption yield of
8.75 per cent per annum. The net proceeds of the ZDP Shares issue
were lent to F&C PET for use in future investment
opportunities.
As at 31 December 2012 the ZDP Share price was 140.88 pence,
representing a premium of 10.7 per cent over the net asset value
per ZDP Share of 127.24 pence.
Mark Tennant
Chairman
F&C Private Equity Zeros plc
Audited Statement of Comprehensive Income
Year ended 31 December 2012
Year ended
31 December Year ended 31
2012 December 2011
GBP'000 GBP'000
----------------------------- ------------- ---------------
Revenue
Interest Income 572 561
----------------------------- ------------- ---------------
Total income 572 561
Expenditure
Expenses - -
----------------------------- ------------- ---------------
Total expenditure - -
----------------------------- ------------- ---------------
Profit before finance costs
and taxation 572 561
Finance costs (3,351) (3,048)
----------------------------- ------------- ---------------
Loss before taxation (2,779) (2,487)
Taxation - -
----------------------------- ------------- ---------------
Loss for the year (2,779) (2,487)
----------------------------- ------------- ---------------
Loss per Ordinary Share (5,558.00)p (4,974.00)p
----------------------------- ------------- ---------------
F&C Private Equity Zeros plc
Audited Balance Sheet
At 31 December 2012
2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ------------ ---------- --------------
Non current assets
Investments 48 50
Inter-company receivable 9,305 5,954
Subordinated Unsecured Loan
Note 27,721 27,149
37,074 33,153
Current assets
Other receivables 1 1
Cash at bank 7 5
Net current assets 8 6
--------------------------------------- ---------- ------------ ---------- --------------
Total assets less current liabilities 37,082 33,159
--------------------------------------- ---------- ------------ ---------- --------------
Creditors: amounts falling
due after one year
Zero Dividend Preference Shares (38,173) (34,822)
Net liabilities (1,091) (1,663)
--------------------------------------- ---------- ------------ ---------- --------------
Equity
Ordinary share capital 50 50
Capital contribution reserve 9,305 5,954
Other reserve (1,147) (1,719)
Revenue reserve (9,299) (5,948)
--------------------------------------- ---------- ------------ ---------- --------------
Shareholders' funds (1,091) (1,663)
--------------------------------------- ---------- ------------ ---------- --------------
Net liabilities per Ordinary
Share (2,182.00)p (3,326.00)p
--------------------------------------- ---------- ------------ ---------- --------------
Net asset value per ZDP Share 127.24p 116.07p
--------------------------------------- ---------- ------------ ---------- --------------
F&C Private Equity Zeros plc
Audited Statement of Changes in Equity
Year ended 31 December 2012
Capital Contribution Reserve
Other Revenue Reserve
Share Capital Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net liabilities at start of
year 50 5,954 (1,719) (5,948) (1,663)
Loss for the year - - - (2,779) (2,779)
Capital contribution during
the year - 3,351 - - 3,351
Transfer to other reserve - - 572 (572) -
----------------------------- -------------- ----------------------------- ---------- ------------------ --------
Net liabilities at 31
December 2012 50 9,305 (1,147) (9,299) (1,091)
----------------------------- -------------- ----------------------------- ---------- ------------------ --------
F&C Private Equity Zeros plc
Audited Statement of Changes in Equity
Year ended 31 December 2011
Capital Contribution Reserve
Other Revenue Reserve
Share Capital Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net assets at start of year
as previously stated 50 - - 3 53
Prior year adjustment - 2,906 (2,277) (2,906) (2,277)
----------------------------- -------------- ----------------------------- ---------- ------------------ --------
Net liabilities at start of
year (restated) 50 2,906 (2,277) (2,903) (2,224)
Loss for the year - - - (2,487) (2,487)
Capital contribution during
the year - 3,048 - - 3,048
Transfer to other reserve - - 558 (558) -
----------------------------- -------------- ----------------------------- ---------- ------------------ --------
Net liabilities at 31
December 2011 50 5,954 (1,719) (5,948) (1,663)
----------------------------- -------------- ----------------------------- ---------- ------------------ --------
F&C Private Equity Zeros plc
Audited Cash Flow Statement
Year ended 31 December 2012
Year ended 31 Year ended
December 2012 31 December
2011
GBP'000 GBP'000
------------------------------------------------- ---------------- --------------
Cash flows from operating activities
Loss before taxation (2,779) (2,487)
Non-cash adjustment to reconcile loss
before taxation to net cash flow:
Interest on Subordinated Unsecured Loan
Note (570) (558)
Working capital adjustment:
Change in inter-company receivable Subordinated
Unsecured Loan Note 3,351 3,048
------------------------------------------------- ---------------- --------------
Net cash inflow from operating activities 2 3
------------------------------------------------- ---------------- --------------
Increase in cash and cash equivalents 2 3
------------------------------------------------- ---------------- --------------
Cash and cash equivalents at beginning
of period 5 2
------------------------------------------------- ---------------- --------------
Cash and cash equivalents at end of period 7 5
------------------------------------------------- ---------------- --------------
Principal Risks and Uncertainties and Risk Management
The Board believes that the principal risks faced by the Company
are:
Final Capital Entitlement
The ZDP Shares offer a pre-determined rate of growth in capital
entitlement up to 152.14 pence per share on the repayment date of
15 December 2014, but no right of income.
F&C PET's debt to the Company is pursuant to the loan
agreement which ranks behind any secured creditors of F&C PET.
Therefore it is not guaranteed that the final capital entitlement
will be paid. On a return of assets, including a winding up of
F&C PET, the Company will only receive payment if there are
sufficient assets attributable to the Ordinary Shares of F&C
PET, having first taken account of prior ranked liabilities and
having regard to all other unsecured liabilities of F&C PET.
ZDP shares are not a secured, protected or guaranteed
investment.
Liquid Market for ZDP Shares
The market price and realisable value of the ZDP Shares, as well
as being affected by the underlying value of F&C PET's net
assets, will be affected by interest rates, supply and demand for
the ZDP Shares, market conditions and general investor sentiment.
As such, the market value and realisable value of a ZDP Share can
fluctuate and may not always reflect its accrued capital
entitlement. In addition, given the Company's size and type, there
is no guarantee that an active market will be sustained for the ZDP
Shares. If an active trading market is not maintained, the
liquidity and trading price of the ZDP Shares could be adversely
affected.
Macroeconomic and Investment Risks
The Company's obligation to pay the ZDP shareholders the final
capital entitlement is dependent upon F&C PET's ability to
comply with its obligations to the Company. This in turn is
impacted by F&C PET's performance and its ability to manage
macroeconomic and investment risk. A material fall in the value of
assets in the investment portfolio of F&C PET may lead to a
winding up of F&C PET in the longer term.
The performance of F&C PET's underlying investment portfolio
is principally influenced by a combination of economic growth, the
availability of appropriately priced debt finance, interest rates
and the number of active trade and financial buyers. All of these
factors have an impact on F&C PET's ability to invest, and its
ability to exit from its underlying portfolio or on the levels of
profitability achieved on exit. Financial results may be adversely
affected by movements in foreign exchange rates.
F&C PET operates in a very competitive market. Changes in
the number of market participants, the availability of funds within
the market, the pricing of assets, or in the ability of its
investment manager, F&C Investment Business Limited, to access
deals could have a significant effect of F&C PET's competitive
position and on sustainability of returns.
In order to source and execute good quality investments, F&C
PET is primarily dependent upon F&C Investment Business Limited
having the ability to attract and retain executives with the
requisite investment experience.
Once invested, the performance of the F&C PET's portfolio is
dependent on a range of factors. These include, but are not limited
to: (i) the quality of the initial investment decision; (ii) the
ability of the portfolio company to execute successfully its
business strategy; and (iii) actual outcomes against key
assumptions underlying the portfolio company's financial
projections. Any one of these factors could have an impact on the
valuation of a portfolio company and upon F&C PET's ability to
make a profitable exit from the investment within the desired
timeframe. Future F&C PET share issues, share buy backs or
raising new debt facilities in the longer term could dilute the
interests of the holders of ZDP Shares and lower the price of the
ZDP Shares.
Government Policy and Regulation Risk
F&C PET carries on business as an investment trust under
section 1158 of the Corporation Tax Act 2010. Continued status as
an investment trust is subject to F&C PET conducting its
affairs in a manner which will satisfy HM Revenue and Customs'
conditions for continued approval as an investment trust. Any
change in F&C PET's tax status, or in taxation legislation of
practice in the UK or elsewhere, could affect the value of
investments in F&C PET's investment portfolio and F&C PET's
ability to achieve its investment objective and could also affect
the tax treatment of the ZDP Shares and the tax treatment of the
final capital entitlement.
The Company is also exposed to risks in relation to its
financial instruments. Further details of these risks and the way
they are managed are contained in note 2.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable United
Kingdom law and those International Financial Reporting Standards
('IFRS') as adopted by the European Union.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they present fairly the
financial position, financial performance and cash flows of the
Company for that period. In preparing the financial statements the
Directors are required to:
-- select suitable accounting policies in accordance with IAS 8:
Accounting Policies, Changes in Accounting Estimates and Errors and
apply them consistently;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements of IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the Company's financial position and financial
performance;
-- state that the Company has complied with IFRS, subject to any
material departures disclosed and explained in the financial
statements; and
-- make judgements and estimates that are reasonable and prudent.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Responsibility Statements under the Disclosure and Transparency
Rules
Each of the Directors confirms that to the best of his or her
knowledge:
-- the financial statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
-- the Report of the Directors includes a fair review of the
development and performance of the business and the position of the
Company together with a description of principal risks and
uncertainties that it faces.
On behalf of the Board
Mark Tennant
Director
Notes
1. The results have been prepared in accordance with the
Companies Act 2006 and International Financial Reporting Standards
('IFRS') as adopted by the European Union.
2. Financial Instruments
The Company's financial instruments comprise fixed interest
investments, cash balances and liquid resources including debtors
and creditors.
Quoted non-current asset investments held are valued at bid
prices which equate to their fair values.
The main risks arising from the Company's financial instruments
are market risk, interest rate risk, liquidity risk and credit
risk.
Market Risk
Market risk embodies the potential for both losses and gains and
includes interest rate risk and price risk. The Company's
investment is listed on a recognised stock exchange.
Interest Rate Risk
The Company's financial assets are interest bearing, some of
which are at fixed rates and some at variable. As a result the
Company is subject to exposure to fair value interest rate risk due
to fluctuations in the prevailing levels of market interest
rates.
Liquidity and Funding Risk
This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
Liquidity risk is considered to be significant as the Company is
reliant upon the sale of assets within its parent undertaking,
which mainly comprises unlisted investments. Details of how this
risk is managed are contained within the financial statements of
the parent company.
Credit Risk
This is the risk that a counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has
entered with the Company.
3. Restatement for period ended 31 December 2010
The parent company issued to the Company a non interest bearing
subordinated unsecured loan note 2014 equal to the net proceeds of
the ZDP Shares issued which were lent by the Company to its parent
company under an agreement dated 1 December 2009. The loan is non
interest bearing. However, IAS 39 requires that the fair value of
the loan be calculated and the difference to the amount received
treated as interest over the life of loan. The 2010 figures have
been restated to reflect the deemed interest received on the loan
to the parent of GBP572,000 for the period ended 31 December
2010.
In addition, the parent company also entered into a subsidiary
capital contribution agreement whereby the parent company will
undertake to contribute such funds to the Company as will ensure
that the Company has, after repayment of the loan note by the
parent company, sufficient assets to satisfy the final capital
entitlement of the ZDP Shares. The contribution from the parent
company of GBP2,906,000 should have been recorded directly in
equity and not as income in the statement of comprehensive income.
The 2010 figures have been restated to reflect this error.
The effect of the restatements is summarised below:
At 31 December
2010
GBP'000
Provision of interest free loan to parent (2,849)
Interest Income 572
Decrease in carrying value of Subordinated
Unsecured Loan Note (2,277)
Movement in reserves
Increase in retained losses (2,906)
Increase in capital contribution reserve 2,906
Decrease in other reserve (2,277)
4. The loss per Ordinary Share is based on 50,000 Ordinary
Shares in issue during the year (2011: 50,000 Ordinary Shares).
The net liabilities per Ordinary Share is based on 50,000
Ordinary Shares in issue at the end of the year (2011: 50,000
Ordinary Shares).
Net asset value per ZDP Share is based on 30,000,000 ZDP Shares
in issue at the end of the year (2011: 30,000,000 ZDP Shares).
5. This announcement is not the Company's statutory accounts.
The statutory accounts for the year ended 31 December 2012 (on
which the audit report has been signed) will be delivered to the
Registrar of Companies.
6. A copy of the Annual Report and Accounts has been submitted
to the National Storage Mechanism and will shortly be available for
inspection at www.Hemscott.com/nsm.do
7. The Annual Report and Accounts for the year will be sent to
shareholders and are available for inspection at the Company's
registered office, 80 George Street, Edinburgh EH2 3BU and the
parent company's website www.fcpet.co.uk
For more information, please contact:
Hamish Mair (Investment Manager) 0131 718 1184
Gordon Hay Smith (Company Secretary) 0131 718 1018
hamish.mair@fandc.com / gordon.haysmith@fandc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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