TIDMELTZ
RNS Number : 3534T
Electra Private Equity Invest PLC
06 December 2011
EMBARGOED UNTIL 07:00 AM, TUESDAY 6 DECEMBER 2011
ELECTRA PRIVATE EQUITY INVESTMENTS PLC
Audited Results for Full Year ended 30 September 2011
The information contained in this announcement is restricted and
is not for release, publication, or distribution, directly or
indirectly, nor does it constitute an offer of securities for sale
in the United States, Canada, Japan, Australia or New Zealand.
References in this announcement to Electra Private Equity
Investments PLC have been abbreviated to 'the Company'. References
to the Company's parent company, Electra Private Equity PLC, have
been abbreviated to 'Electra'. References to Electra Partners LLP,
Electra's Manager, have been abbreviated to 'Electra Partners'.
Corporate Summary of ZDP Shares
Group Asset Cover at 30 September 2011: 11.2 times Final Capital
Entitlement as at 5 August 2016.
Redemption Yield of 6.5% based on initial placing of 100p per
ZDP Share.
Final Capital Entitlement per ZDP Share of 155.41p on 5 August
2016.
The figures below show the movement in the middle market share
price from the first day the ZDP Shares were listed on 5 August
2009 through to 30 September 2011. The initial placing price of the
ZDP Shares was 100p.
Share Price of ZDP Shares
Share price
p
--------------- ------------
5 August 2009 102.0
30 September
2009 106.8
31 March 2010 107.8
30 September
2010 115.5
31 March 2011 116.1
30 September
2011 119.0
--------------- ------------
The ZDP Shares offer a pre-determined rate of growth in capital
entitlement up to the repayment date of 5 August 2016 but no right
of income. The ZDP Shares rank ahead of Electra's Ordinary
Shareholders and Subordinated Convertible Bondholders but behind
any bank borrowings of Electra. The Final Capital Entitlement for
the ZDP Shares is not guaranteed should Electra's net assets be
insufficient on the repayment date of 5 August 2016.
The ZDP Shares do not normally carry voting rights at general
meetings of the Company. The separate approval of a special
resolution of holders of the Company's ZDP Shares is required for
certain proposals which would be likely to affect their rights or
general interests.
Chairman's Statement
I am pleased to present the Company's Annual Report and Accounts
for the year ended 30 September 2011.
The Company is a wholly owned subsidiary of Electra Private
Equity PLC ('Electra') and was established solely for the purpose
of issuing and redeeming Zero Dividend Preference ('ZDP') Shares.
Further details can be found elsewhere in this Annual Report and
Accounts.
ZDP Shares
Following the ZDP Share issues in 2009, the Company has not
issued any further ZDP Shares.
The 2009 ZDP Share issues raised a total of GBP46 million of net
proceeds. Pursuant to a loan agreement between the Company and
Electra, in 2009 the Company lent to Electra the whole of the net
proceeds and these funds continue to be managed in accordance with
the investment policy of Electra. This loan is on terms requiring
its repayment by Electra to the Company at any time up to or
immediately prior to the ZDP repayment date.
Electra has undertaken that, at any time up to or immediately
prior to the ZDP repayment date, it will subscribe for such number
of ordinary shares in the Company as is necessary to provide the
Company on the ZDP repayment date (after taking into account the
monies to be received by it on repayment of the loan) with
sufficient funds to meet the repayment obligations in respect of
the ZDP Shares.
Board Composition
Ron Armstrong and Peter Williams retired as Directors of the
Company on 24 February 2011. Both also retired as Directors of
Electra on the same date.
Roger Perkin and I were respectively a Director and Chairman of
the Company throughout the year and were joined on the Board by
Michael Walton when he was appointed a Director of the Company on
31 March 2011. All of the Directors of the Company are also
Directors of Electra.
Outlook
The Board believes that the Company will be in a position to
fulfil its requirement to meet the Final Capital Entitlement to the
ZDP Shareholders in August 2016.
Dr Colette Bowe
Chairman
5 December 2011
Report of the Directors
To the Members of Electra Private Equity Investments PLC
The Directors present the audited Accounts of the Company for
the year ended 30 September 2011 and their Report on its
affairs.
Business Review
The Company is a subsidiary of Electra, which owns the entire
issued ordinary share capital of the Company.
This Business Review describes the business of the Company and
details the main risks and uncertainties associated with the
Company's activities, taking into account performance as measured
by the Key Performance Indicators ('KPIs').
Objective
The objective of the Company is to provide the final capital
entitlement of the Company's Zero Dividend Preference ('ZDP')
Shares to the Zero Dividend Preference Shareholders at the
repayment date of 5 August 2016.
Current and Future Development
A review of the main features of the year is contained in the
Corporate Summary of ZDP Shares and in the Chairman's Statement on
pages 1 and 2.
Performance
A number of performance measures are considered by the Board in
assessing the Company's success towards achieving its objective.
The KPIs used to measure the progress and performance of the
Company are as follows:
-- Group Asset Cover
-- The movement in share price
Details of the KPIs are shown on page 1.
Risk Management
The Company is a wholly owned subsidiary of Electra which was
established solely for the purpose of issuing and redeeming ZDP
Shares, and accordingly the principal risks facing the Company
include Market Price Risk, Liquidity Risk and Capital Risk as
further detailed in Note 12 of the Notes to the Accounts. In
addition, the Company is also focused on the following risks:
Final Capital Entitlement
Electra's debt to the Company is pursuant to the loan agreement
which ranks behind any secured creditors of Electra. Therefore it
is not guaranteed that the final capital entitlement will be paid.
On a return of assets, including a winding up of Electra, the
Company will only receive payment if there are sufficient assets of
Electra, having first taken account of prior ranked liabilities and
having regard to all other unsecured liabilities of Electra. 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 Electra'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 the realisable value (prior to redemption) 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 Electra's ability to comply
with its obligations to the Company. This in turn is impacted by
Electra's performance and its ability to manage macroeconomic and
investment risk. A material fall in the value of the assets in the
investment portfolio of Electra may lead to the winding up of
Electra in the longer term.
The performance of Electra's underlying investment portfolio is
principally influenced by a combination of economic conditions, 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 Electra's ability to invest, Electra's
ability to exit from its underlying portfolio and the levels of
profitability achievable on exit.
Electra 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 Manager,
Electra Partners, to access deals could have a significant effect
on Electra's competitive position and on the sustainability of
returns.
In order to source and execute good quality investments, Electra
is primarily dependent upon Electra Partners having the ability to
attract and retain executives with the requisite investment
experience and whose compensation is in line with Electra's
objectives.
Once invested, the performance of the Electra portfolio is
dependent upon 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 the 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 Electra's ability to make
a profitable exit from the investment within the desired timeframe.
Future Electra share issues, share buy backs or raising new debt
facilities in the longer term could dilute the interests of the ZDP
Shareholders and reduce the price of the ZDP Shares.
Government Policy and Regulation Risk
Electra carries on business as an investment trust under section
1158 of the Corporation Taxes Act 2010. Retention of investment
trust status is subject to Electra conducting its affairs in a
manner which will satisfy annually the HM Revenue and Customs
conditions for continuing approval as an investment trust. Any
change in Electra's tax status, or in taxation legislation or
practice in the UK or elsewhere, could affect the value of
investments in Electra's investment portfolio and Electra'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.
Corporate Governance
The Company has a "Standard" listing on the London Stock
Exchange and so is not required to comply with the UK Corporate
Governance Code but it is committed to appropriately high standards
of corporate governance. The Company's corporate governance
arrangements are described on pages 7 and 8.
Community, Employee and Environmental Issues
In carrying out its activities and in its relationships with the
community, the Company aims to conduct itself responsibly,
ethically and fairly. The Company has no employees and the Board is
comprised entirely of non-executive Directors. In common with its
parent Company Electra, the Company has no direct impact on the
environment.
Share Capital
At 30 September 2011 there was a total of 50,000 ordinary shares
of GBP1.00 each in issue.
Zero Dividend Preference Shares
At 30 September 2011 there was a total of 47,295,000 ZDP Shares
of 0.01 pence each in issue.
In accordance with the Company's Articles of Association, the
ZDP Shares carry no entitlement to any dividends or other
distributions or to participate in the revenue or any other profits
of the Company. The ZDP Shareholders have no right to receive
notice of, or to attend or vote at, any general meeting of the
Company except in those circumstances set out in the Company's
Articles of Association.
Directors
The current Directors of the Company are listed on page 19. Dr
Bowe and Mr Perkin served as Directors throughout the year ended 30
September 2011. Mr Walton was appointed a Director of the Company
on 31 March 2011. Mr Armstrong and Mr Williams were Directors of
the Company until they retired at the conclusion of the Annual
General Meeting of ordinary shareholders held on 24 February 2011.
No other person was a Director of the Company during any part of
the year under review. Dr Bowe will retire at the Annual General
Meeting of ordinary shareholders in 2012 and, being eligible,
offers herself for re-election. Mr Walton will offer himself for
election at the Annual General Meeting in 2012. Short biographical
details of the Directors are shown on page 19.
Dr Bowe, Mr Perkin and Mr Walton are all Directors of the
Company's parent company Electra.
Directors' Conflicts of Interest
Each of the Directors is also a Director of Electra and is
accordingly to be regarded as interested in any transaction or
arrangement that may be made with Electra. The Boards of Electra
and the Company have agreed that each Director of the Company is
authorised to continue to act as a Director of the Company and of
Electra and to consider and approve transactions or arrangements
between the Company and its parent, notwithstanding his or her
interest in such matters as a result of his or her appointment as a
Director of either Board.
The Board considers the matter of potential conflicts of
interest on a regular basis and it has been agreed that to date
none of the Directors has a conflict of interest.
Directors' Interests
None of the Directors had an interest in either the ordinary
shares or the ZDP Shares of the Company during the period under
review and there have been no changes in this position between 1
October 2011 and 5 December 2011.
The interests of the Directors in the Ordinary Shares and 5%
Subordinated Convertible Bonds of Electra, the Company's parent
company, are shown in Electra's Report and Accounts for the year
ended 30 September 2011.
None of the Directors has a service contract with the
Company.
Directors' Indemnity
Directors' and Officers' Liability insurance cover has been put
in place. In addition, the Company's Articles of Association
provide, subject to the provisions of applicable UK legislation, an
indemnity for Directors in respect of costs incurred in the defence
of any proceedings brought against them by third parties arising
out of their positions as Directors, in which they are acquitted or
judgement is given in their favour.
Substantial Interests
At 5 December 2011 Electra owned 100% of the voting rights in
the Company's ordinary share capital.
Auditors
A resolution to re-appoint PricewaterhouseCoopers LLP as
Auditors of the Company will be proposed at the Annual General
Meeting of the Company's ordinary shareholders in 2012. A separate
resolution will be proposed at the Annual General Meeting
authorising the Directors to determine the remuneration of the
Auditors.
The auditors PricewaterhouseCoopers LLP have indicated their
willingness to continue in office.
Audit Information
Each of the Directors confirms that so far as they are aware,
there is no relevant audit information of which the Company's
Auditors are unaware and the Directors have taken all steps they
ought to have taken to make themselves aware of any relevant audit
information and to establish that the Company's Auditors are aware
of that information.
Significant Agreements
Pursuant to the Intercompany Loan Agreement between the Company
and Electra documenting the loan from the Company to Electra of the
net proceeds of the ZDP share placing, Electra is required to repay
the loan to the Company immediately prior to the ZDP Repayment
Date, being 5 August 2016.
These funds are to be managed in accordance with the investment
policy of Electra.
Pursuant to the undertaking between the Company and Electra,
Electra has undertaken that it will subscribe for such number of
ordinary shares in the Company as is necessary to provide the
Company on the ZDP Repayment Date in August 2016 (after taking into
account the monies received by the Company on repayment of the
loan) with sufficient funds to meet the repayment obligations in
respect of the ZDP Shares.
Creditor Payment Policy
The Company agrees the terms of payment with its suppliers when
agreeing the terms of each agreement. Suppliers are aware of the
terms of payment and the Company abides by the terms of
payment.
Going Concern
The Directors believe that it is appropriate to continue to
adopt the going concern basis in preparing the Accounts as the
Company has adequate resources to continue in operational existence
for the foreseeable future.
By order of the Board of Directors
Frostrow Capital LLP, Company Secretary
25 Southampton Buildings, London WC2A 1AL
5 December 2011
Corporate Governance
The Company has a "Standard" listing on the London Stock
Exchange and so is not required to comply with the UK Corporate
Governance Code but it is committed to appropriately high standards
of corporate governance. The Company's corporate governance
arrangements are described below.
The Board of Directors
The Company is a wholly owned subsidiary of Electra. The Company
is managed by the Board, which comprises three non-executive
directors. Dr Bowe and Mr Perkin served as Directors throughout the
year ended 30 September 2011. Mr Walton was appointed a Director of
the Company on 31 March 2011. It is the responsibility of the Board
to ensure that there is effective stewardship of the Company's
affairs. All decisions are taken by the Board and the Board meets
as required to discharge its duties. The Board met four times
during the year and all Directors attended all the meetings held
while they were appointed as Director.
The Board receives information that it considers to be
sufficient and appropriate to enable it to discharge its duties.
Directors receive board papers several days in advance of Board
meetings and are able to consider in detail any issues to be
discussed at the relevant meeting.
The Directors believe that the Board has an appropriate balance
of skills and experience, independence and knowledge of the Company
to enable it to provide effective strategic leadership and proper
governance of the Company. Information about the Directors,
including their relevant experience can be found on page 19.
Given the nature of the Company's business and the number of
directors, the Directors have not established separate Committees
of the Board but deal with all business themselves.
Independence of the Board
All the Directors were non-executive Directors of the Company's
parent company, Electra, throughout the year.
The Board has carefully considered the independence of each
Director and, notwithstanding the cross-directorships detailed
above, has concluded that each Director is wholly independent on
the basis that the Board firmly believes that independence is a
state of mind and the character and judgement which accompany this
are distinct from and are not compromised by length of service.
The Board did not undertake a separate formal appraisal process
of its own operations and performance during the year or separate
director appraisals as these processes were covered by the
appraisals carried out by the Board of Electra, as described in the
Report and Accounts of that company for the year ended 30 September
2011.
Directors' Terms of Appointment
It is the Board's policy that Directors shall retire and be
subject to appointment by shareholders at the first Annual General
Meeting following their appointment by the Board and be subject to
re-election at least every third year thereafter.
Re-election of Directors
In accordance with the Company's Articles, Dr Bowe will retire
at the Annual General Meeting to be held in 2012 and offers herself
for re-election and Mr Walton will offer himself for election at
the Annual General Meeting in 2012. Biographical details of the
Directors seeking election or re-election are set out on page
19.
Independent Professional Advice
Individual Directors may seek independent professional advice in
furtherance of their duties at the Company's expense within certain
parameters. All Directors have access to the advice and services of
the Company Secretary.
Company Secretary
Frostrow Capital LLP acted as the independent Company Secretary
in addition to its role as Board Advisor during the year under
review.
Induction and Training
New Directors are provided with an induction programme which is
tailored to the particular circumstances of the appointee and which
includes being briefed fully about the Company by the Chairman,
senior executives of Electra Partners and the Company Secretary.
Following appointment, the Chairman regularly reviews and agrees
with Directors their training and development needs as necessary to
enable them to discharge their duties.
Internal Control
The Board confirms that it has an ongoing process for
identifying, evaluating and managing the significant risks faced by
the Company. This process has been in place throughout the year and
has continued since the year end. It is reviewed at regular
intervals by the Board.
The Board is responsible for the Company's system of internal
control and has reviewed its effectiveness for the year ended 30
September 2011. This review encompasses all controls including
financial, operational and compliance controls and risk management.
The system of internal control is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and
can only provide reasonable and not absolute assurance against
material misstatement or loss.
The Company's annual financial statements and half-yearly
financial statements are prepared in accordance with applicable
regulatory requirements.
The Company's system of internal control mainly comprises the
regular monitoring by the Board of the key investment and financial
data of the Company's parent Electra and the review of the
Company's own financial statements.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company Law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. Under Company Law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable International Financial Reporting
Standards (IFRSs) as adopted by the European Union have been
followed;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
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.
The financial statements are published on
www.electraequity.com/eltz, which is a website maintained by
Electra Partners. The maintenance and integrity of the website is,
so far as it relates to the Company, the responsibility of Electra
Partners. The work carried out by the auditors does not involve
consideration of the maintenance and integrity of this website and,
accordingly, the auditors accept no responsibility for any changes
that have occurred to the financial statements since they were
initially presented on the website. Visitors to the website need to
be aware that legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed in
Board of Directors section of the Annual Report confirm that, to
the best of their knowledge:
-- the Company financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and loss of the
Company; and
-- the Report of Directors contained in the Reports section of
the Annual Report includes a fair review of the development and
performance of the business and the position of the Company,
together with a description of the principal risks and
uncertainties that it faces.
By order of the Board of Directors
Dr Colette Bowe
Paternoster House, 65 St Paul's Churchyard, London, EC4M 8AB
5 December 2011
Independent Auditors' Report
To Electra Private Equity Investments PLC
We have audited the financial statements of Electra Private
Equity Investments PLC for the year ended 30 September 2011 which
comprise the Statement of Comprehensive Income, the Statement of
Changes in Equity, the Balance Sheet, the Statement of Cash Flow
and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors'
Responsibilities set out on page 9, 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 applicable 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 Chapter
3 of Part 16 of the Companies Act 2006 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.
Scope of the audit of the financial statements
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. In addition, we
read all the financial and non-financial information in the Annual
Report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 30 September 2011 and of its loss and cash flows for
the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion the information given in the Report of the
Directors for the financial year for which the financial statements
are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Mark Pugh (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 December 2011
Statement of Comprehensive Income
Period
23 April
Year ended 2009 to
30 Sept 30 Sept
2011 2010
Note GBP'000 GBP'000
----- ----------------------------------------- ----------- -----------
3 Income 2,138 2,322
4 Expenses (31) (120)
----- ----------------------------------------- ----------- -----------
Net profit before finance costs
and taxation 2,107 2,202
----- ----------------------------------------- ----------- -----------
6 Finance costs (3,474) (3,657)
----- ----------------------------------------- ----------- -----------
Loss on ordinary activities before
taxation (1,367) (1,455)
7 Taxation 282 (562)
----- ----------------------------------------- ----------- -----------
Loss on ordinary activities attributable
to the owners of the parent (1,085) (2,017)
Other comprehensive income - -
----- ----------------------------------------- ----------- -----------
Total comprehensive loss for the
period (1,085) (2,017)
----- ----------------------------------------- ----------- -----------
Basic and diluted earnings per
9 ordinary share GBP(21.70) GBP(40.34)
----- ----------------------------------------- ----------- -----------
The amounts dealt with in the Statement of Comprehensive Income
are all derived from continuing activities.
Statement of Changes in Equity
Called-up
For the year ended 30 September share Revenue Total shareholders'
2011 capital reserves funds
GBP'000 GBP'000 GBP'000
--------------------------------- ---------- ---------- --------------------
Total equity at 1 October
2010 50 (2,017) (1,967)
Total comprehensive loss for
the period - (1,085) (1,085)
--------------------------------- ---------- ---------- --------------------
Total equity attributable
to the owners of the parent
at 30 September 50 (3,102) (3,052)
--------------------------------- ---------- ---------- --------------------
Statement of Changes in Equity
Called-up
For the period ended 30 September share Revenue Total shareholders'
2010 capital reserves funds
GBP'000 GBP'000 GBP'000
----------------------------------- ---------- ---------- --------------------
Ordinary shares issued in period 50 - 50
Total comprehensive loss for
the period - (2,017) (2,017)
----------------------------------- ---------- ---------- --------------------
Total equity attributable to
the owners of the parent at
30 September 50 (2,017) (1,967)
----------------------------------- ---------- ---------- --------------------
Balance Sheet
As at 30 Sep
As at 30 Sep 2011 2010
Note GBP'000 GBP'000
----- --------------------------- ------------------ -------------
Current Assets
10 Loans and receivables 49,485 47,840
Current tax asset 182 -
Cash and cash equivalents 315 315
----- --------------------------- ------------------ -------------
49,982 48,155
----- --------------------------- ------------------ -------------
Current Liabilities
Current tax liability - (562)
Other payables - -
----- --------------------------- ------------------ -------------
Net Current Assets 49,982 47,593
----- --------------------------- ------------------ -------------
Non-current Liabilities
Zero dividend preference
11 shares (53,034) (49,560)
----- --------------------------- ------------------ -------------
Net Liabilities (3,052) (1,967)
----- --------------------------- ------------------ -------------
Capital and Reserves
Called-up ordinary
13 share capital 50 50
Retained earnings (3,102) (2,017)
----- --------------------------- ------------------ -------------
Total Equity Shareholders'
Funds (3,052) (1,967)
----- --------------------------- ------------------ -------------
The notes on pages 13 to 18 form an integral part of the
financial statements.
The Accounts on pages 11 to 18 were approved by the Directors on
5 December 2011 and were signed on their behalf by:
Dr C Bowe, Chairman
Electra Private Equity Investments PLC
Company Number: 6885579
The Statement of Cash Flow
For the period ended 30 September 2011 2010
GBP'000 GBP'000
---------------------------------------- -------- ---------
Operating activities
Interest received - 1
Expenses paid - (50)
---------------------------------------- -------- ---------
Net cash outflow from operating
activities - (49)
---------------------------------------- -------- ---------
Financing Activities
Proceeds from issue of Ordinary
Shares - 50
Proceeds from issue of Zero Dividend
Preference Shares - 47,467
Finance costs - (693)
Intercompany loans advanced - (46,460)
---------------------------------------- -------- ---------
Net cash inflow from financing
activities - 364
---------------------------------------- -------- ---------
Cash and cash equivalents - 315
---------------------------------------- -------- ---------
Cash and cash equivalents at beginning
of period 315 -
---------------------------------------- -------- ---------
Cash and cash equivalents at end
of period 315 315
---------------------------------------- -------- ---------
Notes to Financial Statements
1 Basis of Accounting
The financial statements for the year ended 30 September 2011
have been prepared in accordance with the Companies Act 2006 and
International Financial Reporting Standards ("IFRS"). IFRS
comprises standards and interpretations approved by the
International Accounting Standards Board ("IASB") and the
International Financial Reporting Interpretations Committee
("IFRIC") as adopted in the European Union as at 30 September
2011.
The financial statements comprise the Balance Sheet as at 30
September 2011 and for the year ended 30 September 2011 the related
Statement of Comprehensive Income, Statement of Changes in Equity,
Statement of Cashflow and the related notes hereinafter referred to
as 'financial statements'. The principal accounting policies
adopted by the Company are set out below.
The comparative period of the Accounts is from incorporation, on
23 April 2009, to 30 September 2010.
The financial statements are prepared under the historical cost
convention.
The Company's financial statements are presented in sterling,
which is the currency of the primary environment in which the
Company operates. All values are rounded to the nearest thousand
pounds (GBP'000) except when otherwise indicated.
The financial statements have been prepared on a going concern
basis as Electra has undertaken that, at any time up to or
immediately prior to the ZDP repayment date, it will subscribe for
such number of ordinary shares in the Company as is necessary to
provide the Company on the ZDP repayment date (after taking into
account the monies to be received by it on repayment of the loan)
with sufficient funds to meet the repayment obligations in respect
of the ZDP Shares.
Cash and cash equivalents
Cash comprises cash at bank and short term deposits with an
original maturity of less than three months.
Loans and receivables
Loans and other receivables are non derivative financial assets
with fixed or determinable payments that are not quoted in an
active market. Loans and other receivables are initially recognised
at fair value including direct and incremental transaction costs.
Loans and receivables are subsequently carried at amortised cost
using effective interest rate method.
Zero Dividend Preference Shares
Zero Dividend Preference Shares which exhibit the
characteristics of liabilities are recognised as liabilities in the
Balance Sheet in accordance with IAS 32. Borrowings are initially
recognised at fair value. After initial recognition, these
liabilities are measured at amortised cost, which represents the
initial net proceeds of the issue after issue costs plus the
accrued entitlement to the date of these financial statements.
The accrued entitlement is calculated as the difference between
the proceeds on the issue of these shares and the final liability
and is charged as interest expense over the term of the life of
these shares using the effective interest method.
Share Capital
Ordinary shares issued by the Group are recognised at fair value
or proceeds received with the excess of the amount received over
nominal value being credited to the share premium account. Direct
issue costs net of tax are deducted from equity.
Taxation
The tax effect on income and expenses is calculated using the
Company's effective rate of tax for the accounting period.
Impairment
The Company assesses at the end of each reporting period whether
there is objective evidence that the financial asset is impaired. A
financial asset is impaired and impairment losses are incurred only
if there is objective evidence of impairment; when observable data
indicates there is a measurable decrease in the estimated further
cash flows.
The amount of loss is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows discounted at the financial asset's original effective
interest rate.
Application of New Standards
At the balance sheet date, the Company has adopted all Standards
and IFRIC interpretations that were either issued, or which become
effective, during the year. None of the standards applicable during
the year were relevant and did not have a significant impact on the
financial statements or accounting policies.
New Standards to be Applied
At the date of authorisation of these financial statements, the
IASB and the IFRIC have issued the following standards, amendments
and interpretations to be applied to financial statements with
periods commencing on or after the following dates:
-- IAS 24 (revised) Related Party Disclosures (effective for
financial periods beginning on or after 1 January 2011). Revises
the definition of related parties.
-- IFRS 9 Financial instruments: Classification (effective for
financial periods beginning on or after 1 January 2013). Standard
addresses the classification and measurement of financial assets in
the form of debt instrument or equity.
-- IFRS 7 (amendments) Financial Instruments: Disclosures
(effective for financial periods beginning on or after 1 January
2011). Amendments include multiple clarifications related to the
disclosures of financial instruments.
-- IFRS 10 Consolidated financial statements (effective for
financial periods beginning on or after 1 January 2013, subject to
endorsement by the EU). Standard provides additional guidance to
assist in the determination of control where this is difficult to
assess.
-- IFRS 13 Fair value measurement (effective for financial
periods beginning on or after 1 January 2012, subject to
endorsement by the EU). Standard aims to improve consistency and
reduce complexity by providing a precise definition of fair value
and a single source of fair value measurement and disclosure
requirements for use across IFRSs.
-- IAS 27 (revised 2011) Separate Financial Statements
(effective for financial periods beginning on or after 1 January
2013, subject to endorsement by the EU). Standard contains
accounting and disclosure requirements for investments in
subsidiaries, joint ventures and associates, when an entity
prepared separate financial statements.
2 Segmental Analysis
The chief operating decision-maker has been identified as the
Board of the Company. The Board of the Company considers there to
be only one business segment and there is therefore no further
segmental analysis.
3 Other Income
For the period ended
30 September 2011 2010
GBP'000 GBP'000
---------------------- -------- --------
Interest
Bank interest - 1
Interest receivable
Other interest 2,138 2,321
---------------------- -------- --------
2,138 2,322
---------------------- -------- --------
4 Expenses
For the period ended 30
September 2011 2010
GBP'000 GBP'000
------------------------- -------- --------
Administrative expenses 11 100
Auditors' remuneration 20 20
------------------------- -------- --------
31 120
------------------------- -------- --------
During the year PricewaterhouseCoopers LLP earned the following
fees.
Period to 30 September 2011 2010
GBP'000 GBP'000
------------------------ ----------- --------
Audit fees
Statutory audit
of the company 20 20
------------------------ ----------- --------
5 Directors and Employees
No remuneration was paid to any Directors during the year.
The Company has no employees.
6 Finance costs
For the period ended 30
September 2011 2010
GBP'000 GBP'000
-------------------------- -------- --------
Zero Dividend Preference
costs 3,474 3,657
-------------------------- -------- --------
This represents the amortised cost of the issue expenses plus
the accrued entitlement of the final liability less the proceeds on
issue.
7 Taxation on the profit for the year
Taxation on profit for the period
ended 30 September 2011 2010
GBP'000 GBP'000
-------------------------------------- ------------ --------
(a) UK Corporation Tax
Current Tax
UK Corporation tax on profits
for the year - 562
Prior Year adjustment (282) -
Total Current Tax Charge (282) 562
-------------------------------------- ------------ --------
Deferred Tax
Origination and reversal of timing
differences - -
-------------------------------------- ------------ --------
Total Deferred Tax - -
-------------------------------------- ------------ --------
Tax on Profit on Ordinary Activities (282) 562
-------------------------------------- ------------ --------
(b) Factors Affecting Tax Charge
for the Year
Profit on Ordinary Activities
before tax (1,367) (1,455)
-------------------------------------- ------------ --------
Profit on Ordinary Activities
multiplies by standard rate in
the UK 27% (2010: 28%) (368) (407)
Group relief claimed (570) (55)
Expenses not deductible for tax
purposes 938 1,024
Prior year adjustment (282) -
Current Tax (Credit)/Charge for
the year (282) 562
-------------------------------------- ------------ --------
8 Dividends
No dividend was paid during the year ended 30 September 2011
(2010: nil).
9 Earnings per Share
For the period ended 30 September 2011 2010
GBP GBP
Earnings per ordinary share
(basic and diluted) (21.70) (40.34)
----------------------------------- -------- --------
The calculation of earnings per share is based on the loss
attributable to the owners of the parent of GBP1,085,000 (2010:
GBP2,017,000) and on a weighted average number of 50,000 (2010:
50,000) ordinary shares of GBP1 each in issue.
10 Loans and Receivables
2011 2010
-----------------------
As at 30 September GBP'000 GBP'000
----------------------- --------------- --------
Amounts owed by Group
entities 49,485 47,840
----------------------- --------------- --------
Under the intercompany Loan Agreement the Company charges
interest at LIBOR rates plus a margin of 3%.
11 Zero Dividend Preference Shares
2011 2010
--------------------------
As at 30 September GBP'000 GBP'000
-------------------------- -------- --------
Zero Dividend Preference
Shares 53,034 49,560
-------------------------- -------- --------
On 5 August 2009, the Company issued 43,000,000 Zero Dividend
Preference Shares at 100p each. On 2 December 2009, a further
4,295,000 Zero Dividend Preference Shares were issued at a price of
104p each. Each share has a par value of 0.01p and is redeemable on
5 August 2016 for 155.41p.
12 Financial Instruments
The Company was established for the issuance of Zero Dividend
Preference shares and it has the single objective of providing
final capital entitlement to the Zero Dividend Preference
shareholders at 5 August 2016.
The Company's financial instruments comprise:
1. Cash at bank and in hand.
2. An issuance of Zero Dividend Preference shares.
3. Loan due from Electra.
The Company's obligation to pay the ZDP Shareholders the final
capital entitlement is dependent upon Electra's ability to comply
with its obligations to the Company. The main risks arising from
the Company's financial instruments are fluctuations in market
price, liquidity and capital risk.
Market price risk
Market price risk arises mainly from uncertainty about future
prices of financial instruments used in Electra's operations. It
represents the potential loss Electra might suffer through holding
market positions in the face of price movements, mitigated by stock
selections. Details of how this risk is managed are contained
within the Accounts of Electra Private Equity PLC.
Liquidity 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 Electra is
reliant upon the sale of assets which mainly comprises unlisted
investments. Details of how this risk is managed are contained
within the Accounts of Electra Private Equity PLC.
Capital risk
The management of Electra's capital risk safeguards its ability
to continue as a going concern and thus its capacity to comply with
its obligations to the Company. Details of how this risk is managed
are contained within the Accounts of Electra Private Equity
Plc.
i) Electra Private Equity / Electra Private Equity Investments
Intercompany Interest charge
The sensitivity of the income statement is the effect of assumed
changes in interest rates on the net interest income for one year,
based on the floating rate non-trading financial assets held at 30
September 2011.
Period to 30 September
2011
Increase Decrease
in variable in variable
GBP'000 GBP'000
--------------------------------- ------------- -------------
1% movement in interest rates
Impact on interest receivable
on Electra loan (478) 478
--------------------------------- ------------- -------------
Total impact as a percentage of
loss after tax (35.0%) 35.0%
--------------------------------- ------------- -------------
Total impact as a percentage of
shareholders' equity (15.7%) 15.7%
--------------------------------- ------------- -------------
ii) Maturity of Financial Liabilities
The maturity profile of the Company's financial liabilities as
at 30 September 2011 was:
As at 30 September 2011 2010
GBP'000 GBP'000
-------------------- -------- --------
Over four years 73,496 73,496
-------------------- -------- --------
This relates to the Zero Dividend Preference Shares. These are
redeemable on 5 August 2016.
iii) Fair value of Financial Assets and Liabilities
All the financial assets of the Company are held at fair
value.
As at 30 September 2011 2010
GBP'000 GBP'000
------------------------------- --------------- --------
Primary Financial Assets
Held
Cash at bank and in
hand 315 315
Primary Financial Liabilities
Held
Zero Dividend Preference
shares 53,034 49,560
------------------------------- --------------- --------
13 Share Capital
As at 30 September 2011 2010
GBP'000 GBP'000
------------------------------------------- -------- --------
Allotted, called up and fully paid 50,000
ordinary shares of GBP1 each 50 50
------------------------------------------- -------- --------
14 Capital and Reserves
For the year ended 30 September
2011 Total
Called-up Revenue Shareholders'
share capital reserve funds
GBP'000 GBP'000 GBP,000
--------------------------------- -------------- -------- --------------
Opening balance at 1 October
2010 50 (2,017) (1,967)
Net revenue transferred
to reserves - (1,085) (1,085)
--------------------------------- -------------- -------- --------------
At 30 September 2011 50 (3,102) (3,052)
--------------------------------- -------------- -------- --------------
For the period ended 30
September 2010 Total
Called-up Revenue Shareholders'
share capital reserve funds
GBP'000 GBP'000 GBP,000
------------------------- -------------- -------- --------------
Net revenue transferred
to reserves - (2,017) (2,017)
Ordinary shares issued
in period 50 - 50
------------------------- -------------- -------- --------------
As at 30 September 2010 50 (2,017) (1,967)
------------------------- -------------- -------- --------------
15 Related Party Transactions
Pursuant to a loan agreement between the Company and Electra, in
2009 the Company lent Electra the whole of the net proceeds of the
ZDP shares and these funds continue to be managed in accordance
with the investment policy of Electra. This loan is on terms
requiring its repayment by Electra to the Company at any time up to
or immediately prior to the ZDP repayment date. As at 30 September
2011, the outstanding balance of the loan was GBP49,485,060 (2010:
GBP47,840,000) including interest accrued of GBP4,459,000 (2010:
GBP2,321,000).
16 Immediate and Ultimate Parent
The Company's immediate and ultimate parent undertaking is
Electra, a company incorporated in Great Britain and registered in
England and Wales. Copies of the financial statements are available
at the Company's registered office at Paternoster House, 65 St
Paul's Churchyard, London, EC4M 8AB.
Board of Directors
Colette Bowe (Chairman)
An economist by profession, Dr Bowe has worked in Whitehall,
City regulation and the fund management industry. She is currently
Chairman of the Ofcom board, a board member of the UK Statistics
Authority and a member of the supervisory board of AXA Investment
Managers Deutschland GmbH.
Dr Bowe was appointed a Director and Chairman in 2010.
Roger Perkin
Mr Perkin is a former senior partner at Ernst & Young with
extensive global accounting experience and financial services
expertise. He spent 40 years at Ernst & Young and its
predecessor firms, including over 30 years as a Partner, working
with a wide range of clients before specialising in financial
services. He is a director of Nationwide Building Society and The
Evolution Group Plc.
Mr Perkin was appointed a Director in 2010.
Michael Walton
Mr Walton has over 35 years of experience in the private equity
industry, having joined the Electra House Group in 1972, with
responsibility for unlisted investments. He was a director of the
Company from 1981 to 1986. Subsequently, Mr Walton was Managing
Director of Gartmore Private Capital and a Director of NatWest
Ventures and Bridgepoint Capital. He has served on the Council of
the British Venture Capital Association.
Mr Walton was appointed a Director in March 2011.
Notes:
All the Directors are also Directors of the Company's parent
company Electra.
Contact Details
Board of Directors
Colette Bowe (Chairman)
Roger Perkin
Michael Walton
Telephone +44 (0)20 7214 4200
Secretary
Frostrow Capital LLP
25 Southampton Buildings
London WC2A 1AL
Telephone +44 (0)20 3008 4910
Registered Office
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
Company Number
06885579
Registered Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants &
Statutory Auditors
7 More London Riverside
London SE1 2RT
Stockbroker
J.P. Morgan Cazenove
Registrar and Transfer Office
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone (UK) 0871 384 2351 *
Textel/Hard of hearing line:
(UK) 0871 384 2255 *
Telephone (Overseas) +44 121 415 7047
* Calls to these numbers are charged at 8p per minute from a BT
landline. Other telephony providers' costs may vary.
The Report and Accounts for the year ended 30 September 2011
will be available on the Company's website
www.electraequity.com/eltz shortly. Neither the contents of this
website nor the contents of any website accessible from hyperlinks
on this website (or any other website) is incorporated into, or
forms part of this announcement.
The financial information set out above does not constitute the
Company's statutory financial statements for the period ended 30
September 2011. The financial information for 2010 is derived from
the statutory financial statements which have been delivered to the
Registrar and included the Auditors' Report which was unqualified
and did not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006. The statutory financial
statements for 2011 will be finalised on the basis of the financial
information presented in this announcement and will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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