TIDMAPL
RNS Number : 6455I
ACP Capital Limited
16 March 2010
ACP Capital Limited
Results for the year ended 31 December 2009
The Board of ACP Capital Limited ("ACP" or the "Company": AIM: APL) today
announces the results for the Company and its subsidiaries (together, the
"Group") for the 12 months ended 31 December 2009.
Key points:
· The Group distributed GBP108m during 2009, comprising GBP79.4m to the
shareholders of ACP and GBP28.8 to holders of the minority interest in ACP
Mezzanine Limited.
· Sale of the IFR Capital plc preferred equity, ordinary shares and Tranche
D debt investment for EUR79.8 million in total;
· Cancellation and repayment in full of the EUR15 million finance facility to
Leasecom Financial Assets SAS by a subsidiary;
· Sale of the Group's entire portfolio of CDO, CLO and RMBS structured
product investments, for which ACP Mezzanine Limited received EUR6.7 million and
ACP received GBP908k;
· Sale of the Group's equity and debt investments in GCI Automotive Holding
GmbH for EUR7.02 million;
· Sale of a subsidiary's participation in the mezzanine debt issued by
Iceland Foods Group Limited for GBP3.2 million;
· Sale of ACP's participation in 2nd lien debt issued by George Mezz Limited
for GBP1.61 million;
· Settlement by the Group of outstanding litigation with IFR without any
admission of liability and with each party bearing its own costs;
· The net asset value per share at 31 December 2009 was 28.7 pence (2008:
58.7 pence)
· Profit per share for year ended 31 December 2009 was 10.58 pence (2008:
Loss per share of 50.40 pence);
· Consolidated cash and cash equivalents at the balance sheet date of
GBP9.76 million (2008: GBP20.62 million).
Contacts:
Hugh Field/Bruce Garrow, Collins Stewart Europe, +44 (0) 207 523 8350 (Nominated
Adviser)
Tim McCall/ Barnaby Fry, Hogarth, +44 (0) 207 357 9477
The financial information set out in the announcement does not constitute the
company's statutory accounts for the years ended 31 December 2009 or 2008. The
financial information for the year ended 31 December 2008 is derived from the
statutory accounts for that year.
The audit of the statutory accounts for the year ended 31 December 2009 is
complete. The auditors reported on those accounts; their report was unqualified
and did not include references to any matters to which the auditors drew
attention to by way of emphasis without qualifying their report.
The Company expects the full annual report and financial statements to be
published on its web site (www.acpcapital.com) on 16 March 2010.
ACP CAPITAL LIMITED
CHAIRMAN'S STATEMENT
At year end, the Group's net asset value was 28.7 pence as compared with 58.7
pence a year earlier. During the year the Group sold its interests in IFR
preferred equity, IFR ordinary shares, and D tranche position in IFR debt,
structured product investments and GCI Automotive debt and equity. In addition,
the Leasecom ABS loan was repaid in full and cancelled. In total GBP92.2
million was received from asset realisations and GBP108.2mnmillion was
distributed to shareholders; as compared with last year, the portfolio now
comprises the following (based on year end book value):
+----------------------+----------------------+----------------------+
| | ACP Capital Limited | ACP Mezzanine |
| | | Limited ** |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
| IFR Capital plc | | |
+----------------------+----------------------+----------------------+
| | GBP13,408,634 | EUR7,070,217 |
| Tranche A | | |
+----------------------+----------------------+----------------------+
| | GBP8,252,614 | EUR4,351,507 |
| Tranche B | | |
+----------------------+----------------------+----------------------+
| | GBP8,096,888 | EUR4,269,395 |
| Tranche C | | |
+----------------------+----------------------+----------------------+
| | (GBP6,707,239) | - |
| Currency hedge | | |
| impact | | |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
| Leasecom Group SAS | GBP17,738,433 | - |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
| GCI Management AG | GBP3,387,140 | - |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
| Davenham Group plc | GBP455,566 | - |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
| ACP Mezzanine | GBP7,389,523 | - |
| Limited * | | |
+----------------------+----------------------+----------------------+
| | | |
+----------------------+----------------------+----------------------+
* Based on the mid market price of the shares held by ACP Capital Limited in
ACP Mezzanine Limited on 31 December 2009
** 100% of investments held by ACP Mezzanine Limited on 31 December 2009,
including minority interest
The remaining assets primarily comprise three tranches of IFR debt, an equity
investment in Leasecom, and equity investments in Davenham Group plc and GCI
Management AG, two public companies, quoted, on AIM in London and on the
Frankfurt stock-exchange in Germany, respectively.
The most significant event during the year was the sale in November of the
Group's interests in IFR preferred shares, equity and D tranche debt for
proceeds totalling EUR80 million. All outstanding litigation with IFR was also
settled with no admission of liability and each party bearing its own costs.
Our remaining investment in IFR comprises mainly three tranches of debt. The
"A" tranche bears interest at 225 bps over 3 month Euribor and is amortising
with the final payment due in December 2014. The "B" and the "C" tranches are
interest only, respectively, at 275 and 325 bps over 3 month Euribor and
repayment of principal due in December 2015 and December 2016 respectively.
Following the sale of our interests in the IFR preferred shares and equity, two
shareholders control nearly all of IFR's ordinary equity, and the company has
now been delisted from AIM. IFR is up to date with its interest payments under
these tranches of debt.
Leasecom is a French equipment leasing company functioning as a financial
intermediary, providing financing to lessors of computer and IT equipment and
then selling these leases to French financial institutions. Leasecom is well
managed, well financed with very little debt, and profitable. On shareholders'
equity of EUR35.0 million the company made a dividend payment for 2009 of EUR7.0
million on 7 January 2010. Our share of that dividend is EUR3.14 million, which
has already been received and will soon be distributed. At the ACP Mezzanine
level, the EUR15 million loan facility to Leasecom was cancelled and repaid in
full, and has since been returned to ACP Mezzanine's shareholders.
Our remaining investments are relatively small. We own approximately 22% of the
equity in GCI, a Munich based merchant bank and approximately 29% of the equity
in Davenham, a Manchester based finance company. Neither of these investments
has performed well with GCI valued at the year end at EUR3.8 million (GBP3.4
million) compared with an original investment of approximately EUR27.0 million in
2007. Davenham is valued at the year end at GBP0.5 million compared with an
original investment of approximately GBP25.0 million during the course of 2006
and 2007. Both companies have had poor trading results, financial difficulties
and operate in difficult markets. Davenham has considerable exposure to
residential property in northern and central England while GCI has been heavily
invested in small, often family owned, German companies.
We are continuing to reduce costs through staff and overhead reductions. Our
objective remains to sell assets at appropriate prices and return the proceeds
less expenses to our shareholders. I am hopeful that there will be progress to
report when we release our interims results in six months.
Respectfully yours,
John D. Chapman
Chairman
ACP CAPITAL LIMITED
DIRECTORS' REPORT
The Directors present their report with the financial statements of ACP Capital
Limited ("ACP" or the "Company") and its subsidiaries (together, the "Group")
for the year ended 31 December 2009. The Company was incorporated on 30 August
2005.
PRINCIPAL ACTIVITES AND REVIEW OF THE BUSINESS
The Company is incorporated in Jersey and, while it was in investment mode,
provided specialist integrated finance and asset management solutions focused on
European small and mid-sized enterprises. The Group provided equity, mezzanine
and senior debt to companies targeting an integrated finance solution across
their capital structure.
At an EGM held on 17 July 2008, the Company announced that it would seek to
dispose of assets on an orderly basis and return the proceeds to shareholders by
way of distributions.
A review of the business during the year is contained in the Chairman's
statement.
ACP Mezzanine Limited ("ACPM")
The Company owns 54.37% of ACPM. As a result, ACPM is a subsidiary of the
Company and these financial statements are prepared on a consolidated basis
including the balances of ACPM at 31 December 2009.
At an EGM held on 9 December 2008, shareholders approved a change in investment
policy to enable ACPM to seek to dispose of its assets on an orderly basis and
return the proceeds to shareholders by way of capital distributions.
Accordingly, during the year, ACPM sold all of its collateralised loan
obligations and collateralised debt obligations, and part of its debt
facilities.
RESULTS AND DIVIDENDS
The results for the year are set out in the financial statements.
For the 2009 calendar year the Company has distributed to shareholders a total
of 38.1 pence per share.
The Directors do not recommend payment of a final dividend.
The Group's net asset value per share at the year end was 28.7 pence per share
(2008 - as restated: 58.7 pence per share).
DIRECTORS AND THEIR INTERESTS
The Directors during the year and at the date of this report were:
John Chapman
Stephen Coe
Antony Gardner-Hillman
James Lowenstein
Patrick McCann
All of the current Directors hold non-executive positions on the Board. There
are currently no executive Directors on the Board.
John Chapman and Stephen Coe are also non-executive Directors of ACPM and other
Group companies.
The Directors have no interest in the Company's shares or any options to acquire
ordinary shares in the Company as at 31 December 2009.
Directors' terms of service
None of the Directors have service contracts with the Group with the exception
of John Chapman and Stephen Coe who have contracts with a subsidiary
undertaking, ACP Capital UK LLP (the "LLP"). The terms of appointment of the
other directors are governed by letters of appointment. The majority of
Directors are appointed for an initial period of three years and this may be
terminated by either the Company or the Director serving three months' written
notice on the other at any time and is further subject to rotational retirement
rules.
DIRECTORS' REPORT - continued
Directors Fees
Directors' remuneration for the year was as follows:
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | 2009 | | 2008 |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | GBP | | GBP |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Directors' | | | | |
| fees | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Derek Vago | | | | 126,067 |
| (1) | | - | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Nikolaj | | | | 108,592 |
| Larsen (1) | | - | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Eric | | | | 108,546 |
| Youngblood | | - | | |
| (1) | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| John | | 107,980 | | 53,760 |
| Chapman | | | | |
| (2) | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Patrick | | 25,000 | | 12,500 |
| McCann | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| James | | 25,000 | | 12,500 |
| Lowenstein | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Stephen | | 70,000 | | 25,675 |
| Coe (3) | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Antony | | 25,000 | | 15,000 |
| Gardner-Hillman | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | 252,980 | | 462,640 |
+-----------------+----------------------------+--------------------+----------+--------------------+
| Performance | | | | |
| fees | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| John | | 229,648 | | |
| Chapman | | | | - |
| (2) | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | 482,628 | | 462,640 |
+-----------------+----------------------------+--------------------+----------+--------------------+
| | | | | |
+-----------------+----------------------------+--------------------+----------+--------------------+
(1) The 2008 fees of the former directors are for 6.5 months.
(2) John Chapman is also entitled to an additional fee equivalent to 0.3 percent
of any amounts distributed by the Company to its shareholders after the date of
his appointment. His contract is subject to a 6 month notice period.
(3) Stephen Coe has an entitlement to a discretionary bonus to be determined on
or around 1 September 2010.
Stephen Coe and John Chapman's service agreements with the LLP contain
provisions providing for certain payments on termination or upon certain change
of control events (in respect of the Company) occurring. ACP has guaranteed the
LLP obligations pursuant to these agreements as follows:
Stephen Coe
Should certain events occur that constitute a change of control of the company
or should Mr Coe's engagement by the LLP be terminated (except for cause) prior
to 14 May 2010, the LLP has committed to pay Mr Coe an amount equal to 75
percent of the payments he would receive from the Group until 14 November 2010.
John Chapman
Should Mr Chapman's engagement with the LLP be terminated, the LLP has committed
to continue to pay him 0.3 percent of any amounts distributed by ACP to its
shareholders during the following two years. Should certain events occur that
constitute a change of control of the company, the LLP has committed to pay Mr
Chapman up front a reasonable estimate of the payments he is expected to receive
from the Group for the following two years (subject to adjustment based on
distributions paid by ACP in the following two years).
DIRECTORS' REPORT - continued
SUBSTANTIAL SHAREHOLDINGS
At 31 December 2009, the Company had been notified of the following interests in
its issued share capital:
+------------+----------------------------+-------+----------+--------+
| QVT | | | | 28.15% |
| Financial | | | | |
| LP | | | | |
+------------+----------------------------+-------+----------+--------+
| Aviva Investors Global Services Limited | | | 12.47% |
+-----------------------------------------+-------+----------+--------+
| Rakison | | | | 11.61% |
| Services | | | | |
| Limited | | | | |
+------------+----------------------------+-------+----------+--------+
| The | | | | 6.60% |
| Baupost | | | | |
| Group LLC | | | | |
+------------+----------------------------+-------+----------+--------+
| Artemis Investment Management Ltd | | | 5.83% |
+-----------------------------------------+-------+----------+--------+
| Société Générale Asset Management UK | | | 4.70% |
| Ltd | | | |
+-----------------------------------------+-------+----------+--------+
| Millennium Capital Partners Ltd | | | 3.70% |
+-----------------------------------------+-------+----------+--------+
| Midas Capital Partners Ltd | | | 3.14% |
+-----------------------------------------+-------+----------+--------+
| Weiss Capital Management, Inc | | | 3.04% |
+-----------------------------------------+-------+----------+--------+
| | | | | |
+------------+----------------------------+-------+----------+--------+
THE ANNUAL GENERAL MEETING
The Notice of the Annual General Meeting of the Company and a circular dealing
with any special business to be considered at the Annual General Meeting will be
dispatched to shareholders separately.
DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Directors are aware, there is no relevant audit information of
which the Company's auditors are unaware. The Directors have taken all the steps
they ought to have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Company's auditors are
aware of that information.
AUDITORS
BDO LLP have expressed their willingness to continue in office as auditors. A
resolution to reappoint BDO LLP will be proposed at the forthcoming Annual
General Meeting.
On behalf of the Board
Director
15 March 2010
CORPORATE GOVERNANCE
The Directors are committed to maintaining high standards of corporate
governance. The Company is incorporated in Jersey. The Companies (Jersey) Law
1991 does not contain a mandatory code of corporate governance, although it does
impose statutory obligations on directors to act in good faith and with a view
to the best interests of the Company. The Company currently complies with
applicable corporate governance requirements in Jersey.
The Directors acknowledge the importance of the principles of corporate
governance set out in The Combined Code issued by the Financial Reporting
Council in June 2008. Although the Combined Code is not compulsory for AIM
traded companies, the Directors have applied the principles as far as
practicable and appropriate for a relatively small public company as follows:
Board Operation
The Board is currently comprised of a non-executive Chairman (John Chapman) and
four non-executive Directors. The Board considers that all non-executive
Directors are capable of exercising independent judgement.
The non-executive Chairman and other Directors are engaged on terms whereby
their appointment can be terminated on three months' notice, save as noted in
the Directors' Report above.
Directors are subject to re-election by the shareholders at Annual General
Meetings. The Articles of Association of the Company provide that a certain
proportion of the Directors will be subject to re-election at each Annual
General Meeting.
The Board meets regularly and is responsible for commercial strategy,
performance, approval of investments, monitoring and approval of major business.
The Board has a formal schedule of matters specifically reserved to it for
decision. To enable the Board to discharge its duties, all Directors receive
appropriate and timely information. Briefing papers are distributed to all
Directors in advance of Board meetings. All Directors have access to the advice
and services of the Company Secretary, who is responsible for ensuring that
Board procedures are followed and that applicable rules and regulations are
complied with. The appointment and removal of the Administrator is a matter for
the Board as a whole. In addition, procedures are in place to enable the
Directors to obtain independent professional advice in the furtherance of their
duties, if necessary, at the Company's expense.
The Board met 18 times during the year, including the Annual and Extraordinary
General Meetings.
Board Committees
Audit Committee
The Audit Committee comprises Stephen Coe (Chairman), Patrick McCann, and James
Lowenstein. Stephen Coe is a Chartered Accountant who has financial experience
of acting as a non-executive finance director.
The Audit Committee carries out a variety of functions, including reviewing
annual and interim results, receiving reports from its auditors, agreeing the
auditors' remuneration and assessing the effectiveness of the audit and internal
control environment. The Audit Committee oversees the relations with the
external auditors and where necessary, may obtain specialist external advice
from either its auditors or other advisers.
Audit Committee meetings coincide with meetings of the Board and take place not
less than twice a year. The Audit Committee has written terms of reference.
CORPORATE GOVERNANCE - continued
Remuneration Committee
The Remuneration Committee comprises Stephen Coe, Antony Gardner-Hillman and
James Lowenstein.
The Remuneration Committee is responsible for reviewing the scale and structure
of the senior employees' remuneration and the terms of their service or
employment contracts, including share option schemes and other bonus
arrangements.
Remuneration Committee meetings coincide with meetings of the Board and take
place at least once a year.
The Remuneration Committee has written terms of reference.
A full summary of Directors' Remuneration is set out on page 4.
Nomination Committee and Litigation Committee
The Nomination Committee comprises John Chapman, Patrick McCann, and James
Lowenstein whilst the Litigation Committee comprises John Chapman, Patrick
McCann, and Antony Gardner-Hillman.
The Nomination Committee is responsible for reviewing the Board structure, size
and composition and making recommendations to the board of any changes deemed
necessary.
The Litigation Committee is responsible for reviewing litigation issues, and
making recommendations to the Board in relation to what actions should be taken
on these issues.
The Nomination Committee and Litigation Committee have written terms of
reference.
The Nomination Committee and Litigation Committee meet as required.
REGULATORY Compliance
The Company will take all reasonable steps to ensure compliance by the Directors
with the provisions of the AIM Rules for Companies as published by the LSE
relating to dealings in securities of the Company and has adopted a share
dealing code for this purpose. The Company is also aware of the Channel Islands
Stock Exchange Model Code for Securities Transactions by Directors of Listed
Companies and will take all reasonable steps to ensure compliance by the
Directors and senior employees with the relevant provisions of this code.
Internal Financial Control
The Board is responsible for establishing and maintaining the Group's system of
internal financial control and places importance on maintaining a strong control
environment.
Procedures which the Directors have established with a view to providing
effective internal financial control include:
· the Group's organisational structure has clear lines of responsibility
and delegation of authority;
· a budgeting system whereby actual performance is measured against budget
on a regular basis;
· periodic results and activity reports are closely monitored by the
Directors;
· the Board is responsible for identifying the major business risks faced
by the Company and for determining the appropriate courses of action to manage
those risks; and
· the Audit Committee monitors the effectiveness of the Group's internal
financial control system.
The Directors recognise, however, that such a system of internal financial
control can only provide reasonable, not absolute, assurance against material
misstatement or loss.
Relations with Shareholders
Communications with shareholders are given high priority. The Group makes
regular announcements, including announcements of the half year interim results
and the preliminary year end results. The Board uses the Annual General Meeting
to communicate with investors and welcomes their participation. The Board aims
to ensure that Directors are available at Annual General Meetings to answer
questions.
CORPORATE GOVERNANCE - continued
CREDITORS PAYMENT POLICY
Group operating companies are responsible for agreeing the terms and conditions
under which business transactions with their suppliers are conducted.
DIRECTORS LIABILITY INSURANCE
The Group maintains liability insurance to indemnify the Directors for losses
that may arise from their duties as Directors of the Company or subsidiary
companies.
DIRECTOR'S RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the financial statements in
accordance with applicable laws and International Financial Reporting Standards.
Jersey company law requires the Directors to prepare financial statements for
each financial year which give a true and fair view of the state of affairs of
the Group and Company and of the profit or loss of the Group and 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 estimates that are reasonable and prudent;
· state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
and
· prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group and Company and to enable them to ensure that the financial statements
have been properly prepared in accordance with the Companies (Jersey) Law 1991.
They are also responsible for safeguarding the assets of the Group and Company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Going Concern
After making enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
On behalf of the Board
Director
15 March 2010
ACP CAPITAL LIMITED
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2009
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | 2009 | | 2008 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | (as |
| | | | | | | | | restated |
| | | | | | | | | - note |
| | | | | | | | | 25) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | |Notes | | GBP | | GBP |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Investment income | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Gains/(losses) on investments at | | | | | 19,863,632 | | (88,481,490) |
| fair value through profit or loss | | | | | | | |
+-------------------------------------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Dividend and interest | | | | | | 16,922,768 | | 19,444,903 |
| income | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Fees and other income | | | | | | 37,491 | | 3,773,163 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Total net investment income | | | | | | 36,823,891 | | (65,263,424) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Exchange movements | | | | | | (2,143,188) | | 6,215,010 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Impairment of loans and | | | | | | | | (9,412,455) |
| receivables | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Impairment of | | | | | | (3,166,941) | | (32,567,588) |
| available-for-sale | | | | | | | | |
| investments | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Negative goodwill | | | | | | | | 1,127,177 |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Equity-settled share-based | | | | 21 | | | | (6,043,952) |
| payments | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Other operating expenses | | | | 7 | | (4,602,558) | | (11,544,344) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Operating profit/(loss) | | | | | | 26,911,204 | | (117,489,576) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Finance income | | | | 8 | | 84,848 | | 2,247,272 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Finance expense | | | | 8 | | (3,733) | | (6,903,054) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Profit/(loss) before tax | | | | | | 26,992,319 | | (122,145,358) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Income taxes | | | | 9 | | (100,157) | | (109,659) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Profit/(loss) for the year | | | | | | 26,892,162 | | (122,255,017) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Other comprehensive income | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Exchange differences on | | | | | | (4,846,080) | | 23,868,679 |
| translating foreign | | | | | | | | |
| operations | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Profit/(loss) after tax and total | | | | | 22,046,082 | | (98,386,338) |
| comprehensive income for the year | | | | | | | |
+-------------------------------------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Profit attributable to: | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Owners of the Parent | | | | | | 19,643,227 | | (102,266,138) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Minority interest | | | | | | 7,248,935 | | (19,988,879) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | 26,892,162 | | (122,255,017) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Total comprehensive income | | | | | | | | |
| attributable to: | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Owners of the Parent | | | | | | 16,972,612 | | (89,309,978) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Minority interest | | | | | | 5,073,470 | | (9,076,360) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | 22,046,082 | | (98,386,338) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Earnings/(loss) per share | | | | | | | | |
| attributable to the owners | | | | | | | | |
| of the parent | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| Basic and diluted | | | | 20 | | 9.43 | | (50.40) |
| | | | | | | p | | p |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+--------------------+
Consolidated Statement of Financial Position
As at 31 December 2009
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | 2009 | | 2008 |
| | | | | | | | | (as |
| | | | | | | | | restated |
| | | | | | | | | - note |
| | | | | | | | | 25) |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | |Notes | GBP | | GBP |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Assets | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Non-current assets | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Investments measured at | | | | | 10 | 55,639,982 | | 105,169,492 |
| fair value through profit | | | | | | | | |
| or loss | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Investments classified as | | | | | 11 | | | |
| loans and receivables | | | | | | - | | - |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Available-for-sale | | | | | 12 | | | 24,585,894 |
| investments | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Property, plant and | | | | | 13 | | | |
| equipment | | | | | | - | | - |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | 55,639,982 | | 129,755,386 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Current assets | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Investments measured at | | | | | 10 | 3,075,567 | | 2,228,496 |
| fair value through profit | | | | | | | | |
| or loss | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Trade and other receivables | | | | | 15 | 870,852 | | 5,105,434 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Cash and cash equivalents | | | | | | 9,764,635 | | 20,621,092 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total current assets | | | | | | 13,711,054 | | 27,955,022 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total assets | | | | | | 69,351,036 | | 157,710,408 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Liabilities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Current liabilities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Trade and other payables | | | | | 16 | 379,367 | | 2,519,643 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Current income tax payable | | | | | | 90,411 | | 185,345 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total current liabilities | | | | | | 469,778 | | 2,704,988 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total liabilities | | | | | | 469,778 | | 2,704,988 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Net assets | | | | | | 68,881,258 | | 155,005,420 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Equity and reserves | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Issued capital | | | | | 17 | 208,341 | | 208,341 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Share premium | | | | | 18 | 129,022,353 | | 208,400,632 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Capital redemption reserve | | | | | | 3,435 | | 3,435 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Translation reserve | | | | | | 10,285,545 | | 12,956,160 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Retained earnings | | | | | | (79,704,700) | | (99,347,927) |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total equity attributable | | | | | | 59,814,974 | | 122,220,641 |
| to owners of the Company | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Minority interest | | | | | | 9,066,284 | | 32,784,779 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Total equity | | | | | | 68,881,258 | | 155,005,420 |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| Net asset value per share | | | | | | 28.7 | | 58.7 |
| (pence) | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+-----------------------+-------+-----------------------+
+--------------------------------------------------------------------------------+
| The financial statements were approved by the Board of Directors and |
| authorised for issue on 15 March 2010. |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| Director |
+--------------------------------------------------------------------------------+
Consolidated Statement of Cash Flows
For the year ended 31 December 2009
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | 2009 | | 2008 |
| | | | | | | | | (as |
| | | | | | | | | restated |
| | | | | | | | | - note |
| | | | | | | | | 25) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | |Notes | GBP | | GBP |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Cash flow from operating | | | | | | | | |
| activities: | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Profit/(loss) for the | | | | | | 26,892,162 | | (122,255,017) |
| financial period | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Income tax expense | | | | | | 100,157 | | 109,659 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | 26,992,319 | | (122,145,358) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Movement in fair value of | | | | | | (19,863,632) | | 88,481,490 |
| investments and loans | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Negative goodwill | | | | | | | | (1,127,177) |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Finance expense | | | | | | 3,733 | | 6,903,054 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Finance income | | | | | | (84,848) | | (2,247,272) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Impairment of loans and | | | | | | | | 9,412,455 |
| receivables | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Impairment of | | | | | | 3,166,941 | | 32,567,588 |
| available-for-sale | | | | | | | | |
| investments | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Loss on disposal of | | | | | | | | 17,784 |
| property, plant and | | | | | | - | | |
| equipment | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Exchange rate differences | | | | | | 2,143,188 | | (6,215,010) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Equity-Settled Share-Based | | | | | | | | 6,043,952 |
| Payments | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Changes in working capital: | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Decrease / (increase) in | | | | | | 4,234,582 | | (1,455,018) |
| trade and other receivables | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Decrease in trade and other | | | | | | (2,140,276) | | (1,108,880) |
| payables | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Capitalised accrued | | | | | | (12,625,196) | | (8,698,191) |
| interest | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| New lending / investments | | | | | | (2,828,052) | | (1,558,835) |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Sale / repayment of | | | | | | 99,755,171 | | 3,306,860 |
| investments | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Cash flow from operations | | | | | | 98,753,930 | | 2,177,442 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Income taxes paid | | | | | | (195,091) | | |
| | | | | | | | | - |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Net cash flow from | | | | | | 98,558,839 | | 2,177,442 |
| operating activities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Cash flow from investing | | | | | | | | |
| activities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Acquisition of subsidiary | | | | | | | | 32,938,915 |
| net of cash acquired | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Net cash flow from | | | | | | | | 32,938,915 |
| investing activities | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Cash flow from financing | | | | | | | | |
| activities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Options exercised | | | | | | | | 12,245 |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Buy back of own shares | | | | | | | | (4,635,581) |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Repayment of financing | | | | | | | | (56,092,802) |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Interest paid and other | | | | | | (3,733) | | (7,904,639) |
| related financing costs | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| New bank loans raised | | | | | | | | 5,036,081 |
| | | | | | | - | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Bank interest received | | | | | | 84,848 | | 2,268,559 |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Dividends and capital distributions | | | | | (28,791,965) | | (12,344,382) |
| paid to minority interests | | | | | | | |
+-------------------------------------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Dividends and capital distributions | | | | | (79,378,279) | | (15,317,296) |
| paid to owners of the parent | | | | | | | |
+-------------------------------------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Net cash flow from | | | | | | (108,089,129) | | (88,977,815) |
| financing activities | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Effects of exchange rate changes on | | | | | (1,326,167) | | 14,626,591 |
| cash and cash equivalents | | | | | | | |
+-------------------------------------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Net decrease in cash and | | | | | | (10,856,457) | | (39,234,867) |
| cash equivalents | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Opening cash and cash | | | | | | 20,621,092 | | 59,855,959 |
| equivalents | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| Closing cash and cash | | | | | 24 | 9,764,635 | | 20,621,092 |
| equivalents | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
| | | | | | | | | |
+-----------------------------+-------+-------+-------+-------+-------+----------------------+-------+---------------------+
Consolidated Statement of Changes in Equity
For the year ended 31 December 2009
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | Issued | Share | Capital |Translation | Retained | Equity | Minority | Total |
| | capital | premium |redemption | of foreign | earnings |attributable | interest | |
| | | | reserve | operations | |to owners of | | |
| | | | | | | the parent | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| At 31 December 2007, as | 199,531 | 216,734,311 | - | - | 16,216,521 | 233,150,363 | - | 233,150,363 |
| published | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Total comprehensive income | - | - | - | 12,956,160 | (93,692,121) | (80,735,961) | (9,076,360) | (89,812,321) |
| for the period | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Buyback and cancellation of | (3,435) | - | 3,435 | - | (2,881,330) | (2,881,330) | - | (2,881,330) |
| shares | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Minority interest on | - | - | - | - | - | - | 54,205,520 | 54,205,520 |
| acquisition of subsidiary | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Revaluation adjustment on | - | - | - | - | (7,729,012) | (7,729,012) | - | (7,729,012) |
| gaining control of | | | | | | | | |
| subsidiary | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Dividends paid (note 24) | - | - | - | - | (6,983,617) | (6,983,617) | - | (6,983,617) |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Equity share options | 12,245 | - | - | - | - | 12,245 | - | 12,245 |
| exercised | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Equity-settled share-based | - | - | - | - | 6,043,952 | 6,043,952 | - | 6,043,952 |
| payments | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Shares acquired for | - | - | - | - | (1,748,303) | (1,748,303) | - | (1,748,303) |
| Employee Share Awards | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Capital distributions (note | - | (8,333,679) | - | - | - | (8,333,679) | - | (8,333,679) |
| 24) | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Distributions to minority | - | - | - | - | - | - | (12,344,381) | (12,344,381) |
| interest | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| At 31 December 2008, as | 208,341 | 208,400,632 | 3,435 | 12,956,160 | (90,773,910) | 130,794,658 | 32,784,779 | 163,579,437 |
| published | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Prior year adjustment (note | - | - | - | - | (8,574,017) | (8,574,017) | - | (8,574,017) |
| 25) | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| At 31 December 2008, as | 208,341 | 208,400,632 | 3,435 | 12,956,160 | (99,347,927) | 122,220,641 | 32,784,779 | 155,005,420 |
| restated (note 25) | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Total comprehensive income | - | - | - | (2,670,615) | 19,643,227 | 16,972,612 | 5,073,470 | 22,046,082 |
| for the period | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Capital distributions (note | - | (79,378,279) | - | - | - | (79,378,279) | - | (79,378,279) |
| 23) | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| Distributions to minority | - | - | - | - | - | - | (28,791,965) | (28,791,965) |
| interest | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| At 31 December 2009 | 208,341 | 129,022,353 | 3,435 | 10,285,545 | (79,704,700) | 59,814,974 | 9,066,284 | 68,881,258 |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
| | | | | | | | | |
+-----------------------------+----------+--------------+------------+-------------+--------------+--------------+--------------+--------------+
ACP CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1 General information
ACP Capital Limited ("ACP" or the "Company") and its subsidiaries (together the
"Group"), while they were in investment mode, provided specialist integrated
finance and asset management solutions focused on European small and
medium-sized enterprises. The Company was incorporated on 30 August 2005 and
registered in Jersey under registration number 91066. The Company's shares were
admitted to trading on AIM on 6 January 2006. The consolidated financial
statements for the year ended 31 December 2009 were authorised for issue by the
Board of Directors on 15 March 2010.
At an EGM held on 17 July 2008, the Company announced that it would seek to
dispose of assets on an orderly basis and return the proceeds to shareholders by
way of distributions. Any new lending subsequent to the EGM has been due to
previous commitments.
2 Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively "IFRSs") issued by the International Accounting
Standards Board ("IASB") as adopted by the European Union and with those parts
of Companies (Jersey) Law 1991 applicable to companies preparing their financial
statements under IFRSs.
The financial statements have been presented in Sterling, the functional
currency of the Company. Some of the subsidiary entities of the Group use a
different functional currency, being the currency in the primary economic
environment in which the entity operates.
They are prepared under the historical cost convention modified to include
available-for-sale investments and investments measured at fair value through
profit or loss. The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on the
experience of the Directors and other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the
judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The most significant techniques for estimation are described in the accounting
policies or notes to the financial statements.
Note 3 sets out a description of the significant accounting policies of the
Group. The accounting policies are consistent with those applied in the year
ended 31 December 2008, and amended to reflect the adoption of the new
standards, amendments to standards or interpretations which are mandatory for
the first time for the financial year ended 31 December 2009.
New and amended standards adopted by the group
The Group has adopted the following new and amended IFRSs as of January 2009:
IFRS 7 'Financial instruments - Disclosures' (amendment) - effective 1 January
2009. The amendment requires enhanced disclosures about fair value measurement
and liquidity risk. In particular, the amendment requires disclosure of fair
value measurements by level of a fair value measurement hierarchy. As the change
in accounting policy only results in additional disclosures, there is no impact
on earnings per share.
IAS 1 (revised). 'Presentation of financial statements' - effective 1 January
2009. The revised standard amends the presentation of certain aspects of the
financial statements.
None of the other new standards that are effective from 1 January 2009 have had
a material effect on the financial statements.
Standards, amendments and interpretations to published standards not yet
effective
The following standards and amendments to existing standards have been published
and are mandatory for the group's accounting periods beginning on or after 1
January 2010 or later periods, but the group has not yet adopted them:
IAS 27 - Consolidated and Separate Financial Statements (effective for
accounting periods beginning on or after 1 July 2009).
IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations (effective
for accounting periods beginning on or after 1 January 2010).
IAS 1 - Presentation of Financial Statements (effective for accounting periods
beginning on or after 1 January 2010).
IAS 7 - Statement of Cash Flows (effective for accounting periods beginning on
or after 1 January 2010).
IAS 36 - Impairment of assets (effective for accounting periods beginning on or
after 1 January 2010).
IAS 39 - Financial Instruments: Recognition and Measurement (effective for
accounting periods beginning on or after 1 January 2010).
IAS 24 (revised) - Related Party Disclosures (effective for accounting periods
beginning on or after 1 January 2011).
IFRS 9 - Financial Instruments (effective for accounting periods beginning on or
after 1 January 2013).
3 Significant accounting policies
The accounting policies have been consistently applied across the Group entities
for the purpose of producing these consolidated financial statements. The
significant accounting policies applied are as follows:
a) Basis of consolidation
The financial information in the Group's Financial Statements for the year ended
31 December 2009 incorporates the Financial Statements of the Company and its
subsidiaries. Subsidiaries are entities controlled by the Group. Control exists
when the company has the power, directly or indirectly, to govern the financial
and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that are currently
exercisable or convertible are taken into account. The financial statements of
the subsidiaries are included in the consolidated financial statements from the
date that the control commences until the date control ceases.
Intra-group balances and any unrealised gains and losses arising from
intra-group transactions are eliminated in preparing the Financial Statements of
the Group.
b) Acquisitions
Acquisitions are accounted for as a business combination, in which case, the
identifiable assets, liabilities and contingent liabilities of a subsidiary or
joint venture are measured at their estimated fair value at the date of
acquisition. The cost of acquisition is measured as the fair value of the
consideration given together with any liabilities incurred or assumed at the
date of acquisition, plus costs directly attributable to the acquisition.
The excess of the cost of acquisition over the fair value of the Group's share
of the identifiable net assets acquired is recorded as goodwill. Where the fair
value of identifiable assets, liabilities and contingent liabilities exceed the
fair value of consideration paid, the excess is credited in full to the profit
or loss on the acquisition date.
Where a subsidiary is acquired in stages, the identifiable assets, liabilities
and contingent liabilities are measured at their estimated fair value and
compared to the cost of acquisition at each date investment in the subsidiary
took place.
c) Investments in an associate
An associate is an entity over which the Group has significant influence and is
neither a subsidiary nor an interest in a joint venture. Significant influence
is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control over those policies.
Investments in associates that are held as part of the Group's investment
portfolio are carried at fair value even though the Group may have significant
influence over those companies. Realised and unrealised gains and losses arising
from changes in the fair value of these investments are recognised in the income
statement in the period in which they arise. This treatment is permitted by IAS
28 Investment in Associates which allows investments held by venture capital
organisations and similar institutions to be excluded from the scope of IAS 28
Investment in Associates provided that those investments upon initial
recognition are designated at fair value through profit or loss and accounted
for in accordance with IAS 39 Financial Instruments: Recognition and
Measurement, with changes in fair value recognised through profit or loss in the
period of change.
d) Investments measured at fair value through profit or loss
Investments are recognised and derecognised at trade date. All listed and
unlisted equity investments are designated as at fair value through profit or
loss and subsequently carried in the statement of financial position at fair
value, and the changes in fair value are recognised in the consolidated
statement of comprehensive income analysed between accrued interest and other
fair value movements.
The valuation technique used for each class of investment is as follows:
Equity - publicly traded equity is valued at bid price at the reporting date.
Unlisted equity is stated at Directors' valuation having regard to venture
capital guidelines and third party reports.
Preference equity - valued as a percentage to par using the same percentage to
par of indicative bids of junior debt in the company in which the preference
equity is held.
Syndicated loans - are stated at Directors' valuation based on similar assets
traded in the secondary market.
e) Loans and receivables
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are initially recognised
at fair value plus transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as
significant financial difficulties on the part of the counterparty or default or
significant delay in payment) that the Group will be unable to collect all of
the amounts due under the terms receivable, the amount of such provision being
the difference between the net carrying amount and the present value of the
future expected cash flows associated with the impaired receivable, these
impairments together with foreign exchange gains and losses and associated
interest on these assets are recognised through the consolidated statement of
comprehensive income.
f) Available-for-sale
Non-derivative financial assets not included in the above categories are
classified as available-for-sale and comprise principally the Group's CDOs, CLOs
and small and medium sized enterprises ("SME") loans. They are carried at fair
value and valued based on an average of indicative valuations from market
makers. Available-for-sale financial assets are carried at fair value with
changes in fair value generally recognised in other comprehensive income and
accumulated available-for-sale reserve; exchange differences on assets
denominated in a foreign currency and interest calculated using the effective
interest rate method is recognised in profit or loss. Where there is a
significant or prolonged decline in the fair value of the available-for-sale
financial asset (which constitutes objective evidence of impairment), the full
amount of the impairment including any amount previously recognised in other
comprehensive income, is recognised in profit or loss. Purchases and sales of
available-for-sale financial assets are recognised on trade date with any change
in fair value between trade date and settlement date being recognised in
retained earnings.
g) Property, Plant and Equipment
Office equipment is stated at historical cost less depreciation. Depreciation is
calculated on a straight line method to allocate the cost over the estimated
useful life. The estimated life of office equipment is 3 years.
h) Trade and other receivables
Trade and other receivables are recognised initially at fair value. A provision
for impairment is established where there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of
the receivables concerned.
i) Cash & cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less.
j) Loans
All loans and borrowings are initially recognised at the fair value of the
consideration received net of issue costs associated with the borrowings. After
initial recognition, these are subsequently measured at amortised cost using the
effective interest method, which is the rate that exactly discounts the
estimated future cash flows through the expected life of the liabilities.
Amortised cost is calculated by taking into account any issue costs and any
discount or premium on settlement.
k) Trade and other payables
Trade and other payables are stated at amortised cost.
l) Equity instruments
Equity instruments issued by the Group are recognised at the proceeds or fair
value received with the excess of the amount received over 0.1p par value being
credited to the share premium account. Direct issue costs are deducted from
equity.
m) Revenue
Income from loans and receivables is recognised as it accrues by reference to
the principal outstanding and the effective interest rate applicable, which is
the rate that exactly discounts the estimated future cash flows through the
expected life of the financial asset to that asset's carrying value.
Fee income earned on financing arrangements that relate to investments measured
at fair value through profit or loss are recognised when that investment is
made. Fees earned from financing arrangements that relate to investments
classified as loans and receivables are recognised over the life of the assets.
Fees in respect of any ongoing services are recognised as that service is
provided.
Dividends from equity investments are recognised in the consolidated statement
of comprehensive income when the shareholders rights to receive payment have
been established.
n) Dividends
Dividends are recognised when they become legally payable. In the case of
interim dividends to equity shareholders, this is when declared by the
Directors. In the case of final dividends, this is when approved by the
shareholders at the AGM.
o) Share-based payments
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the consolidated statement of
comprehensive income over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity instruments expected to
vest at each reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the fair value of
the options granted. As long as all other vesting conditions are satisfied a
charge is made irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to achieve a
market vesting condition.
When the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and after
the modification, is also charged to the consolidated statement of comprehensive
income over the remaining vesting period.
p) Finance expense
Interest expense is calculated using the effective interest rate method. Finance
costs are recognised in the consolidated statement of comprehensive income over
the period of the loans and borrowings related to those costs.
q) Foreign currency translation
Transactions entered into by group entities in a currency other the currency of
the primary economic environment in which they operate (their "functional
currency") are recorded at the rates ruling when the transactions occur. Foreign
currency monetary assets and liabilities are translated at the rates ruling at
the reporting date. Exchange differences arising on the retranslation of
unsettled monetary assets and liabilities are translated at the rates ruling at
the reporting date, and are recognised immediately through profit or loss.
On consolidation, the results of overseas operations are translated into
sterling at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations are translated at the
rate ruling at the reporting date. Exchange differences arising on translation
the opening assets at opening rate and the results of overseas operations at
actual rate are recognised directly in equity (the "translation reserve").
r) Derivative financial instruments ("derivatives")
The Group uses foreign exchange swaps to manage its currency risk.
In accordance with its treasury policy, the Group does not hold or issue
derivatives for trading purposes.
All derivatives are initially recognised at fair value at the date the
derivative is entered into and are subsequently re-measured at fair value. The
gains or losses on derivatives, are recognised in the consolidated statement of
comprehensive income immediately.
4 Significant judgments, key assumptions and estimates
The Group's significant accounting policies are stated in note 3 above. Not all
of these significant accounting policies required management to make difficult,
subjective or complex judgements or estimates. The following is intended to
provide an understanding of the policies that management consider critical
because of the level of complexity, judgment or estimation involved in their
application and their impact on the consolidated financial statements. These
judgments involve assumptions or estimates in respect of future events. Actual
results may differ from these estimates.
Fair value of financial instruments
The Group determines the fair value of financial instruments that are not quoted
by using either indicative prices or valuation techniques. These indicative
prices and valuation techniques are significantly affected by the assumptions
used, including discount rates and estimates of future cash flows. In that
regard, the derived fair value estimation cannot always be substantiated by
comparison with independent markets and in many cases may not be capable of
being realised immediately.
At the reporting date GBP17.8 million (2008: GBP19.1 million) of investments
were valued using valuation techniques. The valuation technique used is based on
a relative valuation method (EBITDA multiple) and a discounted cash flow
analysis. The multiples used in the valuation are in line with multiples of peer
companies. If the EBITDA or multiple had been 5% lower or higher the investment
value would have reduced or increased by GBP0.8 million (2008: GBP1.0 million)
respectively.
5 Segment reporting
The Directors consider that there is only one business segment being specialist
integrated finance and asset management and only one geographic area being
Europe.
6 Financial risk management
The Group's activities expose it to a variety of financial risks: concentration
risk, market price risk, interest rate risk, currency risk, credit risk,
liquidity risk and capital risk. The Group's overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group's financial performance.
a) Concentration risk
Concentration risk arises from individual investments to which the Group has
significant exposure. The Group defines significant exposure as 10 percent of
gross portfolio value. Concentration risk is managed through regular review of
public information and from review of reports from debt agents and similar,
where appropriate. The Group seeks to have board representation on such
investments and to communicate regularly with managers of these investments. ACP
Capital UK LLP and ACP Investment Management Limited report quarterly to the
Board on concentration risk.
The concentration risks at year end were:
-IFR Capital plc - the Group's exposure totalled GBP37.1 million of the net
asset value total of GBP68.8 million (2008: GBP89.7 million of GBP155.0
million).
-Leasecom Group SAS - the Group's exposure totalled GBP17.7 million of the net
asset value total of GBP68.8 million (2008: GBP24.7 million of GBP155.0
million).
b) Market price risk
Market price risk arises from uncertainty in the future value of financial
instruments. During the year significant investment disposals have been made.
Existing investments are managed by the investment advisor who reports regularly
to the Board to review past and expected future performance. The nature of
investments is diverse. Monitoring includes reviewing monthly and quarterly
financial management reports and monthly portfolio managers' reports. Regular
contact is maintained with borrowers, agent banks and portfolio managers. Board
meetings are also attended. Where available, prices are monitored daily as are
companies on watch lists. Investments are not actively traded but opportunistic
sales of investments have occurred. Other than listed equity investments all
pricing is indicative only as there is little, if any, actual trading in other
instruments.
The Company's investments are exposed to market price fluctuation.
The market price of the Group's remaining investments fluctuated by 17 percent
during the year ended 31 December 2009.
The Directors' consider that price volatility during the year ended 31 December
2010 will be at a similar level.
As such, if the market price of these investments had been 17 percent lower at
31 December 2009 the Company's profit and net assets would have been lower by
GBP9.98 million (2008: 22.20 million). A 17 percent increase in market price
would, on the same basis, have increased the profit and net assets by the same
amount.
c) Interest rate risk
As the Group has no borrowings, interest rate risk arises solely from interest
received in respect of the Group's investments and loans and cash balances.
Investments and loans issued at floating interest rates expose the Group to cash
flow interest rate risk. The Group is also exposed to fair value risk interest
rate risk on the debt instruments held at fair value through profit or loss.
The table below details the Group's exposure to interest rates at 31 December
2009 by reference to the earlier of the contractual repricing or maturity date:
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| 2009 | | | | Within | | | | More | | |
| | | | | | | | | than | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | 1 | | 2-5 | | 5 | | Total |
| | | | | year | | years | | years | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | GBP | | GBP | | GBP | | GBP |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Fixed rate: | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Investments measured at fair | | - | | - | | | | |
| value through profit or loss | | | | | | - | | - |
+----------------------------------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Floating rate: | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Investments measured at fair | | 3,075,567 | | 17,672,210 | | 16,219,856 | | 36,967,633 |
| value through profit or loss | | | | | | | | |
+----------------------------------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Available-for-sale | | | | - | | | | | | |
| investments | | | | | | - | | - | | - |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Cash and cash | | | | 9,764,635 | | - | | - | | 9,764,635 |
| equivalents | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | 12,840,202 | | 17,672,210 | | 16,219,856 | | 46,732,268 |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| 2008 | | | | Within | | | | More | | |
| | | | | | | | | than | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | 1 | | 2-5 | | 5 | | Total |
| | | | | year | | years | | years | | (as |
| | | | | | | | | (as | | restated) |
| | | | | | | | | restated) | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | GBP | | GBP | | GBP | | GBP |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Fixed rate: | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Investments measured at fair | | - | | - | | 12,740,161 | | 12,740,161 |
| value through profit or loss | | | | | | | | |
+----------------------------------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Floating rate: | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Investments measured at fair | | 2,228,496 | | 20,284,573 | | 41,297,810 | | 63,810,879 |
| value through profit or loss | | | | | | | | |
+----------------------------------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Loans and | | | | - | | 205,283 | | 24,380,612 | | 24,585,895 |
| receivables | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| Cash and cash | | | | 20,621,092 | | - | | - | | 20,621,092 |
| equivalents | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | 22,849,588 | | 20,489,856 | | 78,418,583 | | 121,758,027 |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------------------+-----+--------------------+-----+------------------+-----+-------------------+
Floating rate interest is based on Euribor and a fixed margin.
In the year to 31 December 2010, the Directors consider that any movement in the
Eurobor rate will be upward and the increase will be a maximum of 150 basis
points.
At 31 December 2009, if interest rates on Euro floating rate investments had
been 150 basis points higher with all other variables held constant, the Group
profit after tax for the year would have GBP0.7 million higher (2008: loss
GBP1.5 million lower).
d) Foreign exchange risk
The Group invests in assets denominated in currencies other than Sterling.
The Group has foreign exchange hedging agreements in place with IFR Capital Plc
("IFR") under which ACP's (but not ACPM's) Euro denominated investment in IFR's
senior debt (the "Senior Facilities") was fixed into Sterling by reference to
the Euro-Sterling exchange rate on 20 December 2007. The effect of the hedging
agreement are that to the extent that ACP makes foreign exchange gains or losses
on the Senior Facilities then ACP is due to pay such gain to, or receive such
loss from, IFR on the date that ACP 's total debt commitments to IFR are reduced
to zero. This foreign exchange hedging covers 34.0% (2008: 15.9%) of the
foreign denominated assets. This foreign exchange derivative has not been
separated from the host IFR Capital investment as the whole instrument is
classified as fair value through profit or loss.
For the remaining foreign currency denominated assets, the Directors consider
that further reduction in foreign currency exposure does not warrant the cash
flow risk created from such hedging techniques. Therefore in relation to these
assets, the movements in the exchange rate between Sterling and any currencies
in which the Group transact exposes the Group to currency risk resulting in
gains or losses on retranslation into Sterling all of which are recognised
through profit or loss. These movements in the exchange rate may be influenced
by factors such as trade imbalances, levels of short term interest rates,
differences in relative values of similar assets in different currencies, long
term opportunities for investment and capital appreciation and political
developments.
The Group's policy is for Group entities to settle liabilities denominated in
their own currency with cash generated from operations in that same currency. If
Group entities have liabilities denominated in a currency other than their
functional currency (and have insufficient reserves of that currency to settle
them) cash already in that currency will, where possible, be transferred from
elsewhere in the Group.
The table below details the Group exposure to foreign currencies at the balance
sheet date:
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| 2009 | | Sterling | | Euro | | Euro | | Other | | Total |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | unhedged | | hedged | | currencies | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Total Assets | | 2,310,919 | | 43,989,220 | | 23,050,897 | | | | 69,351,036 |
| | | | | | | | | - | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Total Liabilities | | (469,778) | | | | | | | | (469,778) |
| | | | | - | | - | | - | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Net assets | | 1,841,141 | | 43,989,220 | | 23,050,897 | | | | 68,881,258 |
| | | | | | | | | - | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| 2008 | | Sterling | | Euro | | Euro | | Other | | Total |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | unhedged | | hedged | | currencies | | |
| | | | | (as | | (as | | | | |
| | | | | restated) | | restated) | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Total Assets | | 7,280,417 | | 125,517,430 | | 23,969,563 | | 942,998 | | 157,710,408 |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Total Liabilities | | (2,461,985) | | (243,003) | | | | - | | (2,704,988) |
| | | | | | | - | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| Net assets | | 4,818,432 | | 125,274,427 | | 23,969,563 | | 942,998 | | 155,005,420 |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+--------------------+-----+------------------+-----+--------------------+-----+--------------------+
The table below shows the effect on the net assets of the Group at the reporting
date if the Euro had strengthened or weakened by various percentages against
sterling with all other variables held constant. Any changes in net assets
would impact the consolidated statement of comprehensive income.
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | Net | | Net |
| | | | | | | | | Assets | | Assets |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| % change in Euro | | | | | | | | GBP | | GBP |
| against Sterling | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 20% weakened | | | | | | | | 61,549,721 | | 134,126,349 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 10% weakened | | | | | | | | 64,882,238 | | 143,616,836 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 5% weakened | | | | | | | | 66,786,533 | | 149,039,971 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Year end closing | | | | | | | | 68,881,258 | | 155,005,420 |
| rate | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 5% strengthened | | | | | | | | 71,196,480 | | 161,598,811 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 10% strengthened | | | | | | | | 73,768,949 | | 168,924,801 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| 20% strengthened | | | | | | | | 79,878,563 | | 186,324,027 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
e) Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a
financial instrument fails to meet its contractual obligations.
The Group is exposed to credit risk from deposits with banks and financial
institutions. The credit risk on cash and cash equivalents is limited due to the
high proportion of funds being held with high rated banking institutions. The
table below shows the balance of cash and cash equivalents held with various
financial institutions at the end of each reporting period.
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| Bank & rating | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| | | | | | | | | Balance | | Balance |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| Deutsche Bank AG | | | | | | | | 7,670,590 | | 19,854,295 |
| - rated A- | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| The Bank of New York Mellon | | | | | | 157,261 | | 630,253 |
| Corp. - rated A- | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| Bank of Cyprus Public Co. Ltd - | | | | | | 41,528 | | 74,944 |
| rated BBB+ | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| HSBC Holdings Plc | | | | | | | | | | 55,465 |
| - rated A- | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| Royal Bank of | | | | | | | | 1,895,256 | | |
| Scotland plc - | | | | | | | | | | - |
| rated A- | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| Bayerische Hypo-und Vereinsbank | | | | | | - | | 6,135 |
| AG - rated A- | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| | | | | | | | | 9,764,635 | | 20,621,092 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+----------------------+
The Group is exposed to a loss in investment value, loss in income and increase
in costs, such as legal fees, if counterparties of their investments fail to
meet their interest payment obligations.
The table below shows the fair value of the Group's investments at the end of
each of reporting period and the rating of those investments (where applicable).
The fair value approximates to the Group's maximum credit exposure to these debt
instruments.
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | 2009 | | 2008 |
+-------------------+----+-------+----+---------------------------------+----+------------------------------------+
| | | | | GBP | | % | | GBP | | % |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Syndicated Loans: | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - B | | | | | | 0.00% | | 9,228,649 | | 6.60% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - unrated | | | | 36,967,632 | | 62.96% | | 39,134,890 | | 33.90% |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | 36,967,632 | | 62.96% | | 48,363,539 | | 40.50% |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Equity (not | | | | 21,747,917 | | 37.04% | | 30,846,948 | | 21.90% |
| rated) | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Preference Shares | | | | | | 0.00% | | 28,187,503 | | 20.10% |
| (not rated) | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| SME Loans (not | | | | | | 0.00% | | 13,307,620 | | 9.50% |
| rated) | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| CLO1: | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - B | | | | | | 0.00% | | 1,556,528 | | 1.10% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - BB | | | | | | 0.00% | | 7,415,333 | | 5.30% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - BBB | | | | | | 0.00% | | 609,765 | | 0.40% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | 0.00% | | 9,581,626 | | 6.80% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| CDO2: | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - BB | | | | | | 0.00% | | 1,333,447 | | 0.90% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - BBB | | | | | | 0.00% | | 100,373 | | 0.10% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | 0.00% | | 1,433,820 | | 1.00% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| RMBS3: | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - B | | | | | | 0.00% | | 251,168 | | 0.20% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| Rating - CCC | | | | | | 0.00% | | 11,658 | | 0.00% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | 0.00% | | 262,826 | | 0.20% |
| | | | | - | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | 58,715,549 | | 100.00% | | 131,983,882 | | 100.00% |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
| | | | | | | | | | | |
+-------------------+----+-------+----+------------------+----+---------+----+---------------------+----+---------+
1Structured portfolio of leveraged loan assets ("CLO")
2Structured portfolio of debt assets ("CDO")
3Structured portfolio of residential mortgage backed securities ("RMBS")
During the year all the CLO, CDO and RMBS investments were sold, resulting in
the disposal of the lowest ranking debt tranches. Accordingly the Directors
consider credit risk has been reduced.
To mitigate against potential interest default and loss in value, the remaining
investments (IFR Senior Facilities), are managed on an ongoing basis as follows:
· Review of monthly reports.
· Review of quarterly financial covenant compliance certificates.
· Regular contact with agent banks or in some instances the borrower
directly, to determine covenant compliance, trading status and performance.
However, there is no guarantee that these credit risk management procedures will
be able to limit potential loss in investment value or loss of income from
counterparties who default on their obligations. If any or the Group's
counterparties default on interest payments, the Group's revenues and
profitability will be adversely affected.
Financial assets that were overdue or impaired are disclosed in note 15.
f) Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its immediate
financial commitments.
At 31 December 2009 the Group had working capital of GBP10.1 million (2008:
GBP25.7 million) represented by GBP9.7 million (2008: GBP20.6 million) of cash,
GBP0.9 million (2008: GBP5.1 million) of short-term receivables and GBP0.5
million (2008: GBP2.7 million) of short-term liabilities.
The Group's policy is to ensure that its operating costs are fully covered by
the dividend and interest income currently generated by the Group's assets.
The table below shows the multiple of operating costs to dividend and interest
income:
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| Dividend and | | | | | | | | 16,922,768 | | 19,444,903 |
| interest income | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| Other operating | | | | | | | | 4,602,558 | | 11,544,344 |
| expenses | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| Multiple of operating costs to | | | | | | 4 | | 2 |
| interest income | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+-------------------------+
To monitor liquidity risk, the Board receives rolling 12 month cash flow
projections on a quarterly basis as well asinformation regarding cash balances
and indications of any potential defaults on interest income from its
investments.
g) Capital risk management policies and objectives
Following the EGM on 17 July 2008, the Group's capital management policy and
objective is to return capital to shareholders by way of distributions.
The Group's capital comprises of purely equity funding, with the Group having no
borrowings.
h) Fair value estimation
Effective 1 January 2009, the group adopted the amendment to IFRS 7 for
financial instruments that are measured in the statement of financial
performance at fair value, this requires disclosure of fair value measurements
by level of the following fair value measurement hierarchy, sensitivity analysis
is included in note 4:
- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| 2009 | | | | Level | |Level | | Level | | Total |
| | | | | 1 | | 2 | | 3 | | |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| | | | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| Financial assets at fair value | | | | | | | |
| through profit and loss | | | | | | | |
+---------------------------------------+-------------------+-----+-------+-----+------------------+-----+------------------+
| Equity share | | | | 4,009,483 | | | | 17,738,433 | | 21,747,916 |
| investments | | | | | | - | | | | |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| Preference share | | | | | | | | | | |
| investments | | | | - | | - | | - | | - |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| Syndicated loans | | | | | | | | 36,967,633 | | 36,967,633 |
| | | | | - | | - | | | | |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| | | | | 4,009,483 | | | | 54,706,066 | | 58,715,549 |
| | | | | | | - | | | | |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------------------+-----+-------+-----+------------------+-----+------------------+
The table below shows the movement during the year of each class of financial
instrument categorised as level 3:
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| 2009 | | Opening | | Additions/ | | Movement/ | | Disposal/ | | Closing |
| | | balance | | interest | | impairment | | translation | | balance |
| | | | | receivable | | in value | | adjustment | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Financial assets at fair value | | | | | | | |
| through profit and loss | | | | | | | |
+----------------------------------------------------+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Preference share | | 28,187,502 | | 3,869,921 | | 11,118,687 | | (43,176,110) | | |
| investments | | | | | | | | | | - |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Syndicated loans | | 48,362,956 | | | | 5,727,330 | | (17,122,653) | | 36,967,633 |
| | | | | - | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Equity | | 19,118,631 | | | | 74 | | (1,380,272) | | 17,738,433 |
| | | | | - | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | 95,669,089 | | 3,869,921 | | 16,846,091 | | (61,679,035) | | 54,706,066 |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Available for | | | | | | | | | | |
| sale financial | | | | | | | | | | |
| assets | | | | | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Collateralised | | 1,433,819 | | | | (901,845) | | (531,974) | | |
| debt obligations | | | | - | | | | | | - |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Collateralised | | 9,581,626 | | | | (2,778,556) | | (6,803,069) | | |
| loan obligations | | | | - | | | | | | - |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| Residential | | 262,824 | | | | (77,807) | | (185,017) | | |
| Mortgage Backed | | | | - | | | | | | - |
| Securities | | | | | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| SME loans | | 13,307,624 | | 2,828,052 | | 736,319 | | (16,871,995) | | |
| | | | | | | | | | | - |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | 24,585,892 | | 2,828,052 | | (3,021,889) | | (24,392,055) | | |
| | | | | | | | | | | - |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | 120,254,981 | | 6,697,973 | | 13,824,202 | | (86,071,090) | | 54,706,066 |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
| | | | | | | | | | | |
+-------------------+-----+--------------------+-----+-------------------+-----+------------------------+-----+--------------------+-----+------------------+
7 Other operating expenses
Other operating expenses include the following amounts:
Services provided by the Group's auditor
During the year the Group obtained the following services from the Group's
auditors BDO LLP (in 2008 the Group obtained these services from BDO LLP and
Kingston Smith LLP):
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| Audit services | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| Statutory audit | | | | | | | | 128,007 | | 161,203 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| Non audit | | | | | | | | | | |
| services | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| Taxation services | | | | | | | | 1,500 | | 46,046 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| Other services | | | | | | | | | | 48,922 |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| | | | | | | | | 129,507 | | 256,171 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+---------------------+
Staff costs
Staff costs (including Directors) comprise:
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| Wages and | | | | | | | | 1,963,505 | | 1,019,405 |
| salaries | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| Directors' fees | | | | | | | | 252,980 | | 462,640 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| Directors' | | | | | | | | 229,648 | | |
| performance fees | | | | | | | | | | - |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| Social security | | | | | | | | 70,054 | | 381,553 |
| costs | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | 2,516,187 | | 1,863,598 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| Number of employees (excluding | | | | | | 7 | | 13 |
| directors) | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------------+-----+------------------------+
See note 21 for details of share based payments.
Director emoluments
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| Aggregate emoluments | | | | | | | 482,628 | | 462,640 |
| (Directors' fees) | | | | | | | | | |
+-------------------------+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
The Company had five Directors at 31 December 2009 (2008: five Directors)
Bad debts
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+-------------------+
| Bad debt expense | | | | | | | | 100,000 | | 4,229,019 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+-------------------+
8 Net finance income/(cost)
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Finance income | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Interest received | | | | | | | | 84,848 | | 2,247,272 |
| on bank deposits | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Finance expense | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Interest payable | | | | | | | | (3,733) | | (1,276,537) |
| on bank | | | | | | | | | | |
| borrowings | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Break costs | | | | | | | | | | (5,626,517) |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | (3,733) | | (6,903,054) |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| Net finance | | | | | | | | 81,115 | | (4,655,782) |
| income/(cost) | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+----------------------+-----+-------------------+
9 Income taxes
The income tax charge represents UK corporation tax at a standard rate of 28
percent (2008: 30%) chargeable on the profits arising in ACP Capital (UK)
Limited, the controlling partner of the Group's adviser, ACP Capital UK LLP.
The Company and a number of the subsidiaries are registered in Jersey as exempt
companies and are, therefore, not liable to Jersey income tax on profits derived
outside Jersey. Confirmation has been obtained from the Comptroller of Income
Tax in Jersey that, by concession, the companies will be liable to tax in Jersey
only in respect of income, other than bank interest income, arising in Jersey.
During the year no income, other than bank interest income, arose in Jersey.
With effect from the 2009 year of assessment Jersey abolished the exempt company
regime for existing companies. Profits arising in the Group for the 2009 year of
assessment and future periods will be subject to tax at the rate of 0%. In the
prior year the Group was exempt from taxation under the provisions of Article
123A of the Income Tax (Jersey) Law 1961 as amended.
10 Investments measured at fair value through profit or loss
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | (as |
| | | | | | | | | | | restated) |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Opening balance | | | | | | | | 107,397,988 | | 165,522,198 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Additions, including interest | | | | | | 12,625,196 | | 8,698,191 |
| income capitalised | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Fair value of investments of | | | | | | | | 46,600,479 |
| subsidiary on acquisition | | | | | | - | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Write back of brought forward | | | | | | | | (31,054,816) |
| parent company investment in | | | | | | - | | |
| subsidiary on acquisition | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Disposals | | | | | | | | (76,907,789) | | (3,306,858) |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Exchange differences on | | | | | | (4,263,478) | | 9,420,284 |
| translating foreign operations | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Movement in fair | | | | | | | | 19,863,632 | | (88,481,490) |
| value of | | | | | | | | | | |
| investments | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Closing balance | | | | | | | | 58,715,549 | | 107,397,988 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Disclosed in | | | | | | | | 3,075,567 | | 2,228,496 |
| current assets | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Disclosed in | | | | | | | | 55,639,982 | | 105,169,492 |
| non-current | | | | | | | | | | |
| assets | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | 58,715,549 | | 107,397,988 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
The fair value of listed investments is based on quoted market price at the
balance sheet date. The fair value of unlisted investments is determined by
using indicative prices or valuation techniques. Note 4 and note 6 reviews the
sensitivity of the prices used.
11 Loans and receivables
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Opening balance | | | | | | | | | | 15,912,561 |
| | | | | | | | | - | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Fair value of | | | | | | | | | | 40,916,554 |
| loans and | | | | | | | | - | | |
| receivables of | | | | | | | | | | |
| subsidiary on | | | | | | | | | | |
| acquisition | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Impairment of | | | | | | | | | | (9,412,455) |
| loans and | | | | | | | | - | | |
| receivables | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Transfer to | | | | | | | | | (47,416,660) |
| available-for-sale | | | | | | | - | | |
| investments | | | | | | | | | |
+--------------------------+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Closing balance | | | | | | | | | | |
| | | | | | | | | - | | - |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
Loans and receivables are carried at amortised cost using the effective interest
rate method, less provision for impairment. Impairment provisions are recognised
when there is objective evidence (such as significant financial difficulties on
the part of the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under the terms
receivable, the amount of such provision being the difference between the net
carrying amount and the present value of the future expected cash flows
associated with the impaired receivable.
12 Available-for-sale investments
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Opening balance | | | | | | | | 24,585,894 | | |
| | | | | | | | | | | - |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Transfer from | | | | | | | | | | 47,416,660 |
| loans and | | | | | | | | - | | |
| receivables | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Additions | | | | | | | | 2,828,052 | | 1,520,190 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Interest income | | | | | | | | | | 38,644 |
| accrued | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Impairment of | | | | | | (3,166,941) | | (32,567,588) |
| available-for-sale investments | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Exchange differences on | | | | | | (1,399,623) | | 8,177,988 |
| translating foreign operations | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Disposal | | | | | | | | (22,847,382) | | |
| | | | | | | | | | | - |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| Closing balances | | | | | | | | | | 24,585,894 |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+---------------------+
Following the EGM on 17 July 2008, the Group announced that it would seek to
dispose of its assets and distribute proceeds to its shareholders by way of
distributions. Accordingly assets previously disclosed as loans and receivables
have been reclassified to available-for-sale investments.
Available-for-sale investments were carried at fair value which was determined
by using indicative prices.
In relation to the prior year, where the valuation of the assets was based on an
average of indicative prices, if the lowest or highest price had been used then
the value of the Group's available-for-sale investments at 31 December 2008
would have been GBP2.17 million lower or greater respectively.
13 Property, plant and equipment
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Cost | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| At 1 January 2009 and 31 | | | | | | | | |
| December 2009 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Depreciation | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| At 1 January 2009 and 31 | | | | | | | | |
| December 2009 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Net book value as at 31 | | | | | | | | |
| December 2009 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Cost | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Brought forward | | | | | | | | | | 50,335 |
| at 1January 2008 | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Disposals | | | | | | | | | | (50,335) |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Carried forward as at 31 | | | | | | | | |
| December 2008 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Depreciation | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Brought forward | | | | | | | | | | 23,102 |
| at 1January 2008 | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Disposals | | | | | | | | | | (23,102) |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Carried forward as at 31 | | | | | | | | |
| December 2008 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| Net book value as at 31 | | | | | | | | |
| December 2008 | | | | | | | | - |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+---------------------+
The Group's property, plant and equipment was written down to GBPnil during the
year ended 31 December 2008.
14 Financial instruments by category
The accounting policies for financial instruments have been applied to line
items as follows:
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| 2009 | | | | Assets | | Available | | Loans | | Total |
| | | | | at | | for sale | | and | | |
| | | | | fair | |investments | | receivables | | |
| | | | | value | | | | | | |
| | | | | through | | | | | | |
| | | | | profit | | | | | | |
| | | | | or loss | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| | | | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| Assets as per | | | | | | | | | | |
| balance sheet | | | | | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| Equity share | | | | 21,747,916 | | | | | | 21,747,916 |
| investments | | | | | | - | | - | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| Syndicated loans | | | | 36,967,633 | | | | | | 36,967,633 |
| | | | | | | - | | - | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| Trade and other | | | | | | | | 870,852 | | 870,852 |
| receivables | | | | - | | - | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| Cash and cash | | | | | | | | 9,764,635 | | 9,764,635 |
| equivalents | | | | - | | - | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| | | | | 58,715,549 | | | | 10,635,487 | | 69,351,036 |
| | | | | | | - | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+-------------+-----+--------------------+-----+--------------------+
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| 2009 | | | | | | | | | | Liabilities |
| | | | | | | | | | | held at |
| | | | | | | | | | | amortised |
| | | | | | | | | | | cost |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| | | | | | | | | | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| Liabilities as | | | | | | | | | | |
| per balance sheet | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| Trade and other | | | | | | | | | | 379,367 |
| payables | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+--------------------+
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| 2008 | | | | Assets | | Available | | Loans | | Total |
| | | | | at | | for sale | | and | | |
| | | | | fair | | investments | | receivables | | |
| | | | | value | | | | | | |
| | | | | through | | | | | | |
| | | | | profit | | | | | | |
| | | | | or loss | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| | | | | (as | | | | | | (as |
| | | | | restated) | | | | | | restated) |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| | | | | GBP | | GBP | | GBP | | GBP |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Assets as per | | | | | | | | | | |
| balance sheet | | | | | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Equity share | | | | 30,846,948 | | | | | | 30,846,948 |
| investments | | | | | | - | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Preference share | | | | 28,187,503 | | | | | | 28,187,503 |
| investments | | | | | | - | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Syndicated loans | | | | 48,363,537 | | | | | | 48,363,537 |
| | | | | | | - | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Collateralised | | | | | | 1,433,820 | | | | 1,433,820 |
| debt obligations | | | | - | | | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Collateralised | | | | | | 9,581,626 | | | | 9,581,626 |
| loan obligations | | | | - | | | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| SME loans | | | | | | 13,307,622 | | | | 13,307,622 |
| | | | | - | | | | - | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Residential Mortgage Backed | | | | 262,826 | | | | 262,826 |
| Securitisation | | - | | | | - | | |
+---------------------------------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Trade and other | | | | | | | | 5,105,434 | | 5,105,434 |
| receivables | | | | - | | - | | | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| Cash and cash | | | | | | | | 20,621,092 | | 20,621,092 |
| equivalents | | | | - | | - | | | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| | | | | 107,397,988 | | 24,585,894 | | 25,726,526 | | 157,710,408 |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+------------------+-----+--------------------+-----+-------------------+-----+--------------------+
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| 2008 | | | | | | | | | | Liabilities |
| | | | | | | | | | | held at |
| | | | | | | | | | | amortised |
| | | | | | | | | | | cost |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Liabilities as | | | | | | | | | | |
| per balance sheet | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Trade and other | | | | | | | | | | 2,519,643 |
| payables | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
15 Trade and other receivables
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| Trade receivables | | | | | | | | 378,664 | | 4,076,139 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| Other receivables | | | | | | | | 441,562 | | 955,276 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| Prepayments | | | | | | | | 50,626 | | 74,019 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| | | | | | | | | 870,852 | | 5,105,434 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+---------------------+-----+---------------------+
Trade receivables include interest receivable on interest bearing assets. The
maximum exposure to credit risk at the reporting date is the fair value of each
class of receivable mentioned above. The Group does not hold any collateral as
security.
At 31 December 2009 trade and other receivables that were past due but not
impaired are detailed below, including ageing analysis. These relate to
customers with no default history.
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| 3-6 months | | | | | | | | | | 886,905 |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| Greater than 12 | | | | | | | | 324,510 | | |
| months | | | | | | | | | | - |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 324,510 | | 886,905 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
Other than the loans and receivable analysed below, there were no other assets
that were passed due or impaired.
At 31 December 2009 trade receivables of GBP188,211 (2008: GBP537,119) were past
due and impaired. The amount of the provision as at 31 December 2009 was
GBP188,211 (2008: GBP134,000). The ageing of these receivables is as follows:
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| 6-12 months | | | | | | | | | | 537,119 |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| Greater than 12 | | | | | | | | 188,211 | | |
| months | | | | | | | | | | - |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 188,211 | | 537,119 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
16 Trade and other payables
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| Trade payables | | | | | | | | 176,495 | | 450,909 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| Accruals | | | | | | | | 202,872 | | 2,068,734 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | 379,367 | | 2,519,643 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+--------------------+-----+--------------------+
17 Share capital
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| | | | | 2009 | | 2009 | | 2008 | | 2008 | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| | | | | No. | | GBP | | No. | | GBP | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Authorised share capital of 350 million 0.1 | | 350,000 | | | | 350,000 | |
| pence ordinary shares | | | | | | | |
+-------------------------------------------------------+----+--------------------+----+-------------------+----+----------------------+----+
| | | | | | | | | | | | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Issued and fully paid 0.1 | | | | | | | | | |
| pence ordinary shares | | | | | | | | | |
+--------------------------------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Brought forward | | | | 208,341,941 | | 208,341 | | 199,531,941 | | 199,531 | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Share options | | | | | | | | 12,245,000 | | 12,245 | |
| exercised | | | | - | | - | | | | | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Buy back of | | | | | | | | (3,435,000) | | (3,435) | |
| shares | | | | - | | - | | | | | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| Carried forward | | | | 208,341,941 | | 208,341 | | 208,341,941 | | 208,341 | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
| | | | | | | | | | | | |
+-------------------+----+-------+----+-----------------+----+--------------------+----+-------------------+----+----------------------+----+
Fully paid ordinary shares, which have a par value of 0.1 pence, carry one vote
per share and carry a right to dividends and capital distributions.
There were no share transactions in the current period. In the prior period the
Group acquired 3,435,000 of the Company's own shares. The share buy back was
made at the prevailing market rates at the date of transaction with the total
cost being GBP2,881,330. 12,245,000 shares were issued at par when all
outstanding share options vested in July 2008.
18 Share premium
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| Brought forward | | | | | | | | 208,400,632 | | 216,734,311 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| Capital | | | | | | | | (79,378,279) | | (8,333,679) |
| distribution | | | | | | | | | | |
| (note 24) | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| Carried forward | | | | | | | | 129,022,353 | | 208,400,632 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-------------------+
19 Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium
Amount subscribed for in excess of nominal value.
Capital redemption reserve
Amounts transferred from share capital on redemption of issued shares.
Translation of foreign operations reserve
The amount of any gains and losses arising on the translation of net assets of
foreign operations in to Sterling.
Retained earnings reserve
Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
Minority Interest reserve
The share of net assets attributable to minority shareholdings in subsidiary
undertakings.
20 Earnings per share
The calculation of the basic earnings and diluted earnings per share
attributable to the equity shareholders of the Group is based on the following
data:
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | | | (as |
| | | | | | | | | | | restated |
| | | | | | | | | | | - note |
| | | | | | | | | | | 26) |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | GBP | | GBP |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Earnings/(Loss) per share | | | | | | 19,643,227 | | (102,266,138) |
| attributable to the equity | | | | | | | | |
| holders of the Company during | | | | | | | | |
| the year | | | | | | | | |
+----------------------------------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Weighted average number of | | | | | | 208,341,941 | | 202,905,796 |
| ordinary shares for the purposes | | | | | | | | |
| of basic earnings per share | | | | | | | | |
+----------------------------------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Effect of dilutive | | | | | | | | | |
| potential ordinary | | | | | | | | | |
| shares: | | | | | | | | | |
+--------------------------+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Share options | | | | | | | | | | |
| | | | | | | | | - | | - |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| Weighted average number of | | | | | | 208,341,941 | | 202,905,796 |
| ordinary shares for the purposes | | | | | | | | |
| of diluted earnings per share | | | | | | | | |
+----------------------------------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
| | | | | | | | | | | |
+--------------------+-----+-------+-----+-------+-----+-------+-----+------------------+-----+-----------------+
21 Share based payments
The Company operated an executive share option scheme for Directors and certain
senior management.
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| | | | | 2009 | | 2009 | | 2008 | | 2008 |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| | | | | GBP | | No. | | GBP | | No. |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| | | | |Weighted | | | |Weighted | | |
| | | | | average | | | | average | | |
| | | | |exercise | | | |exercise | | |
| | | | | price | | | | price | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| | | | | | | | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| Outstanding at | | | | | | | | | | 4,430,000 |
| beginning of year | | | | | | - | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| Granted during | | | | | | | | | | 8,065,000 |
| the year | | | | | | - | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| Exercised during | | | | | | | | | | (12,245,000) |
| the year | | | | | | - | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| Lapsed during the | | | | | | | | | | (250,000) |
| year | | | | | | - | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| | | | | | | | | | | |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
| Outstanding at | | | | - | | | | - | | |
| end of year | | | | | | - | | | | - |
+-------------------+----------+-------+----------+----------+----------+-------+----------+----------+----------+--------------------+
All options vested and were either exercised or lapsed during the prior year.
All options were exercised on 17 July 2008. The share price as at that date was
63 pence.
No options were granted during the year (2008: the weighted average fair value
of options granted was 47 pence).
The following information is relevant in the determination of the fair value of
options granted during the prior year under the equity share option scheme
operated by the Group. No options were granted during the current year.
+-------------------+----+-------+----+-------+----+-------+----+-------+----+------------+
| || | | | | | | | | 2008 |
+-------------------++-------++-------++-------++-------++------------+
| || | | | | | | | | GBP |
+-------------------++-------++-------++-------++-------++------------+
| Option pricing || | | | | | | | | QCA - IRS |
| model used || | | | | | | | | Option |
| || | | | | | | | | value |
+-------------------++-------++-------++-------++-------++------------+
| Weighted average share price | | | | | | | | 0.855 |
| at grant date | | | | | | | | |
+--------------------------------++-------++-------++-------++------------+
| Exercise price || | | | | | | | | 0.001 |
+-------------------++-------++-------++-------++-------++------------+
| Expected Life of || | | | | | | | | 3 |
| Option (years) || | | | | | | | | |
+-------------------++-------++-------++-------++-------++------------+
| || | | | | | | | | |
+-------------------++-------++-------++-------++-------++------------+
| Expected dividend || | | | | | | | | 2% |
| yield || | | | | | | | | |
+-------------------++-------++-------++-------++-------++------------+
| Expected || | | | | | | | | 5% |
| volatility || | | | | | | | | |
+-------------------++-------++-------++-------++-------++------------+
| Illiquid market || | | | | | | | | 20% |
| discount || | | | | | | | | |
+-------------------++-------++-------++-------++-------++------------+
| Discount due to market | | | | | | | | 20% |
| performance targets | | | | | | | | |
+--------------------------------++-------++-------++-------++------------+
| | | | | | | | | | | |
+-------------------+----+-------+----+-------+----+-------+----+-------+----+------------+
The Company recognised the following total expenses and costs in respect of
equity settled share payments in the period.
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
| Recognised immediately as an expense and | | | | | | 6,043,952 |
| charged to the consolidated statement of | | | | - | | |
| comprehensive income | | | | | | |
+-----------------------------------------------+-----+-------+-----+-------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-------------------+
22 Subsidiaries
The Group has the following subsidiaries:
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| Name | | | | Country | |Percentage | | Principal activity |
| | | | | of | | owned | | |
| | | | |incorporation | | | | |
| | | | | and | | | | |
| | | | | registration | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Mezzanine | | | | Jersey | | 54.37% | | Mezzanine assets and |
| Limited | | | | | | | | other investments |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Mezzanine Asset | | | Jersey | | 54.37% | | Dormant | | |
| Holdings 1 Limited | | | | | | | | | |
+-------------------------+-------+----+---------------+----+------------+----+---------------+----+----+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Mezzanine Asset | | | Jersey | | 54.37% | | Dormant | | |
| Holdings 2 Limited | | | | | | | | | |
+-------------------------+-------+----+---------------+----+------------+----+---------------+----+----+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Investment | | | | Jersey | | 100% | | Investment manager |
| Management Limited | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Capital | | | | Jersey | | 100% | | Trustee for employee |
| Nominee Limited | | | | | | | | awards |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | |
+--------------------+----+-------+----+--------------------+------------+----+---------------+----+----+
| ACP Capital UK LLP | | | | England & | 100% | | Advisory services | |
| | | | | Wales | | | | |
+--------------------+----+-------+----+--------------------+------------+----+--------------------+----+
| | | | | | | | | | |
+--------------------+----+-------+----+--------------------+------------+----+---------------+----+----+
| ACP Capital (UK) | | | | England & | 100% | | Controlling member of |
| Limited | | | | Wales | | | the LLP |
+--------------------+----+-------+----+--------------------+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Capital Cyprus (HR) limited | Cyprus | | 100% | | Ceased trading in 2008. |
| [insolvency proceedings] | | | | | Used to be employment |
+--------------------------------------+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| ACP Capital | | | | Cyprus | | 100% | | Investment holdings |
| (Cyprus) Limited | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| Perseus Holdings | | | | Jersey | | 100% | | Investment holdings |
| Limited | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+-------------------------+
| | | | | | | | | | | |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
| Mittelstand Kapital Solutions GmbH | Germany | | 100% | | Ceased trading in 2008. |
| [insolvency proceedings] | | | | | Used to be advisory |
| | | | | | services |
+--------------------+----+-------+----+---------------+----+------------+----+---------------+----+----+
23 Dividends and capital distributions
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Interim dividends | | | | | | | | | | |
| paid in the | | | | | | | | | | |
| period | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Year ended 31 December 2008 - | | | | | | | | 6,983,617 |
| paid April 2008 | | | | | | - | | |
+---------------------------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| Capital | December | | | | | | | | 8,333,679 |
| distribution - | 2008 | | | | | | - | | |
| paid | | | | | | | | | |
+-------------------+-------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | March 2009 | | | | | | 9,375,387 | | |
| | | | | | | | | | - |
+-------------------+-------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | May 2009 | | | | | | 3,645,984 | | |
| | | | | | | | | | - |
+-------------------+-------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | November | | | | | | 10,521,268 | | |
| | 2009 | | | | | | | | - |
+-------------------+-------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | December | | | | | | 55,835,640 | | |
| | 2009 | | | | | | | | - |
+-------------------+-------------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | 79,378,279 | | 8,333,679 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | 79,378,279 | | 15,317,296 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-------------------+
24 Cash and cash equivalents
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| | | | | | | | | GBP | | GBP |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| Cash available on | | | | | | | | 9,764,635 | | 20,621,300 |
| demand | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| Overdrafts | | | | | | | | | | (208) |
| | | | | | | | | - | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| | | | | | | | | 9,764,635 | | 20,621,092 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------------------+-----+-----------------------+
25 Prior year adjustments
The prior year adjustment relates to an embedded hedging agreement within the
investment agreement (the "Agreement") between ACP and IFR Capital Plc ("IFR")
under which ACP's (but not ACPM's) Euro denominated investment in IFR's senior
debt (the "Senior Facilities") was fixed into Sterling by reference to the
Euro-Sterling exchange rate on 20 December 2007. The effect of the Agreement is
that to the extent that ACP makes foreign exchange gains or losses on the Senior
Facilities then ACP is due to pay such gain to, or receive such loss from, IFR
on the date that ACP 's total debt commitments to IFR are reduced to zero.
The Group's financial statements as at 31 December 2008 did not reflect this
element of the embedded hedging agreement, and treated the debt as a foreign
denominated monetary asset. Accordingly, in prior periods the Group has
incorrectly recognised gains and losses on the translation of these loans at the
reporting dates. This foreign exchange derivative has not been separated from
the host IFR Capital investment as the whole instrument is classified as fair
value through profit or loss.
The effect that this has had on the previously published financial statements
is:
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| | | | | | | | | | | 2008 |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Statement of Comprehensive | | | | | | | | GBP |
| Income | | | | | | | | |
+---------------------------------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Increase in losses on investments at fair value through profit or loss | | 8,574,017 |
| and Group loss attributable to owners of the Company | | |
+---------------------------------------------------------------------------+-----+-----------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Statement of | | | | | | | | | | |
| Financial | | | | | | | | | | |
| Position | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Reduction in asset value for investments measured at fair value through | | 8,574,017 |
| profit or loss and Group net assets (excluding non-controlling interest) | | |
+---------------------------------------------------------------------------+-----+-----------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Earnings per | | | | | | | | | | |
| share | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Basic (increase | | | | | | | | | | 4.22 |
| in loss per | | | | | | | | | | pence |
| share) | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| Diluted (increase | | | | | | | | | | 4.22 |
| in loss per | | | | | | | | | | pence |
| share) | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
| | | | | | | | | | | |
+-------------------+-----+-------+-----+-------+-----+-------+-----+-------+-----+-----------+
This misstatement would have had an immaterial effect on the consolidated
statement of financial position as at the beginning of the comparative period (1
January 2008). In consequence the opening consolidated statement of financial
position and associated notes have not been presented in the financial position.
A copy of the financial statements for the year ended 31 December 2008 can be
found at www.acpcapital.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KKADNCBKKPND
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