TIDMACPM
RNS Number : 6453I
ACP Mezzanine Ltd
16 March 2010
ACP Mezzanine Limited
Results for the year ended 31 December 2009
The Board of ACP Mezzanine Limited ("ACPM" or the "Company": AIM: ACPM) today
announces the results for the Company and its subsidiaries (together, the
"Group") for the 12 months ended 31 December 2009.
Key points:
· A total of EUR70.8 million distributed to shareholders during the year;
· Sale of the IFR Capital plc ("IFR") preferred shares and Tranche D debt
for EUR43.6 million;
· Cancellation and repayment in full of EUR15 million facility to Leasecom
Financial Assets SAS;
· Sale of the entire portfolio of CDO, CLO and RMBS structured product
investments for EUR6.7 million;
· Sale of the participation in the mezzanine debt issued by Iceland Foods
Group Limited for EUR3.9 million;
· Sale of the debt investment in GCI Automotive Holding GmbH for EUR3.27
million;
· Notice of termination of the Investment Management Agreement with ACP
Investment Management Limited served;
· Net asset value per share at 31 December 2009: 9.5 eurocents (2008: 32.40
eurocents)
· Consolidated cash and cash equivalents at the balance sheet date of EUR5.72
million (2008: EUR11.78 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.
CHAIRMAN'S STATEMENT
ACP Mezzanine Limited's ("ACPM" or "the Company") net asset value per share at
year end was 9.5 eurocents as compared with 32.40 eurocents at the end of 2008.
During the year we returned EUR70.8 million (30.05 eurocents per share) of capital
primarily from the sales of the following investments:
· The IFR Capital plc ("IFR") preferred shares and Tranche D / second lien
debt;
· The sale of the CLO, CDO and RMBS portfolio ;
· The sale of our subordinated debt investments in GCI Automotive Holdings
GmbH;
· The sale of our participation in the mezzanine debt issued by Iceland
Foods Group Limited; and
· The sale of certain shares in and held as security in respect of a loan
to PFAFF Industrie Machinen AG.
Additionally, the EUR15 million facility to Leasecom Financial Assets SAS was
cancelled and repaid in full.
Our current portfolio comprises investments in tranches "A," "B," and "C" of the
IFR debt. All three tranches are secured. The A tranche is amortising, has a
margin of 225 bps per annum over 3-month Euribor payable quarterly and matures
in December 2014 . The B and C tranches are non-amortizing and have margins of
275 bps and 325 bps, respectively, over 3-month Euribor, payable quarterly and
mature in December 2015 and December 2016 respectively. Following the sale of
the IFR preferred shares, two shareholders now control almost all of IFR's
equity and IFR has been delisted from the AIM Market of the London Stock
Exchange plc (the "LSE") ("AIM").
Our objective is to realise assets and return capital net of expenses to our
shareholders. Our major expense is the investment management contract with our
manager, ACP Investment Management Limited ("ACPIM"). That agreement, which we
inherited, requires us to pay ACPIM a management fee equal to 1.75% of gross
shareholder equity per annum. Gross shareholder equity represents the aggregate
gross proceeds of all issues of shares in the capital of the Company, less any
distributions made. Under the terms of the investment management agreement, we
may terminate by giving ACPIM 24 months notice of termination or pay a
termination fee equal to twice the total of the four most recent quarterly
management fee payments. On 2 December 2009 notice was served on the manager to
terminate the agreement, with effect from 3 December 2011.
Respectfully yours,
John D. Chapman
Chairman
DIRECTORS' REPORT
The Directors present their report with the financial statements of ACP
Mezzanine Limited ("ACPM" or the "Company") and its subsidiaries (together, the
"Group") for the year ended 31 December 2009. The Company was incorporated on 31
May 2006.
PRINCIPAL ACTIVITES AND REVIEW OF THE BUSINESS
The Company is a Jersey-incorporated limited liability public company which
listed on AIM in July 2006. The Group, while it was in investment mode, had
invested in a portfolio of debt facilities, CDOs, and CLOs. The Group's
investments are managed by ACP Investment Management Limited ("ACPIM"), a
subsidiary of the parent company ACP Capital Limited ("ACP"), through an
investment management agreement.
A review of the business during the year is contained in the Chairman's
statement.
At an EGM held on 9 December 2008, shareholders approved a change in investment
policy whereby ACPM will seek to dispose of assets on an orderly basis and
return the proceeds to shareholders by way of distributions.
RESULTS AND DIVIDENDS
The results for the year are set out in the financial statements.
For the 2009 calendar year, ACPM has distributed to shareholders a total of
30.05 eurocents per share.
The Directors do not recommend the payment of a final dividend.
The Group's net asset value per share at 31 December 2009 was 9.5 eurocents per
share (2008: 32.4 eurocents per share).
DIRECTORS AND THEIR INTERESTS
The Directors during the year and at the date of this report were:
John Chapman
Stephen Coe
George Baird
Rupert Walker (appointed 9 January 2009)
Graeme Ross (resigned 9 January 2009)
All the current Directors hold non-executive positions on the Board. There are
currently no executive Directors on the Board.
The Directors have no interest in the Company's shares as at 31 December 2009.
Directors' terms of service
There are no executive Directors on the Board. None of the Directors have
service contracts with any company in the Group. Their terms of appointment are
governed by letters of appointment. The majority of Directors have been
appointed for an initial period of three years and for the majority of the
Directors 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 Fees
Directors' remuneration for the year was as follows:
+------------+----------------------------+---------------------+----------+---------------------+
| Directors' | | 2009 | | 2008 |
| fees | | EUR | | EUR |
+------------+----------------------------+---------------------+----------+---------------------+
| | | | | |
+------------+----------------------------+---------------------+----------+---------------------+
| George | | 18,280 | | 17,772 |
| Baird | | | | |
+------------+----------------------------+---------------------+----------+---------------------+
| Stephen | | 4,739 | | 2,010 |
| Coe (1) | | | | |
+------------+----------------------------+---------------------+----------+---------------------+
| John | | 38,309 | | 18,528 |
| Chapman | | | | |
| (1) | | | | |
+------------+----------------------------+---------------------+----------+---------------------+
| | | 61,328 | | 38,310 |
+------------+----------------------------+---------------------+----------+---------------------+
| | | | | |
+------------+----------------------------+---------------------+----------+---------------------+
2009 Directors' fees reflect a full year for Messrs Coe and Chapman; 2008 was a
partial year.
(1) John Chapman and Stephen Coe are also Directors of ACP Capital Limited. John
Chapman is also a Director of ACP Investment Management Limited and ACP Capital
UK Limited, whilst Stephen Coe is also a director of ACP Capital (Cyprus)
Limited and Leasecom Financial Assets SAS.
SUBSTANTIAL SHAREHOLDINGS
At 31 December 2009, the Company had been notified of the following interests in
its issued share capital:
+------------+----------------------------+-------+----------+--------+
| ACP | | | | 54.37% |
| Capital | | | | |
| Limited | | | | |
+------------+----------------------------+-------+----------+--------+
| F & C Asset Managers plc | | | 8.67% |
+-----------------------------------------+-------+----------+--------+
| Weiss Asset Managers plc | | | 6.62% |
+-----------------------------------------+-------+----------+--------+
| Credit Agricole Cheuvreux International | | | 5.56% |
+-----------------------------------------+-------+----------+--------+
| Midas Capital Partners Limited | | | 5.07% |
+-----------------------------------------+-------+----------+--------+
| Artemis Investment Management Limited | | | 4.11% |
+-----------------------------------------+-------+----------+--------+
| Brooks Macdonald Asset Management | | | 4.03% |
+-----------------------------------------+-------+----------+--------+
| | | | | |
+------------+----------------------------+-------+----------+--------+
THE ANNUAL GENERAL MEETING
The Notice of the Annual General Meeting of the Company and a circular dealing
with the 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 Group'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 Group's auditors are aware
of that information.
AUDITORS
BDO LLP have expressed their willingness to continue in office as auditors. A
resolution to reappoint them will be proposed at the forthcoming Annual General
Meeting.
On behalf of the Board
Director
15 March 2010
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
listed 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 meets regularly and is responsible for strategy, performance, approval
of disposals where such disposals do not fall within the discretion granted to
ACP Investment Management Limited (ACPIM) pursuant to the Investment Management
Agreement, and the framework of internal controls. 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 services of the Company
Secretary. The appointment and removal of the Company Secretary 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 Directors are satisfied that
the balance of the Board is such that no individual or small group of
individuals can dominate the Board's decision making. There are no executive
Directors on the Board. Executive functions are carried out by ACPIM.
The Board met 12 times during the year, including the Annual General Meeting.
Board Committees
Nomination Committee
A nomination committee is not considered appropriate because of the small size
of the Board and the Company, but all appointments or potential appointments are
fully discussed by all Board members. All new Directors and senior management
are given a comprehensive introduction to the Company's business. Any training
which is deemed by the Board to be necessary will be provided at the Company's
expense. Consideration will be given by the Board as to whether the Board has
the skills required to manage the Group effectively, and particularly its
relationship with the Company Secretary. The Directors do not consider that it
is necessary at present for formal procedures to be in place to enable the Board
to conduct a formal annual performance evaluation of itself or individual
members of the Board.
Remuneration Committee
The Directors do not intend to establish a remuneration committee, as such
committee would not be appropriate given the structure of the Board and the
Company's operations. The Board will review annually the remuneration of the
Directors and agree reasonable and market standard levels of non-executive fees
based on market information sourced through discussions with third parties.
Audit Committee
The Audit Committee comprises Stephen Coe, John Chapman and George Baird.
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 Company's Board and take
place not less than twice a year. The Audit Committee has written terms of
reference.
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 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;
· quarterly results and activity reports are closely monitored by the
Directors;
· the Board is responsible for identifying the major business risks
faced by the Group and for determining the appropriate courses of action to
manage those risks; and
· oversight of the performance of ACPIM and its compliance with the
Investment Management Agreement.
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. In addition to the
regular announcements, including ACPM's announcement of the preliminary year end
results and at the half year, the Board also issues reports in respect of ACPM's
net asset value to its shareholders on a quarterly basis. The Board uses the
Annual General Meeting to communicate with investors and welcomes their
participation. The Board aims to ensure that at least one Director is available
at Annual General Meetings to answer questions.
CREDITORS PAYMENT POLICY
The 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 ACPM or its subsidiary
companies.
INVESTMENT MANAGER
In 2006, ACPM entered into an Investment Management Agreement ("IMA") with
ACPIM, a wholly owned subsidiary of ACP Capital Limited (ACP). Under the
Agreement, ACPIM was appointed investment manager for an initial period of 3
years and given discretion to deal with the Group's assets subject to certain
guidelines. The period of appointment was extended to 7 years starting in
December 2007. The annual management fee chargeable by ACPIM is currently based
on 1.75 percent of gross shareholders' equity, less any distributions.
Additionally, ACPIM is entitled to a performance fee equivalent to 25 percent
above a benchmark return (minimum 2 percent per quarter).
As a result of the reduction in the Group's investment portfolio, ACPIM has been
given notice of termination of the IMA. The IMA will terminate on 3 December
2011.
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 of the profit or loss of the Group 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 do so.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group 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 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
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2009
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Investment | | | | | |Notes | | | | |
| income | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Gains/(losses) on investments at fair value | | | | 12,154,507 | | (24,057,920) |
| through profit or loss | | | | | | |
+-----------------------------------------------------+----------+-------+----------+---------------------+----------+-------------------+
| Dividend and interest income | | | | | | 10,832,929 | | 14,765,307 |
+----------------------------------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Fees and | | | | | | | | 42,090 | | 615,000 |
| other income | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Total net investment | | | | | | | 23,029,526 | | (8,677,613) |
| income | | | | | | | | | |
+--------------------------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Exchange | | | | | | | | 158,763 | | (236,591) |
| movements | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Impairment of loans and | | | | | | | | (21,435,114) |
| receivables | | | | | | - | | |
+----------------------------------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Impairment of | | | | | | (2,822,547) | | (30,813,934) |
| available-for-sale investments | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Investment manager's fees | | | | 21 | | (2,562,110) | | (2,511,379) |
+----------------------------------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Other | | | | | | 7 | | (1,014,822) | | (3,021,305) |
| operating | | | | | | | | | | |
| expenses | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Operating | | | | | | | | 16,788,810 | | (66,695,936) |
| profit/(loss) | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Finance | | | | | | 8 | | (811) | | (5,784,601) |
| expense | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Finance | | | | | | 8 | | 60,373 | | 1,745,272 |
| income | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Profit/(loss) | | | | | | | | 16,848,372 | | (70,735,265) |
| before tax | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Income taxes | | | | | | 9 | | | | |
| | | | | | | | | - | | - |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
| Total comprehensive income for the year | | | | 16,848,372 | | (70,735,265) |
+-----------------------------------------------------+----------+-------+----------+---------------------+----------+-------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+---------------------+----------+-------------------+
+-----------------+----------+-------+----------+-------+----------+-------+----------+-------+----------+--------------+
| Earnings/(loss) | | | | | | | | | | |
| per share | | | | | | | | | | |
+-----------------+----------+-------+----------+-------+----------+-------+----------+-------+----------+--------------+
| Basic and | | | | | | 19 | | 7.15 | | (40.25)cents |
| diluted | | | | | | | | cents | | |
+-----------------+----------+-------+----------+-------+----------+-------+----------+-------+----------+--------------+
| | | | | | | | | | | |
+-----------------+----------+-------+----------+-------+----------+-------+----------+-------+----------+--------------+
Consolidated Statement of Financial Position
As at 31 December 2009
+-------------+--------+----+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | 2009 | | 2008 |
| | | | | | | | EUR | | EUR |
+-------------+--------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| Assets | | | |Notes | | | | |
+----------------------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| Non-current assets | | | | | | | | |
+----------------------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| Investments measured at fair value through | 10 | | 14,586,155 | | 41,022,886 |
| profit or loss | | | | | |
+-------------------------------------------------+-------+--------+--------------------+--------+--------------------+
| Investment classified as loans and | | 11 | | | | |
| receivables | | | | - | | - |
+----------------------------------------+--------+-------+--------+--------------------+--------+--------------------+
| Available-for-sale investments | | 12 | | | | 22,488,110 |
| | | | | - | | |
+----------------------------------------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | 14,586,155 | | 63,510,996 |
+-------------+--------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | |
+-------------+--------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| Current assets | | | | | | | | |
+----------------------+---------+-------+--------+-------+--------+--------------------+--------+--------------------+
| Investments measured at fair value through | 10 | | 1,104,964 | | 756,474 |
| profit or loss | | | | | |
+-------------------------------------------------+-------+--------+--------------------+--------+--------------------+
| Trade and other | | | | 14 | | 1,215,710 | | 1,072,292 |
| receivables | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Cash and cash equivalents | | | | | | 5,717,258 | | 11,781,538 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Total current assets | | | | | | 8,037,932 | | 13,610,304 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | |
+-------------+-------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Total assets | | | | | | 22,624,087 | | 77,121,300 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | |
+-------------+-------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Liabilities | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Current liabilities | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Trade and other payables | | | | 15 | | 220,589 | | 724,701 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Total current liabilities | | | | | | 220,589 | | 724,701 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Total liabilities | | | | | | 220,589 | | 724,701 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Net assets | | | | | | 22,403,498 | | 76,396,599 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Equity & Reserves | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Issued capital | | | | 16 | | | | |
| | | | | | | - | | - |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Share premium | | | | 17 | | 77,658,496 | | 148,499,969 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Retained earnings | | | | | | (55,254,998) | | (72,103,370) |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Total equity and reserves | | | | | | 22,403,498 | | 76,396,599 |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | | |
+-------------+--------+----+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | | |
+-------------+--------+----+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| Net asset value per share | | | | | | 9.5 | | 32.4 |
| (eurocents) | | | | | | | | |
+---------------------------+----+-------+--------+-------+--------+--------------------+--------+--------------------+
| | | | | | | | | | | |
+-------------+--------+----+----+-------+--------+-------+--------+--------------------+--------+--------------------+
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 |
| | | | | | | | | EUR | | EUR |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Cash flow from operating | | | | | | | | |
| activities: | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Profit /(loss) for the | | | | | | 16,848,372 | | (70,735,265) |
| financial period | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Movement in fair value of investments and loans | | | | (12,154,507) | | 24,057,920 |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| Finance | | | | | | | | 811 | | 5,784,601 |
| expense | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Finance | | | | | | | | (60,373) | | (1,745,272) |
| income | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Exchange | | | | | | | | (158,763) | | 236,591 |
| rate | | | | | | | | | | |
| differences | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Impairment of investments classified as loans and receivables | | | | 21,435,114 |
| | | - | | |
+------------------------------------------------------------------------+----------+-----------------------+----------+--------------------+
| Impairment of available-for-sale investments | | | | 2,822,547 | | 30,813,934 |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| Changes in working | | | | | | | | | |
| capital: | | | | | | | | | |
+--------------------------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| (Increase)/decrease in trade and other | | | | (143,418) | | 7,952,603 |
| receivables | | | | | | |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| Decrease in trade and other | | | | | | (504,112) | | (7,130,883) |
| payables | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| New lending/investments | | | | | | (3,175,054) | | (17,850,200) |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Capitalised accrued interest | | | | | | (4,344,761) | | (2,793,994) |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Sale/repayment of investments | | | | 65,428,126 | | 1,536,057 |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Net cash flow from operations | | | | | | 64,558,868 | | (8,438,794) |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Cash flow from financing | | | | | | | | |
| activities | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Proceeds from issues of share | | | | | | | | 80,000,000 |
| capital | | | | | | - | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Costs of issues of share | | | | | | | | (3,176,733) |
| capital | | | | | | - | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Share | | | | | | | | | | 1,000,000 |
| options | | | | | | | | - | | |
| exercised | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Repayment | | | | | | | | | | (47,764,656) |
| of | | | | | | | | - | | |
| financing | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Interest paid and other related financing costs | | | | (811) | | (6,247,383) |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| Drawdown of financing | | | | | | | | 13,729,933 |
| facilities | | | | | | - | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Bank | | | | | | | | 60,373 | | 1,745,272 |
| interest | | | | | | | | | | |
| received | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Capital | | | | | | | | (70,841,473) | | (25,106,878) |
| distributions | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Dividends | | | | | | | | | | (8,873,550) |
| paid | | | | | | | | - | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Net cash flow from financing | | | | | | (70,781,911) | | 5,306,005 |
| activities | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Effects of exchange rate changes on cash and cash | | | | 158,763 | | (242,881) |
| equivalents | | | | | | |
+-----------------------------------------------------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Net decrease in cash and cash equivalents | | | | | (6,064,280) | | (3,375,670) |
+---------------------------------------------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Opening cash and cash | | | | | | 11,781,538 | | 15,157,208 |
| equivalents | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| Closing cash and cash | | | | | | 5,717,258 | | 11,781,538 |
| equivalents | | | | | | | | |
+----------------------------------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
| | | | | | | | | | | |
+---------------+----------+-------+----------+-------+----------+-------+----------+-----------------------+----------+--------------------+
Consolidated Statement of Changes in Equity
For the year ended 31 December 2009
1 General information
ACP Mezzanine Limited ("ACPM" or the "Company") and its subsidiaries (together
the "Group"), while in investment mode, provided sub-investment grade finance to
European small and mid-sized enterprises - with a primary focus on the United
Kingdom, France, Germany and Italy. The 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 9 December 2008, ACPM's shareholders approved a resolution
authorising the Company to dispose of assets in an orderly basis and return the
proceeds to shareholders by way of distributions. Any new lending subsequent to
the EGM has been due to commitments under previous commitments.
2 Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards, and 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 are presented in Euro, the functional and
presentational currency of the Group.
They are prepared under the historical cost convention modified to include
investments and available-for-sale 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 Disc;osures (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 for the purpose of
producing these 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) Investments measured at fair value through profit and 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:
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 - valued based on indicative bids from market makers.
c) 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 profit or loss.
d) Available-for-sale investments
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 enterprise ("SME") loans. They are carried at fair
value and valued based on an average of indicative bids 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 recognized 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.
e) 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.
f) 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.
g) Trade and other payables
Trade and other payables are stated at amortised cost.
h) Equity instruments
Equity instruments issued by the Company are recognised at the proceeds or fair
value received. As share capital has nil par value proceeds are credited to the
share premium account. Direct issue costs are deducted from share premium.
i) 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 profit or loss when the
shareholders' rights to receive payment have been established.
j) 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.
k) Share-based payments
Where equity settled share options are awarded to Directors, the fair value of
the options at the date of grant is charged to the profit or loss 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 profit or loss over the remaining
vesting period.
l) 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.
m) Foreign currency translation
Transactions entered into in a currency other than the Euro 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. Exchange
differences arising on the retranslation of unsettled monetary assets and
liabilities are recognised immediately in the profit or loss.
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 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 indicative prices. These indicative prices 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. Note 6 states the financial risk
management policies for the Group.
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 at least 20
percent of gross portfolio value.
Following the investment disposals during the year, the only investments the
Group still retain are the tranches of IFR debt. At 31 December 2009 IFR
accounted for EUR15.7 million of the net asset value total of EUR22.4 million (2008:
EUR41.8 million of the net asset value total of EUR76.6 million.).
This concentration risk is managed through regular review of public information
and from review of reports from debt agents and similar, where appropriate.
ACPIM reports quarterly to the Board on such matters.
b) Market price risk
Market price risk arises from uncertainty in the future value of financial
instruments. No new investments are being made and during the year the Group
disposed of its entire investment portfolio with the exception of its IFR Senior
Facilities. These remaining investments are managed by the investment advisor
who reports regularly to the board to review past and expected future
performance. 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. All pricing is indicative only as there is little, if any,
actual trading in comparable instruments.
The Group's investments are exposed to market price fluctuation.
The market price of the remaining investments fluctuated by 5 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 5 percent lower at 31
December 2009 the Group's profit and net assets would have been lower by EUR0.78
million (2008: EUR0.80 million). A 5 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 cash balances. The Group has
no interest rate hedging in place as the Directors do not consider that the
reduction in interest rate exposure warrants the cash flow risk created from
such hedging techniques. Investments issued at floating interest rates therefore
expose the Group to cash flow interest rate risk.
The table below details the Group's exposure to interest rates at 31 December
2009 by reference to the earlier of the contractual re-pricing or maturity date:
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| 2009 | | Within | | 1 - 2 | | 3 - 5 | | Over | | Total |
| | | | | Years | | | | 5 | | EUR |
| | | 1 year | | EUR | | Years | | years | | |
| | | EUR | | | | EUR | | EUR | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| Floating | | | | | | | | | | |
| rate: | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| Investments | | 1,104,964 | | 1,348,056 | | 5,001,065 | | 8,237,034 | | 15,691,119 |
| measured at | | | | | | | | | | |
| fair value | | | | | | | | | | |
| through | | | | | | | | | | |
| profit or | | | | | | | | | | |
| loss | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| Cash and | | 5,717,258 | | | | | | | | 5,717,258 |
| cash | | | | - | | - | | - | | |
| equivalents | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| | | 6,822,222 | | 1,348,056 | | 5,001,065 | | 8,237,034 | | 21,408,377 |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+------+-------------------+
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| 2008 | | Within | | 1 - 2 | | 3 - 5 | | Over | | Total |
| | | | | Years | | Years | | 5 | | EUR |
| | | 1 year | | EUR | | EUR | | years | | |
| | | EUR | | | | | | EUR | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Fixed rate: | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Investments | | | | | | | | 13,375,500 | | 13,375,500 |
| measured at | | - | | - | | - | | | | |
| fair value | | | | | | | | | | |
| through | | | | | | | | | | |
| profit or | | | | | | | | | | |
| loss | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Floating | | | | | | | | | | |
| rate: | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Investments | | | | | | 215,520 | | 22,272,590 | | 22,488,110 |
| available- | | - | | - | | | | | | |
| for-sale | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Investments | | 756,474 | | 3,144,893 | | 3,611,587 | | 20,890,906 | | 28,403,860 |
| measured at | | | | | | | | | | |
| fair value | | | | | | | | | | |
| through | | | | | | | | | | |
| profit or | | | | | | | | | | |
| loss | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| Cash and | | 11,781,538 | | - | | - | | - | | 11,781,538 |
| cash | | | | | | | | | | |
| equivalents | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | 12,538,012 | | 3,144,893 | | 3,827,107 | | 56,538,996 | | 76,049,008 |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------------------+------+------------------+------+------------------+
Floating rate interest on the remaining investments (the IFR Senior Facilities)
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 is likely to be upward and the increase will be a maximum of 150
basis points.
If such an increase had been applicable for the year ended 31 December 2009,
profit after tax, with all other variables held constant, would have been EUR0.3
million higher (2008: EUR1.4 million higher).
d) Foreign exchange risk
The Group has assets denominated in currencies other than the Euro. The Group
has no foreign exchange hedging in place as the Directors do not consider that
the reduction in foreign currency exposure warrants the cash flow risk created
from such hedging techniques. Therefore the movements in the exchange rate
between the Euro and any currencies in which the Group transact expose the Group
to currency risk resulting in gains or losses on retranslation into the Euro all
of which are recognised through the consolidated statement of comprehensive
income. 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 table below details the Group's exposure to foreign currencies at 31
December 2009:
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| 2009 | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| | | Euro | | Sterling | | US | |Swiss | | Total |
| | | EUR | | EUR | |Dollar | |Franc | | EUR |
| | | | | | | EUR | | EUR | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| Total | | 21,290,936 | | 1,333,151 | | | | | | 22,624,087 |
| Assets | | | | | | - | | - | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| Total | | (220,589) | | | | | | | | (220,589) |
| Liabilities | | | | - | | - | | - | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| Net assets | | 21,070,347 | | 1,333,151 | | | | | | 22,403,498 |
| | | | | | | - | | - | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-------------------+------+--------+------+-------+------+--------------------+
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| 2008 | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| | | Euro | | Sterling | | US | | Swiss | | Total |
| | | EUR | | EUR | | Dollar | | Franc | | EUR |
| | | | | | | EUR | | EUR | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| Total | | 72,075,157 | | 4,056,118 | | 984,012 | | 6,013 | | 77,121,300 |
| Assets | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| Total | | (723,822) | | (879) | | - | | - | | (724,701) |
| Liabilities | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| Net assets | | 71,351,335 | | 4,055,239 | | 984,012 | | 6,013 | | 76,396,599 |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+--------------------+------+-----------------------+------+--------------------+------+----------------------+------+--------------------+
The table below shows the effect on the net assets of the Group at the reporting
date if Sterling had strengthened or weakened by various percentages against the
Euro with all other variables held constant. Any change in net assets would
impact the profit or loss.
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| % change in Sterling | | | | | | | | |
| against Euro | | | | | | | | |
+-----------------------------+------+-------+------+-------+------+------------------+------+------------------+
| 20% | | | | | | | | 22,136,868 | | 75,720,726 |
| weakened | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| 10% | | | | | | | | 22,270,183 | | 76,027,941 |
| weakened | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| 5% weakened | | | | | | | | 22,336,841 | | 76,203,492 |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| Year end | | | | | | | | 22,403,498 | | 76,396,599 |
| closing | | | | | | | | | | |
| rate | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| 5% | | | | | | | | 22,470,156 | | 76,610,033 |
| strengthened | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| 10% | | | | | | | | 22,536,813 | | 76,847,181 |
| strengthened | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| 20% | | | | | | | | 22,670,128 | | 77,410,409 |
| strengthened | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
e) Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a
financial instrument fails to meet their interest payment and capital repayment
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 the reporting period.
+--------------+------+------+------+-------+------+-------+------+--------------------+------+--------------------+
| Bank & | | | | | | | | 2009 | | 2008 |
| rating | | | | | | | | EUR | | EUR |
+--------------+------+------+------+-------+------+-------+------+--------------------+------+--------------------+
| | | | | | | | | | | |
+--------------+------+------+------+-------+------+-------+------+--------------------+------+--------------------+
| Deutsche Bank AG - | | | | | | | 4,992,186 | | 11,340,965 |
| rated A- | | | | | | | | | |
+---------------------+------+------+-------+------+-------+------+--------------------+------+--------------------+
| The Bank of New York Mellon Corp. | | | | | 158,252 | | 440,573 |
| - rated A- | | | | | | | |
+-----------------------------------+-------+------+-------+------+--------------------+------+--------------------+
| Royal Bank of Scotland - | | | | | | 566,820 | | |
| rated A- | | | | | | | | - |
+----------------------------+------+-------+------+-------+------+--------------------+------+--------------------+
| | | | | | | | | 5,717,258 | | 11,781,538 |
+--------------+------+------+------+-------+------+-------+------+--------------------+------+--------------------+
| | | | | | | | | | | |
+--------------+------+------+------+-------+------+-------+------+--------------------+------+--------------------+
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 periods and the rating of those investments (where
applicable).
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | 2009 | | 2008 |
| | | | | EUR | | EUR |
| | | | | % | | % |
+-------------+------+-------+------+-----------------------------------+------+--------------------------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Syndicated | | | | | | | | | | |
| loans: | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - BB | | | | 15,691,119 | | 100.00% | | 15,920,993 | | 24.77% |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - B | | | | | | 0.00% | | 9,688,873 | | 15.08% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | 15,691,119 | | 100.00% | | 25,609,866 | | 39.85% |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Preference shares (not | | | | 0.00% | | 16,169,494 | | 25.16% |
| rated) | | - | | | | | | |
+----------------------------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| SME loans | | | | | | 0.00% | | 12,032,900 | | 18.72% |
| (not rated) | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| CLO1: | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - BB | | | | | | 0.00% | | 7,785,128 | | 12.11% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - B | | | | | | 0.00% | | 1,634,150 | | 2.54% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | 0.00% | | 9,419,278 | | 14.65% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| CDO 2: | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - BB | | | | | | 0.00% | | 760,000 | | 1.18% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| RMBS 3: | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - B | | | | | | 0.00% | | 263,693 | | 0.41% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| Rating - | | | | | | 0.00% | | 12,239 | | 0.02% |
| CCC | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | 0.00% | | 275,932 | | 0.43% |
| | | | | - | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | 15,691,119 | | 100.00% | | 64,267,470 | | 100.00% |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+---------+------+---------------------+------+---------+
1Structured portfolio of leveraged loan assets ("CLO")
2Structured portfolio of debt assets ("CDO")
3Structured portfolio of residential mortgage assets ("RMBS")
During the year, the lowest ranking debt tranches (CLO ,CDO and RMBS
investments) were sold. 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.
At both 31 December 2009 there were no financial assets overdue or impaired.
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 EUR6.7 million (2008: EUR12.1
million) represented by EUR5.7 million (2008: EUR11.8 million) of cash, EUR1.2 million
(2008: EUR1.1 million) of short-term receivables and EUR0.2 million (2008: EUR0.8
million) of short-term liabilities.
The Group's policy is to ensure that its operating costs are fully covered by
the interest income currently generated by the Group's assets.
The table below shows the multiple of operating costs to interest income:
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| Interest | | | | | | | | 10,832,929 | | 14,765,307 |
| income | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| Investment | | | | | | | | 2,562,110 | | 2,511,379 |
| manager's | | | | | | | | | | |
| fees | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| Other | | | | | | | | 1,014,822 | | 3,021,305 |
| operating | | | | | | | | | | |
| expenses | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | 3,576,932 | | 5,532,684 |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------------+------+-------------------------+
| Multiple of operating costs to interest | | | | 3 | | 3 |
| 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 of the parent Company ACP Capital Limited 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 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 position
at fair value, this requires disclosure of fair value measurements (by level)
according to the following fair value measurement hierarchy:
- 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).
All of the Group's financial instruments measured at fair value are valued using
indicative prices and accordingly are classified as level 3.
The table below shows the movement during the year of each class of financial
instrument:
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| 2009 | | Opening | | Additions/ | | Movement/ | | Disposal | | Closing |
| | | balance | | interest | | impairment | | EUR | | balance |
| | | EUR | | receivable | | in value | | | | EUR |
| | | | | EUR | | EUR | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Financial assets at fair value through | | | | | | |
| profit and loss | | | | | | |
+-----------------------------------------------------------------------+------+---------------------+------+--------------------+------+------------------+
| Preference | | 16,169,494 | | 4,344,761 | | 6,484,955 | | (26,999,210) | | |
| share | | | | | | | | | | - |
| investments | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Syndicated | | 25,609,866 | | | | 5,669,552 | | (15,588,299) | | 15,691,119 |
| loans | | | | - | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | 41,779,360 | | 4,344,761 | | 12,154,507 | | (42,587,509) | | 15,691,119 |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Available for sale | | | | | | | | |
| financial assets | | | | | | | | |
+--------------------------------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Collateralised | | 760,000 | | | | (454,152) | | (305,848) | | |
| debt | | | | - | | | | | | - |
| obligations | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Collateralised | | 9,419,278 | | | | (3,374,463) | | (6,044,815) | | |
| loan | | | | - | | | | | | - |
| obligations | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| Residential | | 275,931 | | | | (87,728) | | (188,203) | | |
| Mortgage | | | | - | | | | | | - |
| Backed | | | | | | | | | | |
| Securitisation | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| SME loans | | 12,032,901 | | 3,175,054 | | 1,093,796 | | (16,301,751) | | |
| | | | | | | | | | | - |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | 22,488,110 | | 3,175,054 | | (2,822,547) | | (22,840,617) | | |
| | | | | | | | | | | - |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | 64,267,470 | | 7,519,815 | | 9,331,960 | | (65,428,126) | | 15,691,119 |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
| | | | | | | | | | | |
+----------------+------+--------------------+------+-------------------+------+---------------------+------+--------------------+------+------------------+
7 Other operating expenses
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 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+---------------------+------+---------------------+
| | | | | | | | | | |
+--------------------+-------+------+-------+------+-------+------+---------------------+------+---------------------+
| Audit services | | | | | | | | |
+----------------------------+------+-------+------+-------+------+---------------------+------+---------------------+
| Statutory audit | | | | | | 26,258 | | 58,633 |
+----------------------------+------+-------+------+-------+------+---------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+---------------------+------+---------------------+
| Non audit services | | | | | | | | |
+----------------------------+------+-------+------+-------+------+---------------------+------+---------------------+
| Taxation and other | | | | | | | | 17,471 |
| services | | | | | | - | | |
+----------------------------+------+-------+------+-------+------+---------------------+------+---------------------+
| | | | | | | | | 26,258 | | 76,104 |
+-------------+------+-------+------+-------+------+-------+------+---------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+---------------------+------+---------------------+
+----+----+----+----+----+----+-------+------------------+---------------------+------------------+---------------------+
| Director emoluments | | | 2009 | | 2008 |
| | | | EUR | | EUR |
+-----------------------------+-------+------------------+---------------------+------------------+---------------------+
| | | | | | | | | | | |
+----+----+----+----+----+----+-------+------------------+---------------------+------------------+---------------------+
| Directors' emoluments | | | | 61,328 | | 38,310 |
+------------------------+----+-------+------------------+---------------------+------------------+---------------------+
| | | | | | | | | | | |
+----+----+----+----+----+----+-------+------------------+---------------------+------------------+---------------------+
+-------------+------+-------+------+-------+------+-------+------+-------+------+-------------------+
| Bad debts | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+-------------------+
| Bad debt expense | | | | | | | 2,075,527 |
| | | | | | - | | |
+-----------------------------------+-------+------+-------+------+-------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+-------------------+
8 Net finance income/(cost)
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Finance | | | | | | | | | | |
| income | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Interest received on bank | | | | | | 60,373 | | 1,745,272 |
| deposits | | | | | | | | |
+------------------------------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Finance | | | | | | | | | | |
| expense | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Interest payable on bank | | | | | | (811) | | (3,574,649) |
| borrowings | | | | | | | | |
+------------------------------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Break costs | | | | | | | | | | (2,209,952) |
| | | | | | | | | - | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | (811) | | (5,784,601) |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| Net finance | | | | | | | | 59,562 | | (4,039,329) |
| income/(cost) | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
| | | | | | | | | | | |
+---------------+------+-------+------+-------+------+-------+------+-----------------------+------+-------------------+
9 Income taxes
The Company is registered in Jersey as an exempt company and is therefore, not
liable to Jersey income tax on profits derived outside Jersey. Confirmation has
been obtained from the Controller 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 percent.
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 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Opening | | | | | | | | 41,779,360 | | 63,557,429 |
| balance | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Interest income receivable after more | | | | 4,344,761 | | 2,793,994 |
| than one year | | | | | | |
+-------------------------------------------+------+-------+------+-------------------+------+-------------------+
| Disposals | | | | | | | | (42,587,509) | | (1,536,057) |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Movement in fair value of | | | | | | 12,154,507 | | (23,036,006) |
| investments | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------------------+------+-------------------+
| Closing | | | | | | | | 15,691,119 | | 41,779,360 |
| balance | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+--------------------+
| Disclosed | | | | | | | | 1,104,964 | | 756,474 |
| in current | | | | | | | | | | |
| assets | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+--------------------+
| Disclosed in non-current | | | | | | 14,586,155 | | 41,022,886 |
| assets | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------------------+------+--------------------+
| | | | | | | | | 15,691,119 | | 41,779,360 |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+--------------------+
The fair value of investments is determined by using indicative prices. Note 6
(b) reviews the sensitivity of the prices used.
11 Investments classified as loans and receivables
Loans and receivables comprise collateralised debt obligations, collateralised
loan obligations, SME loans and RMBS assets and 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.
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| Opening | | | | | | | | | | 58,728,562 |
| balance | | | | | | | | - | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| Additions | | | | | | | | | | 16,361,052 |
| | | | | | | | | - | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| Exchange | | | | | | | | | | (966,180) |
| rate | | | | | | | | - | | |
| movements | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| Impairment of loans and | | | | | | | | (22,254,950) |
| receivables | | | | | | - | | |
+----------------------------+------+-------+------+-------+------+-------+------+--------------------+
| Transfer to | | | | | | | | (51,868,484) |
| Available-for-sale | | | | | | - | | |
| investments | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------+------+--------------------+
| Closing | | | | | | | | | | |
| balance | | | | | | | | - | | - |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+--------------------+
12 Available-for-sale investments
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| Opening | | | | | | | | 22,488,110 | | |
| balance | | | | | | | | | | - |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| Transfer from loans and | | | | | | | | 51,868,484 |
| receivables | | | | | | - | | |
+----------------------------+------+-------+------+-------+------+-------------------+------+---------------------+
| Additions | | | | | | | | 3,175,054 | | 1,489,294 |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| Exchange | | | | | | | | | | (55,734) |
| rate | | | | | | | | - | | |
| movements | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| Impairment of | | | | | | (2,822,547) | | (30,813,934) |
| available-for-sale | | | | | | | | |
| investments | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------------------+------+---------------------+
| Disposals | | | | | | | | (22,840,617) | | |
| | | | | | | | | | | - |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| Closing | | | | | | | | | | 22,488,110 |
| balance | | | | | | | | - | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------------------+------+---------------------+
Following the EGM in December 2008, the Company announced that it would seek to
dispose of its assets and distribute proceeds to its shareholders by way of
capital distributions. Accordingly in 2008 assets previously disclosed as Loans
and receivables were reclassified to Available-for-sale investments.
Available-for-sale investments were carried at fair value which is 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 EUR1.71 million lower or greater respectively.
13 Financial instruments by category
The accounting policies for financial instruments have been applied to line
items as follows:
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| 2009 | | | | Assets | |Available-for-sale | | Loans | | Total |
| | | | | at | | investments | | and | | EUR |
| | | | | fair | | EUR | | receivables | | |
| | | | | value | | | | EUR | | |
| | | | | through | | | | | | |
| | | | | profit | | | | | | |
| | | | | or loss | | | | | | |
| | | | | EUR | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| Assets as per balance | | | | | | | | |
| sheet | | | | | | | | |
+----------------------------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| Syndicated | | | | 15,691,119 | | - | | - | | 15,691,119 |
| loans | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| Trade and other | | | | | - | | 3,919 | | 3,919 |
| receivables | | | - | | | | | | |
+--------------------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| Amounts owed from parent | | | | - | | 1,211,791 | | 1,211,791 |
| and subsidiaries of parent | | - | | | | | | |
+----------------------------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| Cash and cash | | | | | - | | 5,717,258 | | 5,717,258 |
| equivalents | | | - | | | | | | |
+--------------------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| | | | | 15,691,119 | | | | 6,932,968 | | 22,624,087 |
| | | | | | | - | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+----------------------+------+----------------------+
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| | | | | | | | | | | Liabilities |
| | | | | | | | | | | held at |
| | | | | | | | | | | amortised |
| | | | | | | | | | | cost |
| | | | | | | | | | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| Liabilities as per balance | | | | | | | | |
| sheet | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------+------+----------------------+
| Trade and | | | | | | | | | | 4,674 |
| other | | | | | | | | | | |
| payables | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| Amounts owed to | | | | | | | | 175,889 |
| subsidiaries of parent | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------+------+----------------------+
| Accruals | | | | | | | | | | 40,026 |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| | | | | | | | | | | 220,589 |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+----------------------+
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| 2008 | | | | Assets | |Available-for-sale | | Loans | | Total |
| | | | | at | | investments | | and | | EUR |
| | | | | fair | | EUR | | receivables | | |
| | | | | value | | | | EUR | | |
| | | | | through | | | | | | |
| | | | | profit | | | | | | |
| | | | | or loss | | | | | | |
| | | | | EUR | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Assets as per balance | | | | | | | | |
| sheet | | | | | | | | |
+----------------------------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Preference share | | 16,169,494 | | | | | | 16,169,494 |
| investments | | | | - | | - | | |
+----------------------------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Syndicated | | | | 25,609,866 | | | | | | 25,609,866 |
| loans | | | | | | - | | - | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| CDOs | | | | | | 760,000 | | | | 760,000 |
| | | | | - | | | | - | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| CLOs | | | | | | 9,419,278 | | | | 9,419,278 |
| | | | | - | | | | - | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| SME loans | | | | | | 12,032,900 | | | | 12,032,900 |
| | | | | - | | | | - | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| RMBS | | | | | | 275,932 | | | | 275,932 |
| | | | | - | | | | - | | |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Trade and other | | | | | | | 582,749 | | 582,749 |
| receivables | | | - | | - | | | | |
+--------------------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Amounts owed from parent | | | | | | 489,543 | | 489,543 |
| and subsidiaries of | | - | | - | | | | |
| parent | | | | | | | | |
+----------------------------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| Cash and cash | | | | | | | 11,781,538 | | 11,781,538 |
| equivalents | | | - | | - | | | | |
+--------------------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
| | | | | 41,779,360 | | 22,488,110 | | 12,853,830 | | 77,121,300 |
+-------------+------+-------+------+------------------+------+--------------------+------+--------------------+------+--------------------+
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| | | | | | | | | | | Liabilities |
| | | | | | | | | | | held at |
| | | | | | | | | | | amortised |
| | | | | | | | | | | cost |
| | | | | | | | | | | EUR |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| Liabilities as per balance | | | | | | | | |
| sheet | | | | | | | | |
+----------------------------+------+-------+------+-------+------+-------+------+---------------------+
| Trade and | | | | | | | | | | 10,139 |
| other | | | | | | | | | | |
| payables | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| Amounts owed to parent company and | | | | | | 489,543 |
| subsidiaries of parent | | | | | | |
+-------------------------------------------+------+-------+------+-------+------+---------------------+
| Accruals | | | | | | | | | | 225,019 |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| | | | | | | | | | | 724,701 |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+-------+------+---------------------+
14 Trade and other receivables
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| Accrued interest | | | | | | | | | 1,054,785 |
| receivable | | | | | | | - | | |
+--------------------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| Amounts owed by parent company and | | | | 1,211,791 | | |
| subsidiaries of parent | | | | | | - |
+-------------------------------------------+------+-------+------+----------------------+------+---------------------+
| Other | | | | | | | | 3,919 | | 17,507 |
| receivables | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | 1,215,710 | | 1,072,292 |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
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, and 31 December 2008, there were no assets
that were past due or impaired.
15 Trade and other payables
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| Trade | | | | | | | | 4,674 | | 10,139 |
| payables | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| Amounts owed to | | | | | | 175,889 | | 489,543 |
| subsidiaries of parent | | | | | | | | |
+----------------------------+------+-------+------+-------+------+----------------------+------+---------------------+
| Accruals | | | | | | | | 40,026 | | 225,019 |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | 220,589 | | 724,701 |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+----------------------+------+---------------------+
16 Issued capital
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| | | | | 2009 | | 2009 | | 2008 | | 2008 |
| | | | | No. | | EUR | | No. | | EUR |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| Authorised, called up and | | | | | | | | |
| fully paid. | | | | | | | | |
+----------------------------+------+-----------------+------+-------+------+-------------------+------+-------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| Opening | | | | 235,745,333 | | | | 101,412,000 | | |
| balance | | | | | | - | | | | - |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| Ordinary shares issued in | | | | | | 133,333,333 | | |
| secondary placing | | - | | - | | | | - |
+----------------------------+------+-----------------+------+-------+------+-------------------+------+-------+
| Share | | | | | | | | 1,000,000 | | |
| options | | | | - | | - | | | | - |
| exercised | | | | | | | | | | |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| Closing | | | | 235,745,333 | | | | 235,745,333 | | |
| balance | | | | | | - | | | | - |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------+------+-------+------+-------------------+------+-------+
Ordinary shares carry one vote per share and carry a right to dividends and
capital distributions.
In June 2008 a secondary placing of 133,333,333 shares was made at EUR0.60 cents
per share, which provided proceeds of EUR76,823,267 after costs. Also in the prior
period, ACP Capital Limited exercised options as part of an Option Deed to
acquire 1,000,000 shares at EUR1.00 per share which provided net proceeds of
EUR1,000,000.
17 Share premium
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Brought | | | | | | | | 148,499,969 | | 95,783,580 |
| forward | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Issued on | | | | | | | | | | 80,000,000 |
| placing | | | | | | | | - | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Cost of | | | | | | | | | | (3,176,733) |
| share issue | | | | | | | | - | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Share | | | | | | | | - | | 1,000,000 |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Capital | | | | | | | (70,841,473) | | (25,106,878) |
| distributions | | | | | | | | | |
| (note 23) | | | | | | | | | |
+--------------------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| Carried | | | | | | | | 77,658,496 | | 148,499,969 |
| forward | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+------------------+------+-------------------+
18 Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium
Amount subscribed for in excess of nominal value.
Retained earnings reserve
Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
19 Earnings/(loss) per share
The calculation of the basic earnings and diluted earnings per share
attributable to the equity shareholders of the Company is based on the following
data:
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| Earnings/(loss) | | | | | | | | | | |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| Earnings/(loss) for the purposes of basic earnings per | | 16,848,372 | | (70,735,265) |
| share being profit attributable to equity shareholders | | | | |
| of the Company | | | | |
+--------------------------------------------------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| Number of | | | | | | | | | | |
| shares | | | | | | | | | | |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
| Weighted average number of ordinary shares for the | | 235,745,333 | | 175,755,379 |
| purposes of basic earnings per share | | | | |
+--------------------------------------------------------------+------+------------------+------+------------------+
| Effect of dilutive potential ordinary shares: | | | - | | - |
| Share options | | | | | |
+------------------------------------------------------+-------+------+------------------+------+------------------+
| Weighted average number of ordinary shares for the | | 235,745,333 | | 175,755,379 |
| purposes of diluted earnings per share | | | | |
+--------------------------------------------------------------+------+------------------+------+------------------+
| | | | | | | | | | | |
+-----------------+------+-------+------+-------+------+-------+------+------------------+------+------------------+
9,657,080 of share options with an exercise price exceeding the weighted average
quoted price of the issued shares have been excluded from the calculation of
diluted earnings per share as they are not deemed dilutive.
20 Share based payments
The Company has options in issue to purchase ordinary shares of the Company.
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| | | | | 2009 | | 2009 | | 2008 | | 2008 |
| | | | | EUR | | No. | | EUR | | No. |
| | | | | Weighted | | | | Weighted | | |
| | | | | average | | | | average | | |
| | | | | exercise | | | | exercise | | |
| | | | | price | | | | price | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| Outstanding at beginning | | | | 9,657,080 | | | | 11,032,080 |
| of year | | | | | | | | |
+----------------------------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| Exercised | | | | | | | | | | (1,000,000) |
| during the | | | | | | - | | | | |
| year | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| Lapsed | | | | | | | | | | (375,000) |
| during the | | | | | | - | | | | |
| year | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| Outstanding | | | | 1.00 | | 9,657,080 | | 1.00 | | 9,657,080 |
| at end of | | | | | | | | | | |
| year | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-----------------------+------+-------------------+------+-----------------------+------+--------------------+
All of the options were fully vested at 31 December 2007, and can be exercised
in whole or in part at any time until July 2011.
No share options were granted during the current or prior year.
21 Related parties
Related party transactions between the Group, its parent company ACP Capital
Limited and fellow subsidiaries of the parent were as follows:
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
| Balance due from/owed to related entities at the | | | | | |
| balance sheet date: | | | | | |
+------------------------------------------------------+-------+----+----------------------+----+-----------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
| | | | | | | | | | | |
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
| Owed to/(by): | | | | | | | | | | |
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Capital Limited (parent company) | | | | | | 1,206,368 | | 295,897 |
+---------------------------------------+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Capital UK LLP (subsidiary of | | | | | | (175,889) | | 879 |
| parent) | | | | | | | | |
+---------------------------------------+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Mezannine UK Limited | | | | | | | 2,452 | | |
| | | | | | | | | | - |
+----------------------------------+----+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Mezzanine Asset Holdings 1 | | | | | | 1,664 | | |
| Limited | | | | | | | | - |
+---------------------------------------+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Mezzanine Asset Holdings 2 | | | | | | 1,307 | | |
| Limited | | | | | | | | - |
+---------------------------------------+----+----+----+-------+----+----------------------+----+-----------------------+
| ACP Investment Management Limited (subsidiary | | | | | | 192,767 |
| of parent) | | | | - | | |
+-------------------------------------------------+----+-------+----+----------------------+----+-----------------------+
| | | | | | | | | 1,035,902 | | 489,543 |
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
| | | | | | | | | | | |
+-----------------------------+----+----+----+----+----+-------+----+----------------------+----+-----------------------+
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| Expense transactions with related entities during the year were as follows: | | | | |
+---------------------------------------------------------------------------------------------------+--------------+-------------------+--------------+-----------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| | | | | | | | | | | |
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| Expense | | | | | | | | | | |
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| ACP Capital UK LLP - recharged expenses | | | | | | | | 879 |
| | | | | | | - | | |
+-------------------------------------------------------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| ACP Investment Management Limited - investment management fee | | | 2,562,110 | | 2,511,379 |
+----------------------------------------------------------------------------------------+----------+--------------+-------------------+--------------+-----------------------+
| ACP Investment Management Limited - performance fee | | | | | | 192,767 |
| | | | | - | | |
+-----------------------------------------------------------------------------+----------+----------+--------------+-------------------+--------------+-----------------------+
| | | | | | | | | 2,562,110 | | 2,705,025 |
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
| | | | | | | | | | | |
+---------------------------------+----------+----------+----------+----------+----------+----------+--------------+-------------------+--------------+-----------------------+
ACP Capital Limited
ACP Capital Limited holds 128,179,798 ordinary shares in the Company,
representing 54.37 percent of the Company at 31 December 2009.
ACP Capital Limited holds 9,141,200 options to acquire ordinary shares in the
Company at an exercise price of EUR1.00 per share.
ACP Investment Management Limited
In 2006, the Group entered into an Investment Management Agreement ("IMA") with
ACPIM, a wholly owned subsidiary of ACP Capital Limited. Under the Agreement,
ACPIM was appointed investment manager for an initial period of 3 years and
given discretion to deal with the Group's assets subject to certain guidelines.
The period of appointment was extended to 7 years starting in December 2007. The
annual management fee chargeable by ACPIM is currently based on 1.75 percent of
gross shareholders' equity less any distributions. Additionally, ACPIM is
entitled to a performance fee equivalent to 25 percent above a benchmark return.
As a result of the reduction in the Group's investment portfolio, ACPIM has been
given notice of termination of the IMA. The IMA will terminate on 3 December
2011.
22 Subsidiary companies
+-------------+------+-------+------+-------+------+-------+------+---------------+------+------------+
| Name | | | | | | | | Country | |Percentage |
| | | | | | | | | of | | owned and |
| | | | | | | | |incorporation | | voting |
| | | | | | | | | and | | rights |
| | | | | | | | | registration | | |
+-------------+------+-------+------+-------+------+-------+------+---------------+------+------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+---------------+------+------------+
| ACP Mezzanine Asset | | | | | | Jersey | | 100% |
| Holdings 1 Limited | | | | | | | | |
+----------------------------+------+-------+------+-------+------+---------------+------+------------+
| ACP Mezzanine Asset | | | | | | Jersey | | 100% |
| Holdings 2 Limited | | | | | | | | |
+----------------------------+------+-------+------+-------+------+---------------+------+------------+
| | | | | | | | | | | |
+-------------+------+-------+------+-------+------+-------+------+---------------+------+------------+
The principal activities of ACP Mezzanine Asset Holdings 1 Limited and ACP
Mezzanine Asset Holdings 2 Limited are to act as nominees for ACP Mezzanine
Limited.
23 Dividends
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | 2009 | | 2008 |
| | | | | | | | | EUR | | EUR |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Interim | | | | | | | | | | |
| dividends | | | | | | | | | | |
| paid: | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Year ended 31 December 2007 - paid March | | | | | | 5,070,600 |
| 2008 | | | | - | | |
+--------------------------------------------+------+-------+------+-------------------+------+-------------------+
| Year ended 31 December 2008 - paid July | | | | | | 3,802,950 |
| 2008 | | | | - | | |
+--------------------------------------------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | 8,873,550 |
| | | | | | | | | - | | |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| Capital | December | | | | | | | | 25,106,878 |
| distribution | 2008 | | | | | | - | | |
| - paid | | | | | | | | | |
+--------------+--------------+------+-------+------+-------+------+-------------------+------+-------------------+
| | March 2009 | | | | | | 3,536,180 | | |
| | | | | | | | | | - |
+--------------+--------------+------+-------+------+-------+------+-------------------+------+-------------------+
| | May 2009 | | | | | | 4,714,907 | | |
| | | | | | | | | | - |
+--------------+--------------+------+-------+------+-------+------+-------------------+------+-------------------+
| | November | | | | | | 16,620,046 | | |
| | 2009 | | | | | | | | - |
+--------------+--------------+------+-------+------+-------+------+-------------------+------+-------------------+
| | December | | | | | | 45,970,340 | | |
| | 2009 | | | | | | | | - |
+--------------+--------------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | 70,841,473 | | 33,980,428 |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
| | | | | | | | | | | |
+--------------+------+-------+------+-------+------+-------+------+-------------------+------+-------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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ACP Mezzanine (LSE:ACPM)
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