REG - Local Shopping REIT - Final Results <Origin Href="QuoteRef">LSR.L</Origin> - Part 2
17/12/2015 07:10
- Part 2: For the preceding part double click ID:nRSQ3420Ja
1,350
79,653
Liabilities of the subsidiaries
Creditors and accruals (1,319)
Bank loans (66,739)
(68,058)
Net assets of subsidiaries 11,595
Fees and other costs 817
12,412
Net loss (1,312)
3. Administrative Expenses
a) The following fees have been paid to the Group's Auditors:
2015 2014
£000 £000
Auditors' remuneration for audit services:
Audit of parent Company 33 37
Audit related assurance services 16 19
Statutory audit of subsidiaries 37 43
Auditors' remuneration for non-audit services:
Tax services 27 27
Other services supplied 7 15
The other services supplied related to the disposal under project Minard of NOS 2 Limited and NOS 3 Limited in 2014 and in
2015 relate to professional advice received in connection with a transaction which did not proceed.
b) Included in administrative expenses is directors' remuneration as disclosed in the Remuneration Report. The company has
no other paid employees.
Directors' emoluments are disclosed separately in the Remuneration Report.
c) Share Awards
There were no material share-based payment arrangements during the period.
d) Non-recurring items
IAS 1 (Revised) - "Presentation of financial statements" requires material items of income and expenditure to be disclosed
separately. The amounts are items which, in management's opinion, need to be disclosed by virtue of their size or incidence
in order for the user to obtain a proper understanding of the financial information. These amounts are considered to be
£nil (2014: £nil).
4. Net Other Income
2015 2014
£000 £000
Other income - 5
Other expenses - -
- 5
5. Net Financing Costs
2015 2014
£000 £000
Interest receivable 18 3
Interest receivable excluding fair value movements 18 3
Fair value gains on derivative financial instruments (note 18) 1,728 2,267
Financing income 1,746 2,270
Bank loan interest (3,937) (7,366)
Amortisation of loan arrangement fees (100) (146)
Head rents treated as finance leases (49) (54)
Financing expenses excluding fair value movements (4,086) (7,566)
Fair value losses on derivative financial instruments (note 18) - -
Financing expenses (4,086) (7,566)
Net financing costs (2,340) (5,296)
6. Taxation
2015 2014
£000 £000
Profit\(loss) before tax 20 1,206
Corporation tax in the UK of 20.5% (2014: 22%) 4 265
Tax relief available from REIT status (464) (1,387)
Effects of:
Revaluation deficit and other non-deductible items 445 391
Deferred tax asset not recognised 14 731
Factors that may affect future current and total tax charges
Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April
2015) were substantively enacted on 2 July 2013. Further reductions to 19% (effective 1 April 2017) and to 18% (effective
1 April 2020) were substantively enacted on 26 October 2015. This will reduce the company's future current tax charge
accordingly and reduce the deferred tax asset at 30 September (which has been calculated based on the rate of 20%
substantively enacted at the balance sheet date) by £0.23m. From 11 May 2007, the Group elected to join the UK REIT regime.
As a result, the Group will be exempt from corporation tax on the profits and gains from its property investment business
from this date, provided it continues to meet certain conditions. Non-qualifying profits and gains of the Group (the
residual business) continue to be subject to corporation tax. The directors consider that all the rental income post-11 May
2007 originates from the Group's tax exempt business.
Due to the availability of losses no provision for corporation tax has been made in these accounts. The deferred tax asset
not recognised relating to these losses can be carried forward indefinitely. It is not anticipated that sufficient profits
from the residual business will be generated in the foreseeable future to utilise the losses carried forward as the current
year losses will be adequate to cover foreseeable profits. The non-provided deferred tax asset at 30 September 2015 was
£2.35 m (2014: £3.22m). Amounts estimated at £0.1m included in tax relief available for REIT status may become subject to
Corporation Tax under s543 CTA 2010 if relief is not granted. In this event, the Company's future tax charge is likely to
increase by up to £0.1m.
7. Investment Properties
Freehold Leasehold
Investment Investment
Properties Properties Total
£000 £000 £000
At 30 September 2013 134,789 31,318 166,107
Additions 51 994 1,045
Disposals (68,217) (13,878) (82,095)
Fair value adjustments 653 (1,149) (496)
Investment properties held for sale 1,487 153 1,640
At 30 September 2014 68,763 17,438 86,201
Additions 376 31 407
Disposals (4,267) (883) (5,150)
Fair value adjustments (819) (819) (1,638)
Investment properties held for sale (428) 76 (352)
At 30 September 2015 63,625 15,843 79,468
The investment properties have all been revalued to their fair value at 30 September 2015.
At the half year and year end, all properties acquired in those six months, together with a sample selected by the valuers
of 25% of the portfolio, at the half year and at the year end have been valued by Allsop LLP, a firm of independent
Chartered Surveyors. The valuations were undertaken in accordance with the Royal Institution of Chartered Surveyors
Appraisal and Valuation Standards on the basis of market value. Market value is defined as the estimated amount for which a
property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length
transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The disposals balance at 30 September 2014 includes properties at carrying value of £78.2m that were disposed of as part of
the NOS 2 and NOS 3 transaction.
The remainder of the portfolio has been valued on the basis of market value by the directors who have an appropriate
recognised professional qualification and recent experience in the location and category of the property being valued.
All rental income recognised in the Income Statement is generated by the investment properties held and all direct
operating expenses incurred resulted from investment properties that generated rental income.
A reconciliation of the portfolio valuation to the total value given in the Balance Sheet for investment properties is as
follows:
2015 2014
£000 £000
Portfolio valuation 81,196 87,564
Investment properties held for sale (2,387) (2,035)
Head leases treated as investment properties held under finance leases per IAS 17 659 672
Total per Balance Sheet 79,468 86,201
8. Investment in Joint Venture
The Group has the following investment in a joint venture:
On 28 September 2011 an agreement was entered into with Gracechurch Commercial Investments Limited ("Gracechurch"), a newly
incorporated entity. The initial investment made was £500,000. The principal activity of the entity was to manage
properties for investment purposes. During the 2014 year the entire portfolio of Gracechurch was disposed of, and
Gracechurch went into voluntary liquidation. During the current year this liquidation was finalised.
The summarised financial information in respect of the Group's share of the jointly controlled entities is shown below.
Gracechurch
At 30 September 2013 507
Share of results, net of tax (4)
Distributions received (210)
At 30 September 2014 293
Distributions received (293)
At 30 September 2015 Nil
Year ended 30 September 2014
Gracechurch
£000
Current assets 317
Current liabilities (24)
293
Represented by:
Capital 500
Brought forward share of results (203)
Share of results, net of tax (4)
Group's share of net assets 293
9 Trade and Other Receivables
2015 2014
£000 £000
Trade receivables 746 1,100
Other receivables 171 1,640
Prepayments 1,111 721
2,028 3,461
10. Cash
2015 2014
£000 £000
Cash in the Statement of Cash Flows 12,740 15,662
Included in bank balances are amounts held pending the next interest payment due in October 2015. Until the interest
payment has been deducted from these balances the cash is not available for use by the Group. At the year end the amount
held on such account was £1,289,294(2014: £1,240,306) with accruals for interest due of £633,355 (2014: £676,647)
11. Interest Bearing Loans and Borrowings
2015 2014
£000 £000
Non-current liabilities
Secured bank loans 54,987 63,961
Loan arrangement fees (299) (319)
54,688 63,642
Current liabilities
Current portion of secured bank loans 1,001 1,164
All bank borrowings are secured by fixed charges over certain of the Group's property assets and floating charges over the
companies which own the assets charged.
For more information about the Group's exposure to interest rate risk, see note 18.
12. Trade and Other Payables
2015 2014
£000 £000
Trade payables 521 399
Other taxation and social security 225 5
Other payables 613 967
Accruals and deferred income 1,770 1,948
3,129 3,319
Other payables include rent deposits held in respect of commercial tenants of £430,000 (2014: £469,000).
13. Leasing
Obligations Under Finance leases
Finance lease liabilities on head rents are payable as follows:
Minimum Lease Payment Interest Principal
£000 £000 £000
At 30 September 2013 6,809 (5,887) 922
(Payments)/charge (54) 54 -
Disposals (2,028) 1,778 (250)
At 30 September 2014 4,727 (4,055) 672
Disposals (80) 67 (13)
(Payments)/charge (48) 48 -
At 30 September 2015 4,599 (3,940) 659
In the above table, interest represents the difference between the carrying amount and the contractual liability/cash
flow.
All leases expire in more than five years.
14. Capital and Reserves
Share Capital
2015 2014
Ordinary 20p Shares Ordinary 20p Shares
Number Amount Number Amount
000 £000 000 £000
Allotted, called up and fully paid 91,670 18,334 91,670 18,334
Investment in Own Shares
At the year end, 9,164,017 shares were held in treasury (2014: 9,164,017).
The number of shares held by the Company's Employee Benefit Trust, LSR Trustee Limited at the year end was 1,096,545 (2014:
1,096,545). During the year the EBT transferred no shares (2014: Nil) to employees on the vesting of awards under the Long
Term Incentive Plan. During the year the EBT transferred no shares to employees on the exercise of awards under the
Company's Share Option Scheme.
Reserves
The value of shares issued to purchase Gilfin Property Holdings Limited in excess of their nominal value has been shown as
a separate reserve in accordance with the Companies Act 2006.
Capital Redemption Reserve
The capital redemption reserve arose in prior years on the cancellation of 8,822,920 Ordinary 20p Shares.
Calculation of Net Asset Value Per Share (NAV)
2015 2014
£000 £000
Net assets 34,852 34,832
Fair value of derivative financial instruments (see note 18) 2,294 4,022
Adjusted net assets 37,146 38,854
2015 2014
Number Number
Allotted, called up and fully paid shares 91,670 91,670
Treasury shares (9,164) (9,164)
Number of shares 82,506 82,506
NAV per share 42p 42p
Adjusted NAV per share 45p 47p
15. Dividends
No dividends were paid during the current and previous year.
16. Earnings Per Share
Basic Earnings Per Share
The calculation of basic earnings per share was based on the loss attributable to Ordinary Shareholders and a weighted
average number of Ordinary Shares outstanding, calculated as follows:
Profit/(Loss) Attributable to Ordinary Shares
2015 2014
£000 £000
Profit for the year 20 1,206
Profit for the year from discontinued operations - -
Profit\ on continuing operations for the year 20 1,206
Weighted Average Number of Ordinary Shares
2015 2014
Number Number
000's 000's
Issued Ordinary Shares at 1 October 2014 91,670 91,670
Shares held by EBT (1,097) (1,097)
Treasury shares (9,164) (9,164)
Weighted average number of Ordinary Shares at 30 September 2015 81,409 81,409
Diluted Earnings Per Share
There is no difference between basic and diluted earnings per share in the prior year and no difference in the current
year.
17. Derivative Financial Instruments
Derivative financial instruments held by the Group are interest rate swaps used to manage the Group's interest rate
exposure. These are shown in the Balance Sheet as follows:
Movements Movements
Fair Value in Income Fair Value in Income Fair Value
2013 Statement 2014 Statement 2015
£000 £000 £000 £000 £000
Non-current liabilities (3,872) 2,238 (1,634) 1634 -
Current liabilities (2,417) 29 (2,388) 94 (2,294)
Fair value (6,289) 2,267 (4,022) 1,728 (2,294)
At 30 September 2015 and 30 September 2014 these derivative financial instruments did not qualify as effective swaps for
hedge accounting under the criteria set out in IAS 39.
A summary of the swaps and their maturity dates are as follows:
Notional value of swap Effective date Maturity date Rate payable Movements
on fixed leg Fair Value in Income Fair Value
£000 % 2014 Statement 2015
20,178 16/07/2007 31/01/2017 4.85 (1,658) 571 (1,087)
22,500 30/04/2013 20/07/2016 5.05 (1,612) 789 (823)
10,500 30/04/2013 29/07/2016 5.05 (752) 368 (384)
(4,022) 1,728 (2,294)
The interest rate receivable on each swap is LIBOR. The notional value of the £20,178,000 swap amortises at a rate of
£200,000 per quarter. Prior to the year end it was agreed that this swap would be terminated on 30th October 2015, and
accordingly has been treated as a current liability.
The derivative financial instruments included in the above tables are stated at their fair value based on quotations from
the Group's bank.
More details of the Group's policy regarding the management of interest rate risk are given in note 18.
18. Financial Instruments and Risk Management
The Board of directors has overall responsibility for the establishment and oversight of the Group's risk management
framework.
As described in the Corporate Governance report, this responsibility has been assigned to the executive directors with
support and feedback from the Audit Committee. The Audit Committee oversees how management monitors compliance with the
Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to
the risks faced by the Group.
The Group has identified exposure to the following financial risks from its use of financial instruments: capital
management risk, market risk, credit risk and liquidity risk.
Capital Management Risk
The Group's capital consists of long-term borrowings, cash and equity attributable to the shareholders. The Board's policy
is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future
development of the business. The Board regularly reviews the Group's capital structure, cost of capital, gearing levels and
other specific measures. From time to time, the Company purchases its own shares when the Board considers that this course
of action would enhance the value of the Group for shareholders. The Group has had a policy of paying 100% of recurring
profits as a dividend each year. Following the restructuring in July 2013 dividend policy will be reviewed half-yearly by
the Board. No dividend has been paid during the year. There were no other changes in the Group's approach to capital
management during the year.
Market Risk
Market risk is the risk that changes in market conditions, such as interest rates, foreign exchange rates and equity
prices, will affect the Group's profit or loss and cash flows. The Group's exposure to market risks is restricted to
interest rate risk only. The Group borrows at floating rates of interest and uses financial instruments to fix the floating
rates of interest in accordance with its policy.
The Group and its jointly controlled entities do not speculate in financial instruments. They are only used to limit their
exposure to interest rate fluctuations. The Group's policy is to hedge between 60% and 100% of its interest rate exposure.
At 30 September 2015, 95% (2014: 83%) of the Group's debt was fixed or protected, as shown below.
At 30 September 2015 At 30 September 2014
Interest Notional Loans not Interest Notional Loans not
bearing value of protected bearing value of protected
loans swaps by swaps loans swaps by swaps
£000 £000 £000 £000 £000 £000
Variable rate loan 55,988 53,178 2,810 65,125 53,979 11,146
55,988 53,178 2,810 65,125 53,979 11,146
The variable rate loan is protected by interest rate swaps which are carried at fair value. These have been identified as
Level 2 in the fair value hierarchy. Level 2 is defined as inputs other than quoted prices included within Level 1 that are
observable for the liability either directly (i.e. as prices) or indirectly (as derived from prices).
Sensitivity Analysis
IFRS 7 requires an illustration of the impact on the Group's financial performance of changes in interest rates. The
following sensitivity analysis has been prepared in accordance with the Group's existing accounting policies and considers
the impact on the Income Statement and on equity of an increase of 100 basis points (1%) in interest rates. As interest
rates were below 1% in the current and previous year, it has not been possible to consider the impact of a decrease of 100
basis points on interest income and expense as it would result in a negative rate of interest. Therefore, the impact of a
fall in interest rates has been restricted to 0%. It has been possible to consider the impact of a 1% change in rates on
the fair value of derivatives as the contracted rates are greater than 1%. All other variables remain the same and any
consequential tax impact is excluded. The analysis assumes that changes in market interest rates affect the interest income
and interest expense of derivative financial instruments. Changes in the fair value of derivative financial instruments
have been estimated by discounting future cash flows at appropriate market rates prevailing at each year end.
Actual results in the future may differ materially from these assumptions and as such, these tables should not be
considered as a projection of likely future gains and losses.
2015 2014
Impact on income Impact on equity Impact on income Impact on equity
Number Amount Number Amount Number Amount Number Amount
+ - + - + - + -
£000 £000 £000 £000 £000 £000 £000 £000
Impact on Interest Income
and expense 169 13 169 131 63 111 63 111
Impact on fair value of
derivatives 627 363 627 363 1,075 608 1,075 608
Credit Risk
Credit risk is the risk of financial loss to the Group if a tenant, bank or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group's receivables from tenants, cash and cash
equivalents held by the Group's banks and derivative financial instruments entered into with the Group's banks.
Trade and Other Receivables
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each tenant. The Group has
over 1,000 tenants in over 300 properties. There is no significant concentration of credit risk due to the large number of
small balances owed by a wide range of tenants who operate across all retail sectors. Geographically there is no
concentration of credit risk in any one area of the UK. An analysis of the business by region, user type and tenant grade
is given on pages 2-3. The level of arrears is monitored monthly by the Group and more frequently on a tenant by tenant
basis by the asset managers.
Cash, Cash Equivalents and Derivative Financial Instruments
Two major UK banks provide the majority of the banking services used by the Group. Financial derivatives are only entered
into with these core banks
The Group's financial assets which are exposed to credit risk are classified as follows and are shown with their fair
value:
30 September 2015
At Available At Amortised Total Carrying
Fair Value For Sale Cost Amount Fair Value
£000 £000 £000 £000 £000
Investments in joint ventures -- -- - - -
Cash and cash equivalents -- 12,740 -- 12,740 12,740
Trade receivables -- -- 746 746 746
Other receivables -- -- 171 171 171
-- 12,740 917 13,657 13,657
30 September 2014
At Available At Amortised Total Carrying
Fair Value For Sale Cost Amount Fair Value
£000 £000 £000 £000 £000
Investments in joint ventures -- -- 293 293 293
Cash and cash equivalents -- 15,662 -- 15,662 15,662
Trade receivables -- -- 1,100 1,100 1,100
Other receivables -- -- 1,640 1,640 1,640
-- 15,662 3,033 18,695 18,695
For all classes of financial assets, the carrying amount is a reasonable approximation of fair value.
The ageing of trade receivables is as follows
2015 2014
Total Impairment After Impairment Total Impairment After Impairment
£000 £000 £000 £000 £000 £000
Not yet due 175 - 175 311 - 311
Past due by one to 30 days 327 (3) 324 368 (2) 366
Past due by 30-60 days 87 (6) 81 220 (5) 215
Past due by 60-90 days 27 (12) 15 32 (8) 24
Past due by 90 days 430 (279) 151 358 (174) 184
1,046 (300) 746 1,289 (189) 1,100
Trade receivables that are not impaired are expected to be recovered.
Other receivables at 30 September 2015 and 30 September 2014 were not past due.
The movement in the trade receivables' impairment allowance during the year was as follows:
2015 2014
£000 £000
Balance at beginning of year 189 264
Impairment loss recognised 134 617
Trade receivables written off (23) (692)
Balance at end of year 300 189
The impairment loss recognised relates to the movement in the Group's assessment of the recoverability of outstanding trade
receivables.
The movement in the trade receivables impairment allowance in relation to NOS 2 and NOS 3 (disposed of during the preceding
year) is a net write off of £178k.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's
approach to managing liquidity risk is to ensure, as far as possible, that it will always have adequate resources to meet
its liabilities when they fall due for both the operational needs of the business and to meet planned future investments.
This position is formally reviewed on a quarterly basis or more frequently should events require it.
The Group's financial liabilities are classified and are shown with their fair value as follows:
30 September 2015
At At Amortised Total Carrying
Fair Value Cost Amount Fair Value
£000 £000 £000 £000
Interest bearing loans and liabilities - 55,689 55,689 55,689
Finance lease liabilities - 659 659 659
Derivative financial instruments 2,294 - 2,294 2,294
Trade payables - 521 521 521
Other payables - 540 540 540
Accruals - 918 918 918
2.294 58,327 60,621 60,621
30 September 2014
At At Total
Fair Value Amortised Carrying Fair Value
Cost Amount -
£000 £000 £000 £000
Interest bearing loans and liabilities - 64,806 64,806 64,806
Finance lease liabilities - 672 672 672
Derivative financial instruments 4,022 - 4,022 4,022
Trade payables - 399 399 399
Other payables - 830 830 830
Accruals - 936 936 936
4,022 67,643 71,665 71,665
For all classes of financial liabilities, other than the fixed rate loan, the carrying amount is a reasonable approximation
of fair value.
The fair value of the fixed rate element of the interest bearing loan disclosed above has been valued by the Group's
bankers.
The maturity profiles of the Group's financial liabilities are as follows:
30 September 2015
Contractual Within One Two Three Four Over
Carrying Cash One to Two to Three to Four to Five Five
Value Flows Year Years Years Years Years Years
£000 £000 £000 £000 £000 £000 £000 £000
Interest bearing loans and borrowings 55,689 59,444 2,429 2,542 54,473 - - -
Finance lease liabilities 659 4,727 48 48 48 48 48 4,487
Derivative financial instruments 2,294 2,718 2,321 397 - - - -
Trade payables 521 521 521 - - - - -
Other payables 540 540 540 - - - - -
Accruals 918 918 918 - - - - -
60,621 68,868 6,777 2,987 54,521 48 48 4,487
30 September 2014
Contractual Within One Two Three Four Over
Carrying Cash One to Two to Three to Four to Five Five
Value Flows Year Years Years Years Years Years
£000 £000 £000 £000 £000 £000 £000 £000
Interest bearing loans and borrowings 64,806 72,292 2,794 2,749 2,696 64,053 - -
Finance lease liabilities 672 4,732 47 47 47 47 47 4,497
Derivative financial instruments 4,022 4,575 2,388 1,982 205 - - -
Trade payables 399 399 399 - - - - -
Other payables 830 830 830 - - - - -
Accruals 936 936 936 - - - - -
71,665 83,764 7,394 4,778 2,948 64,100 47 4,497
Contractual cash flows include the undiscounted committed interest cash flows and, where the amount payable is not fixed,
the amount disclosed is determined by reference to the conditions existing at the year end.
19. Operating Lease Arrangements
a) Leases as Lessee
The company has no leases where it is a lessee
b) Leases as Lessor
The investment properties are let under operating leases. Future minimum lease payments receivable by the Group under
non-cancellable operating leases are receivable as follows:
2015 2014
£000 £000
Less than one year 1,907 2,169
Between one and five years 2,519 2,520
More than five years 3,126 3,226
7,552 7,915
20. Capital Commitments
At 30 September 2015 the Group had contracted capital expenditure for which no provision has been made in these financial
statements of £24,000 (2014: £78,000).
21. Related Parties
Transactions with Key Management Personnel
The only transactions with key management personnel relate to remuneration which is set out in the Remuneration Report.
The key management personnel of the Group for the purposes of related party disclosures under IAS 24 comprise all executive
and non-executive directors.
See also Note 23: Significant Contracts.
22. Group Entities
Country of Ownership Interest*
Incorporation 2015 2014
NOS Limited - in members' voluntary liquidation United Kingdom 100% 100%
NOS 2 Limited - disposed of during year United Kingdom - 100%
NOS 3 Limited - disposed of during year United Kingdom - 100%
NOS 4 Limited United Kingdom 100% 100%
NOS 5 Limited United Kingdom 100% 100%
NOS 6 Limited United Kingdom 100% 100%
Palladium Investments Limited United Kingdom 100% 100%
NOS 8 Limited - in members' voluntary liquidation United Kingdom 100% 100%
Gilfin Property Holdings Limited United Kingdom 100% 100%
LSR Asset Management Limited - in members' voluntary liquidation United Kingdom 100% 100%
NOS Residential Limited - in members' voluntary liquidation United Kingdom 100% 100%
LSR Gresham Asset Advisers Limited - in members' voluntary liquidation United Kingdom 100% 100%
LSR Gresham Investments Limited - in members' voluntary liquidation United Kingdom 100% 100%
Joint Ventures
Gracechurch Commercial Investments Limited - Liquidated during the year United Kingdom 50% 50%
On 7 August 2014 LSR plc disposed of its shareholdings in NOS 2 and NOS 3. Management have considered the criteria of IFRS
5 and have concluded that they are not applicable to this transaction.
23. Significant contracts
With effect from 22 July 2013 the Company entered into a management agreement with Internos Global Investors Limited
("Internos"). Under this agreement the Company pays to Internos:
• An annual management fee of 0.70% of the gross asset value of the portfolio, subject to a minimum fee of £1m in each of
the first two years, £0.95m for the third year and £0.9m for the fourth year.
• An annual performance fee of 20% of the recurring operating profits above a pre-agreed target recurring profit.
• Fees for property sales as follows:
Up to £50m nil
£50m-£150m 0.5% of sales
Over £150m 1.5% of sales
• A terminal fee of 5.7% of cash returned to the Company's shareholders in excess of 36.1 pence per share from the
Effective Date outside of dividend payments (the "Terminal Fee Hurdle"). The Terminal Fee Hurdle rises by 8% per annum
after the first year but reduces on a pro-rata daily basis each time equity is returned to shareholders outside of dividend
payments from recurring operating profits.
Under the terms of the agreement Internos received fees of £1,016,461 (2014:£1,318,539) during the year.
Company Balance Sheet
as at 30 September 2015
2015 2014
Note £000 £000 £000 £000
Fixed assets
Investments C5 29,754 70,418
29,754 70,418
Current assets
Debtors C6 149 2,460
Cash 7,475 10,108
7,624 12,568
Creditors: Amounts falling due within one year C7 (582) (46,261)
Net current assets\(liabilities) 7,042 (33,693)
Total assets less current liabilities 36,796 36,725
Creditors: Amounts falling due after one year - -
Net assets 36,796 36,725
Capital and reserves
Share capital C8 18,334 18,334
Reserves C8 3,742 3,742
Capital redemption reserve C8 1,764 1,764
Profit and loss account C8 12,956 12,885
Shareholders' funds 36,796 36,725
These financial statements were approved by the Board of directors on xx December 2015 and were signed on its behalf by:
Steven Faber
Director
The registered number of the Company is 05304743.
Notes to the Financial Statements
C1. Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are considered material in
relation to the Company's financial statements.
Basis of Preparation
The financial statements have been prepared in accordance with applicable UK Accounting Standards and under the historical
cost accounting rules.
Cash Flow Statement
Under FRS 1, the Company is exempt from the requirement to prepare a cash flow statement on the grounds that the Company is
included in its own published consolidated financial statements.
Related Party Transactions
The Company has taken advantage of the exemption in FRS 8 - Related Party Transactions and has not disclosed transactions
or balances with entities which form part of the Group as these consolidated financial statements include the results of
these entities.
Financial Instruments
The Company has adopted the requirements of FRS 29 - Financial Instruments Disclosures and has taken the exemption under
that standard from disclosure on the grounds that the Group financial statements contain disclosures in compliance with
IFRS 7.
Investments
Investments in subsidiary undertakings are stated at historic cost less provisions for impairment.
Tangible Fixed Assets
Following the termination of the Company's office lease in 2013, all tangible assets were written off in that year.
Taxation
The charge for taxation is based on the result for the period and takes into account taxation deferred because of timing
differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised,
without discounting, in respect of all timing differences between the treatment of certain items for taxation and
accounting purposes, which have arisen, but not reversed by the balance sheet date, except as otherwise required by FRS
19.
Pensions
The Company operates a defined contribution pension plan. Contributions payable by the Company in respect of defined
contribution pension plans are charged to administrative expenses as incurred.
Share-Based Payments
There were no material share-based payment arrangements during the period.
Employee Benefit Trust
The Company operates an Employee Benefit Trust in order to hedge its obligations under the CSOP and LTIP schemes. The
Company either purchases its own shares directly or it funds the trust to acquire shares in the Company. Transactions of
the Employee Benefit Trust are treated as being those of the Company and are reflected in the Company's financial
statements.
Ordinary Share Capital
External costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
Shares which have been repurchased are classified as treasury shares and shown in retained earnings. They are recognised at
the trade date for the amount of consideration paid, together with directly attributable costs. This is presented as a
deduction from total equity. Shares held by the Employee Benefit Trust are treated as being those of the Company.
Profit for the Financial Year
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss
account in these financial statements. The Company's profit for the year was £71,000 (2014: loss (£3,016,000))
C2. Remuneration of Directors
The detailed information concerning directors' emoluments, shareholdings and share options is shown in the Remuneration
Report.
All directors of the Company are directors of the Group.
C3. Remuneration of Auditors
The detailed information concerning Auditors' remuneration is shown in note 3 to the Group financial statements.
C4. Staff Numbers, Costs and Share Option Schemes
The detailed information concerning staff numbers, costs and share option schemes is shown in note 3 to the Group financial
statements.
C5. Fixed Asset Investments
Shares in Group
Undertakings Total
£000 £000
Cost
At 30 September 2014 108,605 108,605
Disposals - -
At 30 September 2015 108,605 108,605
Provisions
At 30 September 2014 38,187 38,187
Impairment charge for year 40,664 40,664
Disposals - -
At 30 September 2015 78,851 78,851
Net book value
At 30 September 2015 29,754 29,754
At 30 September 2014 70,418 70,418
An impairment review of the carrying value of the Company's investments in its subsidiary undertakings has been performed.
In carrying out this review, the directors had due regard to the nature of the property investments held, which is
commensurate with the funding arrangements in place. On the basis of this review which included a review of the underlying
assets of the individual subsidiaries the directors have written down the value of investments in subsidiary undertakings
to their estimated realisable value.
The companies in which the Company's interests at the year end were more than 20% are as follows:
Nature of business Ownership Interest*
NOS Limited - in Members' voluntary liquidation Dormant 100%
NOS 4 Limited Property Investment 100%
NOS 5 Limited Property Investment 100%
NOS 6 Limited Property Investment 100%
Palladium Investments Limited Property Investment 100%
NOS 8 Limited - in Members' voluntary liquidation Property Investment 100%
Gilfin Property Holdings Limited Property Investment 100%
LSR Asset Management Limited - in Members' voluntary liquidation Property Management 100%
NOS Residential Limited - in Members' voluntary liquidation Property Investment 100%
LSR Gresham Asset Advisers Limited - in Members' voluntary liquidation Property Management 100%
LSR Gresham Investments Limited - in Members' voluntary liquidation Property Investment 100%
* All interests are in Ordinary Shares.
All of the above companies are incorporated in Great Britain
C6. Debtors
2015 2014
£000 £000
Amounts owed by Group undertakings - 801
Other debtors 105 1,369
Other taxation and social security 2 274
Prepayments 42 16
149 2,460
C7. Creditors
2015 2014
£000 £000
Trade creditors 305 227
Amounts owed to Group undertakings - 45,663
Other taxation and social security 3 5
Other creditors 4 132
Accruals 270 234
582 46,261
C8. Reconciliation of Shareholders' Funds
Share Capital
2015 2014
Ordinary 20p Shares Ordinary 20p Shares
Number Amount Number Amount
000 £000 000 £000
Allotted, called up and fully paid 91,670 18,334 91,670 18,334
Reserves
Capital Profit and
Redemption Loss Account
Reserves Reserve - Total
£000 £000 £000 £000
At 1 October 2013 3,742 1,764 15,901 21,407
Loss for the financial year - - (3,016) (3,016)
At 30 September 2014 3,742 1,764 12,885 18,391
Profit for the financial year - - 71 71
At 30 September
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