REG - Record PLC - Final Results <Origin Href="QuoteRef">RECL.L</Origin> - Part 4
16/07/2015 11:05
- Part 4: For the preceding part double click ID:nRSP2338Qc
2014 2015 2014
£'000 £'000 £'000 £'000
10% depreciation in the Emerging Market portfolio (324) (304) (324) (304)
10% appreciation in the Emerging Market portfolio 324 304 324 304
The impact of a change to the portfolio value of 10% has been selected as this
is considered reasonable given the current level of exchange rates and the
volatility observed both on a historical basis and expectations for future
movement in emerging markets.
Global Alpha Fund
The Group seeded a product in May 2013 called the Record Currency - Global
Alpha Fund, which manages a portfolio of derivative financial instruments
including forward exchange contracts, options and futures in order to achieve
a return. As Record plc exerts control over the fund, it has been consolidated
into the Group's primary statements. The net assets of the fund at 31 March
2015 were £2,148,875 (2014: £2,138,582). The Group has provided the following
data in respect of sensitivity to this product:
Impact on profit after tax for the year ended 31 March Impact on total equity as at 31 March
2015 2014 2015 2014
£'000 £'000 £'000 £'000
18% depreciation in the Global Alpha portfolio (307) (305) (307) (305)
18% appreciation in the Global Alpha portfolio 307 305 307 305
The impact of a change to the portfolio value of 18% has been selected as this
is considered reasonable given the current level of exchange rates and the
volatility observed both on a historical basis and expectations for future
movement (the target maximum annual drawdown rate is 18%).
22. Fair value measurement
The following table presents financial assets and liabilities measured at fair
value in the consolidated statement of financial position in accordance with
the fair value hierarchy. This hierarchy groups financial assets and
liabilities into three levels based on the significance of inputs used in
measuring the fair value of the financial assets and liabilities. The fair
value hierarchy has the following levels:
§ Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
§ Level 2: inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
§ Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of input to the fair value measurement.
The financial assets and liabilities measured at fair value in the statement
of financial position are grouped into the fair value hierarchy as follows:
2015 Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Investment in Record Currency - FTSE FRB10 Index Fund 1,105 1,105 - -
TIPS 1,462 1,462 - -
Forward foreign exchange contracts used for seed funds 35 - 35 -
Options used for seed funds 576 - 576 -
Forward foreign exchange contracts used for hedging 8 - 8 -
Financial liabilities at fair value through profit or loss
Options used for seed funds (680) - (680) -
2,506 2,567 (61) -
2014 Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Investment in Record Currency - FTSE FRB10 Index Fund 1,120 1,120 - -
TIPS 1,634 1,634 - -
Forward foreign exchange contracts used for seed funds 153 - 153 -
Options used for seed funds 38 - 38 -
Forward foreign exchange contracts used for hedging 7 - 7 -
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts used for seed funds (33) - (33) -
Options used for seed funds (86) - (86) -
Forward foreign exchange contracts used for hedging (3) - (3) -
2,830 2,754 76 -
There have been no transfers between levels in the reporting period (2014:
none).
Basis for classification of financial instruments classified as level 2 within
the fair value hierarchy
Both forward foreign exchange contracts and options are classified as level 2.
Both of these instruments are traded on an active market. Options are valued
using an industry standard model with inputs based on observable market data
whilst the fair value of forward foreign exchange contracts may be established
using interpolation of observable market data rather than from a quoted
price.
Classes and fair value of financial instruments
It is the Directors' opinion that the carrying value of all financial
instruments approximates to their fair value.
Categories of financial instrument
Note Loans and receivables Financial liabilities measured at amortised cost Assets at fair value through profit or loss Liabilities at fair value through profit or loss
At 31 March 2015 £'000 £'000 £'000 £'000
Investment in Record Currency - FTSE FRB10 Index Fund 12 - - 1,105 -
TIPS 12 - - 1,462 -
Trade and other receivables (excludes prepayments) 14 5,800 - - -
Money market instruments with maturities > 3 months 16 18,100 - - -
Cash and cash equivalents 16 12,010 - - -
Derivative financial assets at fair value through profit or loss 15 - - 619 -
Current trade and other payables 17 - (182) - -
Accruals 17 - (2,455) - -
Derivative financial liabilities at fair value through profit or loss 15 - - - (680)
35,910 (2,637) 3,186 (680)
Note Loans and receivables Financial liabilities measured at amortised cost Assets at fair value through profit or loss Liabilities at fair value through profit or loss
At 31 March 2014 £'000 £'000 £'000 £'000
Investment in Record Currency - FTSE FRB10 Index Fund 12 - - 1,120 -
TIPS 12 - - 1,634 -
Trade and other receivables (excludes prepayments) 14 5,000 - - -
Money market instruments with maturities > 3 months 16 15,488 - - -
Cash and cash equivalents 16 11,503 - - -
Derivative financial assets at fair value through profit or loss 15 - - 198 -
Current trade and other payables 17 - (305) - -
Accruals 17 - (2,097) - -
Derivative financial liabilities at fair value through profit or loss 15 - - - (122)
31,991 (2,402) 2,952 (122)
23. Operating lease commitments
Leases in which substantially all the risks and rewards are retained by the
lessor are classified as operating leases. Payments made under these
operating leases are recognised in profit or loss on a straight-line basis
over the term of the lease. Benefits received as an incentive to sign a
lease, whatever form they may take, are credited to profit or loss on a
straight-line basis over the lease term.
On 25 January 2006, the Group signed a lease on new premises at Morgan House,
Madeira Walk, Windsor, Berkshire. This lease expires on 19 June 2016. The
annual commitment under this lease is £229,710 (2014: £229,710).
The Group has considered the risks and rewards of ownership of the leased
property, and considers that they remain with the lessor, consequently, this
lease is recognised as an operating lease.
At 31 March 2015 the Group had commitments under non-cancellable operating
leases relating to land and buildings as set out below:
2015 2014
£'000 £'000
Not later than one year 230 230
Later than one year and not later than five years 57 287
287 517
24. Related parties transactions
Company
Details of transactions between the Company and other Group undertakings,
which are related parties of the Company, are shown below:
Transactions with subsidiaries
The Company's subsidiary undertakings are listed in note 12, which includes a
description of the nature of their business.
2015 2014
£'000 £'000
Amounts due from subsidiaries - 146
Amounts due to subsidiaries (480) (447)
Interest received from subsidiaries on intercompany loan balances 1 5
Net dividends received from subsidiaries 3,070 4,900
Amounts owed to and by related parties will be settled in cash. No guarantees
have been given or received. No provisions for doubtful debts have been
raised against amounts outstanding (2014: £nil). No expense has been
recognised during the period in respect of bad or doubtful debts due from
related parties. During the year ended 31 March 2014, as a result of the
dissolution of Record Currency Management (Jersey) Limited, Record plc wrote
off an intercompany loan balance due from Record Currency Management (Jersey)
Limited with a total of £228,530.
Transactions with seeded funds
From time to time, the Group injects capital into funds operated by the Group
to trial new products (seed capital). If the Group is able to exercise
control over such a seeded fund by holding a majority interest (whether the
majority interest is held by Record plc alone, or by combining the interests
of Record plc and its Directors), then the fund is considered to be a related
party.
Record Currency - Global Alpha Fund and Record Currency - Emerging Market
Currency Fund are both related parties on this basis. Similarly, the Record
Currency - FTSE FRB10 Index Fund was a related party until Record plc ceased
to have the majority interest as a result of external investment into the fund
sufficient to Record plc's holding; there was no transaction between the
Company and this fund during the year.
Group
Transactions or balances between Group entities have been eliminated on
consolidation and in accordance with IAS 24, are not disclosed in this note.
Key management personnel compensation
2015 2014
£'000 £'000
Short-term employee benefits 3,568 3,651
Post-employment benefits 229 263
Share-based payments 940 1,052
4,737 4,966
The dividends paid to key management personnel in the year ended 31 March 2015
totalled £1,677,173 (2014: £2,503,685)
Directors' remuneration
2015 2014
£'000 £'000
Emoluments1 (excluding pension contribution) 2,254 2,136
Gains made on exercise of share options - -
Pension contribution2 137 140
Aggregate emoluments of the Directors 2,391 2,276
During the year, three Directors of the Company (2014: four) participated in
the Group Personal Pension Plan, a defined contribution scheme.
1Excludes termination payments made to Paul Sheriff.
2 Includes payments made in lieu of pension contributions.
25. Capital management
The Group's objectives when managing capital are (i) to safeguard the Group's
ability to continue as a going concern, (ii) to provide an adequate return to
shareholders, and (iii) to meet regulatory capital requirements set by the UK
Financial Conduct Authority.
The Group sets the amount of capital in proportion to risk. The Group manages
the capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. In
order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, or
issue new shares. The Group had no debt in the current or prior financial
year and consequently does not calculate a debt-to-adjusted capital ratio.
The Group's capital is managed within the categories set out below:
2015 2014
£m £m
Regulatory capital 8.8 8.7
Other operating capital 20.5 17.7
Operating capital 29.3 26.4
Seed capital 3.1 3.1
Total capital 32.4 29.5
Operating capital is equivalent to the aggregate net current assets of the
Company and the main trading subsidiaries of the Group. Operating capital is
intended to cover the regulatory capital requirement plus capital required for
day to day operational purposes. The Directors consider that the other
operating capital significantly exceeds the actual day to day operational
requirements.
Seed capital is the capital deployed to support the growth of new funds. Seed
capital is limited to 15% of the Group's total capital.
For regulatory capital purposes Record plc is subject to consolidated
financial supervision by the Financial Conduct Authority ("FCA"). Our
regulatory capital requirements are in accordance with FCA rules consistent
with the Capital Requirements Directive. Our financial resources have
exceeded our financial resource requirements (regulatory capital requirements)
at all times during the year. Further information is provided in the Business
Review.
26. Ultimate controlling party
As at 31 March 2015 the Company had no ultimate controlling party, nor at 31
March 2014.
27. Post reporting date events
No adjusting or significant non-adjusting events have occurred between the
reporting date and the date of authorisation.
28. Statutory Accounts
This statement was approved by the Board on 15 June 2015. The financial
information set out above does not constitute the Company's statutory
accounts.
The statutory accounts for the financial year ended 31 March 2014 have been
delivered to the Registrar of Companies, and those for the year ended in 31
March 2015 will be delivered in due course. The auditor has reported on those
accounts; the reports were unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying the report, and did not contain statements under section 498(2) or
498(3) of the Companies Act 2006 in respect of either set of accounts.
Notes to Editors
This announcement includes information with respect to Record's financial
condition, its results of operations and business, strategy, plans and
objectives. All statements in this document, other than statements of
historical fact, including words such as "anticipates", "expects", "intends",
"plans", "believes", "seeks", "estimates", "may", "will", "continue",
"project" and similar expressions, are forward-looking statements.
These forward-looking statements are not guarantees of the Company's future
performance and are subject to risks, uncertainties and assumptions that could
cause the actual future results, performance or achievements of the Company to
differ materially from those expressed in or implied by such forward-looking
statements.
The forward-looking statements contained in this document are based on
numerous assumptions regarding Record's present and future business and
strategy and speak only as at the date of this announcement.
The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward-looking statements contained in this
announcement whether as a result of new information, future events or
otherwise.
This information is provided by RNS
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