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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Enhanced Pty. | LSE:EHPR | London | Ordinary Share | GG00B2PWW869 | RED PREF SHS NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 78.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
Market price risk arises mainly from uncertainty about future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Investment Manager actively monitors market prices and reports to the Board as to the appropriateness of the prices used for valuation purposes. On a periodic basis independent valuations of the Company's investments are obtained from the Calculation Agent. A list of investments held by the Company is shown in the Schedule of Investments as contained within this report.
The Investment Manager also monitors on a monthly basis the market price risk of each Cell's underlying financial assets and liabilities using statistical measures, such as Delta. Delta is the percentage change in price of a derivative in relation to a 1% change in the price of the underlying security, index or rate. As there is no secondary market for the Company's investments, the Board cannot directly monitor nor control market price risk.
Price sensitivity
If market prices as at 31 October 2013 had been 10 per cent higher/lower, and assuming these values were to remain unchanged through to the end of the life of the cells, with all other variables held constant, the increase/decrease in net assets attributable to holders of Cell Shares on the Redemption Date would have been as stated below, arising due to the increase/decrease in the fair value of the financial assets at fair value through profit or loss.
Increase in net assets Decrease in net assets attributable to holders attributable to holders of Preference Shares of Preference Shares Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2013 2012 2013 2012 Cell GBP GBP GBP GBP US HI A Cell - 2,944,892 - (2,944,892) US HI B Cell - 1,390,195 - (1,390,195) Agrinvest Cell - 5,823,850 - (5,823,850) EPR Cell 2,387,949 2,216,176 (2,387,949) (2,216,176) EBM3 Cell 4,925,140 4,996,199 (4,925,140) (4,996,199) EI Cell - 1,853,444 - (1,853,444) UK EI Cell 5,486,911 5,109,677 (5,486,911) (5,109,677) COMAC Cell 3,178,574 2,951,840 (3,178,574) (2,951,840) USEI A Cell 4,479,155 4,336,372 (4,479,155) (4,336,372) USEI B Cell 3,864,177 3,671,220 (3,864,177) (3,671,220) ------------- ------------ ------------- ------------- 24,321,906 35,293,865 (24,321,906) (35,293,865) ============= ============ ============= ============= (c) Credit Risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Company. At the date of this report the issuer was rated A+ by Standard & Poor's for credit purposes.
Investors should be aware that repayment by the Company at the relevant redemption date of the redemption proceeds due to shareholders will only be performed if the Counterparty satisfies its obligations under the relevant contract to repay to the Company any amount due. Under the terms of the Credit Support Deeds between the Company and the Counterparty, the Counterparty is required to deliver varying amounts of collateral to an escrow account held in favour of the Company.
Under the terms of Credit Support Deeds entered into between the Counterparty and the Company acting for and on behalf of each cell, the Counterparty is required to post collateral in the form of AAA rated government bonds in favour of the Company acting for and on behalf of each cell, such collateral being valued on a weekly basis and, if the value of the collateral is less than the value calculated as specified below (the "Credit Support Amount"), the Counterparty will provide additional collateral to increase the aggregate value to at least the Credit Support Amount. Where there is an event of default in respect of the Counterparty under the swap confirmation, the Company will be entitled to enforce against the Counterparty its security over the collateral.
Due to the collateral being monitored on a weekly basis (as detailed above), there is a risk due to timing that the amount posted to collateral will be less than the Credit Support Amount.
The Credit Support Amount is the lesser of (a) 100% of the net asset value of the relevant cell and (b) the total of the Applicable Percentage of such net asset value plus 10% of such net asset value (where the "Applicable Percentage" is calculated so as to reflect the percentage of shares in the relevant cell held at the relevant time by shareholders other than BNP Paribas Arbitrage SNC).
The most significant concentration of credit risk for the Company is that the Counterparty will be unable to satisfy its obligations under the relevant contract to repay to the Company any amount due. The maximum credit risk exposure at the reporting date is therefore considered to be the total valuation of the investments at this date, being GBP243,219,046 (Oct 2012: GBP352,938,637).
The Investment Manager and Administrator monitor collateral posted on a weekly basis and report to the Board quarterly on the Counterparty's compliance with the relevant Credit Support Deeds. The Investment Manager and Administrator have also undertaken to report to the Board immediately if there is a breach of compliance with the terms of the relevant Credit Support Deeds.
The Board monitors, but cannot control, credit risk.
(d) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in realising assets or otherwise raising funds to meet financial commitments and obligations to shareholders on redemption of their shares of a cell. The only financial commitments of the Company are to meet on-going expenses and these are met out of monies provided to the Company's Administrator by BNP Paribas SA.
There is a further liquidity risk in respect of the redemption of shares, the dates of which are set out in note 6(g) (ii).
As the investments are not traded in an active market, the Company may not be able to liquidate quickly its investments in these instruments at an amount close to their fair value to meet its liquidity requirements or to respond to specific events such as deterioration in the credit worthiness of the Counterparty.
The table below details the residual contractual maturities of the financial liabilities:
At 31 October 2013 1-3 months 3-12 months Over 1 year Total GBP GBP GBP GBP Net assets attributable to holders of Management Shares 263,128 - - 263,128 Net assets attributable to holders of Preference Shares - 73,130,881 170,088,165 243,219,046 ----------- ------------- -------------- -------------- 263,128 73,130,881 170,088,165 243,482,174 At 31 October 2012 1-3 months 3-12 months Over 1 year Total GBP GBP GBP GBP Net assets attributable to holders of Management Shares 334,320 - - 334,320 Net assets attributable to holders of Preference Shares 43,350,865 58,238,503 251,349,269 352,938,637 ------------- ------------- -------------- -------------- 43,685,185 58,238,503 251,349,269 353,272,957
The table below details the expected liquidity of assets held:
At 31 October 2013 1-3 months 3-12 months Over 1 year Total GBP GBP GBP GBP Net assets 263,128 73,130,881 170,088,165 243,482,174 ----------- ------------ ------------ ------------ At 31 October 2012 1-3 months 3-12 months Over 1 year Total GBP GBP GBP GBP Net assets 43,685,185 58,238,503 251,349,269 353,272,957 ----------- ------------ ------------ ------------
The Board monitors, but cannot actively control liquidity risk.
(e) Capital Risk Management
The Company has an unlimited life but the Protected Cell Shares for each cell have a fixed redemption date.
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders.
The Board of directors believe the current capital structure to be sufficient in meeting the capital requirements of the Company.
All expenses are borne by BNP Paribas SA and redemption proceeds are limited to the amounts received, if any, on the maturity or early termination of the relevant investment contract between the Company and the Counterparty.
Potential losses to shareholders are mitigated by the returns stipulated in the swap agreement with the Counterparty as described in note 6(h) and the collateral arrangements which are set out in note 6(i).
(f) Foreign Exchange Risk
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