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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Promethean | LSE:PTH | London | Ordinary Share | GB00B08H5G38 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.125 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMPTH
RNS Number : 8653U
Promethean PLC
06 December 2013
6 December 2012
Promethean PLC
("Promethean" or the "Company")
Annual Report and Accounts and AGM Notice
Promethean PLC announces that the Annual Report and Accounts for the year ended 30 June 2013, Notice of AGM and Proxy Form have been posted to shareholders and are available from the Company's website (www.prometheanplc.com).
The Annual General Meeting of the Company will be held at Clinch's House, Lord Street, Douglas, Isle of Man on 30 December 2013 at 10 a.m.
Enquiries:
Sir Peter Burt
Promethean PLC +44 (0) 207 479 7660
Stuart Gledhill / Jeff Keating / Laura Littley
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Chairman's Statement
The financial year to 30 June 2013 has seen Promethean plc (the "Company") make good progress towards its goal of successfully realising the remainder of its portfolio. At the start of July 2012, three investments remained and I am pleased to say that final exits were achieved for two and that the third currently is in negotiation.
Early repayment of the remaining InterMediactive loan notes on acceptable terms was successfully negotiated and this concluded an investment that has delivered substantial returns for the Company. We also finalised an exit from January Loan Services Limited ("JLSL"). JLSL's performance justified the decision to acquire the business from its failed parent Enterprise Group but the exit is bitter sweet. JLSL is showing an exciting level of growth which, had the Company been continuing as originally intended, might well have resulted in a recovery of the original investment in Enterprise Group.
The exit from the one remaining investment (TIS Group Limited ("TIS")) has proved less straight forward. Negotiations have continued throughout the year and, as announced subsequent to the Company's year end, the Company is in negotiation with a third party in respect to a reverse takeover of the Company. As you know, Promethean plc shares have been suspended until a conclusion has been reached on the proposed reverse takeover. The proposed transaction is conditional and requires the consent from three separate groups of investors, including Promethean shareholders, and so there can be no certainty that any transaction will be completed. Professional advisers are preparing the formal documentation necessary to obtain the approval of all parties concerned and it is hoped that these documents will be sent out in the next few weeks. The Board is strongly supportive of the proposed transaction and will be recommending its acceptance by the shareholders.
The Articles of Association of Promethean Plc require a continuation vote by 31 December 2013. As discussed above, there are still ongoing negotiations regarding the possible reverse takeover. Accordingly, the directors will propose a continuation resolution at the forthcoming annual general meeting but in such circumstances strongly recommend shareholders to vote against resolution 3.
In the event that the proposed reverse takeover transaction does not proceed, the Board will discuss with shareholders the options available on how best to deal with the situation where there will be only the TIS investment and cash remaining in the Company.
As previously announced, the Fund management contract with Promethean Investments LLP came to an end on 30 June 2013 and, as had been agreed, no management fee was paid from 1 January 2013 to 30 June 2013. The Company remained liable for certain liabilities of Promethean Investments LLP and a payment of GBP603,000 was made by the Company to Promethean Investments LLP in January 2013 in respect of these liabilities. Given the changes forced on the Company's investment policy and the consequent accelerated investment exits, the Manager has served the Company well and the Board takes this opportunity to express our thanks to the Manager.
P BURT
Sir Peter Burt
Chairman
5 December 2013
For further information, please contact:
Elizabeth Tansell
Promethean PLC +44 (0) 1624 641563
Stuart Gledhill
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Directors' Report
The directors present their report and accounts for the year ended 30 June 2013.
Principal activities, trading review and future developments
Promethean plc (the "Company") is an investment company established to build a concentrated portfolio of
investments that are actively managed to realise long-term capital gains. Following a Company resolution in 2009, the Board's objectives shifted to a policy of full divestment in the form of an orderly realisation of all investments.
During the course of the year there were three material events that added value to the PLC position. The first was the Cambria distribution in specie which occurred on 9 July 2012 resulting in each shareholder in the PLC receiving 0.74 shares in Cambria for every 1 Ordinary share held in the Company. The second was the repayment of the IMA loan notes for GBP3.3m and the payment of the IMA deferred consideration. The final event was the exercise of the January Loan Services Option agreements, where the board and NOMAD negotiated an extra payment of GBP0.6m for the final option.
During the year the Company took over the management of the investments from Promethean Investments LLP, who ceased to act as Fund Manager. Therefore there is no Investment Manager's Review. The ending of the management contract with the Fund Manager went smoothly with full control being handed back to the board as per the termination agreement.
Results and dividends
The Group's consolidated financial statements are set out on pages 7 to 27. The Group reported net assets at the statement of financial position date of GBP9.6m (2012: GBP17.1m) and in the year to 30 June 2013 a loss attributable to the shareholders of GBP1.9m (2012: GBP10.5m). No dividends were paid in this or the preceding year.
Directors
The directors of the Company during the year and their beneficial interest in the ordinary share capital of the Company were:
Hot Features
Premium
As at 1 July Change in the As at 30 June 2013
2012 year
Sir Peter Burt* 550,000 nil 550,000
Martin Negre 50,000 nil 50,000
Elizabeth Tansell nil nil nil
* including connected parties
Creditors payment policy and practice
It is the Group's policy to agree terms of business with suppliers prior to the supply of goods and services. In the absence of any dispute, the Group pays, wherever possible, in accordance with these agreed terms. Group trade creditors at the year-end amounted to 30 days (2012: 30 days) of average supplies for the year.
Key performance indicators
The directors monitor the business through growth in the net asset value (total amount less total liabilities) using the Group statement of financial position.
Going concern
The Company and Group are in the process of realising all investments in accordance with the shareholders' vote on asset emains divestment in 2009. As detailed in the Chairman's Statement, and at the date of the approval of these accounts, there rsome uncertainty as to the exact form of the final realisation and of the future of the Company once all investments have been disposed. As at the date of approval of these financial statements, and subject to the shareholders continuation vote to be held at the 2013 AGM, the directors are confident that the Company will continue to trade, in some form, for the foreseeable future and so are satisfied that the accounts have been properly prepared on a going concern basis.
Financial risk management
It is the responsibility of management to ensure that proper controls are in place to maintain effective risk management in every aspect of the Company's business. The main risks comprise economic risk, treasury and funding risk, investment risk and operational risk. Details of how management manages the risks are set out in Note 16 to the financial statements.
Events after the Reporting Period
On 13 September 2013 the Promethean plc's share trading on AIM was temporarily suspended pending an announcement of a submission document. On 19 September 2013 the details of the suspension were disclosed in an RNS announcement detailing the discussions held between the Board, TIS Group ("TIS") and Protected Asset TEP Fund plc ("PATF") relating to the establishment of an AIM listed multi-strategy investment company utilising the existing Promethean business. The Board is of the view that this opportunity represents the best solution available in respect of the final investment (TIS). At the time of these financial statements being authorised, the transaction had not progressed to conclusion.
Auditors
Grant Thornton were appointed auditors on 26 November 2007. Grant Thornton have expressed their willingness to continue in office and being eligible they offer themselves for re-election at the forthcoming AGM.
Directors' responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to keep reliable accounting records which allow financial statements to be prepared. In addition, the directors have elected to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. The financial statements are required to give a true and fair view of the state of affairs and profit or loss of the Company and Group for that year. In preparing these financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and estimates that are reasonable and prudent;
-- state whether applicable International Financial Reporting Standards have been followed, subject to anymaterial departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Isle of Man Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors confirm that:
-- so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
-- the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.
On Behalf of the Board
E TANSELL
Elizabeth Tansell
Director
5 December 2013
Report of the Independent Auditor to the Members of Promethean plc
Independent Auditor's Report to the Members of Promethean plc
We have audited the Group and Parent Company financial statements of Promethean Plc for the year ended 30 June 2013 which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group and Company Statement of Changes in Equity, the Group and Company Statements of Cash Flows, and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (as adopted by the European Union).
This report is made solely to the Company's members, as a body, in accordance with Section 80C(2) of the Isle of Man Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the directors' responsibilities statement set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements give a true and fair view of the state of the Group's and Company's affairs as at 30 June 2013 and of the Group's loss for the year then ended in accordance with International Financial Reporting Standards (as adopted by the European Union).
GRANT THORNTON
GRANT THORNTON
Chartered Accountants
Third Floor
Exchange House
54/58 Athol Street
Douglas
ISLE OF MAN
IM1 1JD
5 December 2013
Group Statement of Comprehensive Income for the year to 30 June 2013
Year ended Year ended
30 June 30 June
2013 2012
Notes GBP'000 GBP'000
Investing Operations
Investment and other income 2 3,516 3,683
Realised and unrealised loss on financial
investments 2 (4,337) 12,279
----------- -----------
(821) (8,596)
Management and other expenses (1,003) (1,778)
----------- -----------
Loss from investing activities (1,824) (10,374)
----------- -----------
Loss before finance costs and taxation (1,824) (10,374)
Finance income 5 5 1
Finance costs 4 (38) (6)
----------- -----------
Loss before tax (1,857) (10,379)
Income tax expense 7 - (118)
----------- -----------
Group Loss and Total comprehensive
income (1,857) (10,497)
----------- -----------
Loss per share - (basic and diluted) 8 (4.11p) (23.23p)
Group Statement of Financial Position as at 30 June 2013
June 2013 June 2012
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair value through
profit & loss 10 6,311 16,807
---------- ----------
6,311 16,807
Current assets
Trade and other receivables 11 324 1,261
Cash and cash equivalents 12 3,064 717
---------- ----------
3,388 1,978
---------- ----------
Total assets 9,699 18,785
---------- ----------
Current liabilities
Trade and other payables 13 117 1,550
Taxation liabilities - 132
---------- ----------
117 1,682
---------- ----------
Net assets 9,582 17,103
---------- ----------
Equity
Share capital 14 452 452
Share premium 4,723 10,387
Retained earnings 4,407 6,264
---------- ----------
Total equity attributable to owners of
the parent 9,582 17,103
---------- ----------
Net asset per share 8 GBP0.21 GBP0.38
The financial statements on pages 7 to 27 were approved by the board of directors on 5 December 2013 for
issue and are signed on its behalf by
Sir Peter Burt
Director
Elizabeth Tansell
Director
Company Statement of Financial Position as at 30 June 2013
June 2013 June 2012
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair value through
profit or loss 9 9,112 17,201
Current assets
Trade and other receivables 11 328 632
Cash and cash equivalents 12 259 85
---------- ----------
587 717
---------- ----------
Total assets 9,699 17,918
---------- ----------
Current liabilities
Trade and other payables 13 117 683
Taxation liabilities - 132
---------- ----------
117 815
---------- ----------
Net assets 9,582 17,103
---------- ----------
Equity
Share capital 14 452 452
Share premium 4,723 10,387
Retained earnings 4,407 6,264
---------- ----------
Total equity 9,582 17,103
---------- ----------
The financial statements on pages 7 to 27 were approved by the board of directors on 5 December 2013 for
issue and are signed on its behalf by
Sir Peter Burt
Director
Elizabeth Tansell
Director
Statement of changes in equity for the year ended 30 June 2013
Group
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- --------
Capital return - (5,664) - (5,664)
--------- --------- ---------- --------
Transactions with owners - (5,664) - (5,664)
Loss for the year - - (1,857) (1,857)
--------- --------- ---------- --------
Loss for the year - - (1,857) (1,857)
Other comprehensive income - - - -
--------- --------- ---------- --------
Total comprehensive income for
the year - - (1,857) (1,857)
Balance as at 30 June 2013 452 4,723 4,407 9,582
--------- --------- ---------- --------
Company
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- --------
Capital return - (5,664) - (5,664)
--------- --------- ---------- --------
Transactions with owners - (5,664) - (5,664)
Loss for the year - - (1,857) (1,857)
--------- --------- ---------- --------
Loss for the year - - (1,857) (1,857)
Other comprehensive income - - - -
--------- --------- ---------- --------
Total comprehensive income for
the year - - (1,857) (1,857)
Balance as at 30 June 2013 452 4,723 4,407 9,582
--------- --------- ---------- --------
Statement of changes in equity for the year ended 30 June 2013 (continued)
Group
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 16,761 30,316
--------- --------- ---------- ---------
Capital return - (2,712) - (2,712)
Expenses relating to the return
of capital to the shareholders - (4) - (4)
--------- --------- ---------- ---------
Transactions with owners - (2,716) - (2,716)
Loss for the year - - (10,497) (10,497)
--------- --------- ---------- ---------
Loss for the year - - (10,497) (10,497)
Other comprehensive income - - - -
--------- --------- ---------- ---------
Total comprehensive income for
the year - - (10,497) (10,497)
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- ---------
Company
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 16,761 30,316
--------- --------- ---------- ---------
Capital return - (2,712) - (2,712)
Expenses relating to the return
of capital to the shareholders - (4) - (4)
--------- --------- ---------- ---------
Transactions with owners - (2,716) - (2,716)
Loss for the year - - (10,497) (10,497)
--------- --------- ---------- ---------
Loss for the year - - (10,497) (10,497)
Other comprehensive income - - - -
--------- --------- ---------- ---------
Total comprehensive income for
the year - - (10,497) (10,497)
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- ---------
Statement of Cash Flows for the year ended 30 June 2013
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash outflow from operating activities
Loss before tax for the year (1,857) (1,857) (10,379) (10,400)
Adjustments for :
Depreciation - - 13 -
Finance income (5) - (1) -
Finance cost 38 1 6 -
Investment impairments 4,596 1,471 11,957 13,005
Investment income (3,753) (238) - -
Decrease/(increase) in trade and other
receivables 697 305 (3,331) (604)
(Decrease)/increase in payables (1,433) (566) (198) 611
Tax paid (132) (132) (21) -
Loss on disposal of investments (22) - 322 -
-------- -------- --------- ---------
Net cash outflow in operating activities (1,871) (1,016) (1,632) (2,612)
-------- -------- --------- ---------
Cash inflow from investing activities
Disposal of subsidiaries - - 6 -
Proceeds from investment disposals 4,376 1,316 3,822 -
Purchase of investments (125) (125) (7) -
Finance income 5 - 1 -
-------- -------- --------- ---------
Net cash inflow in investing activities 4,256 1,191 3,822 -
-------- -------- --------- ---------
Cash outflow from financing activities
Capital return - - (2,716) (2,716)
Finance cost (38) (1) (6) -
-------- -------- --------- ---------
Net cash outflow in financing activities (38) (1) (2,722) (2,716)
Net increase/(decrease) in cash and
cash equivalents 2,347 174 (532) (104)
Cash and cash equivalents at beginning
of year 717 85 1,249 189
Cash and cash equivalents at end of
year 3,064 259 717 85
-------- -------- --------- ---------
Notes to the consolidated financial statements for the year ended 30 June 2013
1. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with applicable International Financial Reporting Standards (as adopted by the European Union).
The Company was incorporated in the Isle of Man and as such is regulated by Isle of Man company law. The principal accounting policies adopted are set out below.
Although not referred to in the Isle of Man Companies Act 2006, in accordance with usual practice for companies incorporated under the Isle of Man companies legislation, the Company has not presented its own statement of comprehensive income in these consolidated financial statements. The loss on ordinary activities after taxation of the Company is GBP1.9m (2012: GBP10.5m).
Going concern
The Company and Group are in the process of realising all investments in accordance with the shareholders vote on asset divestment in 2009. As detailed in the Chairman's Statement, and at the date of the approval of these accounts, there remains some uncertainty as to the exact form of the final realisation and of the future of the Company once all investments have been disposed. As at the date of approval of these financial statements, and subject to the shareholders continuation vote to be held at the 2013 AGM, the directors are confident that the Company will continue to trade, in some form, for the foreseeable future and so are satisfied that the accounts have been properly prepared on a going concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (and its subsidiaries) made up to 30 June each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. On acquisition, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between group enterprises are eliminated on consolidation.
Standards and Interpretations in issue but not effective
At the time these financial statements were authorised for issue by the directors the following Standards and Interpretations, which are relevant to the group, were in issue but not yet effective:
-- IFRS 9 Financial Instruments (effective 1 January 2015)
-- IFRS 10 Consolidated Financial Statements (effective 1 January 2014)
-- IFRS 12 Disclosure of Interest in Other Entities (effective 1 January 2014)
-- IAS 27 (Revised), Separate Financial Statements (effective 1 January 2014)
-- IAS 36 Impairment of Assets (effective 1 January 2014)
-- IAS 39 Financial Instruments: Recognition & Measurement (effective 1 January 2014)
-- Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32 (effective 1 January 2014)
-- Mandatory Effective Date and Transition Disclosures - Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)
-- Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS 27 (effective 1 January 2014)
The application of the above Standards and Interpretations is not expected to have a material impact to the Group's results.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of estimates and judgements that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to the valuation of unlisted financial investments held at fair value through the profit and loss, which are valued on the basis noted below and the recognition or otherwise of accrued income on loan notes and similar instruments granted to investee companies.
Despite the Group holding a 55% interest in T.I.S Holdings ("TIS"), the results are not included in the Group results due to a lack of control to govern the financial and operating policies of TIS. It has been determined that control does not exist due to:
-- Board voting powers are deadlocked
-- No legal or implied powers have resulted from the increase in ownership
The investment is designated as a fair value through profit or loss financial asset. The Group has applied the exemption from equity accounting under IAS 28 'Investment in Associates' (paragraph 1). At the year end TIS was valued at GBP6.3m based on an agreed pre-transaction value. The proposed transaction details are set out in the Chairman's Statement. The valuation has been re-assessed and further verified by the directors by virtue of an asset allocation agreement from the TIS Board, based on an independent valuation of the TIS business.
Where a carried interest arrangement amounts to an obligation to make interest payments which is considered to be equity under IAS 32, such payments are treated as distributions to minority interest equity holders, subject to the satisfaction of certain qualifying criteria.
Investments are valued at bid-market price or the conventions of the market on which they are quoted, subject if appropriate, to marketability discounts where formal restrictions on trading exist.
Revenue recognition
Investment income comprises management fees receivable and interest income from treasury deposits and from loans advanced. Investment management fees are recognised under the accrual basis, other fees are recognised in full once a contractual obligation is created for the third party.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate.
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.
Expenses
All expenses are accounted for on an accrual basis.
Taxation
The charge for current tax is based on the results for the period as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax is accounted for using the statement of financial position liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the rates that are expected to apply when the asset or liability is settled.
Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Financial investments
Where a financial investment is not required to be consolidated the equity, loan and similar instruments, are designated at fair value through profit and loss, and are valued in compliance with International Financial Reporting Standards and the International Private Equity and Venture Capital Association guidelines. Gains and losses on the realisation of financial investments are dealt with through the statement of comprehensive income. The difference between the market value of financial investments and cost to the Group is shown as an unrealised gain or loss in the statement of comprehensive income.
Investments are monitored at fair value and designated at fair value through profit or loss in accordance with the Group's documented investment strategy. The Company has recognised its investments in subsidiaries at fair value through profit or loss.
Investments are stated at amounts considered by the directors to be a reasonable assessment of their fair value, where fair value is the amount at which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
All investments are valued according to one of the following bases:
-- Cost (less any provision required)
-- Earnings multiple
-- Sale price / Realisable value
-- Price of recent transaction or
-- Net assets
Investments are only valued at cost for a limited period after the date of acquisition, otherwise investments are valued on one of the other bases described above, and generally the earnings' multiple basis of valuation will be used unless this is inappropriate, as in the case of certain asset-based businesses.
When valuing on an earnings' multiple basis, profits before interest and tax of the current year will normally be used, depending on whether or not more than six months of the accounting period remain and the predictability of future profits. Such profits will be adjusted to a maintainable basis, taxed at the full corporation tax rate and multiplied by an appropriate and reasonable price/earnings multiple. This is normally related to comparable quoted companies, with adjustments made for points of difference between the comparator and the company being valued, in particular for risks, earnings' growth prospects and surplus assets or excess liabilities.
Where a company has incurred losses, or if comparable quoted companies are not primarily valued on an earnings' basis, then the valuation may be calculated with regard to the underlying net assets and any other relevant information, such as the pricing for subsequent recent investments by a third party in a new financing round that is actively being sought, then any offers from potential purchasers would be relevant in assessing the valuation of an investment and are taken into account in arriving at the valuation.
Where appropriate, a marketability discount may be applied to the investment valuation, based on the likely timing of an exit, the influence over that exit, the risk of achieving conditions precedent to that exit and general market conditions.
When investments have obtained an exit (either by listing or trade sale) after the valuation date but before
finalisation of Promethean's relevant accounts, (interim or final), the valuation is based on the exit valuation
subject to an appropriate discount to take account of the time period between valuation and exit dates. In circumstances where an exit is anticipated in the foreseeable future, the valuation is based on an indicative price at which the directors consider that there is a significant probability that a transaction will be completed at that price.
In arriving at the value of an investment, the percentage ownership is calculated after taking into account any dilution through outstanding warrants, options held by third parties or other investors and performance related mechanisms.
Interest accruing on secured and unsecured loan notes is disclosed within investments. When an investee company repays interest by issuing a payment-in-kind ("PIK") note as opposed to a cash payment, the amount of that PIK note issued is subsequently disclosed within Investments held at fair value through profit or loss.
Trade receivables
Trade receivables are initially recognised at fair value (plus transaction costs) and then subsequently carried at amortised cost less impairment for estimated irrecoverable amounts.
Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risks of changes in value.
Trade payables
Trade payables are stated at fair value on initial recognition and then subsequently at amortised cost using the effective interest method.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the statement of financial position date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the profit or loss in the period in which they arise. Exchange differences on non-monetary items are recognised in the statement of changes in equity to the extent that they relate to a gain or loss on that non-monetary item taken to the statement of changes in equity, otherwise such gains and losses are recognised in the statement of comprehensive income.
Equity
Equity comprises the following:
-- Share capital represents the nominal value of equity shares
-- Share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of
expenses of the share issue
-- Distributable Retained earnings represents retained profits
2. Revenues
2013 2012
GBP'000 GBP'000
Investing operations
Management and other fees receivable - 428
Interest income 3,516 3,157
Dividends from equity shares - 98
-------- ---------
3,516 3,683
Loss on retirement from Promethean Investments
LLP - (322)
Realised loss on financial investments (1,240) (3,239)
Unrealised loss on financial investments (3,097) (8,718)
-------- ---------
Realised and unrealised loss on financial investments (4,337) (12,279)
-------- ---------
3. Loss before finance costs and taxation
2013 2012
GBP'000 GBP'000
Loss before finance costs and taxation is after
charging/(crediting):
Depreciation - 13
Audit remuneration:
Fees payable to the Company's auditor for the
audit of the financial statements 41 62
Audit of the financial statements of the Company's
subsidiaries pursuant
to legislation - 21
Other fees payable to the auditors 12 -
Foreign exchange loss/(gain) (7) 24
Operating Lease - 92
-------- --------
4. Finance costs
2013 2012
GBP'000 GBP'000
Finance charges 38 6
-------- --------
5. Interest from investments
2013 2012
GBP'000 GBP'000
Interest on bank deposits 5 1
-------- --------
6. Employees and directors
2013 2012
GBP'000 GBP'000
The total employee costs for the group were:
Directors' fees 75 75
Salaries and wages - 71
Employer's national insurance - 7
-------- --------
75 153
-------- --------
Directors' fees
Sir Peter Burt 30 30
Martin Negre 25 25
Third party payments - SMP Fund Services (Elizabeth
Tansell) 20 20
-------- --------
75 75
-------- --------
GBP'000 GBP'000
Amount paid to highest paid director 30 30
Average number of employees for the group during No. No.
the year were:
Administration 1 1
-------- --------
1 1
-------- --------
The Directors are the key management personnel of Promethean plc.
7. Taxation - continuing operations
2013 2012
GBP'000 GBP'000
Analysis of charge for the year:
Overseas withholding tax - 21
UK Corporation tax charge on profits for the
year - 21
Adjustments in respect of prior periods - 76
--------- --------
Total tax expense - 118
--------- --------
The tax assessed for the year differs from the standard rate of corporation tax in the Isle of Man and United Kingdom. The
tax charge for the year can be reconciled to the loss as per the statement of comprehensive income as follows:
2013 2012
GBP'000 GBP'000
Loss before tax (1,857) (10,379)
-------- ---------
Taxation at standard rate in Isle of Man nil% - -
Overseas withholding tax - 21
Adjustment to tax charge in respect of prior
periods - 76
Taxable income - profit share from UK based
LLP - 21
-------- ---------
Total tax expense - 118
-------- ---------
The Company is resident for Isle of Man income tax purposes, being subject to the standard rate of income tax, which is currently 0%. As the Company is wholly owned by individuals not resident in the Isle of Man for tax purposes, it will notbe subject to the Attribution Regime for individuals, which commenced from 1 July 2008.
8 Loss and net asset value per share
The calculations of basic loss per share of the Group at 30 June 2013 was based on the loss attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding during the year ended 30 June 2013, calculated as follows:
2013 2012
Loss attributable to equity holders of the (GBP1,857,000) (GBP10,497,000)
parent
Issued ordinary shares - beginning of year 45,186,155 45,186,155
Issued ordinary shares - end of year 45,186,155 45,186,155
Weighted average number of issued shares
for the year 45,186,155 45,186,155
Loss per share (basic and diluted) - total (4.11p) (23.23p)
Net asset value per ordinary share 21.2p 37.8p
9. Investments
Company shares in group undertakings and trade investments
2013 2012
GBP'000 GBP'000
On incorporation - 360
Disposal on retirement - (360)
Investment at fair value through
profit and loss 9,112 17,201
-------- --------
9,112 17,201
-------- --------
Company shares in group undertakings and trade investments
On incorporation - 360
Disposal on retirement - (360)
Investment at fair value through
profit and loss 9,112 17,201
------ -------
9,112 17,201
------ -------
Details of significant subsidiaries at 30 June 2013 are as follows:
Name of subsidiary Place of Proportion of Proportion of Principal
Incorporation ownership interest voting power activity
(or registration) held
and operation
Promethean Investments Holding entity
Fund LP England 100 100 for investments
10. Investments
Group 2013 2012
GBP'000 GBP'000
Listed investments
Valuation as at 1 July 2012 7,164 20,056
Realised loss (1,500) (3,239)
Unrealised loss - (5,831)
Disposals (5,664) (3,822)
-------- --------
Valuation as at 30 June 2013 - 7,164
-------- --------
Unlisted investments
Valuation as at 1 July 2012 9,643 9,468
Fair value adjustments recognised
in profit & loss (2,837) (2,887)
Additions including capitalised
loan interest 3,881 3,062
Disposals (4,376) -
-------- --------
Valuation as at 30 June 2013 6,311 9,643
-------- --------
Total investments
-------- --------
Valuation as at 30 June 2013 6,311 16,807
-------- --------
11. Trade and other receivables
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Other debtors 16 20 - -
Prepayments and accrued
income 308 308 1,261 632
324 328 1,261 632
Other debtors 16 20 - -
Prepayments and accrued
income 308 308 1,261 632
324 328 1,261 632
Notes to the consolidated financial statements for the year ended 30 June 2013 (continued)
12. Cash and cash equivalents
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 3,064 259 20 -
Short term deposit - - 697 85
-------- -------- -------- --------
3,064 259 717 85
-------- -------- -------- --------
13. Trade and other payables - current
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 20 20 2 2
Other creditors - 844 -
Accruals and deferred income 97 97 704 681
-------- -------- -------- --------
117 117 1,550 683
-------- -------- -------- --------
Liquidity risk is the risk that an entity will have difficulties in paying its financial liabilities. The Group maintains sufficient reserves to ensure that its financial liabilities are able to be met.
The figures in Note 13 represent short term financial liabilities and are therefore based on gross undiscounted cash flows.
14. Share Capital Group Group
2013 2012
GBP'000 GBP'000
Authorised
100,000,000 ordinary shares of 1p each - beginning
of year 1,000 1,000
------ ------
Issued and fully paid
45,186,155 ordinary shares of 1p each - beginning
of year 452 452
------ ------
45,186,155 ordinary shares of 1p each - end
of year 452 452
------ ------
On incorporation the Company had authorised share capital of GBP1,000,000 divided into 100,000,000 ordinary shares of 1p each.
Also, on incorporation, two ordinary shares were subscribed, nil paid.
On 23rd June 2006 the Company issued 50,000,000 ordinary shares of 1p each at a premium of 99p, to provide additional working capital.
On 14 April 2009 the Company cancelled a total of 4,813,845 ordinary shares tendered at a price of 70.5 pence per share.
Following the company's re-registration under the Isle of Man Companies Act 2006, the Company is governed by a revised Memorandum and Articles of Association.
Following the disposal of Cambria Automobiles plc ("Cambria") as a return of capital in specie to shareholders at fair value, an effective capital return of 17.0 pence per share totalling GBP5,664,000 was returned to Promethean plc shareholders on 12 July 2012. For each share held in Promethean plc, shareholders received 0.73742 shares in Cambria.
In the period to 30 June 2012 the disposal of IFG Group plc led to a capital return of 6.0 pence per share resulting in a return to Promethean plc shareholders of GBP2,712,000.
15. Related party transactions
During the year the group had the following related party transactions:
On 12 August 2013, the Company's registrar and administrator changed from Chamberlain Fund Services Limited to SMP Fund Services Limited. Elizabeth Tansell is a principal of Chamberlain Fund Services Limited and a director of Promethean plc. During the year the Company had the following related party transactions with Chamberlain Fund Services Limited:
Registrar and administrator services charged including accruals 13 13 Transactions during the year with respect to Key Management Personnel: - profit share - 673
During the year the Group made payments of GBP990,000 (2012: GBP646,000) to Promethean Investments LLP in respect of investment management services provided and in settlement of certain liabilities of Promethean Investments LLP for which it was liable. As at the balance sheet date there were no amounts due to or from that entity. Sir Peter Burt is a member of Promethean Investments LLP.
In respect of the Cambria capital return as detailed in Note 14, Sir Peter Burt and Martin Negre received shares in Cambria of 405,581 (including connected parties) and 36,871 respectively.
There is no ultimate controlling party.
16. Financial Instruments
Financial instruments comprise securities and other investments, cash balances and receivables and payables that arise from operations. The investment portfolio includes quoted and unquoted equity investments and debt instruments that are held for the long term.
All gains and losses arising from financial assets designated at fair value are recognised through profit or loss.
The carrying value of all financial assets and liabilities are as follows:
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets comprise
Loans and receivables 3,388 587 1,978 717
Fair value through profit or
loss:
Designated at fair value through
profit or loss 6,311 9,112 16,807 17,201
-------- -------- -------- --------
9,699 9,699 18,785 17,918
-------- -------- -------- --------
Management monitors the ageing of financial assets that are past due but not impaired as at the year end. These amounts
as at 30 June 2013 and 30 June 2012 were not material to the group results.
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities comprise
Amortised cost 117 117 1,682 815
-------- -------- --------- --------
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Losses on:
Designated at fair value through
profit and loss (4,337) (1,471) (12,279) (3,770)
-------- -------- --------- --------
Market Risk
Market risk embodies the potential for both losses and gains and includes currency risk, fair value interest rate risk and price risk. The Group's strategy on the management of market risk is driven by its investment objective, as outlined in the Directors' report. The Group invests in a range of investments, including quoted and unquoted equity securities and debt instruments in a range of sectors. The Board monitors the Group's investment exposure against internal guidelines specifying the proportion of total assets that may be invested in various sectors.
Of the GBP4,337,000 (2012: GBP12,279,000) realised and unrealised loss recognised on investments during the year, a loss of GBP1,500,000 (2012: GBP9,069,000) is attributable to listed investments.
Currency risk
Certain financial instruments are denominated in currencies other than the functional currency. Consequently there is exposure to the risk that the exchange rate of the functional currency may change relative to the currencies in a manner that has an adverse effect on the value of that proportion of the investments denominated in currencies other than the functional currency.
At 30 June 2013 the Group had EURnil (2012: EUR221,765) in cash balances and had no hedging positions or other financial instruments in foreign currencies.
16. Financial Instruments (continued)
Interest rate risk
Interest rate movements may affect the level of income receivable on cash balances held on term deposits and interest payable on floating rate interest bearing liabilities.
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 3,064 259 717 85
-------- -------- -------- --------
Price Risk
Price risk may affect the value of quoted and unquoted investments as a result of changes in market prices (other than arising from interest rate risk or currency risk), whether caused by factors to an individual investment, its issuer or factors affecting all instruments traded in the market. As all of the Company's financial instruments are carried at fair value with fair value changes recognised in the statement of comprehensive income, all changes in market conditions will directly affect net investment income.
The exposure to quoted equity investments are as follows:
Valuation of listed investments
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Listed investments as at 30 June - - 7,164 -
2013
--------- -------- -------- --------
The following table details the sensitivity of a 10% change in prices
on the 30 June 2013 valuation of the investments:
Increase in prices - - 7,880 -
Decrease in prices - - 6,448 -
--------- -------- -------- --------
The following table details the sensitivity of a 10% change in the
30 June 2013 closing bid prices on the profit/(loss):
Increase in prices - - 716 -
Decrease in prices - - (716) -
--------- -------- -------- --------
Unlisted Investments valued using
multiple basis
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Unlisted investments as at 30 - - 5,942 -
June 2013
--------- -------- -------- --------
Valuation movement if:
Multiple applied is increased - - 1,188 -
by 20%
Multiple applied is decreased - - (1,188) -
by 20%
--------- -------- -------- --------
When valuing on an earnings' multiple basis, profits before interest and tax of the current year will normally be used. The profit is adjusted to a maintainable basis, taxed at the full corporation tax rate and multiplied by an appropriate and reasonable price/earnings multiple. The price/earnings multiple is chosen from a basket of comparable quoted companies, taking into account particular risks, earnings' growth prospects and surplus assets or liabilities of the comparator. On all valuations, a marketability discount in the range of 15% to 25% has been applied to reflect the likely timing of an exit, after consideration of influencing factors such as general market conditions.
At the 30 June 2013 the only investment remaining was T.I.S Group, which was valued at GBP6,311,000 in accordance with an agreed pre-transaction value, as described in Note 1. A 20% variance on this would result in a GBP1,262,000 positive or adverse movement on that valuation.
Credit Risk
Credit risk is the risk that the counterparty to the financial instrument will fail to discharge an obligation or commitment. As at 30 June 2013 the financial assets exposed to credit risk were as follows:
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Investments in debt instruments - - 3,076 -
Trade and other receivables 324 328 1,261 632
Cash and cash equivalents 3,064 259 717 85
-------- -------- -------- --------
3,388 587 5,054 717
-------- -------- -------- --------
Prior to making investments in debt instruments, the Manager reviews and evaluates the investee's ability to service and repay its debt as part of the due diligence process. The recoverability of debts from investee companies subsequent to acquisition is monitored by directors attending board meetings and reviewing management accounts on a regular basis.
The credit risk on cash and cash equivalent balances are mitigated by spreading the balances across a number of investment grade banking institutions.
Fair values
The Group's investments are carried at fair values on the statement of financial position. The carrying value of certain other financial instruments, specifically trade and other receivables and payables approximates to fair value due to the short term nature of these instruments.
The principal methods and assumptions used in estimating the fair value of investments is disclosed on page 15.
Capital management and policies and procedures
The Group's capital management objectives are:
- to ensure that it will be able to continue as a going concern;
- to realise all investments and return capital to the equity shareholders; and
- to maximise the income and capital return to its equity shareholders.
The Group's capital at 30 June 2013 comprises equity share capital of GBP452,000 (2012: GBP452,000) and retained earnings and other reserves of GBP9,130,000 (2012: GBP16,651,000).
The Board monitors and reviews the structures of the Group's capital on an ongoing basis assessing the need for new issues of equity shares, and the extent to which revenue, in excess of that which is required to be distributed, should be retained. The Group's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
Fair value hierarchy
Level Level Level Total
1 2 3
2013 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets designated at
fair value through profit or loss
Equity investments
- Listed or quoted - - - -
- Unquoted - - 6,311 6,311
--------- --------- -------- --------
As at 30 June 2013 - - 6,311 6,311
--------- --------- -------- --------
There have been no transfers between Levels 1 and 2 during the reporting period.
The fair value hierarchy of financial assets designated at fair value through profit or loss at 30 June 2012 was as follows:
Level Level Level Total
1 2 3
2012 2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets designated at
fair value through profit or loss
Equity investments
- Listed or quoted 7,164 - - 7,164
- Unquoted - - 9,643 9,643
-------- -------- -------- --------
As at 30 June 2012 7,164 - 9,643 16,807
-------- -------- -------- --------
There have been no transfers between Levels 1 and 2 during the reporting period.
A reconciliation of fair value movements in Level 3 is set out below.
Unquoted Investments Unquoted Investments
2013 2012
GBP'000 GBP'000
Opening balance 9,643 9,469
Additions including capitalised
interest 3,881 3,061
Disposals (4,116) -
Total losses on assets held at
the end of the year (3,097) (2,887)
--------------------- ---------------------
6,311 9,643
--------------------- ---------------------
The fair values of the financial instrument categorised in Level 3, being the remaining investment held in TIS Group, is calculated based on an agreed pre-transaction value. The proposed transaction details are set out in the Chairman's Statement. The valuation has been re-assessed and further verified by the directors by virtue of an asset allocation agreement from the TIS Board, based on an independent valuation of the TIS business.
17. Segmental Analysis
There is now only one segment in the Group.
More than 10% of the investment and other income are derived within the UK, of which T.I.S Group plc represents 100% (2012: 73.4%).
18. Events after the Reporting Period
On 13 September 2013 the Promethean plc's share trading on AIM was temporarily suspended pending an announcement of a submission document. On 19 September 2013 the details of the suspension were disclosed in an RNS announcement detailing the discussions held between the Board, TIS Group ("TIS") and Protected Asset TEP Fund plc ("PATF") relating to the establishment of an AIM listed multi-strategy investment company utilising the existing Promethean business. The Board is of the view that this opportunity represents the best solution available in respect of the final investment (TIS). At the time of these financial statements being authorised, the transaction had not progressed to conclusion.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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