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Name | Symbol | Market | Type |
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Meadow.fin A1 | LSE:37QC | London | Bond |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 123.552 | 0 | 01:00:00 |
TIDM37QC
RNS Number : 5180L
Meadowhall Finance PLC
01 August 2011
The Annual Report and Accounts for the year ended 31 March 2011, attached below in accordance with DTR 6.3.5(2), has been submitted to the Financial Service Authority through the National Storage Mechanism and will shortly be available for inspection at: http://www.Hemscott.com/nsm.do
The Annual Report and Accounts are also available at: http://www.britishland.com/index.asp?pageid=169
MEADOWHALL FINANCE PLC
COMPANY NO: 5987141
ANNUAL REPORT AND ACCOUNTS
YEAR ENDED 31 MARCH 2011
REPORT OF THE DIRECTORS
for the year ended 31 March 2011
The directors submit their report and financial statements for the year ended 31 March 2011.
Principal activities
The company is a wholly owned subsidiary of Meadowhall Limited Partnership, which itself is wholly owned by MSC Property Intermediate Holdings Limited (the 'Group'). MSC Property Intermediate Holdings Limited operates as a joint venture between The British Land Company PLC and LSP Green Park Property Trust. The company's principal activity is to provide funding to fellow subsidiaries of MSC Property Intermediate Holdings Limited.
Business review
As shown in the company's profit and loss account, the profit before tax remains consistent with prior year. Interest payable and receivable also remain consistent with prior year.
Dividends of GBPnil (2010: GBPnil) were paid in the year. Dividends paid are shown in note 10.
The balance sheet shows that the company's financial position at the year end is, in net liability terms, consistent with the prior year.
The performance of the group, which includes the company, is discussed in the group's annual report which does not form part of this report.
Details of significant events since the balance sheet date, if any, are contained in note 14.
Risk management
This company is part of a large property investment group. As such, the fundamental underlying risks for this company are those of the property group as discussed below.
The company generates returns to shareholders through long-term investment decisions requiring the evaluation of opportunities arising in the following areas:
- demand for space from occupiers against available supply;
- identification and execution of investment and development strategies which are value enhancing;
- availability of financing or refinancing at an acceptable cost;
- economic cycles, including their impact on tenant covenant quality, interest rates, inflation and property values;
- legislative changes, including planning consents and taxation;
- engagement of development contractors with strong covenants;
- key staff changes; and
- environmental and health and safety policies.
These opportunities also represent risks, the most significant being change to the value of the property portfolio. This risk has high visibility to senior executives and is considered and managed on a continuous basis. Executives use their knowledge and experience to knowingly accept a measured degree of market risk.
The company's preference for prime assets and their secure long term contracted rental income, primarily with upward only rent review clauses, presents lower risks than many other property portfolios.
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. In order to manage this risk, management regularly monitors all amounts that are owed to the company to ensure that amounts are paid in full and on time.
Liquidity risk is the risk that the entity will encounter difficulty in raising funds to meet commitments associated with financial liabilities. This risk is managed through day to day monitoring of future cash flow requirements to ensure that the company has enough resources to repay all future amounts outstanding.
The company's activities expose it primarily to interest rate risk. The company uses interest rate swap contracts to hedge these exposures. The company does not use derivative financial instruments for speculative purposes.
The company finances its operations by a mixture of equity and public debt issues. The company borrows in Sterling at both fixed and floating rates of interest, using interest rate derivatives to hedge the interest rate risk on variable rate debt.
The company holds one derivative as at 31 March 2011 (2010: one) to fix interest rates on external debt at approximately 4.87% (2010: 4.87%). The fair value of interest rate derivatives at the year end is a liability of GBP5.6m (2010: GBP6.0m).
The directors consider the company to be a going concern and the accounts are prepared on this basis. Details of this are shown in note 1 of the financial statements.
Environment
The company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the company's activities. The company operates in accordance with best practice policies and initiatives designed to minimise the company's impact on the environment include safe disposal of manufacturing waste, recycling and reducing energy consumption.
Directors
The directors who served during the year were:
J Bishop
S G Carter (appointed 08 September 2010)
C M J Forshaw
M J Dillon (resigned 08 September 2010)
J Duzniak
B T Grose (resigned 08 September 2010)
S M Little
M McGann
H R Mould
T A Roberts
A D Smith
S P Smith (appointed 08 September 2010)
P L Vaughan
N M Webb
Directors' responsibilities statement
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed; and
- 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 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.
Payments policy
In the absence of dispute, amounts due to trade and other suppliers are settled as expeditiously as possible within their terms of payment.
Disclosure of information to Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
(a) so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware; and
(b) the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Auditor
A resolution to reappoint Deloitte LLP as the company's auditor will be proposed at the Annual General Meeting.
This report was approved by the Board on 28 July 2011.
A Braine
Secretary
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
Meadowhall Finance PLC
for the year ended 31 March 2011
We have audited the financial statements of Meadowhall Finance PLC for the year ended 31 March 2011 which comprise the Profit and Loss Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet and the related notes 1 to15. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of part 16 of the 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 auditor
As explained more fully in the Directors' Responsibilities Statement, 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 financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent 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 company's affairs as at 31 March 2011 and of its profit for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
Andrew Swarbrick BA FCA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Cambridge, UK
PROFIT AND LOSS ACCOUNT
for the year ended 31 March 2011
Note 2011 2010 GBP GBP Operating Profit - - Interest receivable Group - loans and receivables 41,064,181 41,625,902 Associated companies - - External - other - - Interest payable Group - - Associated companies - bank overdrafts and loans External (including derivatives) (41,059,184) (41,621,673) - other loans Profit on ordinary activities before taxation 2 4,997 4,229 Taxation 4 (1,399) (1,184) Profit for the financial year 10 3,598 3,045 ------------- -------------
Turnover and results are derived from continuing operations within the United Kingdom. The company has only one significant class of business, that of to provide funding to fellow subsidiaries of MSC Property Intermediate Holdings Limited.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 March 2011
2011 2010 GBP GBP Profit on ordinary activities after taxation 3,598 3,045 Derivative valuation movements on net investments 10 326,817 1,620,517 Deferred tax movements on interest rate derivatives 8, 10 (193,764) (530,956) Total recognised gains and losses relating to the financial year 136,651 1,092,606 ========== ==========
BALANCE SHEET
as at 31 March 2011
Note 2011 2010 GBP GBP GBP GBP Current assets Debtors - due within one year 5 30,075,559 30,184,960 Debtors - due after more than one year 5 791,000,643 812,470,767 Cash and deposits - - 821,076,202 842,655,727 Creditors due within one year 6 (35,162,084) (35,601,900) Net current assets 785,914,118 807,053,827 Total assets less current liabilities 785,914,118 807,053,827 Creditors due after one year 7 (789,671,330) (810,947,690) Net liabilities (3,757,212) (3,893,863) ============== ============== Capital and reserves Called up share capital 9 12,502 12,502 Share premium 10 - - Revaluation reserve 10 - - Hedging and translation reserve 10 (3,783,430) (3,916,483) Profit and loss account 10 13,716 10,118 Shareholders' deficit 10 (3,757,212) (3,893,863) ============== ==============
The financial statements of Meadowhall Finance PLC, company number 5987141, were approved by the Board of Directors on 28 July 2011 and signed on its behalf.
Notes to the accounts
for the year ended 31 March 2011
1. Accounting policies
The principal accounting policies adopted by the directors are summarised below. They have been applied consistently throughout the current and previous year.
Accounting basis
The financial statements are prepared in accordance with applicable United Kingdom law and Accounting Standards and under the historical cost convention as modified by the revaluation of investment properties and other fixed asset investments.
Basis of Preparation
The net liability position of the balance sheet at the year end is as a result of market swap rates being below the fixed rate payable on the company's interest rate swaps. This has had a detrimental effect on the fair value of the company's interest rate derivatives at the year end. The interest rate swaps fix the rate payable on the company's liabilities at a rate slightly below the interest on loans receivable. The change in mark to market is not envisaged to have an impact on the company's cash flow for the foreseeable future.
Having reviewed the company's forecast working capital and cash flow requirements, in addition to making enquiries and examining areas which could give risk to financial exposure, the directors have a reasonable expectation that the company has adequate resources to continue its operations for the foreseeable future. As a result they continue to adopt the going concern basis in preparing the accounts.
Financial assets
The company classified all financial assets, with the exception of derivative financial instruments into the category Loans and Debtors. Loans and Debtors are initially measured at fair value including any transaction costs. They are subsequently measured at amortised cost using the effective interest rate method.
Cash flow statement
The company is exempt under FRS 1 (Revised) from preparing a cash flow statement.
Financial liabilities - borrowings
Debt instruments are stated at their net proceeds on issue. Finance charges including premiums payable on settlement or redemption and direct issue costs are spread over the period to redemption, using the effective interest method.
Derivative financial instruments
As defined by FRS 26, derivative financial instruments are measured at fair value in the balance sheet. Changes in the fair value of derivatives that are designated and qualify as effective cash flow hedges are recognised directly in the hedging reserve. Any ineffective portion is recognised in the profit and loss account.
Taxation
Current tax is based on taxable profit for the year and is calculated using tax rates that have been enacted or substantively enacted. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are not taxable (or tax deductible). In particular the group (including this company) became a REIT on 1 January 2007 and income and gains on qualifying assets are now exempt from taxation.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. In addition, a deferred tax asset is recognised when the interest rate derivatives held by the company represent a liability at the balance sheet date. A corresponding deferred tax asset on the liability is recognised on the basis that relief will be available as the derivative reverses over time. The movement on such a deferred tax balance is taken through the hedging reserve in order to ensure it matches the movement in respect of the underlying derivative liability.
2. Profit on ordinary activities before taxation
Auditor's remuneration
A notional charge of GBP1,200 (2010: GBP1,200) per company is deemed payable to Deloitte LLP in respect of the audit of the financial statements. Actual amounts payable to Deloitte LLP are paid by Meadowhall Limited Partnership.
No non-audit fees (2010 : GBPnil) were paid to Deloitte LLP.
3. Staff costs
No director received any remuneration for services to the company in either year.
Average number of employees, excluding directors, of the company during the year was nil (2010 - nil).
4. Taxation
2011 2010 GBP GBP Current tax UK corporation tax 1,399 1,184 Total current taxation charge (credit) 1,399 1,184 ====== ====== Deferred tax Origination and reversal of timing differences Prior year items Total deferred tax charge (credit) - - Total taxation charge (credit) 1,399 1,184 ====== ====== Tax reconciliation Profit on ordinary activities before taxation 4,997 4,229 ------ ------ Tax on profit on ordinary activities at UK corporation tax rate of 28% (2010: 28%) 1,399 1,184 Effects of: Current tax charge (credit) 1,399 1,184 ====== ======
On 23 March 2011 the Government announced that the main rate of corporation tax would reduce to 26% with effect from 1 April 2011. This tax rate reduction was substantively enacted at the balance sheet date and therefore deferred tax balances have been calculated using a rate of 26%. The Government also announced subsequent 1% reductions per annum to reach 23% with effect from 1 April 2014. These tax rate reductions had not been substantively enacted at the balance sheet date and therefore have not been reflected in the financial statements. The effect of these tax rate reductions on the deferred tax balance will be accounted for in the period in which the tax rate reductions are substantively enacted.
5. Debtors
2011 2010 GBP GBP Current debtors (receivable within one year) Amounts owed by associated companies - current accounts 21,276,360 21,276,360 Prepayments and accrued income 8,798,918 8,904,606 Other debtors 281 3,994 30,075,559 30,184,960 ------------ ------------ Long-term debtors (receivable after more than one year) Deferred tax asset (note 8) 1,329,313 1,523,077 Amounts owed by group companies - Long term loans 789,671,330 810,947,690 ------------ ------------ 791,000,643 812,470,767 ============ ============ 6. Creditors due within one year 2011 2010 GBP GBP Debenture loans (see note 7) 21,276,360 21,276,360 Trade creditors - - Amounts owed to group companies - current accounts - - Amounts owed to associated companies - current accounts - - Corporation tax 3,745 1,162 Other taxation and social security - - Other creditors - - Accruals and deferred income 8,270,801 8,366,748 Interest rate derivative liability* 5,611,178 5,957,630 35,162,084 35,601,900 ============ ============
* Includes contract cash flow with a maturity greater than one year at fair value.
7. Creditors due after one year (including borrowings)
2011 2010 GBP GBP Debentures and loans due 1 to 2 years 21,276,360 21,276,360 due 2 to 5 years 72,098,200 66,709,080 due after 5 years 696,296,770 722,962,250 789,671,330 810,947,690 ============ ============
Hedge accounting
The company uses interest rates swaps to hedge exposure to the variability in cash flows on floating rate debt. At 31 March 2011 the market value of these derivatives, which have been designated cash flow hedges under FRS 26, is a liability of GBP5.6m (2010: GBP6.0m liability).
The Treasury Function
The company finances its operations by a mixture of equity and public debt issues. The company borrows in Sterling at both fixed and floating rates of interest, using interest rate derivatives where appropriate to generate a suitably prudent mixture of fixed and variable rate debt.
Risk Management
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. In order to manage this risk, management regularly monitors all amounts that are owed to the company to ensure that amounts are paid in full and on time.
Liquidity risk is the risk that the entity will encounter difficulty in raising funds to meet commitments associated with financial liabilities. This risk is managed through day to day monitoring of future cash flow requirements to ensure that the company has enough resources to repay all future amounts outstanding.
The Company's activities expose it primarily to interest rate risk. The group uses interest rate swap contracts to hedge these exposures. The group does not use derivative financial instruments for speculative purposes.
The ineffectiveness recognised in the income statement on cash flow hedges in the year ended 31 March 2011 was GBPnil (2010 :GBPnil). The table below summarises variable rate debt hedged at 31 March 2011.
2011 2010 GBP GBP Outstanding: after one year 60,000,000 60,000,000 after two years 60,000,000 60,000,000 after five years 54,480,000 57,120,000 Borrowings repayment analysis Repayments due: Within one year 21,276,360 21,276,360 1-2 years 21,276,360 21,276,360 2-5 years 72,098,200 66,709,080 ------------ ------------ 114,650,920 109,261,800 After 5 years 696,296,770 722,962,250 ------------ ------------ Total borrowings 810,947,690 832,224,050 Fair value of interest rate derivatives 5,611,178 5,957,630 ------------ ------------ Net debt 816,558,868 838,181,680 ============ ============ Secured bonds on the assets of the Meadowhall Limited Partnership Class A1 4.986% Bonds due 2037 588,500,440 605,000,000 Class A2 Floating Rate Bonds due 2037 60,000,000 60,000,000 Class B 4.988% Bonds due 2037 162,447,250 167,224,050 ------------ ------------ 810,947,690 832,224,050 Fair value of interest rate derivative liabilities 5,611,178 5,957,630 ------------ ------------ Net debt 816,558,868 838,181,680 ============ ============
The GBP60 million floating rate loan is fully hedged by a swap to 2032. At 31 March 2011, taking into account the effect of the derivative, 100% of the bonds were fixed (2010: 100%) until maturity. The bonds amortise between 2007 to 2032, and are secured on the properties of group valued at GBP1,410.0m (2010: GBP1,257.0m). The weighted average interest rate of the bonds is 4.98% (2010: 4.98%). The weighted average maturity of the bonds is 13.6 years (2010: 14.1 years).
On 19 December 2006, Bonds with a nominal value GBP840m were issued by Meadowhall Finance PLC ('Issuer') and the proceeds, equal to the nominal value, were on-lent to Meadowhall Limited Partnership ('Borrower') under the Issuer/Borrower Loan Agreement. Under this agreement Meadowhall Limited Partnership will grant security over its beneficial interest in Meadowhall Shopping Centre ('Mortgaged Property') and all related interests and assets.
At 31 March 2011 the company was financed by GBP810.9m bonds (2010: GBP832.2m).
The market value of the bonds at 31 March 2011 was GBP781.3m (2010: GBP789.6m).
There is an undrawn 364 day revolving liquidity facility totalling GBP75m which is only available for the requirements of the Meadowhall securitisation.
The fair values of the bonds have been established by obtaining quoted market prices from brokers. The derivatives have been valued by calculating the present value of future cash flows, using appropriate market discount rates, by an independent treasury advisor.
The Class A1 and B Loan notes expose the entity to fair value interest rate risk while the Class A2 Loan notes expose the company to cash flow interest rate risk.
8. Deferred tax asset
2011 2010 GBP GBP 1 April 2010 1,523,077 2,054,033 Credited to hedging and translation reserve (193,764) (530,956) 31 March 2011 1,329,313 1,523,077 ========== ==========
The Directors consider that a deferred tax asset, that relates primarily to timing differences arising with respect to the revaluation of interest rate derivatives, is required to be provided for in the current and prior year.
9. Share capital
2011 2010 GBP GBP Allotted, called up and fully paid Ordinary shares of GBP1.00 each Balance as at 1 April and as at 31 March: 2 shares 2 2 Allotted, called up and partly paid Ordinary shares of GBP1.00 each partly paid up to GBP0.25 per share Balance as at 1 April and as at 31 March: 49,998 shares 12,500 12,500 12,502 12,502 ======= =======
10. Reconciliation of movements in shareholders' funds and reserves
Profit Hedging & and Share Share Revaluation translation loss capital premium reserve reserve account Total GBP GBP GBP GBP GBP GBP Opening shareholders' funds (deficit) 12,502 - - (3,916,483) 10,118 (3,893,863) Profit for the financial year - - - - 3,598 3,598 Dividends - - - - - - Share issues in the year - - - - - - - Unrealised surplus (deficit) on revaluation of investment properties - - - - - - Realisation of prior year revaluations - - - - - - Derivative valuation movements on net investment - - - 326,817 - 326,817 Taxation on hedging and translation movements - - - (193,764) - (193,764) Closing shareholders' funds (deficit) 12,502 - - (3,783,430) 13,716 (3,757,212) -------- -------- ------------ ------------ -------- ------------
11. Capital commitments
The company had capital commitments contracted as at 31 March 2011 of GBPnil (2010 : GBPnil).
12. Contingent liabilities
The company is jointly and severally liable with MSC (Cash Management) Limited and fellow subsidiaries for all monies falling due under the group VAT registration.
13. Related parties
The company has taken advantage of the exemption granted to wholly owned subsidiaries not to disclose transactions with group companies under the provisions of Financial Reporting Standard 8.
14. Subsequent events
There have been no significant events since the year end.
15. Immediate parent and ultimate holding company
The immediate parent company is Meadowhall Limited Partnership.
The ultimate holding company is MSC Property Intermediate Holdings Limited, a joint venture between The British Land Company PLC and LSP Green Park Property Trust.
MSC Property Intermediate Holdings Limited is the smallest and largest group for which group accounts are available and which include the company. The accounts of MSC Property Intermediate Holdings Limited can be obtained from The British Land Company PLC, York House, 45 Seymour Street, London W1H 7LX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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