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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Secure Trust Bank Plc | LSE:STB | London | Ordinary Share | GB00B6TKHP66 | ORD 40P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
5.00 | 1.11% | 457.00 | 453.00 | 459.00 | 457.00 | 457.00 | 457.00 | 5,873 | 10:00:55 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Commercial Banks, Nec | 185.5M | 24.3M | 1.2742 | 3.59 | 86.2M |
TIDMARBB TIDMSTB
RNS Number : 5187I
Arbuthnot Banking Group PLC
26 July 2012
26 July 2012
For immediate release
ARBUTHNOT BANKING GROUP ("Arbuthnot" or "the Group")
Results for the six months to 30 June 2012
Transformation continues
Arbuthnot Banking Group has continued with the transformation of its business and has traded strongly in the first half of 2012. During this period the Group completed the disposal of the securities and Swiss businesses, cancelled the share premium account and considerably expanded the retail banking division through the acquisition of Everyday Loans. It has recorded a profit before tax of GBP10.8m and both of its Banks have continued to demonstrate strong, controlled organic growth.
Arbuthnot Banking Group PLC is the holding company for Arbuthnot Latham & Co., Limited and Secure Trust Bank PLC.
FINANCIAL HIGHLIGHTS
-- Group pre-tax profit GBP10.8m (2011: GBP0.2m) -- Gain on acquisition GBP8.5m (net) -- Customer assets GBP543.4m (2011: GBP356.2m) -- Group earnings per share (EPS) 50.9p (2011: 8.4p) -- Interim dividend per share (DPS) 11p (2011: 11p)
OPERATIONAL HIGHLIGHTS
Retail Banking - Secure Trust Bank
-- Pre-tax profit increased to GBP12.5m (2011: GBP5.0m)
-- Acquisition of Everyday Loans has broadened distribution channels and added further diversification to its lending portfolios and contributed a gain on acquisition of GBP8.5m (net)
-- Underlying profit grew by 50%
-- Overall loan book increased to GBP260.3m from GBP123.9m including GBP71m from Everyday Loans
-- Retail deposits funded loan growth and closed the period at GBP297.9m (2011: GBP217m) -- Total customer numbers grew by 58% to 198,767.
Private Banking - Arbuthnot Latham
-- Pre-tax profits increased to GBP1.4m (2011: GBP1.0m) -- James Fleming joined the business as Chief Executive at the end of the first quarter
-- Strong capital base and excess liquidity enabled the business to maintain its ability to take advantage of the lending opportunities
-- Gilliat Financial Solutions has consistently increased its sales volumes and completed its first overseas product offering
Commenting on the results, Henry Angest, Chairman and Chief Executive of Arbuthnot, said: "This year has been one of continued transformation where significant milestones across the Group have been achieved. All of these have enabled the Group to make good progress.
The current market environment has allowed the Group to attract high calibre people, who along with strong capital and liquidity are enabling it to enhance significantly both its banking businesses. However, we remain cautious and monitor the developments in the wider economy with some concern."
The interim results and presentation are available at http://www.arbuthnotgroup.com.
Secure Trust Bank PLC is today releasing its interim statement and it should be read in conjunction with these results.
ENQUIRIES:
Arbuthnot Banking Group Henry Angest, Chairman and Chief Executive Andrew Salmon, Chief Operating Officer James Cobb, Group Finance Director David Marshall, Director of Communications 020 7012 2400 Canaccord Genuity Hawkpoint Partners Ltd (Nominated Advisor) Lawrence Guthrie Sunil Duggal 020 7665 4500 Numis Securities Ltd (Broker) Chris Wilkinson Mark Lander 020 7260 1000 Pelham Bell Pottinger (Financial PR) Ben Woodford Dan de Belder 020 7861 3232
Chairman's Statement
Arbuthnot Banking Group PLC
I am pleased to report that Arbuthnot Banking Group PLC has traded strongly in the first half of 2012. The Group has reported a profit before tax of GBP10.8m (2011: GBP0.2m).
In our recent Annual Report I concluded that 2011 had been a year of transformation. This process continued in 2012. Across the Group significant objectives have been achieved. In the first part of the year, the disposals of Arbuthnot Securities and the Swiss subsidiary were completed. Then in June we finalised the cancellation of the share premium account and considerably expanded the business of Secure Trust Bank through the acquisition of Everyday Loans. These transactions enable the Group to take advantage of current market conditions.
The Board is maintaining the interim dividend at 11p (gross) which will be paid on 5 October 2012 to shareholders on the register at 7 September 2012.
Retail Banking Subsidiary - Secure Trust Bank PLC
Pre-tax profits for Secure Trust Bank rose to GBP12.5m (2011: GBP5.0m). This includes GBP8.5m (net) gain on acquisition, which arose from the accounting required for the purchase of Everyday Loans. We expect most of this will be amortised over the next 2-3 years. Excluding the impact of this the underlying profit before tax rose by 50%.
The acquisition of Everyday Loans continues to broaden Secure Trust Bank's distribution channels and further diversifies its lending portfolios.
As at 30 June 2012, the Bank's overall loan book had increased to GBP260.3m (2011: GBP123.9m) as organic lending also contributed significantly to the overall growth. The Management are confident that this growth can be maintained as evidenced by the recent signing of an affinity agreement with Shop Direct.
The loan book continues to be funded by growth in retail deposits which closed the period at GBP297.9m (2011: GBP217m), an increase of 37%.
The total customer numbers increased to 198,767 a 58% growth.
Private Banking Subsidiary - Arbuthnot Latham & Co., Limited
Arbuthnot Latham's profits grew to GBP1.4m (2011:GBP1.0m), a 40% increase over the corresponding period.
James Fleming joined the business as Chief Executive at the end of the first quarter.
The business has maintained its ability to take advantage of good quality lending opportunities, which has been facilitated by the strong capital base and by utilising some of the excess liquidity held at the year end.
Gilliat Financial Solutions, the independent provider of structured products, has consistently increased its sales volumes as it has developed its brand awareness across the UK IFA network. It also completed its first overseas product offering during the period.
Outlook
The outlook for both banks remains favourable as opportunities for growth continue to present themselves. The current market environment has allowed the Group to attract high calibre people, who along with strong capital and liquidity are significantly enhancing both its banking businesses. However, we remain cautious and monitor the developments in the wider economy with some concern.
Consolidated Statement of Comprehensive Income
Six months Six months ended ended 30 June 30 June 2012 2011 Note GBP000 GBP000 ----------------------------------------------------- ----- ----------- ----------- Interest and similar income 22,438 16,507 Interest expense and similar charges (6,840) (4,673) ----------------------------------------------------- ----- ----------- ----------- Net interest income 15,598 11,834 ----------------------------------------------------- ----- ----------- ----------- Fee and commission income 10,857 9,766 Fee and commission expense (254) (163) ----------------------------------------------------- ----- ----------- ----------- Net fee and commission income 10,603 9,603 ----------------------------------------------------- ----- ----------- ----------- Gains less losses from dealing in securities (314) 24 ----------------------------------------------------- ----- ----------- ----------- Operating income 25,887 21,461 ----------------------------------------------------- ----- ----------- ----------- Net impairment loss on financial assets (3,679) (1,997) Other income 2 9,947 408 Operating expenses 3 (21,387) (16,239) ----------------------------------------------------- ----- ----------- ----------- Profit before income tax from continuing operations 10,768 3,633 Income tax expense (133) (1,120) ----------------------------------------------------- ----- ----------- ----------- Profit after income tax from continuing operations 10,635 2,513 Loss from discontinued operations after tax (210) (2,429) ----------------------------------------------------- ----- ----------- ----------- Profit for the period 10,425 84 ----------------------------------------------------- ----- ----------- ----------- Foreign currency translation reserve 570 (202) Revaluation reserve - Adjustment - (2) Cash flow hedging reserve - Effective portion of changes in fair value (97) - Available-for-sale reserve - 5 ----------------------------------------------------- ----- ----------- ----------- Other comprehensive income for the period, net of income tax 473 (199) ----------------------------------------------------- ----- ----------- ----------- Total comprehensive income for the period 10,898 (115) ----------------------------------------------------- ----- ----------- ----------- Profit attributable to: Equity holders of the Company 7,783 1,259 Non-controlling interests 2,642 (1,175) ----------------------------------------------------- ----- ----------- ----------- 10,425 84 ----------------------------------------------------- ----- ----------- ----------- Total comprehensive income attributable to: Equity holders of the Company 8,256 1,060 Non-controlling interests 2,642 (1,175) ----------------------------------------------------- ----- ----------- ----------- 10,898 (115) ----------------------------------------------------- ----- ----------- ----------- Earnings per share for profit attributable to the equity holders of the Company during the period (expressed in pence per share): - basic and fully diluted 4 50.9 8.4
Consolidated Statement of Financial Position
At 30 June 2012 2011 GBP000 GBP000 ASSETS Cash 129,137 118,629 Loans and advances to banks 50,249 51,669 Loans and advances to customers 543,379 356,162 Trading securities - long positions - 2,148 Debt securities held-to-maturity 32,757 125,192 Current tax asset 483 - Other assets 10,141 16,984 Financial investments 3,269 5,737 Intangible assets 8,618 3,002 Property, plant and equipment 6,055 5,546 Deferred tax asset 5,967 1,303 --------------------------------------------- -------- -------- Total assets 790,055 686,372 --------------------------------------------- -------- -------- EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 153 150 Share premium account - 21,085 Retained earnings 48,358 11,647 Other reserves (1,397) (1,546) --------------------------------------------- -------- -------- Non-controlling interests 8,640 943 --------------------------------------------- -------- -------- Total equity 55,754 32,279 --------------------------------------------- -------- -------- LIABILITIES Deposits from banks 1,113 2,024 Trading securities - short positions - 999 Derivative financial instruments 1,008 264 Deposits from customers 703,661 624,215 Current tax liability - 414 Other liabilities 16,727 12,821 Deferred tax liability - 126 Debt securities in issue 11,792 13,230 --------------------------------------------- -------- -------- Total liabilities 734,301 654,093 --------------------------------------------- -------- -------- Total equity and liabilities 790,055 686,372 --------------------------------------------- -------- --------
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Group ------------------------------------------------------------------------------------------------------------------ Foreign Cash Share currency Capital flow Share premium translation Revaluation redemption Available-for-sale hedging Treasury Retained Non-controlling capital account reserve reserve reserve reserve reserve shares earnings interests Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 --------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- -------- Balance at 1 January 2012 153 21,085 (570) 140 20 - (329) (1,097) 21,571 5,998 46,971 Total comprehensive income for the period Profit for the six months ended 30 June 2012 - - - - - - - - 7,783 2,642 10,425 Other comprehensive income, net of income tax Foreign currency translation reserve - - 570 - - - - - - - 570 Revaluation reserve Cash flow hedging reserve - Effective portion of changes in fair value - - - - - - (97) - - - (97) Total other comprehensive income - - 570 - - - (97) - - - 473 --------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- -------- Total comprehensive income for the period - - 570 - - - (97) - 7,783 2,642 10,898 --------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- -------- Transactions with owners, recorded directly in equity Contributions by and distributions to owners Transfer of share premium - (21,085) - - - - - - 21,085 - - Purchase of own shares - - - - - - - (34) - - (34) Final dividend relating to 2011 - - - - - - - - (2,081) - (2,081) Total contributions by and distributions to owners - (21,085) - - - - - (34) 19,004 - (2,115) --------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- -------- Balance at 30 June 2012 153 - - 140 20 - (426) (1,131) 48,358 8,640 55,754 --------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- -------- Attributable to equity holders of the Group ------------------------------------------------------------------------------------------------------- Foreign Share currency Capital Share premium translation Revaluation redemption Available-for-sale Treasury Retained Non-controlling capital account reserve reserve reserve reserve shares earnings interests Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- -------- Balance at 1 January 2011 150 21,085 (558) 146 20 142 (1,097) 12,142 2,118 34,148 Total comprehensive income for the period Profit / (loss) for the six months ended 30 June 2011 - - - - - - - 1,259 (1,175) 84 Other comprehensive income, net of income tax Foreign currency translation reserve - - (202) - - - - - - (202) Revaluation reserve - Adjustment - - - (2) - - - - - (2) - Amount transferred to profit and loss on sale - - - - - 5 - - - 5 --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- -------- Total other comprehensive income - - (202) (2) - 5 - - - (199) --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- -------- Total comprehensive income for the period - - (202) (2) - 5 - 1,259 (1,175) (115) --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- -------- Transactions with owners, recorded directly in equity Contributions by and distributions to owners Final dividend relating to 2010 - - - - - - - (1,754) - (1,754) Total contributions by and distributions to owners - - - - - - - (1,754) - (1,754) --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- -------- Balance at 30 June 2011 150 21,085 (760) 144 20 147 (1,097) 11,647 943 32,279 --------------- -------- -------- ------------ ------------ ----------- ------------------- --------- ---------- ---------------- --------
Consolidated Statement of Cash Flows
Six months Six months ended ended 30 June 30 June 2012 2011 GBP000 GBP000 ------------------------------------------------------ ----------- ----------- Cash flows from operating activities Interest and similar income received 22,540 16,445 Interest and similar charges paid (7,302) (4,668) Fees and commissions received 10,603 13,430 Net trading and other income 9,516 693 Cash payments to employees and suppliers (29,061) (23,649) Taxation paid (159) (866) ------------------------------------------------------ ----------- ----------- Cash flows from operating profits before changes in operating assets and liabilities 6,137 1,385 Changes in operating assets and liabilities: - net decrease in trading securities - 1,308 - net decrease in derivative financial instruments 1,959 80 - net increase in loans and advances to customers (156,946) (57,724) - net decrease in other assets 2,178 964 - net increase/(decrease) in deposits from banks 1,105 (1,682) - net increase in amounts due to customers 9,861 120,958 - net increase in other liabilities 543 3,288 ------------------------------------------------------ ----------- ----------- Net cash (outflow)/inflow from operating activities (135,163) 68,577 ------------------------------------------------------ ----------- ----------- Cash flows from investing activities Disposal of financial investments 567 - Purchase of computer software (152) (260) Purchase of property, plant and equipment (1,251) (66) Proceeds from sale of property, plant and equipment - 23 Purchases of debt securities (43,127) (159,847) Proceeds from redemption of debt securities 50,449 177,772 ------------------------------------------------------ ----------- ----------- Net cash from investing activities 6,486 17,622 ------------------------------------------------------ ----------- ----------- Cash flows from financing activities Dividends paid (2,081) (1,754) ------------------------------------------------------ ----------- ----------- Net cash used in financing activities (2,081) (1,754) ------------------------------------------------------ ----------- ----------- Net (decrease)/increase in cash and cash equivalents (130,758) 84,445 Cash and cash equivalents at 1 January 310,144 85,853 ------------------------------------------------------ ----------- ----------- Cash and cash equivalents at 30 June 179,386 170,298 ------------------------------------------------------ ----------- -----------
1. Operating segments
The Group is organised into two main operating segments, arranged over two separate companies with each having its own specialised banking service, as disclosed below:
1) Retail banking - incorporating household cash management, personal lending and banking and insurance services.
2) UK Private banking - incorporating private banking and wealth management.
Transactions between the operating segments are on normal commercial terms. Centrally incurred expenses are charged to operating segments on an appropriate pro-rata basis. Segment assets and liabilities comprise operating assets and liabilities, being the majority of the statement of financial position.
Discontinued operations Continuing operations ------------- ------------------------------------------------ Group Investment Retail UK Private (reconciling Group banking banking banking items) Total Total Six months ended 30 June 2012 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 --------------------------------- ------------- --------- ----------- -------------- -------- -------- Interest revenue - 15,647 6,943 162 22,752 Inter-segment revenue - (73) (79) (162) (314) --------------------------------- ------------- --------- ----------- -------------- -------- Interest revenue from external customers - 15,574 6,864 - 22,438 --------------------------------- ------------- --------- ----------- -------------- -------- Fee and commission income - 5,390 5,467 - 10,857 --------------------------------- ------------- --------- ----------- -------------- -------- Revenue from external customers - 20,964 12,331 - 33,295 --------------------------------- ------------- --------- ----------- -------------- -------- Interest expense - (4,222) (2,573) 217 (6,578) Subordinated loan note interest - - - (262) (262) Segment operating income - 16,815 9,583 (511) 25,887 Impairment losses - (3,070) (609) - (3,679) Segment profit / (loss) before tax (210) 12,523 1,437 (3,192) 10,768 Income tax (expense) / income - (717) - 584 (133) --------------------------------- ------------- --------- ----------- -------------- -------- -------- Segment profit / (loss) after tax (210) 11,806 1,437 (2,608) 10,635 10,425 --------------------------------- ------------- --------- ----------- -------------- -------- -------- Segment total assets - 342,162 480,438 (32,545) 790,055 790,055 Segment total liabilities - 312,480 457,346 (35,525) 734,301 734,301 Other segment items: Capital expenditure - (975) (379) (12) (1,366) (1,366) Depreciation and amortisation - (324) (172) (8) (504) (504) --------------------------------- ------------- --------- ----------- -------------- -------- -------- The "Group" segment above includes the parent entity and all intercompany eliminations and fulfils the requirement of IFRS8.28. Discontinued operations Continuing operations ------------- ---------------------------------------------------------------- International Group Investment Retail Private UK Private (reconciling Group banking banking banking banking items) Total Total Six months ended 30 June GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 2011 --------------------------- ------------- --------- -------------- ----------- -------------- -------- -------- Interest revenue 4 9,895 - 6,720 131 16,746 Inter-segment revenue - (32) - (72) (135) (239) --------------------------- ------------- --------- -------------- ----------- -------------- -------- Interest revenue from external customers 4 9,863 - 6,648 (4) 16,507 --------------------------- ------------- --------- -------------- ----------- -------------- -------- Fee and commission income 3,991 5,560 - 4,206 - 9,766 --------------------------- ------------- --------- -------------- ----------- -------------- -------- Revenue from external customers 3,995 15,423 - 10,854 (4) 26,273 --------------------------- ------------- --------- -------------- ----------- -------------- -------- Interest expense (63) (1,903) (27) (2,576) 103 (4,403) Subordinated loan note interest - - - - (270) (270) Segment operating income 4,025 13,552 (27) 8,187 (247) 21,465 Impairment losses - (1,548) - (449) - (1,997) Segment profit / (loss) before tax (3,391) 5,020 (20) 983 (2,350) 3,633 242 Income tax (expense) / income 962 (1,222) - (133) 235 (1,120) --------------------------- ------------- --------- -------------- ----------- -------------- -------- -------- Segment profit / (loss) after tax (2,429) 3,798 (20) 850 (2,115) 2,513 84 --------------------------- ------------- --------- -------------- ----------- -------------- -------- -------- Segment total assets 12,851 237,473 85 489,170 (53,207) 673,521 686,372 Segment total liabilities 9,373 219,538 2,634 465,974 (43,426) 644,720 654,093 Other segment items: Capital expenditure (10) (65) - (240) (12) (317) (327) Depreciation and amortisation (38) (303) (5) (220) (7) (535) (573) --------------------------- ------------- --------- -------------- ----------- -------------- -------- --------
Segment profit is shown prior to any intra-group eliminations.
Other than the international private banking operations which were in Switzerland, all the Group's other operations are conducted wholly within the United Kingdom and geographical information is therefore not presented.
2. Other income
On 20 March 2012 Arbuthnot Banking Group PLC ("ABG") agreed terms for the sale of Arbuthnot AG. The company was sold to Ducartis Holding AG for a total cash consideration of CHF 2.0m which resulted in a profit for the Group of approximately GBP0.7m, which is recorded in other income. Up to the date of sale, the purchaser funded most of the running costs for this entity. This is also included in other income, and amounted to GBP0.3m.
On 8 June 2012 Secure Trust Bank PLC ("STB") acquired 100% of the shares in Everyday Loans Holdings Limited and its wholly owned subsidiaries Everyday Loans Limited and Everyday Lending Limited (together "EDL"). STB acquired EDL for consideration of GBP1. Upon acquisition STB provided funding so that EDL could redeem the remaining GBP34 million of subordinated debt and also provided a loan facility of GBP37 million to refinance EDL's existing bank debt and to fund future loans. A payment of up to a maximum of GBP1.5 million will be made to the management team of EDL in March 2013, subject to achieving certain performance targets in 2012. Included in other income is a gain on acquisition of GBP8.9m, which arose from fair value adjustments and the recognition of intangibles assets. This is expected to amortise through the profit and loss account over the next 2 to 3 years.
Acquired Recognised assets Fair values / value on liabilities adjustments acquisition GBP000 GBP000 GBP000 ----------------------------------------- ------------ ------------ ------------ Intangible assets 50 5,115 5,165 Property, plant and equipment 491 - 491 Loans and advances to customers 63,720 7,545 71,265 Cash at bank 991 - 991 Other assets 24 - 24 Prepayments and accrued income 2,939 - 2,939 Deferred tax asset - 5,400 5,400 ------------ ------------ ------------ Total assets 68,215 18,060 86,275 Loans and debt securities 71,618 - 71,618 Other liabilities 960 - 960 Accruals and deferred income 1,741 - 1,741 Deferred tax liabilities - 3,039 3,039 ------------ ------------ ------------ Total liabilities 74,319 3,039 77,358 Net identifiable (liabilities) / assets (6,104) 15,021 8,917 ------------ ------------ ------------ Consideration - GBP1 - Gain on acquisition 8,917 ----------------------------------------- ------------ ------------ ------------
3. Operating expenses
Included in operating expenses are GBP0.5m acquisition costs, GBP0.1m amortisation cost, GBP0.3m management incentive provisions and GBP0.7m normal operating costs relating to EDL. Also included in operating expenses are GBP0.5m increased property costs due to excess floor space after the sale of Arbuthnot Securities and GBP0.3m of unrealised losses on equity securities.
4. Earnings per ordinary share
Basic and fully diluted
Earnings per ordinary share are calculated on the net basis by dividing the profit attributable to equity holders of the Company of GBP7,783,000 (2011: GBP1,259,000) by the weighted average number of ordinary shares 15,279,322 (2011: 14,999,619) in issue during the year. There is no difference between basic and fully diluted earnings per ordinary share.
5. Basis of reporting
The interim financial statements have been prepared on the basis of accounting policies set out in the Group's 2011 statutory accounts as amended by standards and interpretations effective during 2012. The statements were approved by the Board of Directors on 25 July 2012 and are unaudited. The interim financial statements will be posted to shareholders and copies may be obtained from The Company Secretary, Arbuthnot Banking Group PLC, Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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