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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Sherborne Inv A | LSE:SIAG | London | Ordinary Share | GG00BFH56B54 | A' ORD SHS NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 400.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMSIAG
RNS Number : 0195Z
Sherborne Investors (Guernsey) A
09 March 2012
9 March 2012
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
Annual Report and Consolidated Financial Statements
For the year ended 31 December 2011
CHAIRMAN'S STATEMENT
Our investment in F&C Asset Management plc ("F&C") continues to progress following the announcement of the results of F&C's first phase of the strategic review on 25 October 2011. The results of the second phase of the review are anticipated to be announced during the month of May.
At 31 December 2011, we held an economic interest relating to 110,081,130 ordinary shares, or 20.69% of the outstanding shares in F&C, through a holding of 19.99% in ordinary shares and the balance in total return equity swaps. Our investment cost as at 31 December 2011 was GBP76,770,664. Our investment cost basis, net of dividends received from F&C and gross gains realised on contracts for difference disposed of during fiscal year 2010 was GBP67,270,587 or 61.11 pence per share. As at the date of this letter our economic exposure to F&C remains unchanged.
Dividend
On 28 October 2011, F&C paid a dividend of 1.0 pence per share to shareholders on the register at 7 October 2011, of which the Company was one. The Company's Board, in turn, declared a dividend of 0.9 pence per share which was paid on 19 December 2011 to shareholders on the register at 18 November 2011.
Including the dividend of 1.7 pence per share paid in July 2011, total dividends paid during the year were 2.6 pence per share.
Net Asset Value
At 31 December 2011, the net asset value attributable to shareholders of the Company was GBP100,356,620 or 95.58 pence per share. The Company's net asset value was based on the closing price of 65.45 pence as at 30 December 2011 for the shares of F&C. On 7 March 2012, F&C's shares closed at 71.00 pence.
We look forward to updating you on further developments at the time of the interim results.
Ian Brindle,
Chairman
Sherborne Investors (Guernsey) A Limited
8 March 2012
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
DIRECTORS' REPORT
The Directors present their annual report on the affairs of the Company and its subsidiary (together, the "Group"), together with the financial statements and auditor's report, for the year ended 31 December 2011.
Principal activities and investing policy
Sherborne Investors (Guernsey) A Limited (the "Company") is a Guernsey domiciled company incorporated on 18 January 2010 with limited liability. The Company's shares were admitted to trading on AIM on 9 March 2010.
The Company is a limited partner in SIGA, LP (the "Investment Partnership"), a limited partnership registered in Guernsey on 19 January 2010, holding a 99.98% capital interest. The Company aims to provide investors with capital growth through its investment in the Investment Partnership to which it has committed GBP100 million, representing substantially all of the Company's net proceeds from its initial public offering. The Company has effected and will continue to effect its investment policy indirectly through the Investment Partnership, which will seek to acquire a significant minority (less than 29.9 per cent) equity investment in a "Selected Target Company". The Group intends that the holding in the Selected Target Company shall not reach such a level as to require the Group to make a bid for the entire Selected Target Company and, therefore, the Group will not have control over the Selected Target Company.
The Group's investment policy is to invest in one target company at a time. Therefore, the Group will not seek to reduce risk through diversification. If, after acquiring a shareholding, the share price of the Selected Target Company rises to a level at which further investment and the effort of a Turnaround is, in the Investment Manager's opinion, no longer justified or otherwise no longer presents a viable Turnaround opportunity, the Investment Partnership intends to sell (and distribute the proceeds to the Company) or distribute in kind the holding to the limited partners, rather than seeking to join the board of directors or otherwise to engage with the company. In these circumstances, the Company intends to distribute any realised net profits received from the Investment Partnership to the Shareholders. In such event, an amount equal to the Company's capital contribution for the initial Selected Target Company (less any losses on the sale) may be recalled by the Investment Partnership and invested into a new target (a "New Target Company"). This process may be repeated until a Turnaround has been effected.
The holding period for the investment in the Selected Target Company is neither fixed nor predictable, but the Company expects that a typical holding period would be greater than one year.
During 2010, the Board of Directors of the Company approved a Selected Target Company, F&C Asset Management plc ("F&C"). At 31 December 2011, the Investment Partnership held an economic interest relating to 110,081,130 ordinary shares, or 20.69% of the outstanding shares in F&C, through a holding of 19.99% in ordinary shares and the balance in total return equity swaps. The investment in the Selected Target Company may be in shares but can also be in warrants, convertibles, derivatives and any other equity, debt or other securities.
Dividend policy
The Company's dividend policy, subject to the discretion of the Directors who reserve the right to retain amounts for working capital, is to pay dividends to Shareholders following receipt of any distributions from the Investment Partnership. This will be dependent on the frequency with which the Selected Target Company pays dividends to its shareholders (of which the Investment Partnership will be one).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
DIRECTORS' REPORT continued
If dividends are received from the Selected Target Company, the Investment Partnership intends to distribute to its limited partners substantially all of the dividend proceeds after allowing for the Investment Partnership's expenses. The Company, in turn, intends promptly to distribute to Shareholders substantially all of the dividend proceeds after allowing for the Company's expenses.
F&C paid dividends in May and November of 2011 and a dividend was subsequently paid to the Company shareholders in July and December 2011, following the above policy.
Business review
A review of the Company's business during the year and an indication of likely future developments are contained in the Chairman's Statement.
Capital
Details of the Company's capital are provided in note 9 to the consolidated financial statements. All shares carry equal voting rights.
Substantial interests
As of the date of this report the Company had received notification of the following material shareholdings:
% of issued Number of Ordinary share Shareholder Shares capital --------------------------------- ------------------- ------------ Aviva plc 20,783,592 19.8% Sherborne Investors GP, LLC 20,000,000 19.0% Ameriprise Financial, Inc. 16,181,489 15.4% AEGON UK Group of Companies 12,500,000 11.9% Lloyds Banking Group plc 5,418,035 5.2% Ritchie European Multi-Strategy Trading, Ltd. 5,000,000 4.8% BlackRock UK Emerging Companies Hedge Fund 3,400,000 3.2% --------------------------------- ------------------- ------------
Post balance sheet events
Details of events that have occurred after the date of the consolidated Statement of Financial Position are provided in note 12 to the consolidated financial statements.
Dividend - Note 11
Dividend payments in the amounts of GBP1,785,000 (equating to 1.7 pence per share) and GBP945,000 (equating to 0.9 pence per share) have been made in respect of the year ended 31 December 2011 (2010: GBP735,000).
Independent Auditor
Deloitte LLP have indicated their willingness to continue as auditor.
By order of the Board of Directors
Date: 8 March 2012
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report and the consolidated financial statements for each period in accordance with applicable law and regulations, which give a true and fair view of the state of affairs of the Group as at the end of the financial period.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the accounts 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 consolidated financial statements, International Accounting Standard 1 requires that directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-- make an assessment of the Group's ability to continue as a going concern.
The Directors confirm that they have complied with the above requirements in preparing the consolidated financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group, and to enable them to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Independent auditor and disclosure of information to auditor
Each of the persons who is a Director at the date of approval of the financial statements confirms that:
-- So far as the Director is aware, there is no relevant audit information of which the Company's auditor are unaware; and
-- The Director has taken all the steps that they ought to have taken as a Director in order to make himself 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 Section 249 of The Companies (Guernsey) Law, 2008.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2011
1 January 2011 18 January 2010 to to 31 December 2011 31 December 2010 Notes GBP GBP GBP GBP Income 1(e) Unrealised gain on investment held at fair value through profit or loss 5 - 13,874,032 Realised gain on investment 23,616 5,654,240 Dividend income 3,007,634 838,305 Bank interest income 297,917 444,178 3,329,167 20,810,755 Expenses 1(f) Unrealised (loss) on investment held at fair value through profit or loss 5 18,596,596 - Professional Fees 569,836 427,035 Trading and custodian fees 116,233 579,674 Administrative fees 413,085 444,750 Other fees 45,184 224,547 Management fees 13 761,169 203,236 Non recurring expenses - 202,520 Directors' fees 110,202 104,500 Tax services 14,613 - (20,626,918) (2,186,262) Less: Finance costs - (151,445) Consolidated comprehensive (loss) / income for the year / period (17,297,751) 18,473,048 Income attributable to: Shareholders (17,294,318) 17,170,000 Non-controlling interest 13 (3,433) 1,303,048 Weighted average number of shares outstanding 105,000,000 105,000,000 Basic and diluted (loss) / gain per share (pence) 4 (16.47) 16.35
All revenue and expenses are derived from continuing operations.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2011
31 December 2011 31 December 2010 Notes GBP GBP GBP GBP Non-current Assets Financial assets at fair value through profit or loss 5 72,048,100 76,288,433 72,048,100 76,288,433 Current Assets Trade and other receivables 6 31,628 7,954 Cash and cash equivalents 7 28,482,761 44,596,224 28,514,389 44,604,178 Current Liabilities Trade and other payables 8 (191,867) (496,138) Net Current Assets 28,322,522 44,108,040 Net Assets GBP 100,370,622 GBP 120,396,473 Capital and Reserves Called up share capital and share premium 9 102,646,625 102,646,625 Retained earnings (2,290,005) 16,435,000 Equity attributable to the Company 100,365,620 119,081,625 Non-controlling interest 14,002 1,314,848 Total Equity GBP 100,370,622 GBP 120,396,473
The consolidated financial statements were approved by the Board of Directors and authorised for issue on 8 March 2012.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2011
Share Capital Non- and Share Retained Controlling Total Premium Earnings Interest Equity Notes GBP GBP GBP GBP Balance at 1 January 2011 102,646,625 16,435,000 1,314,848 120,396,473 Total comprehensive income for the year - (17,294,318) (3,433) (17,297,751) Incentive allocation 13 - 1,299,313 (1,299,313) - Dividends 11 - (2,730,000) - (2,730,000) Investment by non-controlling interest 1(b) - - 1,900 1,900 Balance at 31 December 2011 102,646,625 (2,290,005) 14,002 100,370,622 Share Capital Non- and Share Retained Controlling Total Premium Earnings Interest Equity Notes GBP GBP GBP GBP Balance at 18 January 2010 - - - - Share issue 9 105,000,000 - - 105,000,000 Cost of share issue 9 (2,353,375) - - (2,353,375) Total comprehensive income for the period - 18,469,313 3,735 18,473,048 Incentive allocation 13 - (1,299,313) 1,299,313 - Dividends 11 - (735,000) - (735,000) Investment by non-controlling interest 1(b) - - 11,800 11,800 Balance at 31 December 2010 102,646,625 16,435,000 1,314,848 120,396,473
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2011
1 January 2011 18 January 2010 to to 31 December 31 December 2011 2010 Notes GBP GBP Net cash flow from operating activities (2,060,350) (1,253,900) Investing activities Purchase of investments 5 (11,882,903) (62,414,401) Purchase of investment under equity swaps and CFD's (2,473,360) (46,386,149) Proceeds from termination of CFD's 23,616 52,040,389 Dividend income 3,007,634 838,305 Net cash flows used in investing activities (11,325,013) (55,921,856) Financing activities Share issue - 105,000,000 Cost of share issue - (2,353,375) Commitments from non-controlling interest 1,900 11,800 Dividends paid (2,730,000) (735,000) Finance costs - (151,445) Net cash flows from financing activities 2,728,100 101,771,980 Net (decrease) / increase in cash and cash equivalents (16,113,463) 44,596,224 Cash and cash equivalents at beginning of year / period 44,596,224 - Cash and cash equivalents at year / period end 28,482,761 44,596,224 Cash flow from operating activities Total consolidated comprehensive (deficit) / income for the year / period (17,297,751) 18,473,048 Dividend income (3,007,634) (838,305) Finance costs - 151,445 Realised gain on investment (23,616) (5,654,240) Fair value loss / (gain) on financial assets 18,596,596 (13,874,032) Increase in amounts receivable (23,674) (7,954) (Decrease) / increase in amounts payable (304,271) 496,138 Net cash flow from operating activities (2,060,350) (1,253,900)
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
1 Summary of significant accounting policies
Reporting entity
Sherborne Investors (Guernsey) A Limited (the "Company") is a closed-ended investment company with limited liability formed under The Companies (Guernsey) Law, 2008. The Company was incorporated and registered in Guernsey on 18 January 2010 and its shares were admitted to trading on the London Stock Exchange's AIM market on 9 March 2010. The Company's registered office is Ogier House, St Julian's Avenue, St Peter Port, Guernsey. The "Group" is defined as the Company and its subsidiary, SIGA, LP.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, which comprise standards and interpretations approved by the International Accounting Standards Board (the "IASB") and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee (the "IASC") that remain in effect, together with applicable legal and regulatory requirements of Guernsey law.
These consolidated financial statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments and financial instruments and derivatives.
Going concern
The consolidated financial statements have been prepared on the going concern basis. The Group currently holds significant cash balances. After making enquiries, and on the strength of its consolidated statement of financial position, the Directors are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future. The Board is therefore of the opinion that the going concern basis should be adopted in the preparation of the consolidated financial statements.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the Group's consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies at the date of the Group's consolidated financial statements and revenue and expenses during the reported period. Actual results could differ from those estimated. There are no significant estimates utilised for the preparation of the Group's consolidated financial statements as at 31 December 2011 due to the nature of the activities that have occurred in this period, together with the sole investment held by the Group being quoted on the London Stock Exchange. Fair value of financial assets held through profit or loss is therefore based on the quoted closing bid price at 31 December 2011.
Adoption of new and revised standards
(i) Standards, amendments and interpretations effective but not relevant:
IAS 24, 'Related party disclosures';
IAS 32 (amendment), 'Classification of rights issues';
IFRIC 14 (amendment), 'Prepayments of a minimum funding requirement';
IFRIC 19, 'Extinguishing financial liabilities with equity instruments';
IFRS 1 (amendment), 'Limited exemption from comparative IFRS 7 disclosures'.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
1 Summary of significant accounting policies (continued)
(ii) Standards, amendments and interpretations in issue but not yet effective:
At the date of authorisation of these consolidated financial statements, the following Standards and Interpretations which have not been applied in these consolidated financial statements, were in issue but not yet effective:
IAS 1, 'Financial Statement presentation - presentation of items of other comprehensive income';
IAS 19 (amendment), 'Employee benefits';
IAS 27 (as revised in 2011), 'Separate financial statements';
IAS 28 (as revised in 2011), 'Investments in associates and joint ventures';
IFRS 7, 'Financial instruments: Disclosures - enhanced derecognition disclosure requirements';
IFRS 9, 'Financial instruments - classification and measurement';
IFRS 10, 'Consolidated financial statements';
IFRS 11, 'Joint arrangements';
IFRS 12, 'Disclosure of involvement with other entities';
IFRS 13, 'Fair value measurement'.
The Directors are considering the adoption of these Standards and Interpretations in future periods and do not expect these to have a material impact on the consolidated financial statements of the Group.
a. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and an entity controlled by the Company (its subsidiary). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Non-controlling interests in the net assets of the consolidated subsidiary are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling entities' share of changes in equity since the date of the combination. Losses applicable to the non-controlling entities in excess of their interest in the subsidiary's equity are allocated against their interests to the extent that this would create a negative balance.
The results of the subsidiary acquired during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition.
Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used into line with those used by the Group.
All intra-group transactions, balances and expenses are eliminated on consolidation.
The Company owns 99.98% of the capital interest in SIGA, LP. Whilst the general partner of SIGA, LP, Sherborne Investors (Guernsey) GP, LLC, a company registered in Delaware, USA, is responsible for directing the day to day operations of SIGA, LP, the Company, through its majority interest in SIGA, LP, has the ability to approve the proposed investment of SIGA, LP and to remove the general partner. Hence, the Company has consolidated SIGA, LP in its financial statements.
b. Business combinations
On 4 March 2010, the Company subscribed to commit GBP100 million (one hundred million pounds) to SIGA, LP (the "Investment Partnership"), a Guernsey limited partnership. This commitment constitutes 99.98% of overall commitments to the Investment Partnership.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
1 b. Business combinations (continued)
The objective of this business combination is for the Investment Partnership to realise capital growth from investment in a selected target company identified by the Investment Manager with the aim of generating a significant capital return for Shareholders.
The acquisition of the subsidiary is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under International Financial Reporting Standard 3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds cost of the business combination, the excess is recognised immediately in profit or loss. Goodwill is reviewed for impairments annually.
The interest of non-controlling parties in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.
c. Functional currency
Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in GBP(GBP), which is the Group's functional and presentational currency.
Transactions in currencies other than GBP are translated at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are retranslated into sterling at the rate of exchange ruling at that date.
Foreign exchange differences arising on retranslation are recognised in the consolidated statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the rate of exchange at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated into GBP at foreign exchange rates ruling at the dates the fair value was determined.
d. Financial assets at fair value through profit or loss
Investments, including equity and loan investments in associates, are designated as fair value through profit or loss in accordance with International Accounting Standard 39 ("IAS 39") Financial Instruments: Recognition and Measurement, as the Company is an investment company whose business is investing in financial assets with a view to profiting from their total return in the form of interest and changes in fair value. Investments in voting shares and contracts for difference are initially recognised at cost. The investments in voting shares and contracts for difference are subsequently re-measured at fair value, as determined by the Directors. Unrealised gains or losses arising from the revaluation of investments in voting shares and contracts for difference are taken directly to the consolidated statement of comprehensive income.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
1 d. Financial assets at fair value through profit or loss (continued)
Fair Value is determined as follows:
An unadjusted quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. As required by International Accounting Standard 39 ("IAS 39"), the Directors will not adjust the quoted price for these investments, even in situations where it holds a large position and a sale could reasonably impact the quoted price.
Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level I - An unadjusted quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. As required by IFRS 7, the Group will not adjust the quoted price for these investments, even in situations where it holds a large position and a sale could reasonably impact the quoted price.
Level II - Inputs are other than unadjusted quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.
Level III- Inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.
The investment held by the Group at the period end is classified as meeting the definition of Level I.
e. Revenue recognition
Dividend income is recognised when the Group's right to receive payment has been established. Tax suffered on dividend income for which no relief is available is treated as an expense.
Interest receivable from short-term deposits and investment income are recognised on an accruals basis. Where receipt of investment income is not likely until the maturity or realisation of an investment then the investment income is accounted for as an increase in the fair value of the investment.
f. Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the consolidated statement of comprehensive income.
g. Trade and other receivables
Trade and other receivables are initially recognised at fair value. A provision for impairment of trade receivables is established when there is objective evidence the Group will not be able to collect all amounts due according to the original terms of the receivables.
h. Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the consolidated statement of cash flows.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
1 i. Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method.
j. Financial instruments
Financial instruments and financial liabilities are recognised in the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
k. Segmental reporting
As the Group invests in one investee company, there is no segregation between industry, currency or geographical location. No further disclosures have been made in conjunction with IFRS 8 Operating Segments as it is deemed not to be applicable.
l. Incentive allocation
The incentive allocation is accounted for on an accruals basis, the calculation is disclosed in Note 13. The allocation as at 31 December 2011 is accounted for in the Statement of Changes in Equity.
2 Gain on ordinary activities
The gain on ordinary activities has been arrived at after charging:
1 January 2011 18 January 2010 to to 31 December 31 December 2011 2010 GBP GBP ---------------------------------- --------------- ---------------- Directors' fees 110,202 104,500 Auditor's remuneration* 40,340 59,358 Auditor's non-audit remuneration 14,613 - 165,155 163,858
* An additional GBP90,000 was paid during the period ended 31 December 2010 to the Auditor for services provided in relation to the Company being listed on AIM. This has been included in share issue costs (see note 9).
3 Tax on ordinary activities
The Company has been granted exemption from income tax in Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable to pay an annual fee (currently GBP600) under the provisions of the Ordinance. As such it will not be liable to income tax in Guernsey other than on Guernsey source income (excluding deposit interest on funds deposited with a Guernsey bank). No withholding tax is applicable to distributions to Shareholders by the Company.
The Investment Partnership will not itself be subject to taxation in Guernsey. No withholding tax is applicable to distributions to partners of the Investment Partnership.
Income which is wholly derived from the business operations conducted on behalf of the Investment Partnership with, and investments made in, persons or companies who are not resident in Guernsey will not be regarded as Guernsey source income. Such income will not therefore be liable to Guernsey tax in the hands of non-Guernsey resident limited partners.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
3 Tax on ordinary activities (continued)
Dividend income is shown gross of any withholding tax.
4 Loss / gain per share
The calculation of basic and diluted gain per share is based on the return on ordinary activities less income attributable to the Non-Controlling Interest (including the incentive allocation) and on there being 105 million shares in issue.
5 Financial assets at fair value through profit or loss
As at 31 December As at 31 December 2011 2010 GBP GBP ------------------------------------- ------------------ ------------------ Opening fair value at the beginning of the year / period 76,288,433 - Purchases at cost 14,356,263 62,414,401 Fair value adjustments (18,596,596) 13,874,032 Closing fair value at the end of the year / period 72,048,100 76,288,433 ------------------------------------- ------------------ ------------------
6 Trade and other receivables
As at 31 December As at 31 December 2011 2010 GBP GBP -------------------------------- ------------------ ------------------ Bank interest receivable - 3,825 Prepaid directors and officers insurance 31,628 4,129 31,628 7,954 -------------------------------- ------------------ ------------------
7 Cash and cash equivalents
Cash and cash equivalents comprises cash held by the Group and short term deposits held with Ogier Treasury Services Limited which are invested with underlying banks. The carrying amount of these assets approximates their fair value.
8 Trade and other payables
As at 31 December As at 31 December 2011 2010 GBP GBP ---------------- ------------------ ------------------ Other payables 191,867 496,138 191,867 496,138 ---------------- ------------------ ------------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
9 Share capital and share premium
2011 Consolidated 2010 Consolidated --------------------------------- ------------------ ------------------ Authorised share capital No. No. Ordinary Shares of no par value Unlimited Unlimited --------------------------------- ------------------ ------------------ Issued and fully paid No. No. Ordinary Shares of no par value 105,000,000 105,000,000 --------------------------------- ------------------ ------------------ 2011 2010 Consolidated Consolidated ----------------------------------------- ------------- ------------- Share premium account GBP GBP Balance at the beginning of the year / period 102,646,625 - Share premium account upon issue - 105,000,000 Less: Costs of issue - (2,353,375) ----------------------------------------- ------------- ------------- Balance at the end of the year / period 102,646,625 102,646,625 ----------------------------------------- ------------- -------------
On 9 March 2010 the Company completed its initial public offering and its shares were admitted to trading on AIM. The share issue of 105,000,000 shares at GBP1 each raised gross cash proceeds of GBP105,000,000. Costs associated with the issue were GBP2,353,375, which were deductible against the share premium reserve. This equated to a cost of GBP0.022 per share.
10 Net asset value per share
No. of Consolidated Shares Pence per Share ------------------- ------------ ----------------- 31 December 2010 Ordinary shares Basic and diluted 105,000,000 113.41 31 December 2011 Ordinary shares Basic and diluted 105,000,000 95.58 ------------------- ------------ -----------------
11 Dividend
Dividend payments totalling an amount of GBP2,730,000 have been made in respect of the year ended 31 December 2011.
12 Events after the balance sheet date
There were no events after the date of the statement of financial position requiring disclosure in or adjustment to the financial statements as at the date of the Board of Directors signing the financial statements.
13 Related party transactions
The Investment Partnership and its General Partner, Sherborne Investors (Guernsey) GP, LLC, have engaged Sherborne Investors Management (Guernsey) LLC to serve as Investment Manager who is responsible for identifying the Selected Target Company, subject to approval by the Board of Directors of the Company, as well as day to day management activities of the Investment Partnership.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
13 Related party transactions (continued)
The Investment Manager is entitled to receive from the Investment Partnership a monthly management fee equal to one-twelfth of 1% of the net asset value of the Investment Partnership, less cash and cash equivalents and certain other adjustments.
The sole member of Sherborne Investors (Guernsey) GP, LLC is Sherborne Investors LP (the non-controlling interest), which also serves as the Special Limited Partner of the Investment Partnership. The Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to partners of the Investment Partnership, of which one is the Company, equal 110% of capital contributions to the Investment Partnership, excluding amounts contributed attributable to management fees. At the year end the accrued incentive allocation amounts to GBP nil (2010: GBP1,299,313). The incentive allocation is computed at 10% of the distributions to all partners in excess of 110% and increases to 20% of the distributions to all partners in excess of 150%. As this represents a potential distribution to the Special Limited Partner, a Limited Partner of SIGA, LP, any accrued allocation is allocated to the non-controlling interest.
The Investment Manager and the Special Limited Partner are related parties due to having common majority ownership of themselves or their parent entities.
Each of the Directors (other than the Chairman) receives a fee payable by the Company currently at a rate of GBP30,000 per annum. The Chairman of the Audit Committee receives GBP5,000 per annum in addition to such fee. The Chairman receives a fee payable by the Company currently at the rate of GBP45,000 per annum.
Individually and collectively, the Directors of the Company hold no shares of the Company as at 31 December 2011.
14 Financial risk factors
The Group's investment objective is to realise capital growth from investment in the Selected Target Company, identified by the Investment Manager with the aim of generating significant capital return for Shareholders. Consistent with that objective, the Group's financial instruments mainly comprise of an investment in a Selected Target Company. In addition, the Group holds cash and cash equivalents as well as having trade and other receivables and trade and other payables that arise directly from its operations.
Liquidity risk
The Group has yet to invest some of the funds raised from the listing of the Company, and as a result has a high level of cash and cash equivalents at the date of the consolidated statement of financial position. The Group's cash and cash equivalents are placed with a range of financial institutions having utilised the services of Ogier Treasury (Guernsey) Limited.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
14 Financial risk factors (continued)
Liquidity risk (continued)
The following tables detail the liquidity analysis for financial liabilities at the date of the consolidated statement of financial position for 2010 and 2011:
More Less than than 2011 1 month 1 month Total Consolidated GBP GBP GBP -------------------------- ---------- --------- -------- Trade and other payables 119,006 72,861 191,867 -------------------------- ---------- --------- -------- 119,006 72,861 191,867 -------------------------- ---------- --------- -------- Less than 1 - 3 2010 1 month months Total Consolidated GBP GBP GBP -------------------------- ---------- -------- -------- Trade and other payables 298,895 197,243 496,138 -------------------------- ---------- -------- -------- 298,895 197,243 496,138 -------------------------- ---------- -------- --------
Credit risk
The Company is exposed to credit risk in respect of its cash and cash equivalents, arising from possible default of the relevant counterparty, with a maximum exposure equal to the carrying value of those assets. The credit risk on liquid funds is limited through the Group's utilisation of Ogier Treasury Services Limited. Ogier Treasury Services Limited provides a service where it places cash and cash equivalents with a range of counterparty banks with high credit-ratings assigned by international credit-rating agencies. The Company monitors the placement of cash balances on an ongoing basis.
The Group is exposed to credit risk in respect of its trade receivables and other receivable balances with a maximum exposure equal to the carrying value of those assets.
Market risk
Market price risk arises as a result of the Group's exposure to the future values of the share price of the Selected Target Company. It represents the potential loss that the Group may suffer through investing in the Selected Target Company. Given the Group's exposure to a single investment there is no way of mitigating this exposure. The Group is reliant on gaining sufficient interests in the Selected Target Company which will allow the Investment Manager to gain an element of control, possibly including board representation. If there were to be a 10% movement in the quoted share price of the Selected Target Company at the date of the consolidated statement of financial position, this would have a positive or negative effect on the net asset value and total comprehensive income of GBP7,204,818 (2010: GBP7,628,843).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
14 Financial risk factors (continued)
Interest rate risk
The Group is subject to risks associated with changes in interest rates in respect of interest earned on its cash and cash equivalent balances. The Group seeks to mitigate this risk by monitoring the placement of cash balances on an ongoing basis in order to maximise the interest rates obtained. This risk is also mitigated through the Company's use of Ogier Treasury Services Limited which has negotiated varying preferential interest rates with counterparties.
As at 31 December 2011
Interest bearing ---------------------------------- 1 month 3 months Non- Less than to to interest 1 month 3 months 1 year bearing Total GBP GBP GBP GBP GBP ----------------------------- ----------- ---------- --------- --------------- --------------- Assets Cash and cash equivalents 28,482,761 - - - 28,482,761 Investments held at fair value through profit or loss - - - 72,048,100 72,048,100 Trade and other receivables - - - 31,628 31,628 ----------------------------- ----------- ---------- --------- --------------- --------------- Total Assets 28,482,761 - - 72,079,728 100,562,489 ----------------------------- ----------- ---------- --------- --------------- --------------- Trade and other payables - - - (191,867) (191,867) ----------------------------- ----------- ---------- --------- --------------- --------------- Total Liabilities - - - (191,867) (191,867) ----------------------------- ----------- ---------- --------- --------------- ---------------
As at 31 December 2010
Interest bearing ---------------------------------- 1 month 3 months Non- Less than to to interest 1 month 3 months 1 year bearing Total GBP GBP GBP GBP GBP ----------------------------- ----------- ---------- --------- --------------- ------------ Assets Cash and cash equivalents 44,596,224 - - - 44,596,224 Investments held at fair value through profit or loss - - - 76,288,433 76,288,433 Trade and other receivables - - - 7,954 7,954 ----------------------------- ----------- ---------- --------- --------------- ------------ Total Assets 44,596,224 - - 76,296,387 120,892,611 ----------------------------- ----------- ---------- --------- --------------- ------------ Trade and other payables - - - (496,138) (496,138) ----------------------------- ----------- ---------- --------- --------------- ------------ Total Liabilities - - - (496,138) (496,138) ----------------------------- ----------- ---------- --------- --------------- ------------
As at 31 December 2011, the total interest sensitivity gap for interest bearing items was GBP28,482,761 (2010: GBP44,596,224).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
14 Financial risk factors (continued)
Interest rate risk (continued)
As at 31 December 2011, interest rates reported by the Bank of England were 0.50% (2010: 0.50%), which would equate to income of GBP142,414 (2010: GBP222,981) per annum if interest bearing assets remained constant. If interest rates were to fluctuate by 0.25%, this would have a positive or negative effect of GBP71,207 (2010: GBP111,491) on the Group's annual income.
Capital risk management
The capital structure of the Company consists of proceeds raised from the issue of Ordinary Shares.
As at 31 December 2011, the Group is not subject to any external capital requirement.
The Board of Directors believe that at the date of the consolidated statement of financial position there were no material risks associated with the management of the Company's capital.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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