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| Name | Symbol | Market | Type |
|---|---|---|---|
| Wellcome 4.625% | LSE:57MC | London | Bond |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.55 | 0.57% | 97.00 | 95.30 | 98.70 | 0 | 16:35:14 |
From Dec 2019 to Dec 2024
TIDM57MC
RNS Number : 9661X
Wellcome Trust Finance plc
15 December 2010
Wellcome Trust Finance plc
Annual Financial Report
Wellcome Trust and Wellcome Trust Finance plc (a wholly owned subsidiary of Wellcome Trust) announce that they have each published their Annual Report and Financial Statements for the year to 30 September 2010 today. A copy of each document is available on the Wellcome Trust website at: http://www.wellcome.ac.uk/About-us/Publications .
Wellcome Trust has today issued the following press release in connection with the publication of its Annual Report and Financial Statements:
"2009/10 was another challenging year for economies and financial markets. Governments and central banks around the world were forced to continue intervening in markets in response to the deep-seated problems in the banking system and the high levels of leverage in the developed world.
In these circumstances, we were pleased that the Wellcome Trust's investment portfolio recorded a return of 11.1%, equating to GBP1,450 million on a portfolio value of GBP13.0 billion at the start of the year. We note that the 16% total return generated over the past two years has more than offset the decline in 2007/8, with returns now at a record high.
We have returned a total of 3.8% over three years and 37.4% over five years. Since the inception of the investment portfolio in 1985, it has provided a total return averaging 14.3% a year, a real return of over 11% per annum which is above our long term target of 6.0% real.
These returns enabled us to spend GBP678 million this year in support of our mission and also supported our AAA rating, with our investment asset base ending the year at GBP13.9 billion.
Over the three years of the economic crisis the portfolio has performed well. Growth and venture returns have been strongest at 25% over the period, with direct knowledge assets contributing over 70%. Our absolute return and buyout assets have been 20%, propelled by distressed debt returns of 44%. Equities and equity long/short returns have been 10%. This was helped by the 12% out-performance against global equities of our equity portfolio in the past two years, since the inception of direct management.
Our liquidity position continues to be strong and we have enjoyed positive returns over 5 years in all asset classes and positive returns over 3 years in all asset classes except in Property and Infrastructure, which lost only 7% overall. Our directly managed UK property assets made money at a time when the benchmark went down some 20%.
Over the past year, equity exposure has increased steadily from 38% to 45% as equity markets have continued to move higher, cash levels have been allowed to decline and commercial property and buyout interests have been reduced. Through the year, we continued to increase our direct holdings in private companies.
Sir William Castell, Chairman of the Trust, said: 'We are pleased that the consistency of our investment performance across the different asset classes enabled us to achieve an 11% return in the past year. The deep partnerships with outstanding investment managers, which we have built over a long period, have enabled us, in recent difficult years, to manage liquidity comfortably and to deliver the excellent investment returns which have supported our extensive charitable spend. We continue to increase our direct investment, both in public and private assets, across the world, as opportunities occur.'
Danny Truell, CIO of the Trust, added: 'At a time when different regions of the world face diverse challenges and opportunities, it is more than ever necessary to invest in a range of global assets and strategies that collectively provide sufficient protection against adverse outcomes and sufficient exposure to positive returns, especially should inflationary pressures continue to rise. We attempt to do so in a flexible and proactive manner but would not underestimate the fact that new challenges are likely to arise.'
Wellcome Trust Finance plc further announces that a copy of its Annual Report and Financial Statements for the year ended 30 September 2010 has been submitted to the National Storage Mechanism, and will shortly be available for inspection at www.Hemscott.com/nsm.do .
In accordance with the Disclosure and Transparency Rules, the following information is taken from the Annual Report and Financial Statements for Wellcome Trust Finance plc for the year ended 30 September 2010:
Wellcome Trust Finance plc
Annual Report and Financial Statements
Year ended 30 September 2010
Wellcome Trust Finance plc
Directors' Report
For the year ended 30 September 2010
Report of the Directors
The Directors of Wellcome Trust Finance plc present their report and the audited Financial Statements for the year ended 30 September 2010.
Activities
The principal activity of Wellcome Trust Finance plc (the "Company") is to issue and invest in financial instruments e.g. shares, bonds, debentures, loans, certificates of deposit and other financial obligations.
Review of the Business
The Company issued two tranches of bonds, GBP550 million on 25 July 2006 of 4.625% Guaranteed Bonds due July 2036 and GBP275 million on 28 May 2009 of 4.750% Guaranteed Bonds due May 2021 (the Bonds). The Bonds are listed on the London Stock Exchange. The obligations of the Company on the Bonds are governed by Trust Deeds between the Company, The Wellcome Trust Limited, as trustee of the Wellcome Trust, and Citicorp Trustee Company Limited, as the trustee for the holders of the Bonds. The payment of all amounts due in respect of the Bonds is unconditionally and irrevocably guaranteed pursuant to the terms of a guarantee given by The Wellcome Trust Limited, as trustee of the Wellcome Trust; the guarantee is part of the Trust Deeds.
The Company loaned the proceeds from the Bonds issued to Wellcome Trust Group (the "Group") undertakings and receives interest on these loans.
Results for the Year
The Company made a profit of GBPnil (2009: GBPnil)during the year ended 30 September 2010, after recognising a Gift Aid donation of GBP6,559,405 (2009: GBP6,494,914) to the Wellcome Trust, a charity registered in England under the UK Charities Act 1993 (as amended by the Charities Act 2006) (registered charity number 210183). As at the 30 September 2010 the Company had net assets of GBP137,500,000 (2009: GBP137,500,000). The Directors do not propose the payment of a dividend (2009: GBPnil).
Political and Charitable Donations
The Company made no political donations during the year (2009: GBPnil). The Company made charitable donations of GBP6,559,405 (2009: GBP6,494 914) to the Wellcome Trust under Gift Aid.
Financial Risk Management
The Directors of the Company implement policies to manage the inherent risks relating to the financial assets and liabilities of the Company; however, the Company does not undertake any hedging transactions.
The Directors have assessed for each financial asset and liability: the market risk, interest rate risk, liquidity risk, and credit risk exposure. The Company is not exposed to significant market risk or interest rate risk because the Company's main financial assets and liabilities have fixed redemption values, fixed interest rates and fixed maturity dates. The liquidity risk of the Company is mitigated by the matching of the cash flows from the Company's financial assets and liabilities. Credit risk exposure of the Company's loans is reduced by the Company only advancing loans to entities within the Group. Credit risk exposure of the Company's remaining financial assets is reduced by stringent selection procedures for any external counter parties with which the Company transacts.
Key Performance Indicators
Due to the nature of the Company's operations the key performance measures are: that the Company meets all its legal obligations to the Bond holders and that the Company achieves sufficient return on its assets to be profitable, before any donations to the Wellcome Trust under Gift Aid. During the year the Company met all its legal obligations to the Bond holders and had profits before donations to the Wellcome Trust under Gift Aid.
Environment
Due to the nature of its activities the Company has a minimal environmental impact.
Employees
There are no employees of the Company.
The management and administration of the Company is undertaken by staff from the Wellcome Trust. The Wellcome Trust has not incurred any incremental costs due to the management of this Company.
Corporate Governance
The Company is limited by shares. Its governing documents are its Memorandum of Association and its Articles of Association. The shareholders of the company are: The Wellcome Trust Limited, as trustee of the Wellcome Trust, and Wellcome Trust Nominees Limited, as nominee for the Wellcome Trust.
The Company is considered to be a wholly owned subsidiary of The Wellcome Trust Limited, as trustee of the Wellcome Trust. The Company is not subject to the requirements of the Combined Code because it does not have any equity shares listed on the London Stock Exchange. A statement on corporate governance policies of the Group and the report of the audit, nominations and remuneration committees of the Wellcome Trust are included in the Wellcome Trust's Annual Report and Financial Statements for the year ended 30 September 2010.
The Company complies with all appropriate filing and information requirements of the Financial Services Authority.
Internal Control and Risk Management
The Company's internal control and risk management is undertaken as part of the Wellcome Trust's processes. The key elements of this specifically applicable to the Company are:
-- Delegation: there is a clear organisational structure with documented lines of authority and responsibility for control and documented procedures for reporting decisions, actions and issues.
-- Review: the Audit Committee reviews the effectiveness of the Company's internal control, its financial reporting process, the independence of its statutory auditor and its compliance with relevant statutory and finance regulations and advises the Directors of any relevant matters. The Audit Committee members are listed on page 15.
Creditor Payment Terms
The Company pays suppliers in accordance with contractual terms or within 30 days of invoice date.
Directors and their Interests
The Directors of the Company who served during the year and to the date of this report are set out below:
Mr Simon Jeffreys
Mr Nicholas Moakes
Mr Peter Pereira Gray
Mr Daniel Truell
None of the Directors held any beneficial interest in the shares of the Company or any interest in its parent company, The Wellcome Trust Limited, as trustee of the Wellcome Trust, or Wellcome Trust Nominees Limited, as nominee for the Wellcome Trust.
Each of the Directors is an employee of the Wellcome Trust and receives remuneration from the Wellcome Trust as an employee. No remuneration is paid to any Director for their services as a Director.
Directors Indemnity Policy
There are no qualifying indemnity provisions (as defined in the Companies Act 2006) that benefit the directors of the Company.
Statement of Directors' responsibilities
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 prepared the 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 judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements respectively; 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 the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names are listed in the Directors' report confirm that, to the best of their knowledge:
-- the Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the company; and
-- the Directors' report contained in this section of the Annual Report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that it faces.
Statement of disclosure of information to auditors
Each Director in office at the date of approving this report confirms that: so far as the Director is aware, there is no relevant audit information of which the company's auditors are unaware; and each Director has taken all the steps that ought to have been taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Auditors
A resolution was passed by the Board of Directors on 14 December 2010 appointing PricewaterhouseCoopers LLP as auditor until such time as the Company decides otherwise.
This report was approved by the Board of Directors and signed on its behalf on 14 December 2010 by:
Mr Daniel Truell
Director
Wellcome Trust Finance plc
Independent Auditors' Report
For the year ended 30 September 2010
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLCOME TRUST FINANCE PLC
We have audited the financial statements of Wellcome Trust Finance plc for the year ended 30 September 2010 which comprise the Profit and Loss Account, the Balance Sheet, the Cash Flow Statement and the related notes. 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).
Respective responsibilities of Directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 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.
This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
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.
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 30 September 2010 and of its result and cash flows 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.
Clare Thompson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
14 December 2010
The Financial Statements are published on the Wellcome Trust website, www.wellcome.ac.uk The maintenance and integrity of the Wellcome Trust website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Wellcome Trust Finance plc
Profit and Loss Account
For the year ended 30 September 2010
Hot Features
Premium
Year ended Year ended
30 September 30 September
Note 2010 2009*
GBP GBP
-------------------------------------- ----- ------------- -------------
Turnover 2 45,594,967 36,767,632
Cost of sales (38,972,088) (30,184,080)
Gross profit 6,622,879 6,583,552
Administrative expenses 3 (63,474) (88,638)
Operating profit 6,559,405 6,494,914
Gift Aid donation (6,559,405) (6,494,914)
Profit on ordinary activities before - -
taxation
Taxation on ordinary activities 6 - -
Profit on ordinary activities after - -
taxation
-------------------------------------- ----- ------------- -------------
All income is derived from continuing activities.
The Company has no other gains or losses other than the results for the financial year as set out above, and therefore no separate statement of recognised gains and losses has been presented.
* Interest payable was reclassified as cost of sales within the Profit and Loss Account to better reflect the operations of the Company.
The notes on pages 10 to 15 form part of these Financial Statements.
Wellcome Trust Finance plc
Balance Sheet
As at 30 September 2010
As at As at
30 September 30 September
Note 2010 2009
GBP GBP
--------------------------------------- ----- -------------- --------------
Fixed assets
Investment in subsidiaries 7 1 1
Loans to Group undertakings 8 270,780,921 270,400,000
Current assets
Loans to Group undertakings 8 676,000,000 676,000,000
Amounts due from Group undertakings 1,351,821 1,646,734
Accrued interest on loans 9,387,671 9,483,625
Prepayments 37,929 36,704
Cash at bank and in hand 105,575 9,272
Creditors: amounts falling due within
one year 9 (9,746,779) (10,131,285)
--------------------------------------- ----- -------------- --------------
Net current assets 677,136,217 677,045,050
Creditors: amounts falling due after
more than one year 9 (810,417,139) (809,945,051)
Net assets 137,500,000 137,500,000
--------------------------------------- ----- -------------- --------------
Capital reserves
Called up share capital 11 137,500,000 137,500,000
Profit and loss account - -
Total shareholders' funds 137,500,000 137,500,000
--------------------------------------- ----- -------------- --------------
The Financial Statements on pages 7 to 15 were approved by the Board of Directors on 14 December 2010 and signed on its behalf by:
Mr Daniel Truell
Director
Wellcome Trust Finance plc
Cash Flow Statement
For the year ended 30 September 2010
Year ended Year ended
30 September 30 September
2010 2009*
GBP GBP
------------------------------------------- ------------- --------------
Net cash inflow from operating activities 6,931,216 6,022,487
Financial investments
Issue of loan to Group undertakings - (270,400,000)
Financing
Issue of corporate Bonds - 270,376,363
Gift aid donations paid (6,834,913) (5,999,049)
Net increase/(decrease) in cash 96,303 (200)
------------------------------------------- ------------- --------------
Cash at beginning of year 9,272 9,472
------------------------------------------- ------------- --------------
Cash at end of year 105,575 9,272
------------------------------------------- ------------- --------------
Reconciliation of operating profit to net cash outflow from operating activities
Operating Profit 6,622,879 6,583,552 (Increase) in loans to Group undertakings (380,921) - Increase in Bond liabilities 472,088 4,746,580 Decrease/(increase) in prepayments and accrued income 94,729 (4,618,757) (Decrease)/increase in accruals and deferred income (21,867) 7,677 Increase/(decrease) in amounts owed to Group undertakings 207,782 (607,926) Net cash inflow from operating activities 6,994,690 6,111,126 ------------------------------------------- ---------- ------------
Reconciliation to net debt
Net debt at 1 October 819,148,278 544,025,136 (Increase)/decrease in cash (96,303) 200 Issue of corporate Bonds - 270,376,363 Non cash changes - increase in accrued Bond interest 472,088 4,746,581 Net debt at 30 September 819,524,064 819,148,278 ---------------------------------------- ------------ ------------
* Interest payable was reclassified as cost of sales within the Profit and Loss Account to better reflect the operations of the Company.
Wellcome Trust Finance plc
Notes to the Financial Statements
For the year ended 30 September 2010
1. ACCOUNTING POLICIES
(a) Basis of preparation of the Financial Statements
The Financial Statements have been prepared on a going concern basis in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The Company has adopted fair value accounting rules and applies the related suite of Financial Reporting Standards (FRS):
-- FRS 23: The effects of changes in foreign exchange rates;
-- FRS 25: Financial instruments presentation;
-- FRS 26: Financial instruments measurement; and
-- FRS 29: Financial instruments disclosures, including the amendment issued by the Accounting Standards Board May 2009.
All income and expenditure is recognised in the Financial Statements on an accruals basis. A summary of the more important accounting policies, which have been consistently applied, is set out below:
Accounting policies have been reviewed in accordance with FRS 18 Accounting Policies.
(b) Turnover
Turnover is interest derived from loans to Wellcome Trust Investment Limited Partnership, an undertaking in the Group, and Wellcome Trust. Turnover is calculated using the effective interest rate method and is recognised on an accruals basis.
(c) Cost of sales
Cost of sales is the effective interest on the Bond liabilities (as described in note 1(f)) and is recognised on an accruals basis.
(d) Gift Aid donation
Gift Aid donation recognised is equal to estimated taxable profits of the Company at the time of the approval of the Financial Statements. The Gift Aid paid within 9 months of the balance sheet date is equal to the estimated taxable profits of the Company at time of payment. Any difference between the Gift Aid donation accrued and the Gift Aid donation paid is recognised at the time of payment.
(e) Loans to Group undertaking
The loans to group undertakings are to Wellcome Trust Investment Limited Partnership and Wellcome Trust, with fixed redemption value and fixed interest payments. The loans are not quoted in an active market. The loans were recognised initially at fair value and after initial recognition are measured at amortised cost using the effective interest method.
(f) Bond Liabilities
The Bond liabilities relate to the 30-year corporate bonds issued by the Company in July 2006 and the 12-year corporate bonds issued by the Company in May 2009, listed on the London Stock Exchange (the "Bonds"). The initial measurement of the liability is equal to the proceeds of issue less all transaction costs directly attributable to the issue for each Bond. After initial recognition the liability is measured at amortised cost using the effective interest method. The fair value of the Bond liabilities disclosed within the notes to the Financial Statements is the market value of the Bonds at the year end date. The Company is not required to, and therefore does not, recognise any adjustment to fair value in the Balance Sheet and Profit and Loss Account.
(g) Foreign Currencies
Transactions in currencies other than Sterling are recorded at the rate of exchange prevailing on the dates of the transactions. At each balance sheet date, recorded monetary assets and liabilities and balances carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. All realised and unrealised profits and losses arising on exchange are included in net profit or loss for the period.
2. TURNOVER
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Interest receivable on Loans to Group
undertakings 45,594,967 36,726,501
Interest receivable on cash
deposits - 41,131
45,594,967 36,767,632
--------------------------------------- ------------- -------------
Interest receivable on "Loans to Group undertakings" (see note 8) is the effective interest on:
-- Loans A and B to Wellcome Trust Investment Limited Partnership at a fixed rate of 4.75%; and
-- Loan to Wellcome Trust at fixed rate of 4.80%.
3. ADMINISTRATIVE EXPENSES
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Legal fees (205) 15,709
Taxation advice - 2,990
Auditors' remuneration 7,873 9,545
UK Listing Authority
fees (2,900) -
Rating agency
fees 57,921 54,915
Other 785 5,479
63,474 88,638
------------------------ ------------- -------------
Auditors' remuneration is solely in relation to the statutory audit of the Financial Statements.
4. EMPLOYEE INFORMATION
The Company has no employees. Personnel from the Wellcome Trust undertake the management and administration of the Company at no incremental cost to the Wellcome Trust.
5. REMUNERATION OF DIRECTORS
The Directors of the Company received no remuneration from the Company for their services. There were no Directors for whom retirement benefits are accruing under a money purchase or defined benefit scheme. The Company does not issue share options or offer any long-term incentive schemes, so there were no Directors who exercised share options during the year or became entitled to shares under a long-term incentive scheme.
6. TAXATION
The profits of the Company for the year will be paid under Gift Aid to the Wellcome Trust, a charity registered in England under the UK Charities Act 1993 (as amended by the Charities Act 2006) (registered charity number 210183). There is no difference between accounting and taxable profits, so there is no provision required for deferred tax.
7. INVESTMENTS IN SUBSIDIARIES
The Company has an investment in a subsidiary, Wellcome Trust Finance No. 2 Limited. The subsidiary has remained dormant during the year and has net assets of GBP1 (comprising the unpaid share capital debtor) as at 30 September 2010.
The Company has not prepared consolidated financial statements because the subsidiary is not material, and so meets the exemption requirements of FRS 2 Accounting for Subsidiary Undertakings.
8. LOANS TO GROUP UNDERTAKINGS
Amortised Amortised
Interest cost Year cost Year
rate Loan ended 30 ended 30
Principal per anniversary September September
amount annum date 2010 2009
GBP % GBP GBP
Loan
A 550,000,000 4.75 25 July 550,000,000 550,000,000
Loan 25
B 126,000,000 4.75 September 126,000,000 126,000,000
Loan
(new
bond) 275,000,000 4.80 28 May 270,780,921 270,400,000
946,780,921 946,400,000
-------- ------------ --------- ------------ ------------ ------------
Loans to Group undertakings are loans (the "Loans") to Wellcome Trust Investment Limited Partnership (Loan A and Loan B) and Wellcome Trust (Loan (new bond)). The principal under Loan A and Loan B is repayable on demand by the Company and the principal under Loan (new bond) is repayable on agreement between the Company and Wellcome Trust, but the Loans are expected to be outstanding for 28 years (Loan A and Loan B) and 12 years (Loan (new bond)). Each Loan has a fixed redemption value equal to the principal amount and a fixed interest rate.
9. CREDITORS
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Accruals and deferred
income 14,873 36,740
Amounts due to Group undertakings 1 87,132
Gift Aid due to the
Wellcome Trust 519,405 794,913
Accrued interest on
Bond liabilities 9,212,500 9,212,500
Total creditors: amounts falling due
within one year 9,746,779 10,131,285
--------------------------------------- ------------- -------------
Falling due between one and
five years - -
--------------------------------------- ------------- -------------
Bond liabilities 810,417,139 809,945,051
Falling due after five
years 810,417,139 809,945,051
--------------------------------------- ------------- -------------
Total creditors: amounts falling due
after one year 810,417,139 809,945,051
--------------------------------------- ------------- -------------
The Bond liabilities are stated at the amortised cost using the effective interest method for the GBP550 million 4.625% Guaranteed Bonds due July 2036 ("GBP550 million Bonds"), issued by the Company on 25 July 2006, and the GBP275 million 4.750% Guaranteed Bonds due May 2021 ("GBP275 million Bonds"), issued by the Company on 28 May 2009. The Bond liabilities falling due within one year are the unpaid coupon interest accrued for the year to 30 September 2010 for each Bond. The interest payment to the Bond holders is at a fixed rate of 4.625% per annum (GBP550 million Bonds) and 4.750% per annum (GBP275 million Bonds), and is paid in arrears on 25 July or 28 May respectively each year until repayment of the Bond principals. No amounts fall due between one and five years because the remainder of the Bond liabilities at the balance sheet date is the amortised cost of the amount due to be repaid upon expiry of the 30-year term on 25 July 2036 (GBP550 million Bonds) or upon the expiry of the 12-year term on 28 May 2021 (GBP275 million Bonds) and therefore falls due after five years.
The obligation of the Company on the Bonds is governed by a Trust Deed dated 25 July 2006 (GBP550 million Bonds) or 28 May 2009 (GBP275 million Bonds) between the Company, The Wellcome Trust Limited, as trustee of the Wellcome Trust, and Citicorp Trustee Company Limited, as the trustee for the holders of the Bonds (the "Trust Deed" and the "new Trust Deed"). The payment of all amounts due in respect of the Bonds is unconditionally and irrevocably guaranteed pursuant to the terms of a guarantee given by The Wellcome Trust Limited, as trustee of the Wellcome Trust; the guarantee is part of the Trust Deed and the new Trust Deed.
10. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
As at 1 October 137,500,000 137,500,000
As at 30 September 137,500,000 137,500,000
--------------------- ------------- -------------
11. SHARE CAPITAL
Year ended Year ended
30 September 30 September
2010 2009
Number GBP GBP
Authorised ordinary shares
of GBP1 each 137,500,000 137,500,000 137,500,000
-------------------------------- ------------ ------------- -------------
Issued and fully paid ordinary
shares of GBP1 each 137,500,000 137,500,000 137,500,000
-------------------------------- ------------ ------------- -------------
12. RELATED PARTY TRANSACTIONS
The Company, a wholly owned subsidiary undertaking of the Wellcome Trust has taken the exemption available from the related party disclosure requirements of FRS 8 Related Party Disclosures, because the Financial Statements of the parent company are available to the public (note 15).
13. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise the Loans to Group undertakings and the liability arising from the issue of the Bonds. The Company's loans are non-derivative financial assets with fixed payments which are not available for sale. The Bond liability is a non-derivative financial liability with a fixed redemption value, fixed interest rate and fixed maturity date. The Company has not undertaken any trading in financial instruments during the year.
The financial instruments issued by, or held by, the Company are Sterling denominated and carry no foreign exchange risk.
The financial instruments issued by, or held by, the Company are at fixed interest rates and therefore do not have any related interest rate risk.
The key risks relating to the financial instruments held by the Company are the credit risk and liquidity risk of the counter parties Wellcome Trust Investment Limited Partnershipand the Wellcome Trust in relation to the Loans to Group undertakings. These risks are in respect of the Wellcome Trust Investment Limited Partnership's and Wellcome Trust's ability to meet the interest and principal payments as they fall due. The total value exposed to credit risk as at 30 September 2010 is GBP957.6 million (2009: GBP957.5 million), which comprises the value of the Loans to Group undertakings, amounts due from Group undertakings, accrued interest on loans and cash at bank and in hand.
The following tables detail the maturity of the Company's undiscounted contractual payments as at 30 September:
Contractual payments falling due within one year
Year ended Year ended
30-Sep-2010 30-Sep-2009
Between
Three three Three Between
months months months three
or and one or months and
less year Total less one year Total
GBP GBP GBP GBP GBP GBP
-------------- ------- ---------- ---------- -------- ----------- -----------
Accruals and
deferred
income 14,873 - 14,873 36,740 - 36,740
Amounts due to
Group
undertakings 1 - 1 87,132 - 87,132
Gift Aid due
to the
Wellcome
Trust - 519,405 519,405 - 794,913 794,913
Accrued
interest on
Bond
liabilities - 9,212,500 9,212,500 - 9,212,500 9,212,500
Contractual
payments
falling due
within one
year 14,874 9,731,905 9,746,779 123,872 10,007,413 10,131,285
--------------- ------- ---------- ---------- -------- ----------- -----------
Contractual payments falling due after one year
Year ended Year ended
30-Sep-2010 30-Sep-2009
Between
Between two
two and and
five After five five After five
years years Total years years Total
GBP GBP GBP GBP GBP GBP
------------- --------- ------------ ------------ -------- ------------ ------------
Bond
liabilities - 810,417,139 810,417,139 - 809,945,051 809,945,051
Contractual
payments
falling due
after one
year - 810,417,139 810,417,139 - 809,945,051 809,945,051
-------------- --------- ------------ ------------ -------- ------------ ------------
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The following table is a comparison of fair values and book values of all financial assets and liabilities as at the end of the year:
Fair value Book value
Year ended Year ended
30 September 30 September
2010 2010
GBP GBP
Financial
assets
Loans to Group undertakings 976,609,630 946,780,921
Amounts due from Group undertakings 1,351,821 1,351,821
Accrued interest 9,387,671 9,387,671
Investment in subsidiaries 1 1
Cash at bank and in
hand 105,575 105,575
Financial
liabilities
Accrued interest on
Bond liabilities (9,212,500) (9,212,500)
Bond liabilities (850,286,500) (810,417,139)
The fair value of the Bond liabilities as at 30 September 2010 was GBP850.3 million (2009: GBP813.2 million) and is based on the market value of the Bonds at that date. The fair value of the Loans to Group undertakings as at 30 September 2010 was GBP976.6 million (2009: GBP924.7 million); this is calculated using a valuation model for which the key input is the market value of the Bonds, instruments that are substantially the same as the Loans in term, interest rate and magnitude. The book value of cash at bank and in hand represents its fair value.
14. COMMITMENTS
The Company has no outstanding commitments at 30 September 2010.
15. ULTIMATE PARENT UNDERTAKING & CONTROLLING PARTY
The Company's shares are held by The Wellcome Trust Limited, as trustee of the Wellcome Trust, and by Wellcome Trust Nominees Limited, as nominee for the Wellcome Trust. The Company is a wholly owned subsidiary undertaking of the Wellcome Trust for accounting purposes, and its assets, liabilities and results have been consolidated with those of the Wellcome Trust as required by FRS 2 - "Accounting for Subsidiary Undertakings".
The ultimate parent undertaking and controlling party is the Wellcome Trust, which is the parent undertaking of the smallest and largest group to consolidate these Financial Statements.
Copies of the Wellcome Trust Annual Report and Financial Statements 2010 are available from the Trust's website (www.wellcome.ac.uk) or, without charge, from:
Publishing Department
Wellcome Trust
FREEPOST
RLYJ-UJHU-EKHJ
Slough
SL3 0EN
Wellcome Trust Finance plc
Administrative Details
Directors
Mr Simon Jeffreys
Mr Nicholas Moakes
Mr Peter Pereira Gray
Mr Daniel Truell
Company Secretary
Mr John Stewart
Audit Committee
Mr Edward Walker-Arnott (Chairman to 30 September 2010)
Mr Roderick Kent (Chairman from 1 October 2010)
Mr Philip Johnson
Mr Simon Leathes (resigned 31 December 2009)
Baroness Manningham-Buller
Professor Peter Smith
Mr Nicholas Temple (resigned 31 December 2009)
Registered Company Number
5857955
Registered Office
215 Euston Road
London
NW1 2BE
Auditors
PricewaterhouseCoopers LLP
Hay's Galleria
1 Hays Lane
London
SE1 2RD
Bankers
HSBC Bank plc
31 Holborn Circus
Holborn
London
EC1N 2HR
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USVBRRWAUAAA
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