TIDM80UC
RNS Number : 1876Q
Connect M77/GSO
29 July 2010
Connect M77/GSO plc
Report and financial statements for the year ended 31 March 2010
Registered Number: 04698798
Directors' Report
The Directors present their report together with the audited financial
statements for the year ended 31 March 2010.
Principal Activity and Business Review
On 7 May 2003 a contract was signed with East Renfrewshire Council (on behalf of
the Scottish Government for the M77 and South Lanarkshire Council and East
Renfrewshire Council for the Glasgow Southern Orbital (GSO)) to design, build,
finance and operate (DBFO) the M77 from Fenwick to Malletsheugh and the GSO from
Malletsheugh to Philipshill, East Kilbride and sections of the A726 and to
maintain these roads under a licence over a 32 year period as well as modify
certain sections of the A77. In accordance with the concession agreement the
Company is responsible for operating the roads together with carrying out all of
the routine and major life cycle maintenance for the life of the concession.
The new road sections were opened to the public in April 2005 and the final
completion certificate was issued in September 2005.
There have been no changes to the Company's activities in the year under review
and none are currently contemplated.
The Company's operating profit and its loss on ordinary activities after
taxation are in line with expectations, accounting for severe winter weather in
2009/2010.
Going Concern
The Company's forecasts and projections, taking account of reasonable possible
changes in trading performance, show that the Company has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, the
Directors continue to adopt the going concern basis in preparing the financial
statements.
Share Capital
The issued share capital of the Company was GBP50,000 at 31 March 2010 and 31
March 2009, which consisted of 50,000 ordinary shares of GBP1 each.
Results and Dividends
The Company recorded a loss for the year after taxation of GBP4,725,000 (2009 -
loss GBP4,988,000). The Directors do not propose to pay a dividend in respect of
the year ended 31 March 2010 (2009 - GBPnil).
Principal Risks and Uncertainties
The Company recognises that effective risk management is fundamental to
achieving its business objectives in order to meet its commitments in fulfilling
the Public Private Partnership ("PPP") contract and in delivering a safe and
efficient service. Risk management contributes to the success of the business
by identifying opportunities and anticipating risks in order to enable the
business to improve performance and fulfil its contractual obligations.
Financial instruments
The financial risk management objectives of the Company are to ensure that
financial risks are mitigated by the use of financial instruments where they
cannot be addressed by means of contractual provisions. Financial instruments
are not used for speculative purposes.
Credit and cash flow risks to the Company arise from its client, East
Renfrewshire Council. The credit and cash flow risks are not considered
significant as the client is a quasi governmental organisation.
Directors' Report (continued)
For the year ended 31 March 2010
Financial instruments (continued)
The Company's liquidity risk is principally managed through financing the
Company by means of long term borrowings with an amortisation profile that
matches the expected availability of funds from the Company's operating
activities. All borrowings are in the form of secured bonds issued at a fixed
rate of interest of 5.404% per annum and secured loan stock issued at a fixed
rate of interest of 12.1% per annum. In addition the Company maintains reserve
bank accounts to provide short term liquidity against future debt service and
other expenditure requirements.
Contractual relationships
The Company operates within a contractual relationship with its primary customer
East Renfrewshire Council. A significant impairment of this relationship could
have a direct and detrimental effect on the Company's results and could
ultimately result in termination of the concession. To manage this risk the
Company has regular meetings with East Renfrewshire Council including
discussions on performance, project progress, future plans and customer
requirements.
Key Performance Indicators
The Company has set specific business objectives, which are monitored using a
number of key performance indicators ("KPIs"). The relevant KPIs for this
report are detailed below:
+--------+------------+----+----------+----------+
| | | | 31 | 31 |
| | | | March | March |
| | | | 2010 | 2009 |
| | | | GBP'000 | GBP'000 |
+--------+------------+----+----------+----------+
| Loss after taxation | | (4,725) | (4,988) |
+---------------------+----+----------+----------+
| Net liabilities | | (20,332) | (15,607) |
+--------+------------+----+----------+----------+
The Directors consider that these KPIs are in line with expectations.
Directors
The following persons were Directors of the Company throughout the year, except
as noted:
A C Beauchamp
D W Bowler (Appointed 22 March 2010)
O J W Jennings (Resigned 25 June 2009)
D J Lomas (Appointed 25 June 2009; resigned 22 March 2010)
A Matthews
B R Walker
Payment to Suppliers
The Company agrees terms and conditions for its business transactions with
suppliers. Payment is then made to these terms, subject to the terms and
conditions being met by the suppliers. As at 31 March 2010 creditor days for
the Company amounted to 30 days (2009 - 32 days).
Directors' Report (continued)
For the year ended 31 March 2010
Auditors
Each of the persons who is a Director at the date of approval of the report
confirms that:
i) so far as the Director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
ii) the Director has taken all the steps that he 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 auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the
provisions of S418 of the Companies Act 2006.
A resolution to re-appoint Deloitte LLP as auditors will be proposed at the
forthcoming Annual General Meeting.
6th Floor
By order of the Board
350 Euston Road
Regent's Place
London
NW1 3AX N J
Marshall
Secretary
21 July 2010
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 elected to prepare 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 estimates that are reasonable and prudent;
· state whether applicable UK Accounting Standards have been
followed; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time 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 corporate
and financial information included in the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and loss of Connect M77/GSO plc as at 31 March 2010; and
(b) the Directors' report includes a fair review of the development and
performance of the business and the financial position of Connect M77/GSO plc,
together with a description of it's principal risks and uncertainties.
Signed on behalf of the Board of Directors of Connect M77/GSO plc on 21 July
2010:
A C Beauchamp
Director
Independent Auditors' Report to the Members of Connect M77/GSO plc
We have audited the financial statements of Connect M77/GSO plc for the year
ended 31 March 2010 which comprise the profit and loss account, the balance
sheet and the related notes 1 to 18. The financial reporting framework that has
been applied in their preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company's members, as a body, in accordance
with section Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has
been undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditors' report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the Directors' Responsibilities Statement, 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 (APB's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion the financial statements:
· give a true and fair view of the state of the Company's affairs
as at 31 March 2010 and of its loss 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.
Independent Auditors' Report to the Members of Connect M77/GSO plc (continued)
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.
Makhan Chahal (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
July 2010
Profit and Loss Account
For the year ended 31 March 2010
+-------------------------+--------+----------+----------+-------------+
| | | 2010 | | 2009 |
+-------------------------+--------+----------+----------+-------------+
| | Notes | GBP'000 | | GBP'000 |
+-------------------------+--------+----------+----------+-------------+
| | | | | |
+-------------------------+--------+----------+----------+-------------+
| Turnover | 2 | 12,264 | | 12,340 |
+-------------------------+--------+----------+----------+-------------+
| Cost of sales | | (6,630) | | (6,377) |
+-------------------------+--------+----------+----------+-------------+
| Gross profit | | 5,634 | | 5,963 |
+-------------------------+--------+----------+----------+-------------+
| Administrative expenses | | (315) | | (319) |
+-------------------------+--------+----------+----------+-------------+
| Operating profit | 3 | 5,319 | | 5,644 |
+-------------------------+--------+----------+----------+-------------+
| Interest receivable and | 4 | 102 | | 510 |
| similar income | | | | |
+-------------------------+--------+----------+----------+-------------+
| Interest payable and | 5 | (10,719) | | (10,746) |
| similar charges | | | | |
+-------------------------+--------+----------+----------+-------------+
| Loss on ordinary | | (5,298) | | (4,592) |
| activities before | | | | |
| taxation | | | | |
+-------------------------+--------+----------+----------+-------------+
| Tax credit/(charge) on | 6 | 573 | | (396) |
| loss on ordinary | | | | |
| activities | | | | |
+-------------------------+--------+----------+----------+-------------+
| Loss on ordinary | | | | |
| activities after |14, 15 | (4,725) | | (4,988) |
| taxation and retained | | | | |
| for the financial year | | | | |
+-------------------------+--------+----------+----------+-------------+
There were no recognised gains or losses in either year other than the reported
loss shown above; consequently no separate statement of total recognised gains
and losses is presented.
All activities are from continuing operations in the United Kingdom.
Balance Sheet
31 March 2010
+------------------------+-------+-+-----------+-+-----------+
| | | | 2010 | | 2009 |
+------------------------+-------+-+-----------+-+-----------+
| | Notes | | GBP'000 | | GBP'000 |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Fixed assets | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Tangible assets | 7 | | 133,360 | | 138,255 |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
| Current assets | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Debtors | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| - due within one year | 8 | | 1,836 | | 3,040 |
+------------------------+-------+-+-----------+-+-----------+
| - due after one year | 8 | | 2,058 | | 2,023 |
+------------------------+-------+-+-----------+-+-----------+
| Investments - due | 9 | | 7,050 | | 7,088 |
| within one year | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Cash at bank and in | | | 2,048 | | 342 |
| hand | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| | | | 12,992 | | 12,493 |
+------------------------+-------+-+-----------+-+-----------+
| Creditors: amounts | 10 | | (6,270) | | (5,092) |
| falling due within one | | | | | |
| year | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
| Net current assets | | | 6,722 | | 7,401 |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
| Total assets less | | | 140,082 | | 145,656 |
| current liabilities | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
| Creditors: amounts | | | | | |
| falling due after more | 11 | | (160,414) | | (161,263) |
| than one year | | | | | |
| | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Net liabilities | | | (20,332) | | (15,607) |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
| Capital and reserves | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Called up share | 13 | | 50 | | 50 |
| capital | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Profit and loss | 14 | | (20,382) | | (15,657) |
| account | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| | | | | | |
+------------------------+-------+-+-----------+-+-----------+
| Shareholders' deficit | 15 | | (20,332) | | (15,607) |
+------------------------+-------+-+-----------+-+-----------+
These financial statements for Connect M77/GSO plc, company registration number
04698798, were approved by the Board of Directors on 21 July 2010 and signed on
its behalf by:
A C Beauchamp
Director
Notes to the accounts
For the year ended 31 March 2010
1 Accounting policies
A summary of the principal accounting policies of the Company, all of which have
been applied consistently during the year and the preceding year, is set out
below:
a) Basis of preparation
The financial statements have been prepared under the historical cost convention
and in accordance with applicable United Kingdom law and accounting standards.
They include the results of the activities described in the Directors' Report
all of which are continuing.
FRS 29 requires disclosures and presentation of financial instruments. The
Company is a wholly owned subsidiary of Connect M77/GSO Holdings Limited and
accordingly is exempt from the disclosures required under FRS 29 (Financial
Instruments: Disclosures) as these are detailed in the accounts of Connect
M77/GSO Holdings Limited.
b) Cash Flow Statement
The Company is exempt from the requirement of Financial Reporting Standard No. 1
(Revised) to prepare a cash flow statement as it is a wholly owned subsidiary of
Connect M77/GSO Holdings Limited, which prepares consolidated financial
statements that include a cash flow statement and are publicly available.
c) Turnover
Revenue is recognised as turnover as it is earned and represents amounts due,
exclusive of value added tax, in respect of services provided under the DBFO
Contract.
d) Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and
provision for impairment.
The cost of the DBFO roads represents original cost plus capitalised interest on
finance up to the date of completion. Depreciation of this cost is on the basis
of usage over the period of the concession to operate the road and commenced
when the road came into full use.
The carrying values of the tangible fixed assets are reviewed annually by the
Directors to determine whether there has been any impairment to their values.
e) Taxation
Corporation tax is provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements. Deferred tax assets
are recognised to the extent that it is regarded as more likely than not that
they will be recovered. Deferred tax assets and liabilities are not discounted.
f) Finance costs
Finance costs in relation to the fixed rate senior secured bonds are recognised
at a constant rate in accordance with the carrying value of these bonds.
Notes to the accounts (continued)
For the year ended 31 March 2010
1 Accounting policies (continued)
g) Fixed rate senior secured bonds
Senior secured bonds are initially stated at the amount of the net proceeds
after deduction of related issue costs. The carrying amount is increased by the
finance cost in respect of the accounting period and reduced by payments made in
that period.
h) Going concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Directors'
Report on pages 1 and 2.
The Directors have reviewed the Company's supply chain and do not believe that
any specific risk has been identified. The Directors have also considered the
ability of the client (East Renfrewshire Council) to continue to pay unitary
fees due under the concession contract to the Company and do not consider this
to be a material risk. Despite performance to date the Company's forecasts and
projections, taking account of reasonably possible counterparty performance,
show the Company expects to be able to continue to operate for the full term of
the concession. After making enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the annual report and accounts.
2 Segmental information
Turnover
Turnover by origin and destination:
+----------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+----------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+----------------------------+---------+----------+---------+
| | | | |
+----------------------------+---------+----------+---------+
| United Kingdom | 12,264 | | 12,340 |
+----------------------------+---------+----------+---------+
| | | | |
+----------------------------+---------+----------+---------+
All activities are from continuing operations in the United Kingdom.
+-----------------------------+---------+----------+---------+
| | | | |
+-----------------------------+---------+----------+---------+
| 3 Operating profit | | | |
| | | | |
| Operating profit is stated | | | |
| after charging: | | | |
+-----------------------------+---------+----------+---------+
| | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
+-----------------------------+---------+----------+---------+
| | | | |
+-----------------------------+---------+----------+---------+
| Fees payable to the | 15 | | 15 |
| Company's auditors for the | | | |
| audit of the Company's | | | |
| annual accounts | | | |
+-----------------------------+---------+----------+---------+
| Total audit fees | 15 | | 15 |
+-----------------------------+---------+----------+---------+
| | | | |
+-----------------------------+---------+----------+---------+
| Depreciation | 4,895 | | 4,776 |
+-----------------------------+---------+----------+---------+
Amounts payable to Deloitte LLP by the Company in respect of non audit services
were GBPnil (2009: GBPnil)
The Directors received no salary, fees or other benefits in the performance of
their duties in the current and preceding year. All staff costs are borne by
the shareholders of Connect M77/GSO Holdings Limited who second employees to the
Company and charge related service costs. The Company had no employees in the
year (2009 - none).
Notes to the accounts (continued)
For the year ended 31 March 2010
+---------------------------------+---------+----------+-----------------+
| 4 Interest receivable | | | |
| and similar income | 2010 | | 2009 |
+---------------------------------+---------+----------+-----------------+
| | GBP'000 | | GBP'000 |
| | | | |
+---------------------------------+---------+----------+-----------------+
| | | | |
+---------------------------------+---------+----------+-----------------+
| Bank interest receivable | 102 | | 510 |
+---------------------------------+---------+----------+-----------------+
+---------------------------------+------------------+----------+---------+
| 5 Interest payable and | 2010 | | 2009 |
| similar charges | | | |
+---------------------------------+------------------+----------+---------+
| | | | GBP'000 |
| | GBP'000 | | |
+---------------------------------+------------------+----------+---------+
| | | | |
+---------------------------------+------------------+----------+---------+
| Secured bond interest | 8,551 | | 8,710 |
+---------------------------------+------------------+----------+---------+
| Secured loan stock interest | 2,168 | | 2,036 |
+---------------------------------+------------------+----------+---------+
| Total interest payable and | 10,719 | | 10,746 |
| similar charges | | | |
+---------------------------------+------------------+----------+---------+
+---------------------------------+---------+----------+---------+
| 6 Tax credit/(charge) | 2010 | | 2009 |
| on loss on ordinary activities | | | |
+---------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+---------------------------------+---------+----------+---------+
| The tax credit/(charge) is | | | |
| based on the loss for the year | | | |
| and comprises: | | | |
+---------------------------------+---------+----------+---------+
| Current year tax credit | 538 | | 406 |
+---------------------------------+---------+----------+---------+
| Prior year adjustment | - | | 1,317 |
+---------------------------------+---------+----------+---------+
| Total current tax credit | 538 | | 1,723 |
+---------------------------------+---------+----------+---------+
| | | | |
+---------------------------------+---------+----------+---------+
| Deferred tax credit/(charge) | 35 | | (2,119) |
| (see note 8b) | | | |
+---------------------------------+---------+----------+---------+
| Total tax credit/(charge) on | 573 | | (396) |
| loss on ordinary activities | | | |
+---------------------------------+---------+----------+---------+
The difference between the total current tax shown above and the amount
calculated by applying the standard rate of UK corporation tax to the loss
before tax is as follows:
+---------------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+---------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
| | | | |
+---------------------------------+---------+----------+---------+
| | | | |
+---------------------------------+---------+----------+---------+
| Loss on ordinary activities | (5,298) | | (4,592) |
| before tax | | | |
+---------------------------------+---------+----------+---------+
| Tax on loss on ordinary | | | |
| activities at standard UK | 1,483 | | 1,286 |
| corporation tax rate of 28% | | | |
| (2009: 28%) | | | |
+---------------------------------+---------+----------+---------+
| | | | |
| Effects of: | | | |
+---------------------------------+---------+----------+---------+
| Other timing differences | (127) | | (158) |
+---------------------------------+---------+----------+---------+
| Current year losses surrendered | (818) | | (722) |
| for part payment | | | |
+---------------------------------+---------+----------+---------+
| Prior year losses surrendered | - | | 1,317 |
| for part payment | | | |
+---------------------------------+---------+----------+---------+
| Current tax credit for the year | 538 | | 1,723 |
+---------------------------------+---------+----------+---------+
Notes to the accounts (continued)
For the year ended 31 March 2010
+-------------------------+------+----------+-----+----------+---------+
| 7 Tangible | | | | | |
| fixed assets | | | | | |
| | | | | | |
| DBFO Roads | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| | | | | | GBP'000 |
+-------------------------+------+----------+-----+----------+---------+
| Cost | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| At 1 April 2009 and 31 | | | | | 156,373 |
| March 2010 | | | | | |
| | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| | | | | | |
+-------------------------+------+----------+-----+----------+---------+
Depreciation
+-------------------------+------+----------+-----+----------+---------+
| At 1 April 2009 | | | | | 18,118 |
+-------------------------+------+----------+-----+----------+---------+
| Charge for the year | | | | | 4,895 |
+-------------------------+------+----------+-----+----------+---------+
| | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| At 31 March 2010 | | | | | 23,013 |
+-------------------------+------+----------+-----+----------+---------+
| | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| Net book value | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| At 31 March 2010 | | | | | 133,360 |
+-------------------------+------+----------+-----+----------+---------+
| | | | | | |
+-------------------------+------+----------+-----+----------+---------+
| At 31 March 2009 | | | | | 138,255 |
+-------------------------+------+----------+-----+----------+---------+
The cost of the DBFO Road includes cumulative capitalised interest of
GBP13,139,000 (2009 - GBP13,139,000)
Finance costs have been capitalised within fixed assets based on a fixed rate of
5.404%.
+-------------------------------+---------+----------+---------+
| 8 Debtors | | | |
| | 2010 | | 2009 |
+-------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------+---------+----------+---------+
| Due within one year: | | | |
+-------------------------------+---------+----------+---------+
| Trade debtors | 1,298 | | 1,317 |
+-------------------------------+---------+----------+---------+
| Other debtors - group relief | 538 | | 1,723 |
| receivable | | | |
+-------------------------------+---------+----------+---------+
| | 1,836 | | 3,040 |
+-------------------------------+---------+----------+---------+
| | | | |
+-------------------------------+---------+----------+---------+
+-------------------------------+-------+----------+-------+
| Due after one year: | | | |
+-------------------------------+-------+----------+-------+
| Deferred taxation | 2,058 | | 2,023 |
+-------------------------------+-------+----------+-------+
| | 2,058 | | 2,023 |
+-------------------------------+-------+----------+-------+
a) Deferred taxation
+-------------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+-------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
| | | | |
+-------------------------------+---------+----------+---------+
| Other timing differences | (3,480) | | (3,515) |
+-------------------------------+---------+----------+---------+
| Losses not utilised | 5,538 | | 5,538 |
+-------------------------------+---------+----------+---------+
| At 31 March | 2,058 | | 2,023 |
+-------------------------------+---------+----------+---------+
b) Movement during the year
+-------------------------------+----------+----------+---------+
| | 2010 | | 2009 |
+-------------------------------+----------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------+----------+----------+---------+
| | | | |
+-------------------------------+----------+----------+---------+
| At 1 April | 2,023 | | 4,142 |
+-------------------------------+----------+----------+---------+
| Current year credit/(charge) | 128 | | (2,119) |
| to the profit and loss | (93) | | - |
| account | | | |
+-------------------------------+ +----------+ +
| Prior year adjustment | | | |
+-------------------------------+----------+----------+---------+
| At 31 March | 2,058 | | 2,023 |
+-------------------------------+----------+----------+---------+
Notes to the accounts (continued)
For the year ended 31 March 2010
9 Investments - due within one year
+-------------------------------+------+----------+------+
| | | | |
+-------------------------------+------+----------+------+
Investments due within one year represent amounts held on deposit with a
financial institution which are not available for withdrawal without penalty in
under 24 hours and, in accordance with the Company's funding arrangements, are
restricted and cannot be used to fund the ongoing operations of the Company.
+-------------------------------+---------+----------+---------+
| 10 Creditors: | | | |
| amounts falling due within | 2010 | | 2009 |
| one year | | | |
+-------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------+---------+----------+---------+
| | | | |
+-------------------------------+---------+----------+---------+
| Trade creditors | 61 | | 59 |
+-------------------------------+---------+----------+---------+
| Secured loan stock interest | 4,584 | | 3,397 |
+-------------------------------+---------+----------+---------+
| Accruals | 506 | | 517 |
+-------------------------------+---------+----------+---------+
| VAT payable | 116 | | 137 |
+-------------------------------+---------+----------+---------+
| Fixed rate guaranteed senior | 1,003 | | 982 |
| secured bonds | | | |
+-------------------------------+---------+----------+---------+
| | 6,270 | | 5,092 |
+-------------------------------+---------+----------+---------+
| | | | |
+-------------------------------+---------+----------+---------+
| | | | |
| 11 Creditors: | 2010 | | 2009 |
| amounts falling due after | | | |
| more than one year | | | |
+-------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------+---------+----------+---------+
| | | | |
+-------------------------------+---------+----------+---------+
| Fixed rate guaranteed senior | 145,549 | | 146,398 |
| secured bonds | | | |
+-------------------------------+---------+----------+---------+
| Secured loan stock | 14,865 | | 14,865 |
+-------------------------------+---------+----------+---------+
| | 160,414 | | 161,263 |
+-------------------------------+---------+----------+---------+
Fixed rate guaranteed senior secured bonds due 2034 of GBP152,429,000 were
issued on 7 May 2003. The bonds have been unconditionally and irrevocably
guaranteed by Syncora Guarantee (UK) Limited (formerly XL Capital Assurance (UK)
Limited) for payment of principal and interest.
Interest on the bonds is payable semi-annually in arrears on 31 March and 30
September in each year at a fixed rate of 5.404% per annum commencing on 30
September 2003.
Unless previously redeemed or purchased and cancelled, the bonds will mature on
31 March 2034 and are subject to redemption in part from, and including, 30
September 2006 in accordance with the amortisation schedule set out in the bonds
offering circular.
The secured loan stock bears interest at 12.1% per annum and accrues from the
date of final completion. It is redeemable in instalments between 2010 and
2035, or as the Company elects, but subject to certain restrictions in the
collateral deed. The secured loan stock is held by the Company's parent
company. The Company's parent company has issued loan stock to its immediate
shareholders with identical terms and conditions.
All borrowings contain either a fixed or varying security interest over the
assets of the Company, as defined by an intercreditor agreement. The bonds have
certain covenants attached.
Fixed rate guaranteed senior secured bonds are stated net of unamortised issue
costs of GBP3,269,000 (2009 - GBP3,423,000). The Company incurred total issue
costs of GBP4,403,000 in respect of the fixed rate bonds. These costs, together
with the interest expense, are allocated to the profit and loss amount over the
term of the bonds. Interest is calculated using the effective interest rate
method.
Notes to the accounts (continued)
For the year ended 31 March 2010
11 Creditors: amounts falling due after more than one year (continued)
The Company has committed borrowing facilities available of GBP167,294,000 which
have been fully drawn as at 31 March 2010 (2009 - GBP167,294,000).
+---------+---------+-------+---------+---------+---------+----------+---------+---------+
| | | 2010 | | 2009 |
+---------+---------------------------+-------------------+----------+-------------------+
| | | GBP'000 | | GBP'000 |
+---------+---------------------------+-------------------+----------+-------------------+
| | | | | |
+---------+---------------------------+-------------------+----------+-------------------+
| | Fixed rate guaranteed | 152,429 | | 152,429 |
| | senior secured bonds | | | |
+---------+---------------------------+-------------------+----------+-------------------+
| | Secured loan stock | 14,865 | | 14,865 |
+---------+---------------------------+-------------------+----------+-------------------+
| | | 167,294 | | 167,294 |
+---------+---------------------------+-------------------+----------+-------------------+
| | | | | |
+-------------------+-------+-------------------+------------------------------+---------+
| | | | | | | | | |
+---------+---------+-------+---------+---------+---------+----------+---------+---------+
+-------------------------------+---------+----------+---------+
| The borrowings are repayable | 2010 | | 2009 |
| as follows: | | | |
+-------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+-------------------------------+---------+----------+---------+
| | | | |
+-------------------------------+---------+----------+---------+
| Repayable within one year | 1,003 | | 982 |
+-------------------------------+---------+----------+---------+
| Repayable between one and two | 1,180 | | 1,003 |
| years | | | |
+-------------------------------+---------+----------+---------+
| Repayable between two and | 6,108 | | 5,023 |
| five years | | | |
+-------------------------------+---------+----------+---------+
| Repayable after five years | 153,126 | | 155,237 |
+-------------------------------+---------+----------+---------+
| | 161,417 | | 162,245 |
+-------------------------------+---------+----------+---------+
+----------------------------------------+------+
| 12 Financial instruments and | |
| derivatives | |
+----------------------------------------+------+
The Company's financial instruments comprise borrowings. The main purpose of
these financial instruments is to raise finance for the construction and
operation of the DBFO roads. The Company has not entered into derivatives
transactions. It is, and has been throughout the year under review, the
Company's policy that no trading in financial instruments shall be undertaken.
The main risk arising from the Company's financial instruments is liquidity
risk. The Board's policy for managing this risk is summarised below:
Liquidity risk
The Company's policy throughout the year has been, in order to ensure continuity
of funding, that substantially all of its borrowings should mature in more than
one year.
Interest rate risk
The Company has no exposure to interest rate risk as all its borrowings are at a
fixed rate of interest.
Foreign currency risk
The Company has no foreign currency transactions. All of the Company's
borrowings are denominated in sterling.
Interest rate profile
The interest rate profile of the Company's financial liabilities was as follows:
+--------------------------------+---------+----------+---------+
| | 2010 | | 2009 |
+--------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+--------------------------------+---------+----------+---------+
| | | | |
+--------------------------------+---------+----------+---------+
| Fixed rate borrowings | 161,417 | | 162,245 |
+--------------------------------+---------+----------+---------+
Notes to the accounts (continued)
For the year ended 31 March 2010
+----------------------------------------+--------+
| 12 Financial instruments and | |
| derivatives (continued) | |
+----------------------------------------+--------+
The fixed rate bonds have interest payable at 5.404% per annum and the secured
loan stock has interest payable at 12.1% per annum.
Maturity of financial liabilities
The maturity profile of the Company's financial liabilities was as follows:
+--------------------------------+---------+----------+---------+
| Borrowings | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
+--------------------------------+---------+----------+---------+
| Repayable within one year | 1,003 | | 982 |
+--------------------------------+---------+----------+---------+
| Repayable between one and two | 1,180 | | 1,003 |
| years | | | |
+--------------------------------+---------+----------+---------+
| Repayable between two and five | 6,108 | | 5,023 |
| years | | | |
+--------------------------------+---------+----------+---------+
| Repayable after five years | 153,126 | | 155,237 |
+--------------------------------+---------+----------+---------+
| | 161,417 | | 162,245 |
+--------------------------------+---------+----------+---------+
Fair values
Set out below is a comparison of book values and fair values of the Company's
financial instruments.
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| | Book | | Book | | Fair | | Fair |
| | value | | value | | value | | value |
| | 2010 | | 2009 | | 2010 | | 2009 |
| | GBP000 | | GBP'000 | | GBP000 | | GBP'000 |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| Primary financial | | | | | | | |
| instruments held or | | | | | | | |
| issued to finance | | | | | | | |
| the Company's | | | | | | | |
| operations | | | | | | | |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| | | | | | | | |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| Fixed rate secured | 146,552 | | 147,380 | | 118,868 | | 110,492 |
| bonds | | | | | | | |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| Secured loan stock | 14,865 | | 14,865 | | 32,949 | | 35,152 |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
| | 161,417 | | 162,245 | | 151,817 | | 145,644 |
+----------------------+---------+----------+---------+----------+---------+----------+---------+
Market value has been used to determine the fair value of the financial
instruments at 31 March 2010 and 31 March 2009.
+-------------------+----+----------+----------+----+---------+----------+---------+
| 13 | | | 2010 | | 2009 |
| Called up share | | | | | |
| capital | | | | | |
+-------------------+--------------------------+----+---------+----------+---------+
| | | | | | GBP'000 | | GBP'000 |
+-------------------+----+----------+----------+----+---------+----------+---------+
| | | | | | | | |
+-------------------+----+----------+----------+----+---------+----------+---------+
| Allotted, called | | | | | | | |
| up and fully paid | | | | | | | |
+-------------------+----+----------+----------+----+---------+----------+---------+
| 50,000 ordinary | | | | | 50 | | 50 |
| shares of GBP1 | | | | | | | |
| each | | | | | | | |
+-------------------+----+----------+----------+----+---------+----------+---------+
14 Profit and loss account
+---------------------------------+----------+----------+----------+
| | 2010 | | 2009 |
+---------------------------------+----------+----------+----------+
| | GBP'000 | | GBP'000 |
+---------------------------------+----------+----------+----------+
| | | | |
+---------------------------------+----------+----------+----------+
| At 1 April | (15,657) | | (10,669) |
+---------------------------------+----------+----------+----------+
| Loss for the financial year | (4,725) | | (4,988) |
+---------------------------------+----------+----------+----------+
| At 31 March | (20,382) | | (15,657) |
+---------------------------------+----------+----------+----------+
Notes to the accounts (continued)
For the year ended 31 March 2010
+---------------------------------+----------+----------+----------+
| 15 Reconciliation of | 2010 | | 2009 |
| movements in shareholders' | | | |
| deficit | | | |
+---------------------------------+----------+----------+----------+
| | GBP'000 | | GBP'000 |
+---------------------------------+----------+----------+----------+
| | | | |
+---------------------------------+----------+----------+----------+
| Opening shareholders' deficit | (15,607) | | (10,619) |
+---------------------------------+----------+----------+----------+
| Loss for the financial year | (4,725) | | (4,988) |
+---------------------------------+----------+----------+----------+
| Closing shareholders' deficit | (20,332) | | (15,607) |
+---------------------------------+----------+----------+----------+
+---------------------------------+---------+----------+---------+
| 16 Capital commitments | 2010 | | 2009 |
+---------------------------------+---------+----------+---------+
| | GBP'000 | | GBP'000 |
+---------------------------------+---------+----------+---------+
| | | | |
+---------------------------------+---------+----------+---------+
| Contracted but not provided for | 335 | | 335 |
+---------------------------------+---------+----------+---------+
17 Related party transactions
As a subsidiary of Connect M77/GSO Holdings Limited, the Company has taken
advantage of the exemption in FRS 8 "Related Party Disclosures" from disclosing
transactions with other members of the Group headed by Connect M77/GSO Holdings
Limited.
18 Ultimate parent companies and controlling parties
The Company's immediate parent company is Connect M77/GSO Holdings Limited,
which is incorporated in Great Britain and registered in England and Wales.
Connect M77/GSO Holdings Limited is the parent company of the largest and
smallest group of which the Company is a member and for which group accounts are
drawn up. Copies of these accounts are available from 6th Floor, 350 Euston
Road, Regent's Place, London NW1 3AX.
The Company is jointly controlled by Balfour Beatty plc and Barclays Integrated
Infrastructure Fund (acting by its manager, Barclays Private Equity Limited).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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