Investment property is stated at fair value as at the Balance
Sheet date. Gains or losses arising from changes in fair values are
included in the Consolidated Statement of Comprehensive Income in
the year in which they arise. The fair value of investments
properties is determined by independent real estate valuation
experts using recognised valuation techniques. The fair values are
determined based on recent real estate transactions with similar
characteristics and locations to those of the Group's assets.
The determination of the fair value of investment properties
requires the use of estimates such as future cash flows from the
assets. The estimates of the future cash flows reflect factors such
as repair and conditions of the properties, lease terms, future
lease events, as well as other relevant factors for the particular
investment. These estimates are based on local market conditions
existing at Balance Sheet date.
Fair value of financial instruments
When the fair value of financial assets and financial
liabilities recorded in the Consolidated Balance Sheet cannot be
derived from active markets, they are determined using a variety of
valuation techniques that include the use of mathematical models.
The input to these models is taken from observable markets where
possible, but where this is not feasible, a degree of judgement is
required in establishing fair value. The judgements include
considerations of liquidity and model inputs such as credit risk
(both own and counterparty's), correlation and volatility. Changes
in assumptions about these factors could affect the reported fair
value of financial instruments. The models are calibrated regularly
and tested for validity using prices from any observable current
market transactions in the same instrument (without modification or
repackaging) or based on any available observable market data.
3. Related party disclosure
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Redeemable preference shares
On 19 December 2003 the Company issued 6,000,000 25p redeemable
zero dividend preference shares for GBP6,000,000 to The Standard
Life Assurance Company. On 10 July 2006 these shares were
transferred to Standard Life Assurance Limited. These shares have a
nominal value of GBP1,500,000 and are redeemable by the Company on
the tenth anniversary of admission at a redemption price of
GBP1,7908. These shares do not carry any voting rights. On 29 June
2011, an extraordinary general meeting was held which approved the
conversion of the preference shares into ordinary shares in
accordance with the terms of the Circular to Shareholders. On 21
July 2011, the redeemable preference shares were converted to
ordinary shares.
Ordinary share capital
Standard life Investment Funds Limited held 14,982,501 of the
issued ordinary shares at the Balance Sheet date on behalf of its
Unit Linked Property Funds (2010:16,644,609). This equates to 11.0%
(2010:14.5%) of the ordinary share capital in issue at the Balance
Sheet date. Standard Life Assurance Limited held 14,724,580 of the
issued ordinary shares at the Balance Sheet date on behalf of its
heritage with profits fund (2010: GBPnil). This equates to 10.8%
(2010: 0%) of the ordinary share capital in issue at the Balance
Sheet date. Neither Standard Life Investment Funds Limited or
Standard Life Assurance Limited are considered to exercise control
of the Group individually or together. Those parties related to the
Investment Manager waived their rights to commission on the initial
purchase of these shares in order to maintain the fairness of the
transaction to all parties.
Director's remuneration
2011 2010
GBP GBP
David Moore (resigned as chairman
24 May 2011) 24,955 26,875
Richard Barfield 22,500 20,625
John Hallam (resigned 30 June 2010) - 9,375
Sally-Ann Farnon (appointed 30
June 2010) 22,500 11,250
Shelagh Mason 22,500 20,625
Paul Orchard-Lisle (appointed chairman
24 May 2011) 26,260 20,625
118,715 109,375
Directors expenses 3,412 2,716
122,127 112,091
David Moore is a partner of Mourant Ozannes Advocates and
Notaries Public (Guernsey) who are the Group's solicitors. As at 31
December 2011, the fees paid during the year to Mourant Ozannes
Advocates and Notaries Public (Guernsey) were GBP28,161
(2010:GBP1,252).
Investment Manager
Standard Life Investments (Corporate Funds) Limited is the
Investment Manager.
4 COMMITMENTS
As at 31 December 2011, the Group had exchanged conditional
contracts with third parties and is committed to sell Lister House,
Leeds for GBP1.025m (2010: GBPnil).
As at 31 December 2011, the Group had agreed heads of terms with
RBS for a new loan facility of GBP84,432,692 with a maturity date
of 16 December 2018.
5 EVENTS AFTER THE BALANCE SHEET DATE
On 1 January 2012 one of the Group's shareholders, Standard life
Investment Funds Limited, transferred its assets to Standard Life
Assurance Limited.
On 20 January 2012 the Group completed the sale of Lister House,
an office investment in Leeds for GBP1.025m.
On 20 January 2012 the Company completed the drawdown of
GBP84,432,692 loan with RBS and simultaneously repaid the old loan
facility. The new facility is repayable on 16 December 2018.
Interest is payable at a rate equal to the aggregate of 1 month
Libor, a margin of 1.65% (below 40% LTV) or 1.75% (40% to 60% LTV
inclusive) or 1.95% (above 60% LTV).
Under the terms of the loan facility there are certain events
which would entitle RBS to terminate the loan facility and demand
repayment of all sums due. Included in these events of default is
the financial undertaking relating to the loan to value percentage.
The loan agreement notes that the loan to value percentage is
calculated as the loan amount less the amount of any Sterling cash
deposited within the security of RBS divided by the gross secured
property value, and that this percentage should not exceed 65% for
the first five years and then 60% from the fifth anniversary to
maturity. The arrangement fee for the new facility is GBP675,462
which was paid to RBS on signing of the heads of terms on 22
December 2011. Further directly attributable transaction costs of
GBP116,538 are to be incurred and have not been accounted for as at
the balance sheet date. The new loan facility took affect on 20
January 2012 which is why the transaction was not recorded at the
balance sheet date.
On 20 January 2012 the Company completed an interest rate swap
of a notional amount of GBP12,432,692 with RBS. This interest rate
swap has a maturity of 16 December 2018. Under the swap the Company
has agreed to receive a floating interest rate linked to 3 month
Libor and pay a fixed interest rate of 1.77125%
On 20 January 2012 the Company completed an interest rate swap
of a notional amount of GBP72,000,000 with RBS. The interest rate
swap effective date is 30 December 2013 and a maturity date of 16
December 2018. Under the swap the Company has agreed to receive a
floating interest rate linked to 3 month Libor and pay a fixed
interest rate of 2.0515%.
On 24 February 2012 a dividend of GBP1,548,038 (2010:
GBP1,258,400) in respect of the quarter to 31 December 2011 was
paid.
Additional Notes to the Annual Financial Report
This Annual Financial Report announcement is not the Company's
statutory accounts for the year ended 31 December 2011. The
statutory accounts for the year ended 31 December 2011 received an
audit report which was unqualified and did not include a reference
to any matters to which the auditors drew attention by way of
emphasis without qualifying their report.
The statutory accounts for the financial year ended 31 December
2011 were approved by the Directors on 23 March 2012. The Company's
AGM is to be held on the 15 May 2012. The Annual Report and Notice
of AGM will be sent to shareholders in April 2012 and will be
available for download from the Company's website hosted by the
Investment Manager (www.standardlifeinvestments.co.uk/its) .
Please note that past performance is not necessarily a guide to
the future and that the value of investments and the income from
them may fall as well as rise. Investors may not get back the
amount they originally invested.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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