RNS Number:9856X
Property Acquisition & ManagementLd
26 April 2004
PART 2
30. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the disclosure exemption allowed by Financial Reporting Standard 8 "Related
Party Disclosures" in respect of related transactions with other group companies.
The relationship between the Group and Collins Stewart Fund Management Limited is disclosed in the Report of the
Directors. The Group receives stockbroking services from Collins Stewart Limited in respect of its United Kingdom
listing responsibilities and Collins Stewart (CI) Limited in respect of its Channel Island Stock Exchange
responsibilities, for which a fee of #35,000 per annum is paid.
SR Le Prevost is managing director of Collins Stewart (CI) Limited and a director of Collins Stewart Fund
Management Limited and Collins Stewart Property Fund Management Limited.
CL Walker-Robson is managing director of Collins Stewart Property Fund Management Limited and a director of CNC
Properties Limited.
The management fees charged to/(from) CNC Properties Limited and CNC Property Management Limited involving related
parties during the year are:
CNC Properties Limited CNC Property Management Limited
2003 2002 2003 2002
# # # #
Nelson Investments 63,325 - - -
Nelson Property Holdings Limited - 42,438 - (22,175)
Nelson Land Investments Limited - 24,956 - (7,525)
As at 31 December 2003 CNC Properties Limited and CNC Property Management Limited owed a total amount of #109,437
and #892,895 respectively to Nelson Investments Limited and its subsidiaries.
31. FINANCIAL ASSETS AND LIABILITIES INTEREST RATE DISCLOSURE
Financial summary
The Group has taken advantage of the exemption under Financial Reporting Standard 13 "Derivatives and Other
Financial Instruments", that short-term debtors and creditors can be excluded from disclosure on the ground that
they do not have a significant impact on the risk profile of the Group.
The Group's financial instruments, other than derivatives, comprise investments, borrowings, long-term loans, cash
and liquid resources and various items such as trade debtors, trade creditors etc. that arise directly from its
operations. The main purpose of these financial instruments is to raise finance for the Group's operations.
The Group also enters into derivative transactions (principally interest rate swaps, caps and floors). The purpose
of these transactions is to manage interest rate risks arising from the Group's operations and its sources of
finance.
The main risks arising from the Group's financial instruments are market price, interest rate, liquidity and
foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are
summarised below.
Market price risk
The Group is exposed to movements in the value of the remaining bond portfolio, which can vary with the credit
ratings of the underlying issuers.
Interest rate risk
The Group finances its operations through a mixture of bank borrowings and retained profits. The Group borrows in
desired currencies at both fixed and floating rates of interest and then uses interest rate swaps, caps and floors
to generate the desired profile and manage the Group's exposure to interest rate fluctuations.
Liquidity risk
The Group has entered into loan agreements with The Royal Bank of Scotland for up to #100 million of borrowing (see
note 22). The terms of the Group's borrowings entitle the lender to require early repayment should the Group breach
any of the covenants placed on it by The Royal Bank of Scotland Group.
Foreign exchange risk
The Group still holds a small number of Euro denominated bonds. As it is the intention to liquidate the bond
portfolio, and due to the minimal remaining value of Euro denominated bonds this currency risk has not been hedged.
Financial assets
Listed investments held by PAM High are fixed interest bearing securities. These are disclosed in note 17. The fair
value of the investments is represented by bid-market prices which, after discussion between the Board and the
Investment Manager, have been valued downwards to take account of the high volatility and poor liquidity in the
market.
Cash at bank included #2,452,000 (2002: #903,000) which was held in separate bank accounts in respect of rental
deposits and retentions. The Group holds financial assets of #16,896,000 (2002: #20,302,000) which are recoverable
after more than one year. These assets are not interest bearing and, in the opinion of the Directors, their fair
value is not materially different from their carrying value.
Interest rate risk-profile
Financial assets - Group
2003 2002
Fixed rate Floating rate Fixed rate Floating rate
financial assets financial assets financial assets financial assets
Total Total
#'000 #'000 #'000 #'000 #'000 #'000
Listed investments 466 - 466 1,437 - 1,437
Cash at bank - 7,635 7,635 - 5,912 5,912
The above excludes short-term debtors as all the material amounts are non-interest bearing.
Fixed rate financial assets
2003 2002
Weighted average Weighted average
Weighted average period Weighted average period
rate rate
% years % years
Sterling - medium term 10.37 6.47 10.14 5.18
Euro - medium term 11.65 6.26 8.58 7.04
Deutschmark - medium term 10.00 4.09 10.00 5.09
Financial liabilities - Group
2003 2002
Fixed rate Capped Floating Fixed rate Capped rate Floating
financial rate rate financial financial rate
liabilities financial financial Total liabilities liabilities financial Total
liabilities liabilities liabilities
Note #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Overdrafts - - 4,147 4,147 - - 1,648 1,648
Loan - - - - - - 65 65
notes
Sterling
building 1 6,123 - 9,576 15,699 8,306 - 10,113 18,419
society
debt
Sterling 2 80,000 - 444 80,444 80,000 7,000 8,859 98,859
bank debt
Total 86,123 - 14,167 100,290 88,306 7,000 20,686 115,992
Joint
ventures: 3 6,656 - 3,097 9,753 - - - -
Sterling
bank debt
92,779 - 17,264 110,043 88,306 7,000 20,686 115,992
1. The building society debt is priced at margins 1.25% and
1.50% above LIBOR
2. The bank debt is priced at margins of 0.85% and 1.50%
above LIBOR. Fixed rate bank debt reflects the effect of
interest rate swaps in transforming floating rate
liabilities into fixed rate liabilities.
3. Joint Venture sterling bank debt amounting to #4,656,000
(2002 - #nil) of fixed rate and #1,502,000 (2002 - #nil)
of floating rate financial liabilities is in respect of
Nelson Investments Limited and #2,000,000 (2002 - #nil)
of fixed rate and #1,595,000 (2002 - #nil) of floating
rate financial liabilities is in respect of Deanhill
Estates Limited.
The above analysis excludes short-term creditors as all material amounts are non-interest bearing and sterling
denominated.
Hedge profile - interest bearing liabilities - Group
2003 2002
Fixed rate financial Capped rate financial Fixed rate financial Capped rate financial
liabilities liabilities liabilities liabilities
Weighted Weighted Weighted Weighted
Weighted average Weighted average Weighted average Weighted average
average period average period average rate period average rate period
rate rate
Note % Years % years % years % years
Sterling
building 8.06 2.18 - - 8.01 2.66 - -
society
debt
Sterling 1 8.54 1.81 - - 8.54 2.81 10.00 0.25
bank
debt
JV bank 2 6.89 5.08 - - - - - -
debt
Group 8.42 2.06 - - 8.49 2.79 10.00 0.25
1. The Group benefits from the purchase of an interest
rate floor on a notional principal of #40.0 million at
a strike rate of 7.05% expiring in July 2005. The
benefit of this is not reflected in the average rates
provided above.
2. Through the joint venture the Group benefits from the
purchase of an interest rate floor on a notional
principal of #2.0 million at a strike rate of 6.65%
expiring in January 2007.
The fair value of the Group's financial liabilities are set out below:
2003 2002
Book Notional Fair Fair value Book Notional Fair Fair value
value principal value adjustment value principal value adjustment
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Financial
instruments
held or
issued to
finance the
joint
venture's
operations:
Loan notes - - - - 65 - 65 -
Building 6,123 - 6,379 (256) 8,306 n/a 8,785 (479)
society fixed
rate loans
Derivative
financial
instruments
held to
manage the
Group's
interest rate
exposure:
Interest rate - 80,000 3,448 (3,448) - 80,000 5,930 (5,930)
swaps -
Sterling
Interest rate - - - - - 7,000 - -
caps
Interest rate - 40,000 (1,508) 1,508 - 40,000 (2,761) 2,761
floors
Financial
instruments
held to
finance joint
venture
operations:
Interest rate - 6,656 72 (72) - - - -
swaps -
Sterling
Interest rate - 2,000 (113) 113 - - - -
floors
Gross fair (2,155) (3,648)
value
adjustment
Less tax 647 1,094
relief at 30%
Net fair (1,508) (2,554)
value
adjustment
Fixed rate debt and interest rate swaps have been valued by reference to the offered side of the yield curve
commencing on 31 December 2003 and ending on the contracted expiry dates.
Interest rate caps and floors have been valued on the basis that the instruments be purchased at prices prevailing
on 31 December 2003.
Hedge expiry
The maturity profile of the Group's interest rate hedge instruments are set out below:
Expiring hedge balances
2003 2002
#'000 #'000
Year 1 1,586 8,974
Year 2 70,428 1,400
Year 3 4,363 70,386
Year 4 12,057 4,547
Year 5 88 10,000
Later 4,247 -
92,799 95,307
32. NET CURRENCY POSITION ANALYSIS
The following analysis gives details of the Group's assets and liabilities at the year-end in Sterling based on the
currencies in which they are denominated to identify the extent to which the foreign currency exposures of the
Group are matched or unmatched.
2003 2002
Sterling Euro Deutschmark Total Sterling Euro Deutschmark Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Assets
Goodwill 440 - - 440 733 - - 733
Listed 49 228 189 466 290 931 216 1,437
investments
Other 3,603 - - 3,603 992 - - 992
investments
Investment 177,764 - - 177,764 168,310 - - 168,310
properties
Tangible fixed 7 - - 7 12 - - 12
assets
Property assets 10,933 - - 10,933 11,612 - - 11,612
Cash 7,620 15 - 7,635 5,719 193 - 5,912
Debtors 8,371 - - 8,371 7,516 4 - 7,520
208,787 243 189 209,219 195,184 1,128 216 196,528
Liabilities
Creditors (21,288) - - (21,288) (21,067) - - (21,067)
Loans (100,290) - - (100,290) (115,927) - - (115,927)
Minority (12,024) - - (12,024) (11,031) - - (11,031)
interests
(133,602) - - (133,602) 148,025 - - 148,025
75,185 243 189 75,617 47,159 1,128 216 48,503
33. ANALYSIS OF NET DEBT
At 1 January 2003 Cashflows Exchange difference At 31 December 2003
#'000 #'000 #'000 #'000
Cash at bank and in 5,912 1,719 4 7,635
hand
Overdraft (1,648) (2,499) - (4,147)
Net cash at bank and in 4,264 (780) 4 3,488
hand
Debt due within one (1,127) (912) - (2,039)
year
Debt due after more (113,151) 19,047 - (94,104)
than one year
Loan notes within one (65) 65 - -
year
Total (110,079) 17,420 4 (92,655)
34. RECONCILIATION OF NET REVENUE BEFORE FINANCE COSTS AND TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES
2003 2002
#'000 #'000
Net revenue before finance costs and taxation 10,525 12,587
Profit on sale of investment properties 2,529 -
Decrease in funding of joint ventures - (1,877)
Management fee charged to capital (691) (591)
Other charges to capital (2) (503)
Depreciation 5 5
Amortisation 293 623
Decrease in accrued income - 1,261
Decrease in property assets 679 1,666
Increase/(decrease) in creditors 151 (1,029)
(Increase)/decrease in other debtors (1,175) 172
Net cash inflow from operating activities 12,314 12,314
If you have any queries please contact:
Andrew Duquemin
Collins Stewart Fund Management Limited
TSB House
Le Truchot
St Peter Port
Guernsey
GY1 4AE
Tel: 01481 731 987
Fax: 01481 720 018
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IFMPTMMITMBI
Paq Intl (LSE:PAQ)
Historical Stock Chart
From Jun 2024 to Jul 2024
Paq Intl (LSE:PAQ)
Historical Stock Chart
From Jul 2023 to Jul 2024
