TIDMPTH
RNS Number : 8653U
Promethean PLC
06 December 2013
6 December 2012
Promethean PLC
("Promethean" or the "Company")
Annual Report and Accounts and AGM Notice
Promethean PLC announces that the Annual Report and Accounts for
the year ended 30 June 2013, Notice of AGM and Proxy Form have been
posted to shareholders and are available from the Company's website
(www.prometheanplc.com).
The Annual General Meeting of the Company will be held at
Clinch's House, Lord Street, Douglas, Isle of Man on 30 December
2013 at 10 a.m.
Enquiries:
Sir Peter Burt
Promethean PLC +44 (0) 207 479 7660
Stuart Gledhill / Jeff Keating / Laura Littley
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Chairman's Statement
The financial year to 30 June 2013 has seen Promethean plc (the
"Company") make good progress towards its goal of successfully
realising the remainder of its portfolio. At the start of July
2012, three investments remained and I am pleased to say that final
exits were achieved for two and that the third currently is in
negotiation.
Early repayment of the remaining InterMediactive loan notes on
acceptable terms was successfully negotiated and this concluded an
investment that has delivered substantial returns for the Company.
We also finalised an exit from January Loan Services Limited
("JLSL"). JLSL's performance justified the decision to acquire the
business from its failed parent Enterprise Group but the exit is
bitter sweet. JLSL is showing an exciting level of growth which,
had the Company been continuing as originally intended, might well
have resulted in a recovery of the original investment in
Enterprise Group.
The exit from the one remaining investment (TIS Group Limited
("TIS")) has proved less straight forward. Negotiations have
continued throughout the year and, as announced subsequent to the
Company's year end, the Company is in negotiation with a third
party in respect to a reverse takeover of the Company. As you know,
Promethean plc shares have been suspended until a conclusion has
been reached on the proposed reverse takeover. The proposed
transaction is conditional and requires the consent from three
separate groups of investors, including Promethean shareholders,
and so there can be no certainty that any transaction will be
completed. Professional advisers are preparing the formal
documentation necessary to obtain the approval of all parties
concerned and it is hoped that these documents will be sent out in
the next few weeks. The Board is strongly supportive of the
proposed transaction and will be recommending its acceptance by the
shareholders.
The Articles of Association of Promethean Plc require a
continuation vote by 31 December 2013. As discussed above, there
are still ongoing negotiations regarding the possible reverse
takeover. Accordingly, the directors will propose a continuation
resolution at the forthcoming annual general meeting but in such
circumstances strongly recommend shareholders to vote against
resolution 3.
In the event that the proposed reverse takeover transaction does
not proceed, the Board will discuss with shareholders the options
available on how best to deal with the situation where there will
be only the TIS investment and cash remaining in the Company.
As previously announced, the Fund management contract with
Promethean Investments LLP came to an end on 30 June 2013 and, as
had been agreed, no management fee was paid from 1 January 2013 to
30 June 2013. The Company remained liable for certain liabilities
of Promethean Investments LLP and a payment of GBP603,000 was made
by the Company to Promethean Investments LLP in January 2013 in
respect of these liabilities. Given the changes forced on the
Company's investment policy and the consequent accelerated
investment exits, the Manager has served the Company well and the
Board takes this opportunity to express our thanks to the
Manager.
P BURT
Sir Peter Burt
Chairman
5 December 2013
For further information, please contact:
Elizabeth Tansell
Promethean PLC +44 (0) 1624 641563
Stuart Gledhill
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Directors' Report
The directors present their report and accounts for the year
ended 30 June 2013.
Principal activities, trading review and future developments
Promethean plc (the "Company") is an investment company
established to build a concentrated portfolio of
investments that are actively managed to realise long-term
capital gains. Following a Company resolution in 2009, the Board's
objectives shifted to a policy of full divestment in the form of an
orderly realisation of all investments.
During the course of the year there were three material events
that added value to the PLC position. The first was the Cambria
distribution in specie which occurred on 9 July 2012 resulting in
each shareholder in the PLC receiving 0.74 shares in Cambria for
every 1 Ordinary share held in the Company. The second was the
repayment of the IMA loan notes for GBP3.3m and the payment of the
IMA deferred consideration. The final event was the exercise of the
January Loan Services Option agreements, where the board and NOMAD
negotiated an extra payment of GBP0.6m for the final option.
During the year the Company took over the management of the
investments from Promethean Investments LLP, who ceased to act as
Fund Manager. Therefore there is no Investment Manager's Review.
The ending of the management contract with the Fund Manager went
smoothly with full control being handed back to the board as per
the termination agreement.
Results and dividends
The Group's consolidated financial statements are set out on
pages 7 to 27. The Group reported net assets at the statement of
financial position date of GBP9.6m (2012: GBP17.1m) and in the year
to 30 June 2013 a loss attributable to the shareholders of GBP1.9m
(2012: GBP10.5m). No dividends were paid in this or the preceding
year.
Directors
The directors of the Company during the year and their
beneficial interest in the ordinary share capital of the Company
were:
As at 1 July Change in the As at 30 June 2013
2012 year
Sir Peter Burt* 550,000 nil 550,000
Martin Negre 50,000 nil 50,000
Elizabeth Tansell nil nil nil
* including connected parties
Creditors payment policy and practice
It is the Group's policy to agree terms of business with
suppliers prior to the supply of goods and services. In the absence
of any dispute, the Group pays, wherever possible, in accordance
with these agreed terms. Group trade creditors at the year-end
amounted to 30 days (2012: 30 days) of average supplies for the
year.
Key performance indicators
The directors monitor the business through growth in the net
asset value (total amount less total liabilities) using the Group
statement of financial position.
Going concern
The Company and Group are in the process of realising all
investments in accordance with the shareholders' vote on asset
emains divestment in 2009. As detailed in the Chairman's Statement,
and at the date of the approval of these accounts, there rsome
uncertainty as to the exact form of the final realisation and of
the future of the Company once all investments have been disposed.
As at the date of approval of these financial statements, and
subject to the shareholders continuation vote to be held at the
2013 AGM, the directors are confident that the Company will
continue to trade, in some form, for the foreseeable future and so
are satisfied that the accounts have been properly prepared on a
going concern basis.
Financial risk management
It is the responsibility of management to ensure that proper
controls are in place to maintain effective risk management in
every aspect of the Company's business. The main risks comprise
economic risk, treasury and funding risk, investment risk and
operational risk. Details of how management manages the risks are
set out in Note 16 to the financial statements.
Events after the Reporting Period
On 13 September 2013 the Promethean plc's share trading on AIM
was temporarily suspended pending an announcement of a submission
document. On 19 September 2013 the details of the suspension were
disclosed in an RNS announcement detailing the discussions held
between the Board, TIS Group ("TIS") and Protected Asset TEP Fund
plc ("PATF") relating to the establishment of an AIM listed
multi-strategy investment company utilising the existing Promethean
business. The Board is of the view that this opportunity represents
the best solution available in respect of the final investment
(TIS). At the time of these financial statements being authorised,
the transaction had not progressed to conclusion.
Auditors
Grant Thornton were appointed auditors on 26 November 2007.
Grant Thornton have expressed their willingness to continue in
office and being eligible they offer themselves for re-election at
the forthcoming AGM.
Directors' responsibilities
The directors are responsible for preparing the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to keep reliable accounting
records which allow financial statements to be prepared. In
addition, the directors have elected to prepare financial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union. The financial
statements are required to give a true and fair view of the state
of affairs and profit or loss of the Company and Group for that
year. In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and estimates that are reasonable and prudent;
-- state whether applicable International Financial Reporting
Standards have been followed, subject to anymaterial departures
disclosed and explained in the financial statements;
-- 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 Isle of Man 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 confirm that:
-- so far as each director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the auditors are
aware of that information.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
On Behalf of the Board
E TANSELL
Elizabeth Tansell
Director
5 December 2013
Report of the Independent Auditor to the Members of Promethean
plc
Independent Auditor's Report to the Members of Promethean
plc
We have audited the Group and Parent Company financial
statements of Promethean Plc for the year ended 30 June 2013 which
comprise the Group Statement of Comprehensive Income, the Group and
Company Statements of Financial Position, the Group and Company
Statement of Changes in Equity, the Group and Company Statements of
Cash Flows, and the related notes. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (as adopted by
the European Union).
This report is made solely to the Company's members, as a body,
in accordance with Section 80C(2) of the Isle of Man 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 auditor's 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 set out on page 5, 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
and express an opinion on 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.
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. In addition, we
read all the non-financial information in the annual report to
identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Opinion on financial statements
In our opinion the financial statements give a true and fair
view of the state of the Group's and Company's affairs as at 30
June 2013 and of the Group's loss for the year then ended in
accordance with International Financial Reporting Standards (as
adopted by the European Union).
GRANT THORNTON
GRANT THORNTON
Chartered Accountants
Third Floor
Exchange House
54/58 Athol Street
Douglas
ISLE OF MAN
IM1 1JD
5 December 2013
Group Statement of Comprehensive Income for the year to 30 June 2013
Year ended Year ended
30 June 30 June
2013 2012
Notes GBP'000 GBP'000
Investing Operations
Investment and other income 2 3,516 3,683
Realised and unrealised loss on financial
investments 2 (4,337) 12,279
----------- -----------
(821) (8,596)
Management and other expenses (1,003) (1,778)
----------- -----------
Loss from investing activities (1,824) (10,374)
----------- -----------
Loss before finance costs and taxation (1,824) (10,374)
Finance income 5 5 1
Finance costs 4 (38) (6)
----------- -----------
Loss before tax (1,857) (10,379)
Income tax expense 7 - (118)
----------- -----------
Group Loss and Total comprehensive
income (1,857) (10,497)
----------- -----------
Loss per share - (basic and diluted) 8 (4.11p) (23.23p)
Group Statement of Financial Position as at 30 June 2013
June 2013 June 2012
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair value through
profit & loss 10 6,311 16,807
---------- ----------
6,311 16,807
Current assets
Trade and other receivables 11 324 1,261
Cash and cash equivalents 12 3,064 717
---------- ----------
3,388 1,978
---------- ----------
Total assets 9,699 18,785
---------- ----------
Current liabilities
Trade and other payables 13 117 1,550
Taxation liabilities - 132
---------- ----------
117 1,682
---------- ----------
Net assets 9,582 17,103
---------- ----------
Equity
Share capital 14 452 452
Share premium 4,723 10,387
Retained earnings 4,407 6,264
---------- ----------
Total equity attributable to owners of
the parent 9,582 17,103
---------- ----------
Net asset per share 8 GBP0.21 GBP0.38
The financial statements on pages 7 to 27 were approved by the
board of directors on 5 December 2013 for
issue and are signed on its behalf by
Sir Peter Burt
Director
Elizabeth Tansell
Director
Company Statement of Financial Position as at 30 June 2013
June 2013 June 2012
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair value through
profit or loss 9 9,112 17,201
Current assets
Trade and other receivables 11 328 632
Cash and cash equivalents 12 259 85
---------- ----------
587 717
---------- ----------
Total assets 9,699 17,918
---------- ----------
Current liabilities
Trade and other payables 13 117 683
Taxation liabilities - 132
---------- ----------
117 815
---------- ----------
Net assets 9,582 17,103
---------- ----------
Equity
Share capital 14 452 452
Share premium 4,723 10,387
Retained earnings 4,407 6,264
---------- ----------
Total equity 9,582 17,103
---------- ----------
The financial statements on pages 7 to 27 were approved by the
board of directors on 5 December 2013 for
issue and are signed on its behalf by
Sir Peter Burt
Director
Elizabeth Tansell
Director
Statement of changes in equity for the year ended 30 June
2013
Group
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- --------
Capital return - (5,664) - (5,664)
--------- --------- ---------- --------
Transactions with owners - (5,664) - (5,664)
Loss for the year - - (1,857) (1,857)
--------- --------- ---------- --------
Loss for the year - - (1,857) (1,857)
Other comprehensive income - - - -
--------- --------- ---------- --------
Total comprehensive income for
the year - - (1,857) (1,857)
Balance as at 30 June 2013 452 4,723 4,407 9,582
--------- --------- ---------- --------
Company
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- --------
Capital return - (5,664) - (5,664)
--------- --------- ---------- --------
Transactions with owners - (5,664) - (5,664)
Loss for the year - - (1,857) (1,857)
--------- --------- ---------- --------
Loss for the year - - (1,857) (1,857)
Other comprehensive income - - - -
--------- --------- ---------- --------
Total comprehensive income for
the year - - (1,857) (1,857)
Balance as at 30 June 2013 452 4,723 4,407 9,582
--------- --------- ---------- --------
Statement of changes in equity for the year ended 30 June 2013
(continued)
Group
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 16,761 30,316
--------- --------- ---------- ---------
Capital return - (2,712) - (2,712)
Expenses relating to the return
of capital to the shareholders - (4) - (4)
--------- --------- ---------- ---------
Transactions with owners - (2,716) - (2,716)
Loss for the year - - (10,497) (10,497)
--------- --------- ---------- ---------
Loss for the year - - (10,497) (10,497)
Other comprehensive income - - - -
--------- --------- ---------- ---------
Total comprehensive income for
the year - - (10,497) (10,497)
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- ---------
Company
Share Share Retained Total
capital premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 16,761 30,316
--------- --------- ---------- ---------
Capital return - (2,712) - (2,712)
Expenses relating to the return
of capital to the shareholders - (4) - (4)
--------- --------- ---------- ---------
Transactions with owners - (2,716) - (2,716)
Loss for the year - - (10,497) (10,497)
--------- --------- ---------- ---------
Loss for the year - - (10,497) (10,497)
Other comprehensive income - - - -
--------- --------- ---------- ---------
Total comprehensive income for
the year - - (10,497) (10,497)
Balance as at 30 June 2012 452 10,387 6,264 17,103
--------- --------- ---------- ---------
Statement of Cash Flows for the year ended 30 June 2013
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash outflow from operating activities
Loss before tax for the year (1,857) (1,857) (10,379) (10,400)
Adjustments for :
Depreciation - - 13 -
Finance income (5) - (1) -
Finance cost 38 1 6 -
Investment impairments 4,596 1,471 11,957 13,005
Investment income (3,753) (238) - -
Decrease/(increase) in trade and other
receivables 697 305 (3,331) (604)
(Decrease)/increase in payables (1,433) (566) (198) 611
Tax paid (132) (132) (21) -
Loss on disposal of investments (22) - 322 -
-------- -------- --------- ---------
Net cash outflow in operating activities (1,871) (1,016) (1,632) (2,612)
-------- -------- --------- ---------
Cash inflow from investing activities
Disposal of subsidiaries - - 6 -
Proceeds from investment disposals 4,376 1,316 3,822 -
Purchase of investments (125) (125) (7) -
Finance income 5 - 1 -
-------- -------- --------- ---------
Net cash inflow in investing activities 4,256 1,191 3,822 -
-------- -------- --------- ---------
Cash outflow from financing activities
Capital return - - (2,716) (2,716)
Finance cost (38) (1) (6) -
-------- -------- --------- ---------
Net cash outflow in financing activities (38) (1) (2,722) (2,716)
Net increase/(decrease) in cash and
cash equivalents 2,347 174 (532) (104)
Cash and cash equivalents at beginning
of year 717 85 1,249 189
Cash and cash equivalents at end of
year 3,064 259 717 85
-------- -------- --------- ---------
Notes to the consolidated financial statements for the year
ended 30 June 2013
1. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with
applicable International Financial Reporting Standards (as adopted
by the European Union).
The Company was incorporated in the Isle of Man and as such is
regulated by Isle of Man company law. The principal accounting
policies adopted are set out below.
Although not referred to in the Isle of Man Companies Act 2006,
in accordance with usual practice for companies incorporated under
the Isle of Man companies legislation, the Company has not
presented its own statement of comprehensive income in these
consolidated financial statements. The loss on ordinary activities
after taxation of the Company is GBP1.9m (2012: GBP10.5m).
Going concern
The Company and Group are in the process of realising all
investments in accordance with the shareholders vote on asset
divestment in 2009. As detailed in the Chairman's Statement, and at
the date of the approval of these accounts, there remains some
uncertainty as to the exact form of the final realisation and of
the future of the Company once all investments have been disposed.
As at the date of approval of these financial statements, and
subject to the shareholders continuation vote to be held at the
2013 AGM, the directors are confident that the Company will
continue to trade, in some form, for the foreseeable future and so
are satisfied that the accounts have been properly prepared on a
going concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(and its subsidiaries) made up to 30 June each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee enterprise so as to obtain
benefits from its activities. On acquisition, the identifiable
assets, liabilities and contingent liabilities of a subsidiary are
measured at their fair values at the date of acquisition.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated statement of comprehensive
income from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by other members of the Group. All
significant intercompany transactions and balances between group
enterprises are eliminated on consolidation.
Standards and Interpretations in issue but not effective
At the time these financial statements were authorised for issue
by the directors the following Standards and Interpretations, which
are relevant to the group, were in issue but not yet effective:
-- IFRS 9 Financial Instruments (effective 1 January 2015)
-- IFRS 10 Consolidated Financial Statements (effective 1
January 2014)
-- IFRS 12 Disclosure of Interest in Other Entities (effective 1
January 2014)
-- IAS 27 (Revised), Separate Financial Statements (effective 1
January 2014)
-- IAS 36 Impairment of Assets (effective 1 January 2014)
-- IAS 39 Financial Instruments: Recognition & Measurement
(effective 1 January 2014)
-- Offsetting Financial Assets and Financial Liabilities -
Amendments to IAS 32 (effective 1 January 2014)
-- Mandatory Effective Date and Transition Disclosures -
Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)
-- Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS
27 (effective 1 January 2014)
The application of the above Standards and Interpretations is
not expected to have a material impact to the Group's results.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of
estimates and judgements that affect the reported amount of assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reported
period. Although these estimates are based on management's best
knowledge of the amount, events or actions, actual results
ultimately may differ from those estimates. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities relate
to the valuation of unlisted financial investments held at fair
value through the profit and loss, which are valued on the basis
noted below and the recognition or otherwise of accrued income on
loan notes and similar instruments granted to investee
companies.
Despite the Group holding a 55% interest in T.I.S Holdings
("TIS"), the results are not included in the Group results due to a
lack of control to govern the financial and operating policies of
TIS. It has been determined that control does not exist due to:
-- Board voting powers are deadlocked
-- No legal or implied powers have resulted from the increase in
ownership
The investment is designated as a fair value through profit or
loss financial asset. The Group has applied the exemption from
equity accounting under IAS 28 'Investment in Associates'
(paragraph 1). At the year end TIS was valued at GBP6.3m based on
an agreed pre-transaction value. The proposed transaction details
are set out in the Chairman's Statement. The valuation has been
re-assessed and further verified by the directors by virtue of an
asset allocation agreement from the TIS Board, based on an
independent valuation of the TIS business.
Where a carried interest arrangement amounts to an obligation to
make interest payments which is considered to be equity under IAS
32, such payments are treated as distributions to minority interest
equity holders, subject to the satisfaction of certain qualifying
criteria.
Investments are valued at bid-market price or the conventions of
the market on which they are quoted, subject if appropriate, to
marketability discounts where formal restrictions on trading
exist.
Revenue recognition
Investment income comprises management fees receivable and
interest income from treasury deposits and from loans advanced.
Investment management fees are recognised under the accrual basis,
other fees are recognised in full once a contractual obligation is
created for the third party.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate.
Dividend income from investments is recognised when the
shareholders' rights to receive payment have been established.
Expenses
All expenses are accounted for on an accrual basis.
Taxation
The charge for current tax is based on the results for the
period as adjusted for items which are non-assessable or
disallowed. It is calculated using rates that have been enacted or
substantively enacted by the statement of financial position
date.
Deferred tax is accounted for using the statement of financial
position liability method in respect of temporary differences
arising from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding tax
basis used in the computation of taxable profit. In principle,
deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a
transaction which affects neither the tax profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
Deferred tax is calculated at the rates that are expected to
apply when the asset or liability is settled.
Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items credited or
charged directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net
basis.
Financial investments
Where a financial investment is not required to be consolidated
the equity, loan and similar instruments, are designated at fair
value through profit and loss, and are valued in compliance with
International Financial Reporting Standards and the International
Private Equity and Venture Capital Association guidelines. Gains
and losses on the realisation of financial investments are dealt
with through the statement of comprehensive income. The difference
between the market value of financial investments and cost to the
Group is shown as an unrealised gain or loss in the statement of
comprehensive income.
Investments are monitored at fair value and designated at fair
value through profit or loss in accordance with the Group's
documented investment strategy. The Company has recognised its
investments in subsidiaries at fair value through profit or
loss.
Investments are stated at amounts considered by the directors to
be a reasonable assessment of their fair value, where fair value is
the amount at which an asset could be exchanged between
knowledgeable, willing parties in an arm's length transaction.
All investments are valued according to one of the following
bases:
-- Cost (less any provision required)
-- Earnings multiple
-- Sale price / Realisable value
-- Price of recent transaction or
-- Net assets
Investments are only valued at cost for a limited period after
the date of acquisition, otherwise investments are valued on one of
the other bases described above, and generally the earnings'
multiple basis of valuation will be used unless this is
inappropriate, as in the case of certain asset-based
businesses.
When valuing on an earnings' multiple basis, profits before
interest and tax of the current year will normally be used,
depending on whether or not more than six months of the accounting
period remain and the predictability of future profits. Such
profits will be adjusted to a maintainable basis, taxed at the full
corporation tax rate and multiplied by an appropriate and
reasonable price/earnings multiple. This is normally related to
comparable quoted companies, with adjustments made for points of
difference between the comparator and the company being valued, in
particular for risks, earnings' growth prospects and surplus assets
or excess liabilities.
Where a company has incurred losses, or if comparable quoted
companies are not primarily valued on an earnings' basis, then the
valuation may be calculated with regard to the underlying net
assets and any other relevant information, such as the pricing for
subsequent recent investments by a third party in a new financing
round that is actively being sought, then any offers from potential
purchasers would be relevant in assessing the valuation of an
investment and are taken into account in arriving at the
valuation.
Where appropriate, a marketability discount may be applied to
the investment valuation, based on the likely timing of an exit,
the influence over that exit, the risk of achieving conditions
precedent to that exit and general market conditions.
When investments have obtained an exit (either by listing or
trade sale) after the valuation date but before
finalisation of Promethean's relevant accounts, (interim or
final), the valuation is based on the exit valuation
subject to an appropriate discount to take account of the time
period between valuation and exit dates. In circumstances where an
exit is anticipated in the foreseeable future, the valuation is
based on an indicative price at which the directors consider that
there is a significant probability that a transaction will be
completed at that price.
In arriving at the value of an investment, the percentage
ownership is calculated after taking into account any dilution
through outstanding warrants, options held by third parties or
other investors and performance related mechanisms.
Interest accruing on secured and unsecured loan notes is
disclosed within investments. When an investee company repays
interest by issuing a payment-in-kind ("PIK") note as opposed to a
cash payment, the amount of that PIK note issued is subsequently
disclosed within Investments held at fair value through profit or
loss.
Trade receivables
Trade receivables are initially recognised at fair value (plus
transaction costs) and then subsequently carried at amortised cost
less impairment for estimated irrecoverable amounts.
Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and are subject to
insignificant risks of changes in value.
Trade payables
Trade payables are stated at fair value on initial recognition
and then subsequently at amortised cost using the effective
interest method.
Foreign currencies
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the statement of financial position
date. Non-monetary items that are measured at historical cost in a
foreign currency are translated at the exchange rate at the date of
the transaction. Non-monetary items that are measured at fair value
in a foreign currency are translated using the exchange rates at
the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from
those at which they were initially recorded are recognised in the
profit or loss in the period in which they arise. Exchange
differences on non-monetary items are recognised in the statement
of changes in equity to the extent that they relate to a gain or
loss on that non-monetary item taken to the statement of changes in
equity, otherwise such gains and losses are recognised in the
statement of comprehensive income.
Equity
Equity comprises the following:
-- Share capital represents the nominal value of equity
shares
-- Share premium represents the excess over nominal value of the
fair value of consideration received for equity shares, net of
expenses of the share issue
-- Distributable Retained earnings represents retained
profits
2. Revenues
2013 2012
GBP'000 GBP'000
Investing operations
Management and other fees receivable - 428
Interest income 3,516 3,157
Dividends from equity shares - 98
-------- ---------
3,516 3,683
Loss on retirement from Promethean Investments
LLP - (322)
Realised loss on financial investments (1,240) (3,239)
Unrealised loss on financial investments (3,097) (8,718)
-------- ---------
Realised and unrealised loss on financial investments (4,337) (12,279)
-------- ---------
3. Loss before finance costs and taxation
2013 2012
GBP'000 GBP'000
Loss before finance costs and taxation is after
charging/(crediting):
Depreciation - 13
Audit remuneration:
Fees payable to the Company's auditor for the
audit of the financial statements 41 62
Audit of the financial statements of the Company's
subsidiaries pursuant
to legislation - 21
Other fees payable to the auditors 12 -
Foreign exchange loss/(gain) (7) 24
Operating Lease - 92
-------- --------
4. Finance costs
2013 2012
GBP'000 GBP'000
Finance charges 38 6
-------- --------
5. Interest from investments
2013 2012
GBP'000 GBP'000
Interest on bank deposits 5 1
-------- --------
6. Employees and directors
2013 2012
GBP'000 GBP'000
The total employee costs for the group were:
Directors' fees 75 75
Salaries and wages - 71
Employer's national insurance - 7
-------- --------
75 153
-------- --------
Directors' fees
Sir Peter Burt 30 30
Martin Negre 25 25
Third party payments - SMP Fund Services (Elizabeth
Tansell) 20 20
-------- --------
75 75
-------- --------
GBP'000 GBP'000
Amount paid to highest paid director 30 30
Average number of employees for the group during No. No.
the year were:
Administration 1 1
-------- --------
1 1
-------- --------
The Directors are the key management personnel of Promethean
plc.
7. Taxation - continuing operations
2013 2012
GBP'000 GBP'000
Analysis of charge for the year:
Overseas withholding tax - 21
UK Corporation tax charge on profits for the
year - 21
Adjustments in respect of prior periods - 76
--------- --------
Total tax expense - 118
--------- --------
The tax assessed for the year differs from the standard rate of
corporation tax in the Isle of Man and United Kingdom. The
tax charge for the year can be reconciled to the loss as per the
statement of comprehensive income as follows:
2013 2012
GBP'000 GBP'000
Loss before tax (1,857) (10,379)
-------- ---------
Taxation at standard rate in Isle of Man nil% - -
Overseas withholding tax - 21
Adjustment to tax charge in respect of prior
periods - 76
Taxable income - profit share from UK based
LLP - 21
-------- ---------
Total tax expense - 118
-------- ---------
The Company is resident for Isle of Man income tax purposes,
being subject to the standard rate of income tax, which is
currently 0%. As the Company is wholly owned by individuals not
resident in the Isle of Man for tax purposes, it will notbe subject
to the Attribution Regime for individuals, which commenced from 1
July 2008.
8 Loss and net asset value per share
The calculations of basic loss per share of the Group at 30 June
2013 was based on the loss attributable to ordinary shareholders
and a weighted average number of ordinary shares outstanding during
the year ended 30 June 2013, calculated as follows:
2013 2012
Loss attributable to equity holders of the (GBP1,857,000) (GBP10,497,000)
parent
Issued ordinary shares - beginning of year 45,186,155 45,186,155
Issued ordinary shares - end of year 45,186,155 45,186,155
Weighted average number of issued shares
for the year 45,186,155 45,186,155
Loss per share (basic and diluted) - total (4.11p) (23.23p)
Net asset value per ordinary share 21.2p 37.8p
9. Investments
Company shares in group undertakings and trade investments
2013 2012
GBP'000 GBP'000
On incorporation - 360
Disposal on retirement - (360)
Investment at fair value through
profit and loss 9,112 17,201
-------- --------
9,112 17,201
-------- --------
Company shares in group undertakings and trade investments
On incorporation - 360
Disposal on retirement - (360)
Investment at fair value through
profit and loss 9,112 17,201
------ -------
9,112 17,201
------ -------
Details of significant subsidiaries at 30 June 2013 are as
follows:
Name of subsidiary Place of Proportion of Proportion of Principal
Incorporation ownership interest voting power activity
(or registration) held
and operation
Promethean Investments Holding entity
Fund LP England 100 100 for investments
10. Investments
Group 2013 2012
GBP'000 GBP'000
Listed investments
Valuation as at 1 July 2012 7,164 20,056
Realised loss (1,500) (3,239)
Unrealised loss - (5,831)
Disposals (5,664) (3,822)
-------- --------
Valuation as at 30 June 2013 - 7,164
-------- --------
Unlisted investments
Valuation as at 1 July 2012 9,643 9,468
Fair value adjustments recognised
in profit & loss (2,837) (2,887)
Additions including capitalised
loan interest 3,881 3,062
Disposals (4,376) -
-------- --------
Valuation as at 30 June 2013 6,311 9,643
-------- --------
Total investments
-------- --------
Valuation as at 30 June 2013 6,311 16,807
-------- --------
11. Trade and other receivables
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Other debtors 16 20 - -
Prepayments and accrued
income 308 308 1,261 632
324 328 1,261 632
Other debtors 16 20 - -
Prepayments and accrued
income 308 308 1,261 632
324 328 1,261 632
Notes to the consolidated financial statements for the year
ended 30 June 2013 (continued)
12. Cash and cash equivalents
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 3,064 259 20 -
Short term deposit - - 697 85
-------- -------- -------- --------
3,064 259 717 85
-------- -------- -------- --------
13. Trade and other payables - current
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 20 20 2 2
Other creditors - 844 -
Accruals and deferred income 97 97 704 681
-------- -------- -------- --------
117 117 1,550 683
-------- -------- -------- --------
Liquidity risk is the risk that an entity will have difficulties
in paying its financial liabilities. The Group maintains sufficient
reserves to ensure that its financial liabilities are able to be
met.
The figures in Note 13 represent short term financial
liabilities and are therefore based on gross undiscounted cash
flows.
14. Share Capital Group Group
2013 2012
GBP'000 GBP'000
Authorised
100,000,000 ordinary shares of 1p each - beginning
of year 1,000 1,000
------ ------
Issued and fully paid
45,186,155 ordinary shares of 1p each - beginning
of year 452 452
------ ------
45,186,155 ordinary shares of 1p each - end
of year 452 452
------ ------
On incorporation the Company had authorised share capital of
GBP1,000,000 divided into 100,000,000 ordinary shares of 1p
each.
Also, on incorporation, two ordinary shares were subscribed, nil
paid.
On 23rd June 2006 the Company issued 50,000,000 ordinary shares
of 1p each at a premium of 99p, to provide additional working
capital.
On 14 April 2009 the Company cancelled a total of 4,813,845
ordinary shares tendered at a price of 70.5 pence per share.
Following the company's re-registration under the Isle of Man
Companies Act 2006, the Company is governed by a revised Memorandum
and Articles of Association.
Following the disposal of Cambria Automobiles plc ("Cambria") as
a return of capital in specie to shareholders at fair value, an
effective capital return of 17.0 pence per share totalling
GBP5,664,000 was returned to Promethean plc shareholders on 12 July
2012. For each share held in Promethean plc, shareholders received
0.73742 shares in Cambria.
In the period to 30 June 2012 the disposal of IFG Group plc led
to a capital return of 6.0 pence per share resulting in a return to
Promethean plc shareholders of GBP2,712,000.
15. Related party transactions
During the year the group had the following related party
transactions:
On 12 August 2013, the Company's registrar and administrator
changed from Chamberlain Fund Services Limited to SMP Fund Services
Limited. Elizabeth Tansell is a principal of Chamberlain Fund
Services Limited and a director of Promethean plc. During the year
the Company had the following related party transactions with
Chamberlain Fund Services Limited:
Registrar and administrator services charged
including accruals 13 13
Transactions during the year with respect to
Key Management Personnel:
- profit share - 673
During the year the Group made payments of GBP990,000 (2012:
GBP646,000) to Promethean Investments LLP in respect of investment
management services provided and in settlement of certain
liabilities of Promethean Investments LLP for which it was liable.
As at the balance sheet date there were no amounts due to or from
that entity. Sir Peter Burt is a member of Promethean Investments
LLP.
In respect of the Cambria capital return as detailed in Note 14,
Sir Peter Burt and Martin Negre received shares in Cambria of
405,581 (including connected parties) and 36,871 respectively.
There is no ultimate controlling party.
16. Financial Instruments
Financial instruments comprise securities and other investments,
cash balances and receivables and payables that arise from
operations. The investment portfolio includes quoted and unquoted
equity investments and debt instruments that are held for the long
term.
All gains and losses arising from financial assets designated at
fair value are recognised through profit or loss.
The carrying value of all financial assets and liabilities are
as follows:
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets comprise
Loans and receivables 3,388 587 1,978 717
Fair value through profit or
loss:
Designated at fair value through
profit or loss 6,311 9,112 16,807 17,201
-------- -------- -------- --------
9,699 9,699 18,785 17,918
-------- -------- -------- --------
Management monitors the ageing of financial assets that are past
due but not impaired as at the year end. These amounts
as at 30 June 2013 and 30 June 2012 were not material to the
group results.
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities comprise
Amortised cost 117 117 1,682 815
-------- -------- --------- --------
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Losses on:
Designated at fair value through
profit and loss (4,337) (1,471) (12,279) (3,770)
-------- -------- --------- --------
Market Risk
Market risk embodies the potential for both losses and gains and
includes currency risk, fair value interest rate risk and price
risk. The Group's strategy on the management of market risk is
driven by its investment objective, as outlined in the Directors'
report. The Group invests in a range of investments, including
quoted and unquoted equity securities and debt instruments in a
range of sectors. The Board monitors the Group's investment
exposure against internal guidelines specifying the proportion of
total assets that may be invested in various sectors.
Of the GBP4,337,000 (2012: GBP12,279,000) realised and
unrealised loss recognised on investments during the year, a loss
of GBP1,500,000 (2012: GBP9,069,000) is attributable to listed
investments.
Currency risk
Certain financial instruments are denominated in currencies
other than the functional currency. Consequently there is exposure
to the risk that the exchange rate of the functional currency may
change relative to the currencies in a manner that has an adverse
effect on the value of that proportion of the investments
denominated in currencies other than the functional currency.
At 30 June 2013 the Group had EURnil (2012: EUR221,765) in cash
balances and had no hedging positions or other financial
instruments in foreign currencies.
16. Financial Instruments (continued)
Interest rate risk
Interest rate movements may affect the level of income
receivable on cash balances held on term deposits and interest
payable on floating rate interest bearing liabilities.
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 3,064 259 717 85
-------- -------- -------- --------
Price Risk
Price risk may affect the value of quoted and unquoted
investments as a result of changes in market prices (other than
arising from interest rate risk or currency risk), whether caused
by factors to an individual investment, its issuer or factors
affecting all instruments traded in the market. As all of the
Company's financial instruments are carried at fair value with fair
value changes recognised in the statement of comprehensive income,
all changes in market conditions will directly affect net
investment income.
The exposure to quoted equity investments are as follows:
Valuation of listed investments
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Listed investments as at 30 June - - 7,164 -
2013
--------- -------- -------- --------
The following table details the sensitivity of a 10% change in prices
on the 30 June 2013 valuation of the investments:
Increase in prices - - 7,880 -
Decrease in prices - - 6,448 -
--------- -------- -------- --------
The following table details the sensitivity of a 10% change in the
30 June 2013 closing bid prices on the profit/(loss):
Increase in prices - - 716 -
Decrease in prices - - (716) -
--------- -------- -------- --------
Unlisted Investments valued using
multiple basis
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Unlisted investments as at 30 - - 5,942 -
June 2013
--------- -------- -------- --------
Valuation movement if:
Multiple applied is increased - - 1,188 -
by 20%
Multiple applied is decreased - - (1,188) -
by 20%
--------- -------- -------- --------
When valuing on an earnings' multiple basis, profits before
interest and tax of the current year will normally be used. The
profit is adjusted to a maintainable basis, taxed at the full
corporation tax rate and multiplied by an appropriate and
reasonable price/earnings multiple. The price/earnings multiple is
chosen from a basket of comparable quoted companies, taking into
account particular risks, earnings' growth prospects and surplus
assets or liabilities of the comparator. On all valuations, a
marketability discount in the range of 15% to 25% has been applied
to reflect the likely timing of an exit, after consideration of
influencing factors such as general market conditions.
At the 30 June 2013 the only investment remaining was T.I.S
Group, which was valued at GBP6,311,000 in accordance with an
agreed pre-transaction value, as described in Note 1. A 20%
variance on this would result in a GBP1,262,000 positive or adverse
movement on that valuation.
Credit Risk
Credit risk is the risk that the counterparty to the financial
instrument will fail to discharge an obligation or commitment. As
at 30 June 2013 the financial assets exposed to credit risk were as
follows:
Group Company Group Company
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Investments in debt instruments - - 3,076 -
Trade and other receivables 324 328 1,261 632
Cash and cash equivalents 3,064 259 717 85
-------- -------- -------- --------
3,388 587 5,054 717
-------- -------- -------- --------
Prior to making investments in debt instruments, the Manager
reviews and evaluates the investee's ability to service and repay
its debt as part of the due diligence process. The recoverability
of debts from investee companies subsequent to acquisition is
monitored by directors attending board meetings and reviewing
management accounts on a regular basis.
The credit risk on cash and cash equivalent balances are
mitigated by spreading the balances across a number of investment
grade banking institutions.
Fair values
The Group's investments are carried at fair values on the
statement of financial position. The carrying value of certain
other financial instruments, specifically trade and other
receivables and payables approximates to fair value due to the
short term nature of these instruments.
The principal methods and assumptions used in estimating the
fair value of investments is disclosed on page 15.
Capital management and policies and procedures
The Group's capital management objectives are:
- to ensure that it will be able to continue as a going
concern;
- to realise all investments and return capital to the equity
shareholders; and
- to maximise the income and capital return to its equity
shareholders.
The Group's capital at 30 June 2013 comprises equity share
capital of GBP452,000 (2012: GBP452,000) and retained earnings and
other reserves of GBP9,130,000 (2012: GBP16,651,000).
The Board monitors and reviews the structures of the Group's
capital on an ongoing basis assessing the need for new issues of
equity shares, and the extent to which revenue, in excess of that
which is required to be distributed, should be retained. The
Group's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
Fair value hierarchy
Level Level Level Total
1 2 3
2013 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets designated at
fair value through profit or loss
Equity investments
- Listed or quoted - - - -
- Unquoted - - 6,311 6,311
--------- --------- -------- --------
As at 30 June 2013 - - 6,311 6,311
--------- --------- -------- --------
There have been no transfers between Levels 1 and 2 during the
reporting period.
The fair value hierarchy of financial assets designated at fair
value through profit or loss at 30 June 2012 was as follows:
Level Level Level Total
1 2 3
2012 2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets designated at
fair value through profit or loss
Equity investments
- Listed or quoted 7,164 - - 7,164
- Unquoted - - 9,643 9,643
-------- -------- -------- --------
As at 30 June 2012 7,164 - 9,643 16,807
-------- -------- -------- --------
There have been no transfers between Levels 1 and 2 during the
reporting period.
A reconciliation of fair value movements in Level 3 is set out
below.
Unquoted Investments Unquoted Investments
2013 2012
GBP'000 GBP'000
Opening balance 9,643 9,469
Additions including capitalised
interest 3,881 3,061
Disposals (4,116) -
Total losses on assets held at
the end of the year (3,097) (2,887)
--------------------- ---------------------
6,311 9,643
--------------------- ---------------------
The fair values of the financial instrument categorised in Level
3, being the remaining investment held in TIS Group, is calculated
based on an agreed pre-transaction value. The proposed transaction
details are set out in the Chairman's Statement. The valuation has
been re-assessed and further verified by the directors by virtue of
an asset allocation agreement from the TIS Board, based on an
independent valuation of the TIS business.
17. Segmental Analysis
There is now only one segment in the Group.
More than 10% of the investment and other income are derived
within the UK, of which T.I.S Group plc represents 100% (2012:
73.4%).
18. Events after the Reporting Period
On 13 September 2013 the Promethean plc's share trading on AIM
was temporarily suspended pending an announcement of a submission
document. On 19 September 2013 the details of the suspension were
disclosed in an RNS announcement detailing the discussions held
between the Board, TIS Group ("TIS") and Protected Asset TEP Fund
plc ("PATF") relating to the establishment of an AIM listed
multi-strategy investment company utilising the existing Promethean
business. The Board is of the view that this opportunity represents
the best solution available in respect of the final investment
(TIS). At the time of these financial statements being authorised,
the transaction had not progressed to conclusion.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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