BW20030131002287 20030131T182139Z UTC
( BW)(MELROSE-FIN.-NO.1)(BN22) Annual report & accounts
Business Editors
UK REGULATORY NEWS
LONDON--(BUSINESS WIRE)--Jan. 31, 2003--
MELROSE FINANCING No. 1 PLC
REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002
MELROSE FINANCING No.1 PLC
REPORT OF THE DIRECTORS
Directors
I W G McDonald
SFM Directors Limited
SFM Directors (No.2) Limited
The Directors submit their report and the audited accounts of the
company for the year ended 31 December 2002
Principal Activities
The principal activity of the company has been to issue asset backed
floating rate notes and to make loan advances to a fellow subsidiary.
Results and review of operations for the period
The profit for the year after taxation amounted to �6,684 (10 month
period to 31 December 2001: �5,215). The Directors do not recommend
the payment of a dividend.
Directors and their interests
The Directors at the date of this report are stated above. All the
Directors served throughout the year.
No Director held any beneficial interest in the shares of the company
or any other associated company or corporate body.
The services of SFM Directors Limited and SFM Directors (No 2) Limited
as directors of the company are provided by SFM Corporate Services
Limited. SFM Corporate Services holds 12,506 ordinary shares of �1
each in Melrose Holdings Limited, the parent company of Melrose
Financing No.1 plc. These shares comprise the entire issued share
capital of Melrose Holdings Limited and are held on a discretionary
trust basis for charitable purposes.
Directors' emoluments in the period are disclosed in the notes to the
accounts.
Company Secretary
The Company Secretary throughout the year was SFM Corporate Services Limited.
Auditors
KPMG Audit Plc have signified their willingness to continue in office
and a resolution for their re-appointment will be proposed at the
Annual General Meeting.
By Order of the Board,
I W G McDonald
Director
Registered Office 31 January 2003
-----------------
Blackwell House
Guildhall Yard
LONDON
EC2V 5AE
PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2002
Notes 12 Months to 10 months to
----- ---------------- ----------------
31 December 31 December 2001
---------------- ----------------
2002
� �
Interest receivable 2 73,104,376 75,379,246
Interest payable 3 (73,097,165) (75,371,796)
------------------ ------------------
------------------ ------------------
Profit on ordinary activities before taxation 4 7,211 7,450
Taxation 5 (527) (2,235)
------------------ ------------------
------------------ ------------------
Retained profit for the year 11 6,684 5,215
================== ==================
All gains and losses arising during the year have been recognised in
the profit and loss account and derive from continuing activities.
The notes on pages 5 to 11 form part of these accounts.
BALANCE SHEET
As at 31 December 2002
Notes 2002 2001
----- ---- ----
� �
- -
Current assets:
amounts falling due within one year
Amounts due from group undertakings 6 11,139,446 10,224,232
Cash at bank 382,238 385,182
------------------- --------------------
------------------- --------------------
11,521,684 10,609,414
Current assets:
amounts falling due after more than one year
Loan Notes 7 1,510,950,687 1,510,950,687
Creditors: amounts falling due within one year
Interest payable (9,250,530) (9,396,973)
Amounts due to group undertakings (880) (2,092)
Accruals (69,628) (47,991)
Corporation Tax (639) (2,235)
------------------- --------------------
------------------- --------------------
(9,321,677) (9,449,291)
Net current assets 2,200,007 1,160,123
------------------
Total assets less current liabilities 1,513,150,694 1,512,110,810
-------------------------------------
Creditors:
amounts falling due after more than one year
Asset backed floating rate notes 8 (1,495,452,515) (1,494,419,315)
Subordinated Debt 9 (17,673,780) (17,673,780)
=================== ====================
Net assets 24,399 17,715
----------
=================== ====================
=================== ====================
Share capital & reserves
Called up share capital 10 12,500 12,500
Profit and loss account 11,899 5,215
------------------- --------------------
Equity shareholders' funds 11 24,399 17,715
--------------------------
=================== ====================
Approved by the board on 31 January 2003 and signed on its behalf by:
........................................................................Director
........................................................................Director
The notes on pages 5 to 11 form part of these accounts.
NOTES TO THE ACCOUNTS
For the year ended 31 December 2002
1. Accounting policies
--------------------
1.1 The accounts have been prepared under the historical cost
convention and in accordance with currently applicable UK
accounting standards.
1.2 Interest receivable and payable is accrued on a daily basis.
1.3 In the current year, the company implemented FRS 19 "Deferred Tax". There has been no impact on prior
or current years of implementing this standard.
1.4 Cross currency swaps which are used to hedge on-balance sheet
assets and liabilities, are accounted for on an accruals basis
reflecting the treatment of the underlying items being hedged.
Where a hedge transaction is terminated early, any profit or
loss is spread over the remaining life of the underlying asset
or liability being hedged.
1.5 The company is a 99.996% owned subsidiary of Melrose Holdings
Limited and the cash flows of the company are included in the
consolidated group cash flow statement of Melrose Holdings
Limited. Consequently the company is exempt under the terms of
Financial Reporting Standard No.1 (Revised 1996) from publishing
a cash flow statement.
1.6 Issue costs in respect of the asset backed floating rate notes
have been deferred and are being charged to the profit and loss
account over a six year period, being the estimated average life
of the asset backed floating rate notes.
1.7 Interest accrued but not paid in the period on the Expenses Loans is capitalised.
2. Interest receivable
12 months to 10 months to
31 December 31 December
2002 2001
---- ----
� �
Interest receivable in the period arose from the following
sources:
Interest on Loan Notes 73,104,368 75,379,184
Interest on cash deposits 8 62
--------------------- ---------------------
73,104,376 75,379,246
===================== =====================
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
3. Interest payable
12 months to 10 months to
31 December 31 December
2002 2001
� �
On Asset Backed Floating Rate Notes:
Series 2001-1 Class A1 11,554,563 19,639,826
Class A2 4,263,828 4,493,786
Class B1 301,343 457,403
Class B2 785,342 834,225
Class C1 358,233 483,296
Class C2 636,579 652,089
Class D1 380,321 422,405
Class D2 785,053 750,205
Class D3 1,035,123 977,504
Class E 2,627,118 2,500,188
Series 2001-2 Class A 14,001,808 23,521,344
Class B 839,495 1,253,958
Class C 845,098 1,123,076
Class D1 255,133 278,804
Class D2 782,709 743,192
Class D3 1,352,263 1,270,325
Class E 2,627,118 2,507,590
----------------- --------------------
----------------- --------------------
43,431,127 61,909,216
Amortisation of issue costs 1,063,035 876,318
On cross currency swaps 27,819,607 11,774,372
On Expenses Loans 783,396 811,890
------------------ --------------------
------------------ --------------------
73,097,165 75,371,796
================== ====================
4. Profit on ordinary activities before taxation
---------------------------------------------
The profit on ordinary activities before taxation is stated after
charging:
12 months to 10 months to
31 December 31 December
2002 2001
� �
Auditors' Remuneration for non audit services 12,500 47,116
================ ===============
The fee of �2,000 (December 2001 - �2,000) for audit services
will be borne by Melrose Investor Limited, a fellow subsidiary.
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
The Company has no employees. SFM Corporate Services Limited has
a contract to provide the services of SFM Directors Limited and
SFM Directors (No 2) Limited as directors to the Company. In
addition SFM Corporate Services Limited provides company
secretarial and certain corporate administrative services to the
company. During the year the company's fellow subsidiary,
Melrose Investor Limited, paid for these services. The directors
do not receive any emoluments from the company.
5. Taxation
As restated
12 months to 10 months to
31 December 31 December
2002 2001
� �
Tax on Profit on Ordinary Activities
Current Tax:
Corporation tax charge for the period at a rate of 19%/20% (2001 30%)
639 2,235
Corporation tax (credit)/charge in respect of earlier periods (112)
-------------------- ---------------
==================== ===============
527 2,235
==================== ===============
Factors Affecting the Current Tax Charge for the Period: The tax
assessed for the period is lower than the standard rate of
corporation tax in the UK of 19%/20% The differences are
explained below:
Profit/(loss) on ordinary activities before taxation 7,211 7,450
==================== ===============
Profit/(loss) on ordinary activities multiplied by the standard rate of
corporation tax in the UK 1,386 2,235
-------------------- ---------------
Effects of:
Adjustments to tax in respect of previous periods (112)
Smaller companies marginal relief (747)
-------------------- ---------------
Current corporation tax charge for the period 527 2,235
==================== ===============
6. Amounts due from group company
2002 2001
� �
Due from fellow subsidiary:
Interest receivable on Loan Notes 11,145,041 10,210,312
Reimbursement of expenses (5,595) 13,920
-------------------- ---------------
-------------------- ---------------
11,139,446 10,224232
==================== ===============
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
7. Loan Notes
Details of each Loan Note are as follows:
Scheduled Legal
Value Maturity Date Maturity Date
�
Series 2001-1 Loan Note 755,451,093 15 February 2006 15 February 2011
Series 2001-2 Loan Note 755,499,594 15 February 2008 15 February 2011
-------------------
-------------------
1,510,950,687
===================
The Loan Notes bear interest at a margin above three month LIBOR.
8. Asset backed floating rate notes
Details of the asset backed floating rate notes ("Notes") are as
follows:
Value Maturity date
�
Series 2001-1
Class A1 Notes ( $790,000,000 ) 544,827,586 February 2006
Class A2 Notes 100,000,000 February 2006
Class B1 Notes ( $16,200,000) 11,172,414 February 2006
Class B2 Notes ( Euro 30,000,000) 18,838,305 February 2006
Class C1 Notes ( $14,400,000) 9,931,034 February 2006
Class C2 Notes ( Euro 20,000,000) 12,558,870 February 2006
Class D1 Notes ( $8,000,000) 5,517,241 February 2006
Class D2 Notes ( Euro 15,000,000) 9,419,152 February 2006
Class D3 Notes 11,300,000 February 2006
Class E Notes 26,250,000 February 2006
----------------------
749,814,602
Series 2001-2
Class A Notes ( $935,000,000) 644,827,586 February 2008
Class B Notes ( $43,500,000 ) 30,000,000 February 2008
Class C Notes ( $32,600,000 ) 22,482,759 February 2008
Class D1 Notes ( $5,000,000 ) 3,448,276 February 2008
Class D2 Notes ( Euro 14,100,000) 8,854,003 February 2008
Class D3 Notes 14,000,000 February 2008
Class E Notes 26,250,000 February 2008
----------------------
749,862,624
Less incidental costs of issuing the Notes (4,224,711)
----------------------
----------------------
1,495,492,515
======================
Notes denominated in US Dollars bear interest at a margin above
three month USD LIBOR. Notes denominated in Euros bear interest
at a margin above three month Euribor. Notes denominated in
Sterling bear interest at a margin above three month sterling
LIBOR.
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
Repayment of principal for the Notes denominated in foreign
currencies are hedged by means of cross currency swap agreements,
which result in fixed exchange rates at maturity.
Incidental costs of issuing the Notes represent legal and
professional costs incurred to date less amounts charged to the
profit and loss account.
The Notes are secured under the terms and conditions defined
within the Issuer Deed of Charge. (Note 13).
9. Subordinated Debt
2002 2001
� �
Series 2001-1 Expenses Loan 8,849,710 8,849,710
Series 2001-2 Expenses Loan 8,824,070 8,824,070
-------------------- ---------------------
-------------------- ---------------------
17,673,780 17,673,780
==================== =====================
The Expenses Loans bear interest at a rate of 0.25% above
three-month LIBOR and are subordinate to inter alia payments of
principal and interest on the asset backed floating rate notes.
The liability of Melrose Financing No 1 plc is limited to the
extent it has sufficient assets to meet its obligations under the
Expenses Loans. The Expenses Loans have no specified maturity date
but will become due and payable when the asset backed floating
rate notes have been repaid in full.
10. Share capital
2002 2001
� �
Authorised
100,000 ordinary shares of �1 each 100,000 100,000
===================== ===============
Allotted
50,000 ordinary shares of �1 each 50,000 50,000
===================== ===============
Called up and partly paid
50,000 ordinary shares of �1, 25p paid 12,500 12,500
===================== ===============
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
11. Reconciliation of movement in equity shareholders' funds
--------------------------------------------------------
2002 2001
� �
Share capital called up and paid in the period - 12,500
Profit for the year 6,684 5,215
Equity shareholders' funds at 1 January 17,715 -
--------------------- ---------------
Equity shareholders' funds at 31 December 24,399 17,715
===================== ===============
12. Derivatives and off balance sheet transactions
Notional Principal Carrying Value Fair Value/
Value in Accounts Replacement Cost
� � �
Series 2001-1
Cross currency swap - US Dollars 544,827,586 (1,779,543) (56,493,329)
Cross currency swap - US Dollars 11,172,414 (36,749) (1,172,093)
Cross currency swap - Euros 18,838,305 (20,240) 678,657
Cross currency swap - US Dollars 9,931,034 (32,910) (1,072,525)
Cross currency swap - Euros 12,558,870 (14,340) 451,635
Cross currency swap - US Dollars 5,517,241 (18,674) (643,825)
Cross currency swap - Euros 9,419,152 (12,284) 355,455
Series 2001-2
Cross currency swap - US Dollars 644,827,586 (2,105,684) (66,726,561)
Cross currency swap - US Dollars 30,000,000 (97,925) (3,156,201)
Cross currency swap - US Dollars 22,482,759 (74,327) (2,460,246)
Cross currency swap - US Dollars 3,448,276 (11,733) (425,130)
Cross currency swap - Euros 8,854,003 (12,500) 339,989
The cross currency swaps are used to hedge the liability to make
payments of interest and principal in foreign currency on the
asset backed floating rate notes from a sterling income stream.
The notional principal value represents the sterling equivalent
of the principal values converted at the rates of exchange
defined in the cross currency swap agreements.
13. Deed of charge
All assets of the company are subject to fixed or floating
charges under the terms of deeds of charge (the Series 2001-1
Deed of Charge and the Series 2001-2 Deed of Charge) held by
Citibank, N.A. London Branch, the Note Trustee. Secured amounts
and the security interest are defined within the Series 2001-1
and the Series 2001-2 Deed of Charge.
NOTES TO THE ACCOUNTS (continued)
For the year ended 31 December 2002
14. Related Party Transaction
The company has taken advantage of the exemption under Financial
Reporting Standard 8 not to disclose details of transactions
with related parties that are part of the Melrose Holdings
Limited group.
15. Parent Undertaking
The company's parent undertaking is Melrose Holdings Limited.
The results of this company are incorporated in the consolidated
accounts of Melrose Holdings Limited. Copies of the annual
accounts of Melrose Holdings Limited may be obtained from its
registered office at Blackwell House, Guildhall Yard, London,
EC2V 5AE.
Melrose Holdings Limited is wholly owned by SFM Corporate
Services Limited. SFM Corporate Services Limited holds the
shares on a discretionary trust basis for charitable purposes.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENT
Company Law requires the directors to prepare financial statements
for each financial year which give a true and fair view of the state
of affairs of the Company and of the profit or loss for that period.
In preparing those 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 accounting standards have been
followed, subject to any material 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 proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that
the financial statements comply with the Companies Act 1985. They have
general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
MELROSE FINANCING No.1 PLC
We have audited the financial statements on pages 3 to 11.
This report is made solely to the company's members, as a body, in
accordance with section 235 of the Companies Act 1985. 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
The directors are responsible for preparing the Annual Report. As
described on page 12, this includes responsibility for preparing the
financial statements in accordance with applicable United Kingdom law
and accounting standards. Our responsibilities, as independent
auditors, are established in the United Kingdom by statute, the
Auditing Practices Board, and by our profession's ethical guidance.
We report to you our opinion as to whether the financial
statements give a true and fair view and whether the financial
statements have been properly prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion, the
directors' report is not consistent with the financial statements, if
the company has not kept proper accounting records, if we have not
received all the information and explanations we require for our
audit, or if information specified by law regarding directors'
remuneration and transactions with the group is not disclosed.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards
issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures
in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the group's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that
the financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion:
-- the financial statements give a true and fair view of the
state of affairs of the company as at 31 December 2002 and of
its profit for the year then ended; and
-- the financial statements have been properly prepared in
accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
31 January 2003
Short Name: Melrose Fin. No. 1
Category Code: ACS
Sequence Number: 00001777
Time of Receipt (offset from UTC): 20030131T173231+0000
--30--mh/uk*
CONTACT: Melrose Financing No.1 plc
KEYWORD: UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING
SOURCE: Melrose Fin. No.1
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