EMTN Programme - Rentokil Initial 1927 plc
RENTOKIL INITIAL PLC (RTO)
EMTN Programme - Rentokil Initial 1927 plc
12 September 2012
Rentokil Initial plc (RTO) ("the Company") announces that a copy of the financial statements for its wholly-owned subsidiary Rentokil Initial 1927 plc ("1927") for the year ended 31 December 2011, together with a copy of the amended and restated deed of guarantee issued by 1927 in respect of the Company's €2.5 billion Euro Medium Term Note Programme are available for viewing in the following pages.
-ENDS-
About Rentokil Initial
Rentokil Initial is one of the largest business services companies in the world, operating in all the major economies of Europe, North America, Asia Pacific and Africa. The company has some 66,000 employees providing a range of support services in 60 countries. Services include textiles and hygiene services, pest control, tropical plants, parcels delivery and facilities services.
http://www.rentokil-initial.com
Enquiries:
Investors / Analysts enquiries:
Katharine Rycroft, Head of Investor Relations Rentokil Initial plc 07811 270 734
Media enquiries:
Malcolm Padley, Corporate Communications Rentokil Initial plc 07788 978 199
Kate Holgate, Oliver Hughes Brunswick Group 020 7404 5959
|
RENTOKIL INITIAL 1927 PLC |
|
DIRECTORS' REPORT AND FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2011
|
REGISTERED NUMBER: |
224814 |
|
Contents |
Page |
|
|
|
|
Directors' report |
1 |
|
Statement of directors' responsibilities in respect of the Report of the Directors and the financial statements |
3 |
|
Independent Auditor's report to the members of Rentokil Initial 1927 plc |
4 |
|
Profit and loss account |
5 |
|
Balance sheet |
6 |
|
Notes to the financial statements |
7 |
DIRECTORS' REPORT
The directors present their report and the audited financial statements of the company for the year ended 31 December 2011.
Principal activity/future developments
|
The company's main business is that of an investment holding company for operating companies providing, principally, business-to-business support services. The company's income is mainly derived from management fee and trademark charges in addition to dividend receipts from its investments in subsidiary undertakings. The principal subsidiary undertakings of the company are shown on page 16. The directors do not intend, at the date of this report, that there will be any major changes in the company's activities in the next year. |
Principal risks and uncertainties
The directors of Rentokil Initial plc manage the risks of the Rentokil Initial plc Group ("the Group") at a Group level, rather than at an individual business unit level. For this reason, the company's directors believe that a discussion of the Group's risks would not support an understanding of the development, performance or position of the company's business. The principal risks and uncertainties of the Group, which include those of the company, are discussed in the Group's 2011 Annual Report which does not form part of this report.
Financial risk management
The directors have set policies in place that minimise the company's exposure to liquidity risk, market risk, interest rate risk and foreign exchange risk and thus ensure that the company is able to operate with minimal financial risk. The policies used are disclosed on page 10 and are explained more fully in the Financial Review in the Group's 2011 Annual Report.
Results and dividends
The profit for the year, after taxation, amounted to £67.1m (2010: £27.5m). Interim dividends of £200.0m were paid (2010: £nil). The directors do not recommend the payment of a final dividend for 2011 (2010: £nil).
Directors
|
G T Brown |
||||
|
P Griffiths |
||||
|
J C D Townsend |
|
|||
|
D J McConnachie |
(resigned 01 January 2011) |
|||
|
M L Nicholas |
(appointed 01 January 2011 and resigned 13 May 2011) |
|||
|
S Ingall-Tombs |
(appointed 13 May 2011) |
|||
Employees
|
The company attaches considerable importance to communicating with colleagues. Internal communications take place at a group, divisional, business and team level in order to ensure that colleagues receive accurate information in a timely manner, and a variety of structures exist for two-way communications at all levels. At a corporate level the group intranet is used to announce company news with the support of direct email communication from the executive team. This is supplemented by a periodic electronic magazine called "Horizons" which features interviews with senior executives about major initiatives and performance. |
|
Applications for employment by disabled persons are always fully considered, taking into account the aptitudes of the applicants. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with Rentokil Initial continues and that appropriate re-training is made available. It is the policy of Rentokil Initial that the training, career development and promotion of disabled persons should, as far as possible, be identical with those of other employees. |
DIRECTORS' REPORT (CONTINUED)
Policy in relation to the payment of suppliers
|
It is the company's policy to pay suppliers in accordance with either negotiated or standard terms, provided that the relevant invoice is properly presented in a timely manner and is not the subject of dispute.
At 31 December 2011 the ratio, expressed in days, between the amounts invoiced to the company by suppliers and the amount owed to trade creditors was 26 days (2010: 25 days). |
Charitable donations
Donations for UK charitable purposes in 2011 amounted to £29,000 (2010: £33,000). There were no payments made to political organisations. Payments are made to a wide range of charitable organisations in the UK and encouragement is given to a matched giving scheme whereby the company matches donations made by employees.
Statement of disclosure of information to auditors
|
In accordance with the Companies Act 2006, each director who was a director at the time the report was approved confirms the following:
· So far as each director is aware, there is no relevant audit information of which the company's auditors are unaware; and · Each has taken all steps that each ought to have taken as director to make himself aware of any relevant information and to establish that the company's auditors are aware of that information. |
Auditors
Pursuant to Section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed and KPMG Audit Plc will therefore continue in office.
By order of the board
|
P Griffiths |
Secretary
|
2 City Place |
|
|||||||||
|
Beehive Ring Road |
|
|||||||||
|
Gatwick Airport |
|
|||||||||
|
West Sussex |
|
|||||||||
|
RH6 0HA |
|
|
|
|
|
|
|
|
|
|
|
Company number 224814 |
27 June 2012 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE DIRECTORS' REPORT AND THE FINANCIAL STATEMENTS
|
The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently; · make judgments and estimates that are reasonable and prudent; · state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and · prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.
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 AUDITOR'S REPORT TO THE MEMBERS OF RENTOKIL INITIAL 1927 plc
|
We have audited the financial statements of Rentokil Initial 1927 plc for the year ended 31 December 2011 set out on pages 5 to 22. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed. |
Respective responsibilities of directors and auditors
|
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 (APB's) Ethical Standards for Auditors. |
Scope of the audit of the financial statements
|
A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm |
Opinion on financial statements
|
In our opinion the financial statements: · give a true and fair view of the state of the company's affairs as at 31 December 2011 and of its profit for the year then ended; · have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and · have been prepared in accordance with the requirements of the Companies Act 2006. |
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
· the financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
|
Richard De La Rue |
(Senior Statutory Auditor) |
|
for and on behalf of KPMG Audit Plc, Statutory Auditor |
|
|
Chartered Accountants |
|
|
15 Canada Square |
|
|
London |
|
E14 5GL 28 June 2012
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2011
|
|
Notes |
2011 £m |
2010 £m |
|
|
|
|
|
|
Operating income |
|
70.6 |
64.5 |
|
Operating expenses |
|
(54.7) |
(47.9) |
|
|
|
|
|
|
OPERATING PROFIT |
4 |
15.9 |
16.6 |
|
|
|
|
|
|
Dividends received from subsidiaries |
|
33.9 |
3.7 |
|
|
|
|
|
|
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION |
|
49.8 |
20.3 |
|
|
|
|
|
|
Interest receivable and similar income |
2 |
30.7 |
24.7 |
|
Interest payable and similar charges |
3 |
(15.2) |
(9.7) |
|
|
|
|
|
|
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION |
|
65.3 |
35.3 |
|
|
|
|
|
|
Taxation on profit on ordinary activities |
7 |
1.8 |
(7.8) |
|
|
|
|
|
|
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION |
|
67.1 |
27.5 |
|
|
|
|
|
The results for the year are wholly attributable to the continuing operations of the company.
|
There is no difference between the profit on ordinary activities before taxation and the retained profit for the financial year and their historical cost equivalents. |
The company has no recognised gains and losses other than the results above and therefore no separate statement of total recognised gains and losses has been presented.
|
The notes on pages 7 to 22 form part of the financial statements. |
BALANCE SHEET AS AT 31 DECEMBER 2011
|
|
Notes |
2011 £m |
2010 £m |
|
|
|
|
|
|
FIXED ASSETS |
|
|
|
|
Intangible fixed assets |
8 |
1.7 |
2.0 |
|
Tangible fixed assets |
9 |
10.8 |
4.7 |
|
Investments - shares in subsidiary undertakings |
10 |
1,770.9 |
1,680.4 |
|
|
|
1,783.4 |
1,687.1 |
|
CURRENT ASSETS |
|
|
|
|
Debtors - amounts falling due within one year |
11 |
2,173.3 |
2,076.4 |
|
Debtors - amounts falling due after more than one year |
11 |
129.3 |
192.5 |
|
Derivative financial instruments |
12 |
3.3 |
- |
|
Cash at bank |
|
38.1 |
68.6 |
|
|
|
2,344.0 |
2,337.5 |
|
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
|
|
|
|
Derivative financial instruments |
12 |
(0.8) |
(0.5) |
|
Creditors |
13 |
(2,781.9) |
(2,563.6) |
|
Provisions for liabilities and charges |
15 |
(0.2) |
(0.2) |
|
|
|
(2,782.9) |
(2,564.3) |
|
|
|
|
|
|
NET CURRENT LIABILITIES |
|
(438.9) |
(226.8) |
|
|
|
|
|
|
TOTAL ASSETS LESS CURRENT LIABILITIES |
|
1,344.5 |
1,460.3 |
|
|
|
|
|
|
CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR |
|
|
|
|
Creditors |
13 |
(76.4) |
(59.1) |
|
Provisions for liabilities and charges |
15 |
(0.4) |
(0.6) |
|
|
|
|
|
|
NET ASSETS |
|
1,267.7 |
1,400.6 |
|
|
|
|
|
|
CAPITAL AND RESERVES |
|
|
|
|
Called up share capital |
17 |
18.1 |
18.1 |
|
Share premium account |
18 |
697.3 |
697.3 |
|
Capital redemption reserve |
19 |
19.7 |
19.7 |
|
Retained profits |
20 |
532.6 |
665.5 |
|
SHAREHOLDERS' FUNDS |
22 |
1,267.7 |
1,400.6 |
|
|
|
|
|
The financial statements on pages 5 to 22 were approved by the board on 27 June 2012 and were signed on its behalf by:
|
Jeremy Townsend |
Director
|
The notes on pages 7 to 22 form part of the financial statements. |
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements, except as noted below.
|
The ASB has issued amendments to the following standards:
FRS 29 (IFRS 7) Financial Instruments
SSAP 25 Segmental Reporting
FRS 8 Related Party Disclosures
As a result of the amendments to FRS 29, the company's policy for estimating the fair value of its financial instruments has been disclosed in the note to the financial statements.
FRS 8 Related Party Disclosures is amended to replace the definition of a related party with that set out in UK law. SSAP 25 Segmental Reporting exemption extended to those subsidiary undertakings whose parent undertaking provides segmental information in accordance with EU-adopted IFRSs. The amendments have not had any impact on the financial statements. |
Basis of preparation
The financial statements have been prepared on a going concern basis, in accordance with applicable accounting standards and under historical cost accounting rules. Except for financial instruments which are accounted for under accounting policies consistent with the fair value measurement rules.
|
The company is exempt by virtue of s400 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the company as an individual undertaking and not about its group. |
Under FRS 1 the company is exempt from the requirement to prepare a cash flow statement on the grounds that a parent undertaking includes the company in its own published consolidated financial statements.
As the company is a wholly owned subsidiary of Rentokil Initial plc, the company has taken advantage of the exemption contained in FRS 8 and has therefore not disclosed transactions or balances with wholly owned subsidiaries which form part of the group.
Going Concern
|
The directors have received confirmation from Rentokil Initial plc of its intention to financially support the Company such that the company can meet its obligations as they fall due for of at least 12 months from the date of the directors' approval of these financial statements. |
Foreign currency transactions
Foreign currency transactions are translated into sterling using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the profit and loss account.
1. ACCOUNTING POLICIES (Continued)
Tangible fixed assets
Leasehold buildings are depreciated in equal annual instalments over the shorter of the lease term or the estimated useful life of the leased asset. No depreciation is charged on freehold land or fixed assets under construction. When properties are sold the difference between sale proceeds and net book value is recorded in the profit and loss account.
All other tangible fixed assets are stated at historic cost less depreciation. Historic cost includes expenditure that is directly attributable to the acquisition of the assets. Depreciation on other assets is calculated using the straight-line method to allocate the difference between their cost and their residual values over their estimated useful lives as follows:
· Computer software 5 years
· Plant & equipment 5-10 years
· Office equipment, furniture and fittings 3-10 years
Intangible fixed assets - finite useful lives
|
Intangible assets with finite useful lives are initially measured at either cost or fair value and amortised on a straight-line basis over their useful economic lives, which are reviewed on an annual basis. The residual values of intangible assets are assumed to be nil. |
a) Brands and patents
|
Brands and patents acquired as part of a business combination are initially measured at fair value and amortised on a straight-line basis over their useful economic lives (between 2-15 years). Expenditure incurred to develop, maintain and renew brands internally is recognised as an expense in the period incurred. Separate values are not attributable to internally generated brands and patents. |
b) Research and development
|
Research expenditure is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. |
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Taxation
|
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recover) using the tax rates and rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the taxable profits and results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
|
1. ACCOUNTING POLICIES (Continued)
Taxation (continued)
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all the available evidence, it can be regarded as more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is not recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, being charged to tax only if and when the replacement assets are sold.
Deferred tax is measured at the average rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.
Pensions
|
The company operates defined contribution and defined benefit pension schemes for its employees. The defined benefit pension scheme was closed to future accrual in September 2006. Contributions to the defined contribution plan are charged to the profit and loss account as they fall due. The defined benefit scheme is accounted for on a defined contribution basis as the company's share of the underlying assets and liabilities of the defined benefit scheme cannot be identified. |
Provisions
|
Provision is made in accordance with FRS 12 for self-insurance, based on all claims incurred (whether notified or not) as at the balance sheet date, based on actuarial assessments of the likely amounts of these liabilities.
Other provisions are made for all other known liabilities that exist at the balance sheet date based on management's best estimate of the cost of settling these liabilities. |
Leases
Where the company retains substantially all the risks and rewards of ownership of an asset subject to a lease, the lease is treated as a finance lease. Other leases are treated as operating leases. Future instalments payable under finance leases, net of finance charges, are included in borrowings with the corresponding asset values recorded in fixed assets and depreciated over the shorter of their estimated useful lives or their lease terms. Lease payments are apportioned between the finance element, which is charged to the profit and loss account as interest, and the capital element, which reduces the outstanding obligation for future instalments.
|
Payments under operating leases (net of any incentives received from the lessor) are charged to the profit and loss account on a straight-line basis over the lease term. |
Dividend distribution
|
Dividend distribution to the company's shareholders is recognised as a liability in the financial statements in the period in which the dividends are approved by the company's shareholders. Interim dividends are recognised when paid. |
1. ACCOUNTING POLICIES (Continued)
Financial risk management
The company's activities expose it to market risk, credit risk, liquidity and cash flow interest rate risk.
(a) Market risk
The company is exposed to market risk, primarily related to foreign exchange and interest rate risk. The company's objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in interest rates, foreign currency rates and of the currency exposure of certain net investments in foreign subsidiaries. To achieve this, management actively monitors these exposures and the company enters into currency and interest rate swaps to manage the volatility relating to these exposures.
(b) Credit risk
|
The company has no significant concentrations of credit risk. Derivative counterparties and cash transactions are limited to high-credit-quality financial institutions. The maximum credit risk exposure of the company's financial assets at the end of the period is represented by the amounts reported under the corresponding balance sheet headings. |
(c) Liquidity risk
|
The company is committed to ensuring it has sufficient liquidity to meet its payables as they fall due. To achieve this it aims to maintain significant committed financing headroom. At 31st December 2011 the company had access to the group's headroom under its new smaller facility of £180.0m (2010: £390.0m). |
|
Quantitative information on the risks facing the Group can be found in note 21 of the Group's annual report 2011, along with discussion on capital risk management. |
Financial instruments
|
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the relevant instrument and derecognised when it ceases to be a party to such provisions.
The company classifies its financial instruments in the following categories: financial assets/liabilities at fair value through the profit and loss account and loans and receivables. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition and re-evaluates this designation at every reporting date. The company assesses at each balance sheet date whether there is objective evidence that financial instruments are impaired. |
1. ACCOUNTING POLICIES (CONTINUED)
Financial assets
All financial assets are held at amortised cost, except for derivatives which are classified as held for trading and accordingly held at fair value, with revaluation through the profit and loss account.
(a) Financial assets at fair value through profit and loss account
|
Derivatives are categorised as held for trading unless they are designated as hedges. Assets are classified as current if they are either held for trading or are expected to be realised within 12 months of the balance sheet date. |
(b) Loans and receivables
|
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the company provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months from the balance sheet date. These are classified as non-current assets. Loans and receivables are included in 'Debtors' in the balance sheet. Loans and receivables are measured at amortised cost using the effective interest method, subject to impairment. |
Financial liabilities
Non derivative financial liabilities are stated at amortised cost using the effective interest rate method.
|
Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the balance sheet date with any changes in valuation being recognised immediately in the profit and loss account.
None of the Company's derivative financial instruments are hedge accounted.
Fair value estimation The fair value of any financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Company is the current bid price; the appropriate quoted market price for financial liabilities is the current asking price. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The group uses a variety of methods, such as estimated discounted cash flows, and makes assumptions that are based on market conditions existing at each balance sheet date.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate to their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments. |
2. INTEREST RECEIVABLE AND SIMILAR INCOME
|
|
2011 £m |
2010 £m |
|
|
|
|
|
Bank interest |
5.7 |
3.5 |
|
Intra-group interest receivable |
16.1 |
16.2 |
|
Foreign exchange gains |
8.9 |
5.0 |
|
|
30.7 |
24.7 |
3. INTEREST PAYABLE AND SIMILAR CHARGES
|
|
2011 £m |
2010 £m |
|
|
|
|
|
Interest payable on bank loans and overdrafts |
2.6 |
- |
|
Intra-group interest payable |
12.6 |
9.7 |
|
|
15.2 |
9.7 |
4. OPERATING PROFIT
|
|
2011 £m |
2010 £m |
|
a) Operating profit includes the following items: |
|
|
|
Income from management fees |
(25.9) |
(22.8) |
|
Income from trademark charges |
(44.7) |
(41.7) |
|
Staff costs (see below) |
34.6 |
32.8 |
|
Depreciation of tangible fixed assets (note 9) |
1.4 |
1.3 |
|
Research and development costs |
2.0 |
1.9 |
|
Operating lease rentals (note 24) |
1.4 |
1.2 |
|
Reorganisation costs |
2.6 |
4.6 |
|
Loss on disposal of tangible fixed assets |
0.1 |
0.2 |
|
Amortisation of intangible fixed assets (note 8) Impairment in value of fixed asset investments (note 10)
|
0.3 1.6
|
0.3 -
|
|
b) Staff costs: Wages and salaries Social security costs Other pension costs |
28.7 |
27.4 3.0 2.4 |
|
3.6 |
||
|
2.3 |
||
|
Total staff costs |
34.6 |
32.8 |
5. AUDIT AND NON-AUDIT SERVICES
|
|
2011 £m |
2010 £m |
|
|
|
|
|
Fees payable to the Company's auditors for the audit of the Company's annual accounts |
0.1 |
0.1 |
|
Tax advisory services |
- |
0.1 |
|
|
0.1 |
0.2 |
|
Information about the services provided to the Group's subsidiaries can be found in the Group's annual report 2011. |
6. DIRECTORS' REMUNERATION AND AVERAGE NUMBER OF EMPLOYEES
|
|
2011 £'000 |
2010 £'000 |
|
Aggregate emoluments |
1,860 |
1,435 |
|
Accrued pension benefits under defined contribution scheme |
71 |
58 |
|
Total amount of emoluments |
1,931 |
1,493 |
|
|
|
|
|
Aggregate emoluments of highest paid director (in respect of qualifying services to the company) |
758 |
443 |
|
|
|
|
|
The number of directors to whom retirement benefits are accruing under a defined contribution scheme are as follows: |
2 |
3 |
|
During the year there were 4 directors who qualified for shares under long term incentive plans, of which one was the highest paid director |
|
|
2011 Number |
2010 Number |
|
The average number of employees (including directors) during the year was made up as follows: |
|
|
|
Administration |
375 |
319 |
The costs of these employees are disclosed in note 4 above.
7. TAXATION ON PROFIT ON ORDINARY ACTIVITIES
|
|
2011 £m |
2010 £m |
|
Current tax : |
|
|
|
UK corporation tax on profit for the year - current year |
2.1 |
2.0 |
|
UK corporation tax on profit for the year - prior year |
(2.0) |
5.8 |
|
|
0.1 |
7.8 |
|
Deferred tax - current year |
(1.9) |
- |
|
|
|
|
|
|
(1.8) |
7.8 |
7. TAXATION ON PROFIT ON ORDINARY ACTIVITIES (CONTINUED)
The tax assessed for the period is lower than the standard rate of corporation tax in the UK (26.5%) (2010:28.0%). The differences are explained below:
|
|
2011 £m |
2010 £m |
|
|
|
|
|
Profit on ordinary activities before tax |
65.3 |
35.0 |
|
|
|
|
|
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK (26.5%) (2010: 28.0%) |
17.3 |
9.8 |
|
|
|
|
|
Effects of: |
|
|
|
Disallowable expenses |
0.7 |
0.3 |
|
Non-taxable income from shares in group undertakings |
(9.0) |
(1.0) |
|
Prior year adjustment |
(2.0) |
5.8 |
|
Tax losses received for nil consideration |
(8.5) |
(8.7) |
|
Capital allowances in excess of depreciation |
(0.5) |
(0.3) |
|
Unrelievable withholding tax |
2.1 |
1.9 |
|
Current tax charge for the year |
0.1 |
7.8 |
The 2012 Budget on 21 March 2012 announced that the UK corporation tax rate will reduce to 22% over a period of 3 years from 2012. The first reduction in the UK corporation tax rate from 26% to 24% was substantively enacted on 26 March 2012 and was effective from 1 April 2012. This supersedes a reduction in corporation tax rate from 26% to 25%, previously announced in the 2011 Budget, which was substantially enacted on 5 July 2011 and was effective from 1 April 2012.
It has not yet been possible to quantify the full anticipated effect of the announced further 2% rate reduction, although this will further reduce the company's future tax charge and reduce the company's deferred tax asset accordingly.
8. INTANGIBLE FIXED ASSETS
|
Brand costs
|
£m |
|
Cost |
|
|
At 1 January 2011 and 31 December 2011 |
3.3 |
|
|
|
|
Accumulated amortisation |
|
|
At 1 January 2011 |
1.3 |
|
Amortisation for the year |
0.3 |
|
At 31 December 2011 |
1.6 |
|
|
|
|
Net Book Value |
|
|
At I January 2011 |
2.0 |
|
At 31 December 2011 |
1.7 |
9. TANGIBLE FIXED ASSETS
|
|
Land and buildings
£m |
Office equipment, fixtures and fittings £m |
Computer software
£m |
Total
£m |
|
Cost |
|
|
|
|
|
At 1 January 2011 |
2.2 |
3.3 |
5.7 |
11.2 |
|
Additions |
- |
0.6 |
6.9 |
7.5 |
|
Disposals |
- |
(0.1) |
- |
(0.1) |
|
At 31 December 2011 |
2.2 |
3.8 |
12.6 |
18.6 |
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
At 1 January 2011 |
0.5 |
2.0 |
4.0 |
6.5 |
|
Disposals |
- |
(0.1) |
- |
(0.1) |
|
Depreciation for the year |
0.2 |
0.5 |
0.7 |
1.4 |
|
At 31 December 2011 |
0.7 |
2.4 |
4.7 |
7.8 |
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
At 31 December 2011 |
1.5 |
1.4 |
7.9 |
10.8 |
|
|
|
|
|
|
|
At 31 December 2010 |
1.7 |
1.3 |
1.7 |
4.7 |
|
Analysis of net book value of land and buildings:
|
2011 £m |
2010 £m |
|
Leasehold - under 50 yrs unexpired |
1.5 |
1.7 |
|
At 31 December |
1.5 |
1.7 |
10. INVESTMENTS
|
Shares in subsidiary undertakings |
2011 |
2010 |
|
|
£m |
£m |
|
At 1 January |
1,680.4 |
1,680.4 |
|
Additions in the year |
92.1 |
- |
|
Impairments in the year |
(1.6) |
- |
|
At 31 December |
1,770.9 |
1,680.4 |
|
Investments held as fixed assets are stated at cost less provision for any impairment. In the opinion of the directors the value of such investments are not less than shown at the balance sheet date.
On 29 July 2011 the company purchased all the share capital of Rentokil Initial Espana SA from B.V Rentokil Funding for a consideration of £79.6m.
On 12 October 2011 the company purchased all the share capital of Rentokil Initial Gmbh, a company based in Austria, from BET Finance B.V for a consideration €5.7m (£4.9m).
|
10. INVESTMENTS (CONTINUED)
On 10 November 2011 the company purchased all the share capital of UAB Dezinfa, a company based in Lithuania, for a consideration of €2.1m (£1.8m). On the same day the company also purchased all the share capital of Rentokil OU, a company based in Estonia, for a consideration of €2.2m (£1.8m). Both companies were purchased from Rentokil Initial Espana SA.
During the year the company increased its investment in Rentokil Initial (Philippines) Inc by £4.0m.
During the year, the investment in Rentokil Initial Limited in Ireland was impaired by £1.3m and the full investment of £0.3m in Rentokil Delta for Environmental Protection JSCO was written off due to the suspension of the company's activity in Libya.
The principal investments at 31 December 2011 represent a 100% interest in the ordinary share capital of the following companies:
|
Principal subsidiary name |
Country of incorporation |
|
|
|
|
Rentokil Initial Espana SA |
Spain |
|
Rentokil Initial Gmbh |
Austria |
|
Rentokil Ou |
Estonia |
|
UAB Dezinfa |
Lithuania |
|
Rentokil Initial (Trinidad) Limited |
Trinidad |
|
Rentokil Initial Guyana Limited |
Guyana |
|
Rentokil Initial (Bahamas) Limited |
Bahamas |
|
Rentokil Initial (Barbados) Limited |
Barbados |
|
Rentokil Jamaica Limited |
Jamaica |
|
Rentokil Initial Martinique SARL |
Martinique |
|
Rentokil Initial Employee Share Schemes (Jersey) Limited |
Jersey |
|
Rentokil Initial Kenya Limited |
Kenya |
|
Rentokil Initial Limited |
Ireland |
|
Rentokil Initial (M) Sdn Bhd |
Malaysia |
|
Rentokil Initial (Philippines) Inc |
Philippines |
|
Rentokil Initial Limited |
Fiji |
|
Rentokil Initial Korea Limited |
Korea |
|
PT Rentokil Indonesia |
Indonesia |
|
PT Calmic Indonesia |
Indonesia |
|
Rentokil Initial (1896) Limited (Formerly named BET Limited) |
United Kingdom |
|
Felcourt Insurance Company Limited |
Guernsey |
|
Rentokil Insurance Limited |
United Kingdom |
11. DEBTORS
|
|
2011 £m |
2010 £m |
|
Amounts falling due within one year: |
|
|
|
Amounts owed by ultimate parent |
1,052.8 |
897.1 |
|
Amounts owed by group undertakings |
1,114.2 |
1,177.4 |
|
Other debtors |
5.0 |
0.9 |
|
Prepayments and accrued income |
1.3 |
1.0 |
|
|
2,173.3 |
2,076.4 |
|
|
|
|
|
Amounts falling due after more than one year: |
|
|
|
Amounts owed by group undertakings |
127.4 |
192.5 |
|
Deferred Tax (note 16) |
1.9 |
- |
|
|
129.3 |
192.5 |
|
Amounts owed by group undertakings are made up of interest and non-interest bearing loans. The interest bearing loans of £245.7m (2010: £251.1m) have an effective interest rate ranging from 1.27% to 9.00% (2010: 1.50% to 13.75%), of which £118.4m (2010:£58.6m) falls due within one year. |
12. DERIVATIVE FINANCIAL INSTRUMENTS
|
|
Fair value assets |
Fair value liabilities |
Fair value assets |
Fair value liabilities |
|
|
2011
£m |
2011 |
2010
£m |
2010 |
|
|
£m |
£m |
£m |
£m |
|
External foreign exchange swaps |
3.3 |
0.8 |
- |
0.5 |
|
|
3.3 |
0.8 |
- |
0.5 |
Analysed as follows:
|
Current portion |
3.3 |
0.8 |
- |
0.5 |
All derivatives are marked to market and changes in market valuation are shown within net interest receivable.
13. CREDITORS
|
|
2011 £m |
2010 £m |
|
Amounts falling due within one year: |
|
|
|
Bank overdraft |
192.3 |
113.0 |
|
Amounts due to ultimate parent undertakings |
475.0 |
550.1 |
|
Amounts due to group undertakings |
2,078.1 |
1,848.8 |
|
Corporation tax |
24.1 |
35.9 |
|
Other taxes and social security |
1.0 |
2.0 |
|
Other creditors |
8.4 |
9.6 |
|
Accruals and deferred income |
3.0 |
4.2 |
|
|
2,781.9 |
2,563.6 |
|
Provisions for liabilities and charges (note 15) |
0.2 |
0.2 |
|
|
2,782.1 |
2,563.8 |
|
Amounts falling due after more than one year: |
|
|
|
Amounts due to group undertakings |
76.4 |
59.1 |
|
Provisions for liabilities and charges (note 15) |
0.4 |
0.6 |
|
|
76.8 |
59.7 |
13. CREDITORS (CONTINUED)
|
Interest on borrowings, which are denominated in a number of currencies, is payable at normal commercial rates appropriate to the country in which the borrowing is made.
Amounts due to group undertakings include interest bearing loans of £288.3m with an effective interest rate ranging from 0.24% to 3.00% (2010: 0.75% to 8.00%) which fall due within one year.
9% Preference shares of AUD105.0m (£68.9m) and NZD15.0m (£7.5m) issued to Rentokil Initial Holdings Limited are classified as interest bearing loans falling due after one year. |
14. MATURITY PROFILE OF FINANCIAL LIABILITIES
The maturity profile of the carrying amount of the company's financial liabilities was as follows:
|
|
|
Loans |
Derivatives |
Other Creditors |
Total |
|
2011 |
|
£m |
£m |
£m |
£m |
|
Within 1 year, or on demand |
|
2,728.1 |
0.8 |
28.9 |
2,757.8 |
|
Between 1 and 2 years |
|
- |
- |
0.2 |
0.2 |
|
Between 2 and 5 years |
|
- |
- |
0.2 |
0.2 |
|
Over 5 years |
|
76.4 |
- |
- |
76.4 |
|
|
|
2,804.5 |
0.8 |
29.3 |
2,834.6 |
|
|
|
Loans |
Derivatives |
Other Creditors |
Total |
|
2010 |
|
£m |
£m |
£m |
£m |
|
Within 1 year, or on demand |
|
2,500.8 |
0.5 |
25.1 |
2,526.4 |
|
Between 1 and 2 years |
|
- |
- |
0.2 |
0.2 |
|
Between 2 and 5 years |
|
- |
- |
0.4 |
0.4 |
|
Over 5 years |
|
59.1 |
- |
- |
59.1 |
|
|
|
2,559.9 |
0.5 |
25.7 |
2,586.1 |
Floating rate loans bear interest at rates, based on the relevant national borrowing rate benchmark equivalents (e.g. GBP LIBOR), which are fixed in advance usually for periods of between one and twelve months.
14. MATURITY PROFILE OF FINANCIAL LIABILITIES (CONTINUED)
The carrying amounts of the company's financial liabilities excluding derivative financial instruments are denominated in the following currencies:
|
|
|
|
Loans |
Other Creditors |
Total |
|
2011 |
|
|
£m |
£m |
£m |
|
Pound sterling |
|
|
2,157.6 |
21.6 |
2,179.2 |
|
Euro |
|
|
513.0 |
7.2 |
520.2 |
|
US dollar |
|
|
35.6 |
- |
35.6 |
|
Other currencies |
|
|
98.3 |
0.5 |
98.8 |
|
|
|
|
2,804.5 |
29.3 |
2,833.8 |
|
2010 |
|
|
|
|
|
|
Pound sterling |
|
|
1,703.3 |
16.7 |
1,720.0 |
|
Euro |
|
|
567.2 |
1.8 |
569.0 |
|
US dollar |
|
|
103.5 |
- |
103.5 |
|
Other currencies |
|
|
185.9 |
7.2 |
193.1 |
|
|
|
|
2,559.9 |
25.7 |
2,585.6 |
The company had no undrawn committed borrowing facilities at 31 December 2011 (31 December 2010: £nil).
The maturity profile of the carrying amount of the company's financial assets, excluding other debtors was as follows:
|
|
Cash |
Derivatives |
Other Receivables |
Total |
|
2011 |
£m |
£m |
£m |
£m |
|
Within 1 year, or on demand |
38.1 |
3.3 |
2,173.3 |
2,214.7 |
|
Between: - 1 and 2 years |
- |
- |
69.9 |
69.9 |
|
- 2 and 5 years |
- |
- |
57.5 |
57.5 |
|
|
38.1 |
3.3 |
2,300.7 |
2,342.1 |
|
2010 |
|
|
|
|
|
Within 1 year, or on demand |
68.6 |
- |
2,075.4 |
2,144.0 |
|
Between - 1 and 2 years |
- |
- |
86.2 |
86.2 |
|
- 2 and 5 years |
- |
- |
106.3 |
106.3 |
|
|
68.6 |
- |
2,267.9 |
2,336.5 |
Cash
Floating rate cash earns interest at commercial rates in line with local market practice.
15. PROVISIONS FOR LIABILITIES AND CHARGES
|
|
Vacant property |
Self insurance |
Total |
|
|
£m |
£m |
£m |
|
As at 1 January 2011 |
0.8 |
- |
0.8 |
|
Additional provisions |
- |
- |
- |
|
Used during year |
(0.2) |
- |
(0.2) |
|
As at 31 December 2011 |
0.6 |
- |
0.6 |
|
|
|
|
|
|
As at 1 January 2010 |
1.0 |
0.3 |
1.3 |
|
Additional provisions |
- |
- |
- |
|
Unused amounts reversed |
- |
(0.3) |
(0.3) |
|
Used during year |
(0.2) |
- |
(0.2) |
|
As at 31 December 2010 |
0.8 |
- |
0.8 |
|
Provisions analysed as follows: |
|
2011 £m |
2010 £m |
|
Within 1 year |
|
0.2 |
0.2 |
|
1-2 years |
|
0.2 |
0.2 |
|
2-5 years |
|
0.2 |
0.4 |
|
Total |
|
0.6 |
0.8 |
16. DEFERRED TAXATION
The movement on the deferred taxation account is as follows:
|
|
2011 £m |
2010 £m |
|
|
|
|
|
1 January (note 10) |
- |
- |
|
Credited to profit and loss account (note 7) |
1.9 |
- |
|
At 31 December |
1.9 |
- |
|
|
|
|
|
Deferred tax |
|
|
|
Deferred tax comprises: |
|
|
|
Capital allowances timing differences |
1.4 |
- |
|
Other timing differences |
0.5 |
- |
17. CALLED UP SHARE CAPITAL
|
|
2011 £m |
2010 £m |
|
ALLOTTED AND FULLY PAID |
|
|
|
At 1 January and 31 December 2011 - 1,810,429,098 shares of 1p each |
18.1 |
18.1 |
18. SHARE PREMIUM ACCOUNT
|
|
2011 |
2010 |
|
|
£m |
£m |
|
At 1 January and 31 December 2011 |
697.3 |
697.3 |
19. CAPITAL REDEMPTION RESERVE
|
|
2011 |
2010 |
|
|
£m |
£m |
|
At 1 January and 31 December 2011 |
19.7 |
19.7 |
20. RETAINED PROFITS
|
|
2011 £m |
2010 £m |
|
At 1 January 2011 |
665.5 |
638.0 |
|
Profit for the year |
67.1 |
27.5 |
|
Interim dividends paid (note 21) |
(200.0) |
- |
|
At 31 December 2011 |
532.6 |
665.5 |
21. DIVIDENDS
|
|
2011 £m |
2010 £m |
|
Equity- Ordinary |
|
|
|
Interim paid 11.05p per 1p share (2010: £nil) |
200.0 |
- |
The directors do not propose a final dividend for the year ended 31 December 2011.
22. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
|
|
2011 £m |
2010 £m |
|
Retained profit for the year |
67.1 |
27.5 |
|
Dividend paid |
(200.0) |
- |
|
Retained (loss)/profit for the year |
(132.9) |
27.5 |
|
Opening shareholders' funds |
1,400.6 |
1,373.1 |
|
Equity shareholders' funds |
1,267.7 |
1,400.6 |
23. PENSION COMMITMENTS
The employees of the company contribute to a defined contribution scheme. The principal defined benefit scheme operated by the Group, the Rentokil Initial Pension Scheme ('RIPS'), was closed to future service accrual on 30 September 2006.
At 31 December 2011, the RIPS asset disclosed in the consolidated financial statements of Rentokil Initial plc (prepared under International Financial Reporting Standards) amounted to £144.0m (2010: £5.0m). The directors are of the opinion that there is no material difference between an FRS 17 "Retirement Benefits" and an IAS 19 valuation.
The payment made by the company to the pension scheme during the year was £2.3m.
The directors believe that the company's share of the underlying assets and liabilities of this scheme cannot be identified and as a consequence, the scheme has been accounted for as a defined contribution scheme.
Further information on the Group's pension commitments can be found in the Group's annual report 2011.
24. OPERATING LEASES
The company leases properties and motor vehicles under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The lease expenditure charged to the profit and loss account during the year is disclosed in note 4.
Lease payments under non-cancellable operating leases falling due in the following year are as follows:
|
|
2011 |
2010 |
|
|
£m |
£m |
|
Operating leases which expire: |
|
|
|
Within one year |
0.1 |
- |
|
Between one and five years |
1.2 |
1.1 |
|
After five years |
0.1 |
0.1 |
|
|
1.4 |
1.2 |
25. CONTINGENT LIABILITIES
The company has guaranteed bank and other borrowings of subsidiaries and parent company. The company has in the normal course of business given performance guarantees in respect of the group's own contracts and, in connection with the disposal of businesses, has assumed certain contingent obligations. None of these matters is expected to give rise to any material loss.
26. ULTIMATE PARENT COMPANY
The company's immediate parent is Rentokil Initial Holdings Limited. The company's ultimate parent is Rentokil Initial plc, which forms the only group into which the financial statements of the company are consolidated. The consolidated financial statements of Rentokil Initial plc are available from 2 City Place, Beehive Ring Road, Gatwick Airport, West Sussex, RH6 0HA.
27. POST BALANCE SHEET EVENTS
|
On 3rd January 2012 the company issued 100.0m DKK1.0 redeemable 9% preference shares for DKK100.0m (£11.2m) to Rentokil Initial Holdings Limited. |
|
|
|
Amended and Restated Deed of Guarantee issued by Rentokil Initial 1927 plc in respect of the €2,500,000,000 Euro Medium Term Note Programme of Rentokil Initial plc
|
|
Dated 7 September 2012 |
|
Rentokil Initial 1927 plc (Guarantor) and
HSBC Corporate Trustee Company (UK) Limited (Trustee) |
|
|
|
|
Contents
1 Interpretation 4
2 Guarantee and Indemnity 5
3 Enforcement by Trustee 6
4 Consents 7
5 Fees, Duties and Taxes 7
6 Currency Indemnity 7
7 Preservation of Rights 8
8 Deposit of Guarantee 9
9 Stamp Duties 9
10 Termination 9
11 Amendments 9
12 Benefit of Guarantee 9
13 Partial Invalidity 10
14 Notices 10
15 Contracts (Rights of Third Parties) Act 1999 11
16 Governing Law 11
This Amended and Restated Deed of Guarantee is made on 7 September 2012 and will expire on 31 December 2025 except in relation to any of its obligations and liabilities arising hereunder before such date.
BETWEEN (1) RENTOKIL INITIAL 1927 PLC (the Guarantor) and (2) HSBC Corporate Trustee Company (UK) Limited (the Trustee)
In favour ofthe Trustee as trustee for the Noteholders and, if different, the Couponholders.
Whereas:
The Guarantor has agreed to guarantee, up to and including the Termination Date, as provided by, and subject to, Clause 10, the payment of all sums expressed to be payable from time to time by Rentokil Initial plc (the Issuer) in respect of notes (Notes) issued by the Issuer from time to time under the Issuer's Debt Issuance Programme.
This Guarantee amends and restates the Original Deed of Guarantee. Any Notes issued under the Debt Issuance Programme on or after the date hereof shall have the benefit of this Guarantee. This does not affect any Notes issued under the Debt Issuance Programme prior to the date of this Guarantee.
Now this Guarantee witnesses as follows:
1 Interpretation
1.1 Definitions
In this Guarantee all capitalised terms shall (unless otherwise defined herein) have the meanings given to them in the Trust Deed and the following expressions shall have the following meanings:
Consent includes any authorisation, approval, consent, licence, exemption, filing, registration, notarisation or other matter, official, corporate or otherwise;
Debt Issuance Programme means the Issuer's €2.5bn Euro Medium Note Programme constituted by the Trust Deed;
Group means the Issuer and its subsidiaries and affiliates taken as a whole;
Law includes any law, judicial order or treaty or any regulation, rule or official directive and unlawful is to be construed accordingly;
Noteholder means any holder of Notes, and Couponholder means any holder of coupons relating to such Notes, as the case may be;
Original Deed of Guarantee means the Deed of Guarantee dated 23 October 2008 and made between the Guarantor and the Trustee;
Person means any individual, company, corporation, firm, partnership, joint venture, association, organisation, state or agency of a state or other entity, whether or not having separate legal personality;
Termination Date has the meaning given to it in Clause 10;
this Guarantee means this Amended and Restated Deed of Guarantee as the same may be amended, supplemented, restated and/or modified from time to time; and
Trust Deed means the trust deed dated 9 December 2005, as supplemented by the First Supplemental Trust Deed dated 19 March 2007 and the Second Supplemental Trust Deed dated 13 June 2008 constituting the Notes including the Terms and Conditions of the Notes set out therein of even date herewith and made between the Issuer and the Trustee as the same may be amended, supplemented, restated and/or modified from time to time.
1.2 Clauses
Any reference in this Guarantee to a Clause is, unless otherwise stated, to a Clause hereof.
1.3 Headings
Headings and sub-headings are for ease of reference only and shall not affect the construction of this Guarantee.
2 Guarantee and Indemnity
2.1 Guarantee
Up to and including the Termination Date, the Guarantor hereby unconditionally and irrevocably guarantees to the Trustee (for the benefit of the Trustee, the Noteholders and the Couponholders) the due and punctual payment of all sums expressed to be payable from time to time by the Issuer under the Agency Agreement, the Trust Deed, and, if different, in respect of the Notes, the Receipts or the Coupons (if any) as and when the same become due and payable and accordingly undertakes to pay to or to the order of the Trustee (for the Trustee and on behalf of the Noteholders and the Couponholders) forthwith in the manner and currency prescribed by the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons (as the case may be) for payments by the Issuer, any and every sum or sums which the Issuer is at any time liable to pay under the terms of the Agency Agreement, the Trust Deed or (if different) in respect of the Notes, the Receipts or Coupons (if any) and which such Issuer has failed to pay.
2.2 The Guarantor as Principal Debtor
As between the Guarantor, the Trustee, the Noteholders and the Couponholders but without affecting the Issuer's obligations, the Guarantor shall be liable under this Clause 2 as if it were the sole principal debtor and not merely a surety. Accordingly, it shall not be discharged, nor shall its liability be affected, by anything that would not discharge it or affect its liability if it were the sole principal debtor (including (1) any time, indulgence, waiver or consent at any time given to the Issuer or any other person, (2) any amendment to any other provisions of this Guarantee, the Agency Agreement, the Trust Deed, the Notes or to the Conditions or to any security or other guarantee or indemnity, (3) the making or absence of any demand on the Issuer or any other person for payment, (4) the enforcement or absence of enforcement of this Guarantee, the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons or of any security or other guarantee or indemnity, (5) the taking, existence or release of any security, guarantee or indemnity, (6) the dissolution, amalgamation, reconstruction or reorganisation of the Issuer or any other person or (7) the illegality, invalidity or unenforceability of or any defect in any provision of this Guarantee, the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons or the Issuer's obligations under any of them).
2.3 The Guarantor's Obligations Continuing
The Guarantor's obligations under this Guarantee are and shall remain in full force and effect by way of continuing security until the earlier of the Termination Date and the date no sum remains payable under this Guarantee, the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons. Furthermore, these obligations of the Guarantor are additional to, and not instead of, any security or other guarantee or indemnity at any time existing in favour of any person, whether from the Guarantor or otherwise and may be enforced without first having recourse to the Issuer, any other person, any security or any other guarantee or indemnity. The Guarantor irrevocably waives all notices and demands of any kind and the filing of any claim with a court.
2.4 Exercise of the Guarantor's Rights
So long as any sum remains payable under this Guarantee, the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons:
2.4.1 any right of the Guarantor, by reason of the performance of any of its obligations under this Clause 2, to be subrogated to, or of contribution from or indemnified by, the Issuer or to take the benefit of or to enforce any security or other guarantee or indemnity shall be exercised and enforced by the Guarantor only in such manner and on such terms as the Trustee may require or approve in writing; and
2.4.2 any amount received or recovered by the Guarantor (1) as a result of any exercise of any such right or (2) in the dissolution, amalgamation, reconstruction or reorganisation of the Issuer shall be held in trust for the Trustee and immediately paid to the Trustee and the Trustee shall hold it on the trusts set out in Clause 7.2.1 hereof.
2.5 Suspense Accounts
Any amount received or recovered by the Trustee in respect of any sum payable by the relevant Issuer under the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons may be placed in a suspense account and kept there for so long as the Trustee thinks fit.
2.6 Avoidance of Payments
Up to and including the Termination Date, if any payment received by the Trustee or any Noteholder or Couponholder under the provisions of the Trust Deed shall (whether on the subsequent bankruptcy, insolvency or corporate reorganisation of the Issuer or, without limitation, on any other event) be avoided or set aside for any reason, such payment shall not be considered as discharging or diminishing the liability of the Guarantor and this guarantee shall continue to apply as if such payment had at all times remained owing by the Issuer, and the Guarantor shall indemnify the Trustee, each Noteholder and each Couponholder against any cost, loss, expense or liability sustained or incurred by it as a result of it being required for any reason (including any bankruptcy, insolvency, winding-up, dissolution, or similar law of any jurisdiction) to refund all or part of any amount received or recovered by it in respect of any sum payable by the Issuer under the Agency Agreement, the Trust Deed, any Note or the Receipts or Coupons relating to such Note.
2.7 Debts of Issuer
If any moneys become payable by the Guarantor under this Guarantee, the Guarantor acknowledges that the Issuer shall not (except in the event of the liquidation of the Issuer) so long as any such moneys remain unpaid, pay any moneys for the time being due from such Issuer to the Guarantor. The provisions of Clause 2.4.2 shall apply to any moneys received by the Guarantor from the Issuer while any moneys are payable by the Guarantor under this Guarantee.
2.8 Indemnity
Up to and including the Termination Date and as separate, independent and alternative stipulations, the Guarantor unconditionally and irrevocably agrees (1) that if any sum that, although expressed to be payable by the Issuer under the Agency Agreement, the Trust Deed, the Notes or the Receipts or Coupons, is for any reason (whether or not now existing and whether or not now known or becoming known to the Issuer, the Guarantor, the Trustee or any Noteholder or Couponholder) not recoverable from the Guarantor on the basis of a guarantee it shall nevertheless be recoverable from it as if it were the sole principal debtor and shall be paid by it to the Trustee on demand and (2) as a primary obligation to indemnify the Trustee, each Noteholder and each Couponholder against any loss suffered by it as a result of any sum expressed to be payable by the relevant Issuer under the Agency Agreement, the Trust Deed, the Notes or the Receipts or Coupons not being paid on the date and otherwise in the manner specified in the Agency Agreement or the Trust Deed or any payment obligation of the Issuer under the Agency Agreement, the Trust Deed, the Notes, the Receipts or the Coupons being or becoming void, voidable or unenforceable for any reason (whether or not now existing and whether or not now known or becoming known to the Trustee, any Noteholder or any Couponholder), the amount of that loss being the amount expressed to be payable by the Issuer in respect of the relevant sum.
2.9 Costs
All costs, charges, liabilities, loss, damages and expenses including any value added tax chargeable in respect thereof and legal fees and expenses on a full indemnity basis properly incurred and payments made by the Trustee or any appointee thereof in the preparation or execution or purported preparation or execution of any of its trusts, powers, authorities and discretions under this Guarantee, the enforcement of any provision of this Guarantee and/or the taking of proceedings or any other action against or in relation to the Guarantor under this Guarantee or in respect of any other matter done or omitted in any way relating to this Guarantee shall be payable by the Guarantor on demand. Such costs, charges, liabilities and expenses shall:
2.9.1 in the case of payments made by the Trustee before such demand, carry interest from the date of the demand at the rate of 2 per cent. per annum over the base rate of HSBC Bank plc on the date on which the Trustee made such payments; and
2.9.2 in other cases, carry interest at such rate from 30 days after the date of the demand or (where the demand specifies that payment is to be made on an earlier date) from such earlier date.
3 Enforcement by Trustee
3.1 Enforcement by Trustee
The Trustee may at its discretion or shall on the instructions of the Noteholders under clause 8(A) of the Trust Deed (as applicable) and without notice (but subject always to being indemnified to its satisfaction as therein provided) take such proceedings as it may think fit against the Guarantor to enforce the provisions of this Guarantee.
3.2 Authority to Enforce
The provisions as to enforcement of the Notes contained in clause 8 of the Trust Deed (as applicable) shall apply to this Guarantee as if this Guarantee were referred to therein.
3.3 Only Trustee to Enforce
Only the Trustee may enforce the provisions of this Guarantee. No Noteholder or Couponholder shall be entitled to proceed directly against the Guarantor to enforce performance of any of the provisions of this Guarantee unless the Trustee, having become bound to take proceedings in accordance with the provisions of clause 8 of the Trust Deed, fails to do so within a reasonable period and such failure shall be continuing.
4 Consents
The Guarantor shall promptly:
(a) obtain;
(b) renew;
(c) supply certified copies to the Trustee of; and
(d) comply with the terms of,
any consent required under any law to enable it to perform its obligations under, or for the validity or enforceability of, this Guarantee.
5 Fees, Duties and Taxes
The Guarantor will pay any stamp, issue, registration, documentary and other fees, duties and taxes, including interest and penalties, payable on or in connection with (i) the execution and delivery of these presents and (ii) any action taken by or on behalf of the Trustee or (where permitted under these presents so to do) any Noteholder or Couponholder to enforce, or to resolve any doubt concerning, or for any other purpose in relation to, these presents.
6 Currency Indemnity
6.1 Up to and including the Termination Date the Guarantor shall indemnify the Trustee, the Noteholders and the Couponholders and keep them indemnified against:
(a) any Liability incurred by any of them arising from the non-payment by the Issuer of any amount due to the Trustee or the holders of the Notes and the relative Receiptholders or Couponholders under these presents by reason of any variation in the rates of exchange between those used for the purposes of calculating the amount due under a judgment or order in respect thereof and those prevailing at the date of actual payment by the Guarantor; and
(b) any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the local currency equivalent of the amounts due or contingently due under these presents (other than this Clause 6) is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Guarantor and (ii) the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation. The amount of such deficiency shall be deemed not to be reduced by any variation in rates of exchange occurring between the said final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation.
6.2 The above indemnities shall constitute obligations of the Guarantor separate and independent from its other obligations under the other provisions of these presents and shall apply irrespective of any indulgence granted by the Trustee or the Noteholders, the Receiptholders or the Couponholders from time to time and shall continue in full force and effect notwithstanding the judgment or filing of any proof or proofs in any bankruptcy, insolvency or liquidation of the Guarantor for a liquidated sum or sums in respect of amounts due under these presents (other than this Clause 6). Any such deficiency as aforesaid shall be deemed to constitute a loss suffered by the Noteholders, the Receiptholders and the Couponholders and no proof or evidence of any actual loss shall be required by the Guarantor or its liquidator or liquidators.
7 Preservation of Rights
7.1 Enforcement
The Trustee may make any arrangement or compromise with the Issuer (without prejudice to the rights and obligations of the Issuer and the Guarantor inter se) or with the Guarantor in relation to this Guarantee which the Trustee in its absolute discretion considers expedient in the interests of the Noteholders and the Couponholders.
7.2 Application of moneys received by the Trustee
7.2.1 Declaration of Trust: All moneys received by the Trustee in respect of amounts payable under this Guarantee shall, despite any appropriation of all or part of them by the Issuer or the Guarantor unless and to the extent attributable in the opinion of the Trustee to a particular series of Notes, be apportioned pari passu and rateably between each series of the Notes and all moneys received by the Trustee under this Guarantee to the extent attributable in the opinion of the Trustee to a particular series or which are apportioned thereto as aforesaid shall be held by the Trustee on trust to apply them (subject to the provisions of Clauses 2.5 and 7.2.2):
first, in payment of all costs, charges, loss, damages, expenses including any value added tax chargeable in respect thereof and legal fees and expenses on a full indemnity basis and liabilities properly incurred by the Trustee or any appointee thereof (including remuneration payable to it) in carrying out its functions under this Guarantee or the Trust Deed as the case may be and any other amount owing to it under this Guarantee or the Trust Deed;
secondly, in payment of any amounts owing in respect of the Notes or the Coupons of that series pari passu and rateably;
thirdly, in payment of any amounts owing in respect of the Notes or coupons of each other series;
fourthly, in payment of any amounts owing in respect of the Agency Agreement; and
fifthly, in payment of any balance to the Guarantor for itself.
7.2.2 Investment by Trustee:
(a) The Trustee may at its discretion and pending payment invest moneys at any time available for the payment of principal, premium (if any) and interest on the Securities in some or one of the investments hereinafter authorised for such periods as it may consider expedient with power from time to time at the like discretion to vary such investments. All interest and other income deriving from such investment shall be applied first in payment or satisfaction of all amounts then due and unpaid under Clause 7.2.1 to the Trustee and/or any Appointee and otherwise held for the benefit of and paid to the Holders or Couponholders, as the case may be.
(b) Any moneys which under these presents ought to or may be invested by the Trustee may be invested in the name or under the control of the Trustee in any investments or other assets in any part of the world whether or not they produce income or by placing the same on deposit in the name or under the control of the Trustee at such bank or other financial institution and in such currency as the Trustee may think fit. If that bank or institution is the Trustee or a Subsidiary, holding or associated company of the Trustee, it need only account for an amount of interest equal to the amount of interest which would, at then current rates, be payable by it on such a deposit to an independent customer. The Trustee may at any time vary any such investments for or into other investments or convert any moneys so deposited into any other currency and shall not be responsible for any loss resulting from any such investments or deposits, whether due to depreciation in value, fluctuations in exchange rates or otherwise.
7.3 Additional Security
This Guarantee is in addition to, and is not in any way prejudiced by, any other security, guarantee or indemnity now or hereafter held by the Trustee, any Noteholder or any Couponholder as security for the obligations of each of the Issuers under the Agency Agreement, the Trust Deed, the Notes or, as the case may be, the Coupons.
7.4 Pari passu
The Guarantor undertakes that its obligations under this Guarantee will at all times rank at least pari passu with all other present and future unsecured and unsubordinated obligations of the Guarantor, save for such obligations as may be preferred by law.
8 Deposit of Guarantee
An original of this Guarantee shall be deposited with and held by or to the order of the Trustee at such place as it shall determine until the date which is the earlier of two years after that on which this Guarantee has terminated pursuant to Clause 10.
The Guarantor hereby acknowledges the right of the Trustee and of every Noteholder and Couponholder to the production of this Guarantee.
9 Stamp Duties
The Guarantor shall pay all stamp, registration and other taxes and duties (including any interest and penalties thereon or in connection therewith) which are payable upon or in connection with the execution and delivery of this Guarantee, and shall indemnify the Trustee and each Noteholder and Couponholder against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees and any applicable value added tax) which it incurs as a result of or arising out of or in relation to any failure to pay or any delay in paying any of the same.
10 Termination
The Guarantor shall be discharged and released from all its obligations and liabilities under this Guarantee at 11.59 p.m. (London time) on 31 December 2025 ("Termination Date"), except in relation to its obligations and liabilities arising hereunder before such date.
11 Amendments
Any provision of this Guarantee may be amended or waived with the agreement of the Guarantor and the Trustee. The Trustee may effect, on behalf of the Noteholders and the Couponholders, any amendment which it has agreed with the Guarantor.
12 Benefit of Guarantee
12.1 Deed
This Guarantee shall take effect as a deed for the benefit of the Trustee, the Noteholders and the Couponholders from time to time.
12.2 Benefit
The obligations expressed to be assumed by the Guarantor in this Guarantee shall enure for the benefit of the Trustee and each Noteholder and Couponholder and its (and any subsequent) successors and assigns. Pursuant to the provisions of Clause 3.3 the Trustee shall enforce such obligations against the Guarantor on behalf of itself, the Noteholders and the Couponholders.
12.3 No assignment
The Guarantor may not assign or transfer all or any of its rights, benefits or obligations under this Guarantee.
13 Partial Invalidity
If at any time any provision of this Guarantee is or becomes illegal, invalid or unenforceable in any respect under the Laws of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Guarantee nor the legality, validity or enforceability of such provision under the Laws of any other jurisdiction shall in any way be affected or impaired thereby.
14 Notices
Any notice or demand to the Guarantor or the Trustee to be given, made or served for any purposes under these presents shall be given, made or served by sending the same by pre-paid post (first class if inland, first class airmail if overseas) or facsimile transmission or by delivering it by hand as follows:
to the Issuer: Rentokil Initial 1927 plc
Portland House
Bressenden Place
London SW1E 5BH
England
(Attention: Company Secretary)
Facsimile No. (020) 7866 3803
to the Trustee: HSBC Corporate Trustee Company (UK) Limited
8 Canada Square
London E14 5HQ
(Attention: CTLA Trustee Services Administration)
Facsimile No. (020) 7991 4351
or to such other address or facsimile number as shall have been notified (in accordance with this Clause 14) to the other party hereto and any notice or demand sent by post as aforesaid shall be deemed to have been given, made or served three days in the case of inland post or seven days in the case of overseas post after despatch and any notice or demand sent by facsimile transmission as aforesaid shall be deemed to have been given, made or served 24 hours after the time of despatch PROVIDED THAT in the case of a notice or demand given by facsimile transmission such notice or demand shall forthwith be confirmed by post. The failure of the addressee to receive such confirmation shall not invalidate the relevant notice or demand given by facsimile transmission.
15 Contracts (Rights of Third Parties) Act 1999
Subject to the provisions of Clauses 3 and 12 hereof, no person shall have any right to enforce any term of this Guarantee under the Contracts (Rights of Third Parties) Act 1999.
16 Governing Law
This Guarantee, and any non-contractual obligations arising out of or in connection with it, is governed by, and shall be construed in accordance with, English law.
In witness whereof this Guarantee has been executed as a deed by the Guarantor and the Trustee and is intended to be and is hereby delivered on the date first above written.
EXECUTED as a deed by )
RENTOKIL INITIAL 1927 PLC )
acting by Jeremy Townsend and )
Paul Griffiths ) Director JEREMY TOWNSEND
Director PAUL GRIFFITHS
EXECUTED as a deed by )
HSBC Corporate Trustee )
Company (UK) Limited ) by its attorney JOHN PICKTHORN
acting by its attorney )
)
In the presence of
Signature of witness AMY FLYNN
Name of witness Amy Flynn
Address of witness HSBC
Corporate Trust & Loan Agency
8 Canada Square Level 27
London E14 5HQ
Occupation of witness Banker
This information is provided by RNS
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP