ADC Zeros 2010 plc

Half Yearly Report

RNS Number : 2867A
ADC Zeros 2010 plc
28 January 2011
 

ADC ZEROS 2010 PLC

HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2010

 

The following is the unaudited Interim Board Report for the six months ended 30 November 2010.

 

Interim Board Report

 

The investment objective of ADC Zeros 2010 PLC is to maintain a level of assets to cover the entitlement of the 2010 ZDP Shares at all times. Subject to there being sufficient assets after deductions are made, any shortfall in assets will be covered under the subscription agreement with the Company's parent undertaking, Aberdeen Development Capital PLC ("ADC"), to the extent that ADC has assets to meet its obligations under the subscription agreement.

 

The following is the unaudited Interim Board Report for the six months ended 30 November 2010.

 

Set against the continuing unfavourable environment for the realisation of interests in smaller unlisted companies, the six months to 30 November 2010 has seen ADC's investment manager continue to make headway with the process of liquidating the portfolio in an orderly fashion. No full exits have been achieved during the period but £484,000 was received by way of a recovery of VAT charged on investment management fees in the years 1990-1996 and 2001-2003. At present, interest on the above and for receipts relating to other periods has yet to be received. Once this interest amount has been received the Board intends to declare a fifth return of capital to ZDP shareholders. A separate announcement advising the rate and timing of the payment will be made in due course.

 

The majority of the remaining portfolio investments are fairly illiquid in nature so will prove difficult to realise, particularly at a value which will return full value to the ZDP shareholders. However, we will continue to attempt to extract maximum value despite challenging market conditions and the proximity of the ZDP share repayment date in April 2012.

 


30 November 2010


£m

Total assets less current liabilities (Group)

8.36

Less prior ranking liabilities:


2010 ZDP shares*

(2.89)

2012 ZDP  shares*

(2.89)

Cover

2.58

*rank pari-passu

 

Principal Risks and Uncertainties

 

Investment and Market Risks: Investments in smaller unlisted companies carry substantially greater risk, in terms of price and liquidity, than investments in larger companies or companies listed on the Official List.

 

Shares: The market value of the ZDP shares, as well as being affected by the net asset value, also takes into account their supply and demand. The market value of a ZDP share can fluctuate and may not always reflect its accrued capital entitlement. There can be no guarantee that appreciation in the value of the Group's investments will occur and investors may not get back the full value of their original investment.

 

Investment Objective: There is no guarantee that the investment policy adopted by the Company will provide the returns sought by the Company.

 

Gearing: The Company currently utilises gearing in the form of ZDP shares. Gearing has the effect of exacerbating market falls and market gains.

 

Discount: The ability to buy back ZDP shares with the objective of managing the discount on the ZDP shares is dependent on a number if factors including the ability to buy back shares in the market, the ability to fund share buybacks, the authority to buy back shares being renewed annually and the Board's discretion over the making and timing of any buybacks. Even when ZDP shares are bought back, there can be no guarantee that this will result in the discount narrowing.

 

Duration: There is no fixed life on the Ordinary shares of the Company although some capital has been returned to ZDP shareholders under the Capital Return Scheme and Buy Back Programme approved by Shareholders on 3 August 2007. The 2010 ZDP shares are due to be repaid in full on 30 April 2012, an extension to their life having been approved by Shareholders on 6 April 2010. There is no guarantee that the final capital entitlement of the 2010 ZDP shares and 2012 ZDP shares will be paid in full (42.11 pence per share) on 30 April 2012.

 

Responsibility Statement

 

The Directors are responsible for preparing the half-yearly financial report in accordance with applicable law and regulations. The Directors confirm to the best of their knowledge:

 

a) the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement 'Half-Yearly Financial Reports';

b) the Interim Board Report (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R of the UK Listing Authority Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period and any changes in the related party transactions described in the last annual report that could so do).

 

The half-yearly report for the six months to 30 November 2010 comprises the Interim Board Report and a condensed set of financial statements, and has not been audited or reviewed by the external auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial information.

 

For and on behalf of the Board of ADC Zeros 2010 PLC

John Milligan

Chairman

28 January 2011

 

 

 

 

 



Condensed Statement of Comprehensive Income

 


Six months ended

Six months ended

Year ended


30 November 2010

(unaudited)

30 November 2009

(unaudited)

31 May 2010

(audited)


£'000

£'000

£'000

Interest income

-

-

-

Total revenue

-

-

-

Loan interest

89

131

263


89

131

263

Expenses




Management fees

-

-

-

Other operating expenses

-

-

-

Profit before finance costs and taxation

89

131

263

Finance costs




Zero dividend preference shares

(89)

(131)

(263)

Profit before taxation

-

-

-

Taxation

(2)

-

(36)

Loss after taxation

(2)

-

(36)

Return per Ordinary share (pence)

(1.71)

-

(30.86)

 

The Company does not have any income or expense that is not included in profit/(loss) for the period, and therefore the "Profit/(loss) for the period" is also the "Total comprehensive income for the period" as defined in IAS 1 (revised).

 

All of the profit/(loss) and total comprehensive income is attributable to the equity holders of ADC Zeros 2010 PLC. There are no minority interests.

 

All items in the above statement derive from continuing operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Balance Sheet

 


At

30 November 2010

At

30 November 2009

At

31 May 2010


(unaudited)

£'000

 (unaudited)

£'000

(audited)

£'000

Non-current assets




Held at fair value investments

-

-

-





Current assets




Cash and cash equivalents

162

205

162

Other receivables

2,885

4,162

2,796


3,047

4,367

2,958





Current liabilities




Financial liabilities measured at

amortised cost

 

(216)

 

(221)

 

(214)

Zero dividend preference shares

-

(4,162)

-

Total current liabilities

(216)

(4,383)

(214)

Net current assets/(liabilities)

2,831

(16)

2,744

Total assets less current liabilities

2,831

(16)

2,744





Non-current liabilities




Zero dividend preference shares

(2,885)

-

(2,796)

Total net liabilities

(54)

(16)

(52)





Share capital and reserves




Called up Ordinary share capital

117

117

117

Revenue reserve

(171)

(133)

(169)

Equity shareholders' funds

(54)

(16)

(52)





Net asset value per share (pence)




2010 ZDP

38.51

55.56

37.32

Ordinary

(46.29)

(13.71)

(44.57)

 

 

 

 

 

  

 

 

Condensed Statement of Changes in Equity

 






Share

Revenue


 

For the six months ended 30 November 2010

Capital

reserve

Total

 

(unaudited)

£'000

£'000

£'000

 

Net liabilities at 31 May 2010

117

(169)

(52)

 

Net loss on ordinary activities after taxation

-

(2)

(2)

 

Net liabilities at 30 November 2010

117

(171)

(54)

 

 






Share

Revenue


 

For the six months ended 30 November 2009

Capital

reserve

Total

 

(unaudited)

£'000

£'000

£'000

 

Net liabilities at 31 May 2009

117

(133)

(16)

 

Net profit on ordinary activities after taxation

-

-

-

 

Net liabilities at 30 November 2009

117

(133)

(16)

 

 






Share

Revenue


 

For the year ended 31 May 2010

Capital

reserve

Total

 

(audited)

£'000

£'000

£'000

 

Net liabilities at 31 May 2009

117

(133)

(16)

 

Net loss on ordinary activities after taxation

-

(36)

(36)

 

Net liabilities at 31 May 2010

117

(169)

(52)

 

 

 

 

  

 

 

 

 

Condensed Cash Flow Statement

 


Six months ended

30 November 2010

(unaudited)

Six months ended

30 November 2009

(unaudited)

Year ended

31 May 2010

(audited)


£'000

£'000

£'000

Operating activities




Profit before tax

-

-

-

ZDP shares finance cost

89

131

263

(Increase) / decrease in other receivables

(89)

64

1,430

Net cash inflow from operating activities

before interest and tax

 

-

 

195

 

1,693





Tax paid

-

-

(43)





Financing activities




Return of capital to ZDP shareholders by

parent company

-

(195)

(1,693)

Net cash outflow from financing activities

-

(195)

(1,693)





Net decrease in cash and cash equivalents

-

-

(43)

Cash and cash equivalents at start of period

162

205

205

Cash and cash equivalents at end of period

162

205

162

 

 

 

 

 

 

 

 

  

 

 

Notes to the Financial Statements

 

1.    Accounting policies

The financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - 'Interim Financial Reporting' as adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC). The principal accounting policies adopted by the Company are set out below.

 

The financial statements are prepared under the historical cost convention, except for the measurement at fair value of investments.

 

(a)   Basis of accounting

The financial statements have been prepared on a basis other than that of a going concern which includes, where appropriate, writing down the Company's net assets to a net realisable value. The financial statements do not include any provision for the future costs of terminating the business of the Company except to the extent that such were committed at the Balance Sheet date.

 

The half-yearly financial statements have been prepared using the same accounting policies as the preceding annual accounts.

 

The financial statements are presented in Sterling, which is the currency of the primary environment in which it operates. All values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

 

 

(b)  Zero dividend preference shares

Zero dividend preference shares are treated as a liability of the Company, calculated on the effective yield basis.

 

 

2.    The taxation expense reflected in the Condensed Statement of Comprehensive Income is based on management's best estimate of the weighted average annual corporation tax rate expected for the full financial year. The estimated annual tax rate used for the year to 31 May 2011 is 28%.

 

 

3.    Return per Ordinary share and net asset value per share

 


Six months ended

30 November 2010

Six months ended

30 November 2009

Year ended

31 May 2010

Return attributable to Ordinary shareholders

(£'000)

 

(2)

 

-

 

(36)

Equity shareholders' funds (£'000)

(54)

(16)

(52)

ZDP shareholders' entitlement (£'000)

2,885

4,162

2,796

The weighted number of Ordinary shares in issue at the end of the period on which the return was calculated ,was:

 

 

116,667

 

 

116,667

 

 

116,667

The number of Ordinary shares in issue at the end of the period on which the net asset value was calculated, was:

 

 

116,667

 

 

116,667

 

 

116,667

The number of ZDP shares in issue at the end of the period on which net asset value was calculated was:

 

7,491,110

 

7,491,110

 

7,491,110

Return per Ordinary share (p)

(1.71)

-

(30.86)

Net asset value per Ordinary share (p)

(46.29)

(13.71)

(44.57)

Net asset value per ZDP share (p)

38.51

55.56

37.32

 

4.    The financial information in this Half-Yearly Financial Report comprises non-statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 30 November 2010 and 30 November 2009 has not been audited.

 

The information for the year ended 31 May 2010 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006.

 

This report has not been reviewed or audited by the Company's auditors.

 

5.    This Half-Yearly Financial Report was approved by the Board on 28 January 2011.

 

The Half-Yearly Report will shortly be available from the Company's website (www.developmentcap.co.uk)

and will be posted to shareholders in February 2011.

 

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise.  Investors may not get back the amount they originally invested.

 

For ADC Zeros 2010 PLC

Aberdeen Asset Management PLC, Secretary

 

 

 

 

 

 

 


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