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Henderson UK Fin (94RS)

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Wednesday 23 April, 2014

Henderson UK Fin

Henderson UK Finance plc - Annual Financial Report

RNS Number : 3200F
Henderson UK Finance PLC
23 April 2014
 



 

 

Henderson UK Finance plc

 

2013 Report and Financial Statements: Listing Rule 17.3.4 and Disclosure and Transparency Rule 6.3.5

 

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA OR JAPAN.

 

 

STRATEGIC REPORT

 

The Directors present their report and the financial statements ("Annual Report and Accounts") of Henderson UK Finance plc (the "Company") for the year ended 31 December 2013.

 

Principal activities

 

The Company was incorporated on 9 February 2011. The principal activity of the Company is that of a group financing company. The Directors do not envisage a change of activities in the foreseeable future.

 

Business review

 

On 18 March 2011 the Company announced the issue of £150,000,000 7.25% p.a. senior notes due for repayment on 24 March 2016 (the "Notes").  The Notes are unconditionally and irrevocably guaranteed by Henderson Group plc and by Henderson Global Investors (Holdings) Limited.

 

The Company is a wholly-owned subsidiary of Henderson Group plc ("HG plc" or "the Group"). The Group is run on an integrated basis through business units. Therefore the Company's strategy and business model is governed by that of the Group which is set out in considerable detail in the Annual Report and Accounts of the Group which can be obtained from its registered office as set out in note 20. The Group provides investment management services throughout Europe, the Americas and Asia. The Group manages a broad range of actively managed investment products for institutional and retail investors, across capabilities, including European Equities, Global Equities, Global Fixed Income, Multi Assets and Alternatives.

 

Key performance measures

 

The Board of HG plc, the Company's ultimate parent undertaking, monitors the performance of the Group using a number of financial and non-financial performance measures.  The performance of the Company contributes to the Group's KPIs.  Please refer to the Henderson Group plc Annual Report and Accounts for a review of the Group's KPIs. 

 

Principal risks and uncertainties

 

Henderson's risk management framework helps the Group meet its business objectives within acceptable risk parameters and it is reviewed regularly so that new and emerging risks are identified early on. The Group's culture embeds the management of risk at all levels within the organisation. The framework under which it operates also ensures that it meets its business objectives without exceeding its risk appetite and it is subject to continuous review to ensure it recognises both new and emerging risks in the business. Key risks for the Company are set out below in alphabetical order:

 

Key Risks

Description

Mitigation

Credit

Risk of a counterparty to the Company defaulting on repayment of debt.

Credit risk arising from transactions with counterparties is assessed, managed and monitored in line with the Group's risk appetite.

Liquidity

Liquidity risk is the risk that the Company may be unable to meet its payment obligations as they fall due.

The Company's liquidity is managed by the Group's finance function, which ensures that the Company has sufficient cash and/or highly liquid assets available to meet its liabilities. The Company ensures that it has access to funds to cover all forecasted commitments for at least the following 12 months.

 

Operational and legal

Risk of losses through inadequate or failed internal processes, people or systems or through external events. Risk of losses from litigation.

The Company operates a system of controls which is designed to ensure operational risks are mitigated to an appropriate level. The three lines of defence model is key which is set out in the Annual Report and Accounts of the Group which can be obtained from its registered office as set out in note 20.

Regulatory change

Regulatory risk is the risk that a change in laws and regulations will materially affect the Company's business or markets in which it operates.

Active and constructive engagement with regulators. Regulatory developments are monitored by a dedicated team in Compliance who provide training to the first line where needed. Working group's implement required changes to the Group's business processes. Compliance monitors ongoing regulatory obligations and engages in regular dialogue with the Group's regulators.

Reputational

Reputational risk is the risk that negative publicity regarding the Company will lead to litigation. The risk of damage to the Company's reputation is more likely to result from one of the risks described above materialising rather than as a standalone risk.

The Company believes that reputational risk is mitigated through the effective mitigation of the other key risks.

 

 

 

 

Henderson Secretarial Services Limited

Secretary

DIRECTORS' REPORT

 

The Directors present their report and the financial statements of Henderson UK Finance plc (the "Company") for the year ended 31 December 2013.

 

Results and dividends

 

The Company's results for the year are shown in the Income Statement on page 8. The profit for the year, after tax, amounted to £48,000 (2012: £59,000).

 

The Directors do not recommend the payment of any dividends in respect of the financial year (2012: £nil).

 

Directors

 

The Directors who served during the year were:

 

A J Formica

R P McNamara

R M Thompson (Appointed 22 July 2013)

R L Pennant-Rea (Resigned 1 May 2013)

S J Garrood (Resigned 26 June 2013)

 

Directors' indemnity

 

Henderson Group plc provides a deed of indemnity to the Directors to the extent permitted by United Kingdom law whereby Henderson Group plc is able to indemnify a director against any liability incurred in proceedings in which the Director is successful, and against the cost of successfully applying to the court to be excused for breach of duty where the Director acted honestly and reasonably.

 

Provision of information to Auditors

 

So far as each person who was a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the Auditors in connection with preparing their report, of which the Auditors are unaware. Having made enquiries of fellow Directors and the Auditors, each Director has taken all the steps that they are obliged to take as a director in order to make themselves aware of any relevant audit information and to establish that the Auditors are aware of that information.

 

Financial instruments

 

A statement on the risk management objectives, policies and related matters in respect of the use of financial instruments, including policies for hedging and the exposure to, interest rate, liquidity and credit risk, can be found in note 17 to the financial statements.

 

Charitable donations

 

The Company made no charitable donations during the year.

 

Going concern

 

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. The financial position of the Company, its cash flows and liquidity position are described in the financial statements and notes. 

 

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus the Directors have adopted the going concern basis of accounting in preparing the financial statements.

 

Corporate governance

 

Throughout the year ended 31 December 2013, the Henderson Group and the Company has been in compliance with the code provisions contained in the UK Corporate Governance Code issued by the Financial Reporting Council (FRC) in September 2012 (UK Code). A full Report on Corporate Governance has been included in the Annual Report and Accounts of Henderson Group plc.  A copy of those accounts can be obtained as set out in note 20.

 

Internal controls over financial reporting

 

The Company's financial reporting process has been designed to provide reasonable assurance regarding the reliability of the financial reporting and preparation of financial statements for external purposes, in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS'). This process is under the supervision of the Directors and has appropriate internal controls to ensure its effectiveness.

 

The internal controls include: policies and procedures that: (1) relate to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and disposals of the Company's assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements, and that the receipts and expenditures of the Company are being made only in accordance with authorisations of management and Directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposal of Company assets that could have a material effect on the Company's financial statements.

 

Reporting

 

The Company has listed the Notes on the London Stock Exchange ('LSE') and therefore the Company complies with the LSE disclosure requirements.

 

Independent auditors

 

Ernst & Young LLP has not been reappointed as auditor. The shareholder will appoint PricewaterhouseCoopers LLP ('PwC') as the Company's auditors, subject to approval at the Group's AGM on 1 May 2014, beginning the year ending 31 December 2014.

 

This report was approved by the Board of Directors on 22 April 2014 and signed on its behalf by:

 

 

Henderson Secretarial Services Limited

Secretary

DIRECTORS' RESPONSIBILITIES STATEMENT

 

The Directors are responsible for preparing the Annual Report and Accounts, which includes the Strategic Report, 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 the Directors have prepared the financial statements in accordance IFRS.

 

IAS 1 Presentation of Financial Statements requires that financial statements present fairly for each financial year the Company's financial position, financial performance and cash flows. In preparing these financial statements, the Directors are required to:

 

·           select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

 

·           make judgements and estimates that are reasonable and prudent;

 

·           present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

 

·           provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance;

 

·           state whether applicable IFRS 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 are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors confirm that to the best of their knowledge the Strategic and Directors' Report includes a fair review of the development and performance of the business and the position of the Company for the year ended 31 December 2013 and a description of the principal risks and uncertainties faced by the Company and that the accounting records have been properly maintained.

 

This report was approved by the Board of Directors on 22 April 2014 and signed on its behalf by:

 

 

 

R P McNamara                                                                                                                    R M Thompson

Director                                                                                                                                             Director

22 April 2014                                                                                                                             22 April 2014

 

 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HENDERSON UK FINANCE PLC

 

We have audited the financial statements of Henderson UK Finance plc for the year ended 31 December 2013 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes 1 to 22. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

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 auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. 

 

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page 6, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report and Accounts of the Company to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

 

Opinion on financial statements

 

In our opinion the financial statements:

·      give a true and fair view of the state of the Company's affairs as at 31 December 2013 and of its profit for the year then ended;

·      have been properly prepared in accordance with IFRS as adopted by the European Union; and

·      have been prepared in accordance with the requirements of the Companies Act 2006.

 

Opinion on other matters prescribed by the Companies Act 2006

 

In our opinion the information given in the Strategic Report and 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.

 

 

 

 

Ratan Engineer (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditors

London

Date: 22 April 2014

 

INCOME STATEMENT

For the year ended 31 December 2013

 

 

 

2013

2012

 

 

Notes

£000

£000

Income

 

 

 

 

Finance income

 

3

11,369

11,377

Total income

 

 

11,369

11,377

 

 

 

 

 

Expenses

 

 

 

 

Operating expenses

 

4

(157)

(157)

Total expenses before finance expenses

 

 

(157)

(157)

Finance expenses

 

5

(11,164)

(11,161)

Total expenses

 

 

(11,321)

(11,318)

Profit before tax

 

 

48

59

Tax charge

 

8

-

-

Profit after tax

 

 

48

59

Other comprehensive income

 

 

-

-

Total comprehensive income

 

 

48

59

 

 

 

 

 

 

 

 

 

 

STATEMENT OF FINANCIAL POSITION

As at 31 December 2013                                                                                                                                                                           Registered number 7523697


 

2013

2012

 

 

Notes

£000

£000

 

Current assets





Cash and cash equivalents

11

-

4,696

 

Trade and other receivables

12

152,688

147,658

 

Total assets

 

152,688

152,354

 


 

 

 

 

Non-current liabilities

 

 

 

 

Debt instrument in issue

14

149,363

149,077

 


 

149,363

149,077

 

Current liabilities

 

 

 

 

Trade and other payables

15

2,965

2,965

 

Total liabilities

 

152,328

152,042

 

Net assets

 

360

312

 


 

 

 

 

Capital and reserves

 

 

 

 

Share capital

16

50

50

 

Profit and loss reserve

 

310

262

 

Total equity

 

360

312

 

 

The financial statements were approved and authorised for issue by the Board of Directors on 22 April 2014 and were signed on its behalf by:   

 

 

 

 

 

R P McNamara                                                                                                                    R M Thompson

Director                                                                                                                                             Director

 

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2013

 

 

 

Share capital

Profit and loss reserve

 

Total

 

 

 

£000

£000

£000

At 1 January 2012

 

 

50

203

253

Total comprehensive income after tax

 

 

-

59

59

At 31 December 2012

 

 

50

262

312

Total comprehensive income after tax

 

 

-

48

48

At 31 December 2013

 

 

50

310

360

 

STATEMENT OF CASH FLOWS

For the year ended 31 December 2013

 

 

 

2013

 

2012

 

 

Notes

£000

£000

 

Cash flows from operating activities

 

 

 

 

Profit before tax

 

48

59

 

Adjustments to reconcile profit before tax to net cash flows from operating activities:

 

 

 

 

- finance income

3

(11,369)

(11,377)

 

- debt instrument interest expense

5

11,164

11,161

 

Cash flows from operating activities before changes in operating assets and liabilities

 

(157)

(157)

 

Changes in operating assets and liabilities

13

(4,539)

4,351

 

Net cash flows from operating activities

 

(4,696)

4,194

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Finance income

 

-

11,377

 

 

 

-

11,377

 

Cash flows from financing activities

 

 

 

 

Interest paid on Notes in issue

 

-

(10,875)

 

Net cash flows from financing activities

 

-

(10,875)

 

 

 

 

 

 

Net movement in cash and cash equivalents

 

(4,696)

4,696

 

Cash and cash equivalents at beginning of year

 

4,696

-

 

Cash and cash equivalents at end of year

11

-

4,696

 

 

Notes to the Financial Statements

 

1.    Authorisation of financial statements and statement of compliance with IFRS

 

The financial statements for the year ended 31 December 2013 were authorised for issue by the Board of Directors on 22 April 2014 and the Statement of Financial Position was signed on the Board's behalf by a Director, Mr R.P. McNamara. Henderson UK Finance plc is a company incorporated in England and Wales and tax resident in the United Kingdom.

The financial statements have been prepared in accordance with IFRS and the provisions of the Companies Act 2006.

The principal accounting policies adopted by the Company are set out in note 2.

 

2.    Accounting policies

 

2.1 Significant accounting policies

 

Basis of preparation

The financial statements have been prepared on a going concern basis and on the historical cost basis.

The financial statements are presented in Pounds sterling ("GBP") and all values are rounded to the nearest thousand pounds, except when otherwise indicated.

 

Finance income

Interest income is recognised as it accrues using the effective interest rate method.

 

 

Finance expenses

Interest payable is charged as it accrues using the effective interest rate method.

 

Income taxes

The Company provides for current tax expense according to the tax laws in the jurisdiction in which it operates, using tax rates that have been enacted or substantively enacted by the reporting date. 

 

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised only to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

 

Income tax relating to items recognised in the Statement of Comprehensive Income is also recognised in that statement and not in the Income Statement.

 

Financial assets

Financial assets are initially recognised at fair value in the Statement of Financial Position when the Company becomes a party to the contractual provisions of an instrument and subsequently carried at amortised cost.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or where they have been transferred and the Company has also transferred substantially all risks and rewards of ownership.

 

Cash amounts represent cash in hand and on-demand deposits. Cash equivalents are short-term highly liquid government securities or investments in money market instruments with a maturity date of three months or less.

 

Financial liabilities

Financial liabilities are stated at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement or issue.

 

Equity shares

The Company's ordinary equity shares of £1 each are classified as equity instruments. Equity shares issued by the Company are recorded at the proceeds or fair value received.

 

2.2 Future changes in accounting policies

 

A number of new standards and amendments to standards and interpretations are effective for periods beginning on or after 1 January 2014. These are not expected to have an impact on the Company's financial statements when they become effective.

 

3.   Income

 

2013

2012

 

 

£000

£000

 

Finance income

 

 

 

Interest receivable from Group undertakings

11,369

11,377

 

Total income

11,369

11,377

 

 

 

4.   Expenses

4.1  Operating expenses

 

2013

2012

 

 

£000

£000

 

Recharges from Group undertakings

157

157

 

Total operating expenses

157

157

 

 

4.2  Auditors' remuneration

 

Auditor's remuneration of £16,000 (2012: £16,000) in respect of the audit of the Company's financial statements is borne by a fellow Group undertaking.

 

5.   Finance expenses

 

2013

2012

 

 

£000

£000

 

Interest payable on the Notes

11,164

11,161

 

Total finance expenses

11,164

11,161

 

 

 

6.   Employees

The Company has no employees. Employees' contracts of employment are with Henderson Administration Limited, a Group undertaking, and staff costs are disclosed in that company's financial statements.

 

7.   Directors' remuneration

The Directors of the Company were employed and remunerated as directors and executives of the Group in respect of their services to the Group as a whole. The Directors believe that it is not practicable to apportion part of their remuneration to the services as Directors of the Company.

Mr A J Formica and Mr R M Thompson were also directors of Henderson Group plc during the year and particulars of their remuneration for the period that they were Directors are set out in the Group's Annual Report and Accounts as described in note 20.

 

8.   Tax

Analysis of tax charge in the year


2013

2012

 

 

£000

£000

 

Current tax

 

 

 

Charge for the year

-

-

 

Total tax charge on ordinary activities

-

-

 

 

Factors affecting tax charge for the year

The difference between the total tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:


2013

2012

 

 

£000

£000

 

Profit on ordinary activities before tax

48

59

 

 

 

 

 

Tax on profit on ordinary activities at the standard UK corporation tax rate of 23.25% pro rata (2012: 24.5% pro rata)

11

14

 

Effects of:

 

 

 

Group relief claimed for nil consideration and worldwide debt cap adjustments

(11)

(14)

 

Total tax charged for the year

-

-

 

 

Factors that may affect future tax charges

 

The Government previously announced its intention to reduce the main corporation tax rate to 23% from 1 April 2013, and then to 21% from 1 April 2014 and 20% from 1 April 2015. The announced rate reductions to 20% by 1 April 2015 have been substantively enacted by the reporting date.

 

9.    Segmental information

Operating income and net assets

 

 

The Company's operating income is finance income receivable from Group companies. The Company has no non-current assets. Its operating income and net assets are managed in the UK.

 


10.    Fair value of financial instruments

 

 

Carrying value

Fair value

Carrying value

Fair value

 

Notes

2013

£000

2013

£000

2012

£000

2012

£000

Financial assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

11

-

-

4,696

4,696

Amounts owed by Group undertakings

12

152,688

152,688

147,658

147,658

Total financial assets

 

152,688

152,688

152,354

152,354

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

Debt instrument in issue

14

149,363

159,514

149,077

158,875

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accruals

15

2,965

2,965

2,965

2,965

Total financial liabilities

 

152,328

162,479

152,042

161,840

 

Current asset and liability balances included in the table above, are balances capable of settling in a short time frame, and accordingly the fair value of these assets and liabilities is considered to approximate the carrying value after taking into account any likely impairment.

 

11.    Cash and cash equivalents

 

2013

2012

 

 

£000

£000

 

Cash

-

4,696

 

 

-

4,696

 

 

Henderson Administration Limited holds cash on behalf of fellow Group subsidiaries. It is shown within amounts owed by Group undertakings in the current year (see note 12), but was disclosed as Agency cash in the prior year.

 

12.    Trade and other receivables

 

2013

2012

 

 

£000

£000

 

Amounts owed by Group undertakings

5,030

-

 

Loans to Group undertakings

147,658

147,658

 

 

152,688

147,658

 

 

Loans to Group undertakings comprise two loans to Henderson Global Investors (Holdings) Ltd, one for a principal amount of £115,250,000, and one for a principal amount of £32,408,000, both of which bears interest at 7.7% per annum and are repayable on demand.

 

13.    Changes in operating assets and liabilities

 


2013

2012

 


£000

£000

 

(Increase)/decrease in other assets

(4,539)

10,397

 

Decrease in other liabilities

-

(6,046)

 

Change in operating assets and liabilities

(4,539)

4,351

 

 

Cash held on behalf of the Company by Henderson Administration Limited has been shown within amounts owed by Group undertakings in the current year (see note 11). Due to the change in presentation, interest paid and received has been recognised through changes in operating assets and liabilities and not within investing and financing cash flows in the cash flow statement.

 

14.    Debt instrument in issue

 

Carrying value

Fair value

Carrying value

Fair value

 

2013

2013

2012

2012

 

£000

£000

£000

£000

Debt instrument in issue

149,363

159,514

149,077

158,875

 

On 18 March 2011, the Company announced the issue of the Notes, being £150,000,000 with interest set at 7.25% per annum due for repayment on 24 March 2016.  The Notes are unconditionally and irrevocably guaranteed by Henderson Group plc and Henderson Global Investors (Holdings) Limited.

 

15.    Trade and other payables

 

 

2013

2012

 

 

£000

£000

 

Accruals

2,965

2,965

 

 

2,965

2,965

 

 

 

16.    Share capital

 

Allotted, called up and fully paid shares:

 

no.

£000

Ordinary shares

 

 

Shares in issue at 31 December 2013 and 2012

50,000

50

 

All ordinary shares in issue carry the same right to receive dividends and other distributions declared, made or paid by the Company.

 

The Directors consider shareholder's equity to represent the Company's capital. The Directors manage the Company's capital structure on an ongoing basis. Changes to the Company's capital structure can be affected by adjusting the dividend policy, returning capital to shareholders or issuing new shares and other forms of capital.

 

Nature and purpose of reserves

 

 

The Statement of Changes in Equity on page 10 provides details of movements in equity and reserves during the year.

 

Profit and loss reserve

 

The profit and loss reserve comprises results recognised through the Income Statement. 

 

 

17.    Financial risk management

Financial risk management objectives and policies

Financial assets principally comprise trade and other receivables including amounts owed by Group undertakings. Financial liabilities comprise debt instrument in issue and trade and other payables. The main risks arising from the Company's financial instruments are interest rate risk, liquidity risk and credit risk. Each of these risks is examined in detail below.

 

The management of risk within the Group is governed by the Board of Henderson Group plc and overseen by the Henderson Group Board Risk Committee. The Company is managed in line with the Group's risk policy.

 

17.1   Interest rate risk

 

Interest rate risk is the risk that the Company will sustain losses from adverse movements in interest rates, either through a mismatch of interest-bearing assets and liabilities, or through the effect that such movements have on the value of interest-bearing assets.

 

The Company has no financial instruments bearing interest at a floating rate. None of the financial assets and liabilities are exposed to interest rate risk.

 

Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. 

 

17.2 Liquidity risk

 

Liquidity risk is the risk that the Company may be unable to meet its payment obligations as they fall due.

 

Company liquidity is managed by Group Finance, to ensure that the Company has sufficient cash and/or highly liquid assets available to meet its liabilities. Group Finance also controls and monitors the use of the Company's non-operating capital resources. It is the Company's policy to ensure that it has access to funds to cover all forecast commitments for the next 12 months. 

 

Refer to note 14 for a description of guarantees provided by Group undertakings in respect of the Notes in issue.

 

The maturity dates of the Company's financial liabilities are as follows:

 

At 31 December 2013

 


Within 1 year or repayable on demand

Within 2-5 years

Total

Carrying value in the balance

sheet


£000

£000

£000

£000


 

 

 

 

Debt instrument in issue (including interest)

10,875

166,313

177,188

149,363


10,875

166,313

177,188

149,363

 

At 31 December 2012

 


Within 1 year or repayable on demand

Within 2-5 years

Total

Carrying value in the balance sheet


£000

£000

£000

£000


 

 

 

 

Debt instrument in issue (including interest)

10,875

177,188

188,063

149,077


10,875

177,188

188,063

149,077

17.3 Credit risk

 

Credit risk is the risk of a counterparty of the Company defaulting on funds deposited with it or the non-receipt of a debt. 

 

All receivables are amounts due from Group undertakings on demand.

 

The Company has no overdue financial assets as at 31 December 2013 (2012: £nil).

 

 

18.    Capital commitments

The amounts of capital expenditure contracted for but not provided for in the financial statements at 31 December 2013 amounted to £nil (2012: £nil).

 

19.    Related party transactions

Details of transactions between the Company and the Group's controlled entities, which are related parties, together with amounts due from and to these related parties at the reporting date, are disclosed below:

 

2013

2012

 

£000

£000

Transactions with related parties

 

 

Recharges from Group undertakings

157

157

Interest receivable from Group undertakings

11,369

11,377

 

 

 

 

As at 31 December 2013

As at 31 December 2012

 

£000

£000

Amounts owed by related parties

 

 

Amounts owed by Group undertakings

152,688

147,658

 

 

 

20.    Ultimate Parent Undertaking and Controlling Party

The Company's immediate parent undertaking is Henderson Global Investors (Holdings) Limited, a company incorporated in the United Kingdom and the ultimate parent undertaking is Henderson Group plc, a company incorporated in Jersey.  A copy of Henderson Group plc's Annual Report and Accounts for the year ended 31 December 2013 can be obtained from its registered office at 47 Esplanade, St Helier, Jersey, JE1 0BD or its website, www.henderson.com. 

 

21.    Contingent liabilities

There were no contingent liabilities as at 31 December 2013 (2012: £nil).

 

22.    Events after the reporting date

The Board had not, as at 22 April 2014, being the date the financial statements were approved, received any information concerning significant conditions in existence at the reporting date, which have not been reflected in the financial statements as presented.

 

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results and business of the Company and Henderson Group plc. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. Henderson Group's actual future results may differ materially from the results expressed or implied in these forward-looking statements.

For further detail, please see the Report and Financial Statements for the year ended 31 December 2013, lodged together with this announcement.

To view the full details of the 2013 Report and Financial Statements, paste the following link into your web browser:

http://www.rns-pdf.londonstockexchange.com/rns/3200F_1-2014-4-23.pdf

A copy of the Report and Financial Statements for the year ended 31 December 2013 has been submitted to the National Storage Mechanism: www.hemscott.com/nsm.do 

 

Copies can also be found on the Henderson Group plc website at www.henderson.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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