7 Dec 2015 07:00
7 December 2015
STANDARD LIFE EUROPEAN PRIVATE EQUITY TRUST PLC
RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2015
Highlights
· Company's net asset value total return for the year ended 30 September 2015 was 11.9%.
· Net asset value per ordinary share ("NAV") at 30 September 2015 rose 9.4% to 281.6p (30 September 2014 - 257.4p). The increase in NAV during the period included 9.8% of net realised gains and income from the Company's portfolio of 46 private equity fund interests, 7.1% of unrealised gains on a constant exchange rate basis, 4.1% of negative exchange rate movements on the portfolio, and the payment of dividends during the year ended 30 September 2015.
· Actual NAV of 281.6p compares to a previously estimated NAV at 30 September 2015 of 278.7p announced on 14 October 2015. Closing mid-market price of the Company's ordinary shares on 30 September 2015 was 214.0p, a decrease of 7.0% over the year and a discount of 24.0% to NAV.
· Recommended final dividend of 3.5p per ordinary share, which together with the interim dividend of 1.75p paid in July 2015, makes a total for the year of 5.25p (year ended 30 September 2014 - 5.0p). It remains the Board's intention, subject to unforeseen circumstances, to maintain, at least, the real value of the Company's dividends going forward.
· At the year end the Company's net assets were £438.7 million. In preparing the Company's year end valuation, 100% by value of the portfolio was valued by the relevant fund manager at 30 September 2015.
· Distributions received by, and draw downs from, the portfolio during the year rose to £106.7 million and £63.1 million respectively. In addition, the Company acquired through the secondary market five private equity fund interests for £33.4 million in aggregate and sold one fund interest for £21.7 million. Accordingly, investment activity generated £31.9 million of positive cashflow during the year.
· During the year the Company acquired a total of 3.146 million ordinary shares through a series of share buy-back transactions for £6.9 million. The ordinary shares were acquired at an average price of 218.5p and at an average discount to the prevailing NAV of 16.6%, resulting in a gain of £1.4 million.
· Company had liquid resources of £69.4 million at 30 September 2015, comprising a cash balance of £32.1 million and £37.3 million invested at value (£39.2 million at cost) in UK and European equity index tracker funds. The Company has an undrawn £80 million syndicated revolving credit facility provided by Citi and Societe Generale that expires in December 2020.
· Company made four new fund commitments during the year with commitments of €35.0 million to PAI Europe VI, £28.0 million to Exponent Private Equity Partners III, €35.0 million to Bridgepoint Europe V and €30.0 million to Equistone Partners Europe V.
· Company had £245.8 million of outstanding commitments at 30 September 2015. After undertaking a detailed review, the Manager continues to believe that up to £50 million of the Company's existing outstanding commitments are unlikely to be drawn.
· During the period from 30 September 2015 to 3 December 2015 the Company received distributions of £20.2 million and funded £4.7 million of draw downs. The Company is in advanced negotiations regarding the acquisition of a secondary fund interest.
· At 3 December 2015 the Company had a cash balance of £45.8 million and had £39.6 million at value (£39.2 million at cost) invested in UK and European equity index tracker funds. At 3 December 2015 the Company had outstanding commitments of £234.3 million.
For further information please contact:-
Peter McKellar and Roger Pim of SL Capital Partners LLP (on 0131 245 0055)
Chairman's Statement
Results and performance
The last year has continued to see the Company benefit from a strong mergers and acquisitions market in Europe, with significant cashflows to and from the Company and meaningful realised and unrealised gains, before adjusting for unrealised foreign exchange losses. This has been against a background of volatile listed equity markets and a weakening euro. Including dividends paid, the NAV total return for the year was 11.9%. At 30 September 2015 the Company's net assets were £438.7 million (30 September 2014 - £409.1 million).
For the year ended 30 September 2015 the Company's NAV rose by 9.4% to 281.6p, from 257.4p at 30 September 2014. The increase in NAV during the period comprised 9.8% of net realised gains and income from the Company's portfolio of 46 private equity fund interests and 7.1% of unrealised gains on a constant exchange rate basis, partially offset by 4.1% of negative exchange rate movements on the portfolio, 0.8% of fees, costs and other items, and the payment of dividends during the year ended 30 September 2015.
The closing mid-market price of the Company's ordinary shares on 30 September 2015 was 214.0p, a decrease of 7.0% over the year and a discount of 24.0% to NAV. This compares to a fall in the FTSE All-Share Index of 5.6% and a movement in the MSCI Europe Index (in euros) of 0.0% over the year.
Subject to shareholder approval at the forthcoming Annual General Meeting, this year's proposed final dividend of 3.5p will be paid on 29 January 2016 to shareholders on the Company's share register at 18 December 2015. Together with the interim dividend of 1.75p paid in July 2015, this makes a total for the year of 5.25p (year ended 30 September 2014 - 5.0p). It remains the Board's intention, subject to unforeseen circumstances, to maintain, at least, the real value of the Company's dividends going forward.
The Company is also introducing a Dividend Reinvestment Plan. This will give shareholders the option of reinvesting their dividend payments to buy more ordinary shares in the Company and will be available for the final dividend in January 2016. An accompanying letter and an application form are enclosed with the Company's annual report and accounts.
Private equity is a long-term asset class and should be viewed over equivalent time periods. Over the last ten years the Company's NAV and share price, both on an annualised total return basis, rose by 8.0% and 4.5% respectively, while the FTSE All-Share Index and the MSCI Europe Index (in euros), on a similar total return basis, were up 5.6% and 4.7% respectively.
Investment activity
The last year saw a broadly similar number, but an increased value, of new private equity investments completed in Europe compared to the prior year, with more large/mega transactions being announced. The volume and value of all new buy-out transactions completed in the European private equity market during the year ended 30 September 2015 was 534 transactions and €114.0 billion (year ended 30 September 2014 - 538 and €85.8 billion respectively). Private equity managers are reporting a healthy new deal pipeline, set against a background of strong mergers and acquisitions activity in Europe. The exit environment for private equity backed companies remains robust, with corporates in particular being active buyers. Average pricing multiples for new transactions appear to have risen slightly, while total debt multiples remain in line with the prior year.
During the year the Company witnessed an increase in cashflows to and from its portfolio. The Company received distributions from its fund interests of £106.7 million and paid £63.1 million in draw downs (year ended 30 September 2014 - distributions of £101.8 million and draw downs of £47.8 million). The distributions received by the Company generated net realised gains and income of £51.6 million, equivalent to an average return on the acquisition cost of the realised investments of 1.9 times (year ended 30 September 2014 - 2.0 times). In addition, the Company realised a book loss of £12.0 million on the liquidation of two older funds, the Candover 2001 Fund and Apax Europe IV, where all of the underlying investments had been realised. Importantly, the book losses had been fully provided for previously in the Company's valuation of these fund interests.
Reflecting the objective of capital efficiency in the use of the Company's capital resources and the continuing cash inflow, the Company undertook five secondary fund purchases. The Company acquired an original commitment of €12.9 million to Advent Global Private Equity VI in December 2014, an original commitment of €15.0 million to Cinven Fourth Fund in December 2014, an original commitment of €15.0 million to Nordic Capital Fund VII in February 2015, an original commitment of €5.0 million to Permira Europe III in March 2015 and an original commitment of €8.0 million to Permira IV in March 2015. Finally, the Company sold its entire fund interest in Apax Europe VII in October 2014. Details of all of the secondary transactions are provided in the Manager's Review.
In addition, in a series of transactions the Company acquired a total of 3.146 million ordinary shares through share buy-back transactions for £6.9 million. The ordinary shares were acquired at an average price of 218.5p and at an average discount to the prevailing NAV of 16.6%, resulting in a gain of £1.4 million. The ordinary shares acquired have been cancelled. The Board views the buying in of ordinary shares as part of its strategy in relation to capital efficiency and buy-backs are compared to new fund commitments, secondary fund purchases and the payment of dividends.
After taking account of the above transactions, management fees, dividends and costs, the Company was £9.0 million cashflow positive during the year. At 30 September 2015 the Company had a cash balance of £32.1 million and had £37.3 million invested at value (£39.2 million at cost) in UK and European equity index tracker funds. On 18 September 2015 the Company entered into a new £80 million syndicated revolving credit facility, provided by Citi and Societe Generale, to replace its £80 million debt facility provided by The Royal Bank of Scotland plc and Citi. The terms of the new facility are more favourable than the terms of the previous facility. The new facility expires in December 2020.
In light of the Company's strong liquidity, the quantum of outstanding commitments that the Manager expects to be drawn down over time and the quality of new fund offerings, the Company made four new fund commitments during the year. These were commitments of €35.0 million to PAI Europe VI, £28.0 million to Exponent Private Equity Partners III, €35.0 million to Bridgepoint Europe V and €30.0 million to Equistone Partners Europe V. The Company had £245.8 million of outstanding commitments at 30 September 2015. After undertaking a detailed review, the Manager continues to believe that up to £50 million of the Company's existing outstanding commitments are unlikely to be drawn.
Valuation
At 30 September 2015 the Company's portfolio comprised 46 private equity fund interests. The value of this portfolio was £369.0 million, of which net unrealised gains arising during the year were £12.1 million.
Unrealised gains on a constant exchange rate basis were £28.6 million. 100.0% by value of the portfolio was valued by the relevant fund manager at 30 September 2015. In undertaking the valuations the fund managers followed the International Private Equity and Venture Capital Valuation Guidelines. In so doing, the principal valuation methodology is to use listed comparable valuation multiples.
Negative foreign exchange movements, which principally arose from the 5.7% depreciation in the euro relative to sterling during the year, were £16.5 million. This followed a 7.3% deprecation in the euro relative to sterling in the previous financial year. Once again, the depreciation in the euro had a material impact on the Company's otherwise strong NAV performance.
Recent activity
During the period from 30 September 2015 to 3 December 2015 the Company received distributions of £20.2 million and funded £4.7 million of draw downs. The Company is in advanced negotiations regarding the purchase of a secondary fund interest.
At 3 December 2015 the Company had a cash balance of £45.8 million and had £39.6 million at value (£39.2 million at cost) invested in UK and European equity index tracker funds. At 3 December 2015 the Company had outstanding commitments of £234.3 million.
Outlook
The managers of the largest underlying funds in the Company's portfolio continue to report earnings uplifts across most of their portfolio companies, notwithstanding a more challenging global macro-economic environment. The Company is benefiting from a strong mergers and acquisitions market in Europe and, subject to exogenous shocks, the Manager would expect this to continue.
Taken together, this should result in significant distribution and draw down activity across the portfolio and further realised and unrealised gains being generated. This would allow the Company to build on the solid performance achieved over the last three years.
Edmond Warner, OBE
Chairman
4 December 2015
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks facing the Company relate to the Company's investment activities and include the following:
• market risk;
• currency risk;
• over-commitment risk;
• liquidity risk;
• credit risk;
• interest rate risk; and
• operating and control environment risk
Information on each of these risks, and an explanation of how they are managed, is contained in the Company's Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
The directors are responsible for preparing the Annual Report, the Directors' Remuneration 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 with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 judgements and accounting 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 respectively; 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 and the Directors' Remuneration Report 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 consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. In reaching this conclusion the directors have assumed that the reader of the annual report and accounts has a reasonable level of knowledge of the investment industry.
The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the directors confirm that, to the best of their knowledge:
• the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and
• the directors' report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
For Standard Life European Private Equity Trust PLC
Edmond Warner OBE
Chairman
4 December 2015
INCOME STATEMENT (audited)
for the year ended 30 September 2015
Revenue | Capital | Total | |
£'000 | £'000 | £'000 | |
Gains on investments | - | 40,346 | 40,346 |
Currency gains | - | 495 | 495 |
Income from investments | 11,917 | - | 11,917 |
Investment management fee | (342) | (3,082) | (3,424) |
Administrative expenses | (715) | - | (715) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
BEFORE FINANCE COSTS AND TAXATION | 10,860 | 37,759 | 48,619 |
Finance costs | (127) | (1,141) | (1,268) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
BEFORE TAXATION | 10,733 | 36,618 | 47,351 |
Taxation | (1,784) | 1,627 | (157) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
AFTER TAXATION | 8,949 | 38,245 | 47,194 |
_________ | _________ | _________ | |
NET RETURN PER ORDINARY SHARE | 5.69p | 24.35p | 30.04p |
_________ | _________ | _________ |
The Total column of this statement represents the profit and loss account of the Company.
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All revenue and capital items in the above statement are derived from continuing operations.
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No operations were acquired or discontinued in the year.
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A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.
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The dividend which has been recommended based on this Income Statement is 5.25p (2014 - 5.0p) per ordinary share. |
INCOME STATEMENT (audited)
for the year ended 30 September 2014
Revenue | Capital | Total | |
£'000 | £'000 | £'000 | |
Gains on investments | - | 23,236 | 23,236 |
Currency losses | - | (2,085) | (2,085) |
Income from investments | 12,039 | - | 12,039 |
Investment management fee | (328) | (2,952) | (3,280) |
Administrative expenses | (657) | - | (657) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
BEFORE FINANCE COSTS AND TAXATION | 11,054 | 18,199 | 29,253 |
Finance costs | (104) | (934) | (1,038) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
BEFORE TAXATION | 10,950 | 17,265 | 28,215 |
Taxation | (1,788) | 1,432 | (356) |
_________ | _________ | _________ | |
NET RETURN ON ORDINARY ACTIVITIES | |||
AFTER TAXATION | 9,162 | 18,697 | 27,859 |
_________ | _________ | _________ | |
NET RETURN PER ORDINARY SHARE | 5.69p | 11.60p | 17.29p |
_________ | _________ | _________ | |
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (audited)
For the year ended30 September 2015 |
Share | Capital | |||||
Share | premium | Special | redemption | Capital | Revenue | ||
capital | account | reserve | reserve | reserves | reserve | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 October 2014 | 318 | 86,485 | 62,947 | 83 | 242,135 | 17,134 | 409,102 |
Total recognised gains | - | - | - | - | 38,245 | 8,949 | 47,194 |
Buy back of ordinary shares | (6) | - | (6,923) | 6 | - | - | (6,923) |
Dividends paid | - | - | - | - | - | (10,633) | (10,633) |
______ | _______ | ______ | _______ | ________ | _______ | _______ | |
Balance at 30 September 2015 | 312 | 86,485 | 56,024 | 89 | 280,380 | 15,450 | 438,740 |
______ | _______ | ______ | _______ | ________ | _______ | _______ | |
For the year ended30 September 2014 |
Share | Capital | |||||
Share | premium | Special | redemption | Capital | Revenue | ||
capital | account | reserve | reserve | reserves | reserve | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 October 2013 | 330 | 85,594 | 75,519 | 70 | 223,438 | 16,214 | 401,165 |
Total recognised gains | - | - | - | - | 18,697 | 9,162 | 27,859 |
Conversion of founder A shares | 1 | 891 | - | - | - | - | 892 |
Buy back of ordinary shares | (13) | - | (12,572) | 13 | - | - | (12,572) |
Dividends paid | - | - | - | - | - | (8,242) | (8,242) |
______ | _______ | ______ | _______ | ________ | _______ | _______ | |
Balance at 30 September 2014 | 318 | 86,485 | 62,947 | 83 | 242,135 | 17,134 | 409,102 |
______ | _______ | ______ | _______ | ________ | _______ | _______ |
BALANCE SHEET (audited)
As at | As at | ||||
30 September | 30 September | ||||
2015 | 2014 | ||||
£'000 | £'000 | £'000 | £'000 | ||
NON-CURRENT ASSETS | |||||
Investments at fair value through profit or loss | 406,332 | 387,623 | |||
CURRENT ASSETS | |||||
Debtors | 729 | 473 | |||
Money market funds | - | 16,363 | |||
Cash and short term deposits | 32,099 | 5,212 | |||
_________ | _________ | ||||
32,828 | 22,048 | ||||
CREDITORS: AMOUNTS FALLING | |||||
DUE WITHIN ONE YEAR | (420) | (569) | |||
_________ | _________ | ||||
NET CURRENT ASSETS | 32,408 | 21,479 | |||
_________ | _________ | ||||
TOTAL ASSETS LESS CURRENT LIABILITIES | 438,740 | 409,102 | |||
_________ | _________ | ||||
CAPITAL AND RESERVES | |||||
Called up share capital | 312 | 318 | |||
Share premium account | 86,485 | 86,485 | |||
Special reserve | 56,024 | 62,947 | |||
Capital redemption reserve | 89 | 83 | |||
Capital reserves | 280,380 | 242,135 | |||
Revenue reserve | 15,450 | 17,134 | |||
_________ | _________ | ||||
TOTAL SHAREHOLDERS' FUNDS | 438,740 | 409,102 | |||
_________ | _________ | ||||
NET ASSET VALUE PER EQUITY SHARE | 281.6p | 257.4p | |||
_________ | _________ | ||||
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CASHFLOW STATEMENT (audited)
For the year | For the year | ||||
ended 30 September | ended 30 September | ||||
2015 | 2014 | ||||
£'000 | £'000 | £'000 | £'000 | ||
NET CASH INFLOW FROM OPERATING ACTIVITIES | 7,860 | 7,823 | |||
SERVICING OF FINANCE | |||||
Interest paid | (822) | (1,038) | |||
Arrangement fee | (690) | - | |||
_________ | _________ | ||||
NET CASH OUTFLOW | |||||
FROM SERVICING OF FINANCE | (1,512) | (1,038) | |||
NET CASH INFLOW FROM TAXATION | - | - | |||
FINANCIAL INVESTMENT | |||||
Purchase of investments | (106,307) | (96,562) | |||
Disposal of underlying investments by funds | 106,283 | 90,687 | |||
Disposal of fund investments by way of secondary sales | 21,661 | - | |||
_________ | _________ | ||||
NET CASH INFLOW /(OUTFLOW) FROM | 21,637 | (5,875) | |||
FINANCIAL INVESTMENTS | |||||
ORDINARY DIVIDEND PAID | (10,633) | (8,242) | |||
_________ | _________ | ||||
NET CASH INFLOW /(OUTFLOW) BEFORE FINANCING | 17,352 | (7,332) | |||
Conversion of founder A shares | - | 892 | |||
Buy back of ordinary shares | (7,323) | (12,172) | |||
_________ | _________ | ||||
NET CASH OUTFLOW FROM FINANCING | (7,323) | (11,280) | |||
_________ | _________ | ||||
INCREASE/(DECREASE) IN CASH | 10,029 | (18,612) | |||
_________ | _________ | ||||
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN FUNDS | |||||
Increase/(Decrease) in cash as above | 10,029 | (18,612) | |||
Currency movements | 495 | (2,085) | |||
_________ | _________ | ||||
MOVEMENT IN NET FUNDS IN THE PERIOD | 10,524 | (20,697) | |||
Opening net funds | 21,575 | 42,272 | |||
_________ | _________ | ||||
CLOSING NET FUNDS | 32,099 | 21,575 | |||
_________ | _________ | ||||
REPRESENTED BY: | |||||
Money market funds, cash and short term deposits | 32,099 | 21,575 | |||
_________ | _________ | ||||
Notes:
1. Standard Life European Private Equity Trust PLC is an investment company managed by SL Capital Partners LLP, the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the London Stock Exchange. It seeks to conduct its affairs so as to continue to qualify as an investment trust under section 1158-1165 of the Corporation Taxes Act 2010. The Board is wholly independent of the Manager and Standard Life plc.
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2. Accounting Policies | ||||||
(a) Basis of preparation and going concern | ||||||
The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of investments at fair value through profit or loss, and in accordance with applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (issued November 2014). They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The financial statements, and the net asset value per equity share figures, have been prepared in accordance with the Companies Act 2006 and UK Generally Accepted Accounting Principles ("UK GAAP"). The directors consider the Company's functional currency to be sterling, as the Company is registered in Scotland, the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment. The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the current and prior year.
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(b) Revenue, expenses and finance costs | ||||||
| Dividends from quoted investments are included in revenue by reference to the date on which the price is marked ex-dividend. Income on quoted investments and other interest receivable are dealt with on an accruals basis. Dividends and income from unquoted investments are included when the right to receipt is established. Incentive fees are recognised in the Income Statement as they are earned and when the return exceeds the specified hurdle rate.
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account of the Income Statement except as follows: |
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| - transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the Income Statement; |
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| - the Company charges 90% of investment management fees and finance costs to capital, in accordance with the Board's expected long-term split of returns between capital gains and income from the Company's investment portfolio; and |
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| - any incentive fees payable are allocated wholly to capital, as they are expected to be attributable largely, if not wholly, to capital performance. |
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(c) Investments | ||||||
| Investments have been designated upon initial recognition as fair value through the profit or loss. On the date of making a legal commitment to invest in a fund, such commitment is recorded and disclosed. When funds are drawn in respect of such fund commitment the resulting investment is recognised in the financial statements. The investment is removed when it is realised or the fund is wound up. Subsequent to initial recognition, investments are valued at fair value as detailed below. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Income Statement and are ultimately recognised in the capital reserves. |
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| Unquoted investments are stated at the directors' estimate of fair value and follow the recommendations of the EVCA and the BVCA. The estimate of fair value is normally the latest valuation placed on a fund by its manager as at the balance sheet date. The valuation policies used by the manager in undertaking that valuation will generally be in line with the joint publication from the EVCA and the BVCA, 'International Private Equity and Venture Capital Valuation guidelines'. Where formal valuations are not completed as at the balance sheet date the last available valuation from the fund manager is adjusted for any subsequent cash flows occurring between the valuation date and the balance sheet date. The Company's Manager may further adjust such valuations to reflect any changes in circumstances from the last manager's formal valuation date to arrive at the estimate of fair value. For listed investments, fair value is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service.
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(d) Dividends payable Interim and final dividends are recognised in the period in which they are paid. Scrip dividends are recognised in the period in which shares are issued. | ||||||
(e) Capital reserves Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the "capital reserve - gains/(losses) on disposal". In addition, any prior unrealised gains or losses on such investments are transferred from the "capital reserve - revaluation" to the "capital reserve - gains/(losses) on disposal" on the disposal of the investment. Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the "capital reserve - revaluation". | ||||||
(f) Taxation | ||||||
| i) Current taxation - Provision for corporation tax is made at the current rate on the excess of taxable income net of any allowable deductions. |
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| ii) Deferred taxation is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the balance sheet date, measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. |
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| Due to the Company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. |
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(g) Overseas currencies Overseas assets and liabilities are translated at the exchange rate prevailing at the Company's balance sheet date. Gains or losses on translation of investments held at the year end are accounted for through capital reserves. Gains or losses on the translation of overseas currency balances held at the year end are also accounted for through capital reserves. |
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| Rates of exchange to sterling as at 30 September were: |
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| 2015 | 2014 |
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| Euro | 1.3570 | 1.2834 |
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| US dollar | 1.5148 | 1.6212 |
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| Transactions in overseas currency are translated at the exchange rate prevailing on the date of transaction. |
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Year to | Year to | ||
30 September 2015 | 30 September 2014 | ||
3. | Income | £'000 | £'000 |
Income from fund investments | 11,065 | 11,438 | |
Income from index tracker funds | 836 | 569 | |
Income from cash balances and money market funds |
16 |
32 | |
______________ | ______________ | ||
Total income | 11,917 | 12,039 | |
______________ | ______________ |
4. The return per ordinary share figure is based on the net profit for the year ended 30 September 2015 of £47,194,000 (year ended 30 September 2014: net profit of £27,859,000) and on 157,081,338 (year ended 30 September 2014: 161,125,089) ordinary shares, being the weighted average number of Ordinary shares in issue during the respective periods.
5. The number of ordinary shares in issue as at 30 September 2015 was 155,776,294 (30 September 2014 - 158,922,294).
6. An interim dividend of 1.75p (2014 - nil) per ordinary share was paid on 10 July 2015. The Directors recommend that a final dividend of 3.5p (2014 - 5.00p) per ordinary share be paid on 29 January 2016 to shareholders on the Company's share register as at the close of business on 18 December 2015.
7. The financial information for the year ended 30 September 2015 comprises non-statutory accounts as defined in sections 434-436 of the Companies Act 2006. The financial information for the year ended 30 September 2014 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified. The statutory accounts for the year ended 30 September 2015 contain an unqualified audit report and will be delivered to the Registrar of Companies following the Company's Annual General Meeting, which will be held at The Balmoral Hotel, 1 Princes Street, Edinburgh EH2 2EQ on 20 January 2016 at 12.30pm.
8. The report and accounts for the year ended 30 September 2015 will be posted to shareholders in mid-December 2015 and copies will be available from the Company Secretary - Personal Assets Trust Administration Company Limited, 10 St. Colme Street, Edinburgh EH3 6AA.
for Standard Life European Private Equity Trust PLC,
Personal Assets Trust Administration Company Limited, Company Secretary
END