BW20030314002069 20030314T183043Z UTC
( BW)(PERMANENT-FIN-NO.1)(AS63) Permanent Financing (No 1) PLC
Directors' Report and Financial Statements Period Ended 31
December 2002
Business Editors
UK REGULATORY NEWS
LONDON--(BUSINESS WIRE)--March 14, 2003--
Registered Number 4416192
PERMANENT FINANCING (NO 1) PLC
(Formerly Permanent Finance (No 1) plc)
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2002
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
CONTENTS
Page
Directors and Company Information 2
Directors' Report 3 - 5
Statement of Directors' Responsibilities 6
Report of the Independent Auditors to the Members of Permanent Financing (No 1) plc 7 - 8
Profit and Loss Account 9
Balance Sheet 10
Notes to the Financial Statements 11 - 21
PERMANENT FINANCING (NO 1) PLC
DIRECTORS AND COMPANY INFORMATION DIRECTORS
David Balai
SFM Directors Limited
SFM Directors (No. 2) Limited
SECRETARY
SFM Corporate Services Limited
REGISTERED OFFICE
Blackwell House
Guildhall Yard
LONDON
EC2V 5AE
AUDITORS
KPMG Audit Plc
1 The Embankment
Neville Street
LEEDS
LS1 4DW
PERMANENT FINANCING (NO 1) PLC
DIRECTORS' REPORT
The directors present their report and the audited financial
statements for the period from 15 April 2001 to 31 December 2002.
INCORPORATION
The Company was incorporated in England and Wales on 15 April 2001 as
Permanent Finance (No 1) plc. The Company's name changed to Permanent
Financing (No 1) plc on 24 April 2002. The Company is a public limited
company under the Companies Act 1985.
PRINCIPAL ACTIVITY AND BUSINESS REVIEW
The principal activity of the Company is to issue floating and fixed
rate debt securities and to enter into all financial arrangements in
that connection to fund the Permanent Holdings Limited Group
activities by means of intercompany loans. The debt securities are
issued in US Dollars, Euros and Sterling. No changes in activity are
envisaged.
Permanent Financing (No 1) plc is a wholly owned subsidiary of
Permanent Holdings Limited, a company registered in England and Wales.
The financial statements of Permanent Financing (No 1) plc are
included in the consolidated financial statements of Permanent
Holdings Limited as at 31 December 2002.
RESULTS AND DIVIDEND
The Company did not trade during the period from incorporation on 15
April 2001 to 14 June 2002.
The results for the period are set out on page 9. The profit of �6,878
will be transferred to reserves. The directors do not recommend the
payment of a dividend.
SUPPLIER PAYMENT POLICY
The Company's suppliers are paid through the centralised invoice
processing facilities operated by Halifax plc, the mortgage loan
administrator.
For the forthcoming period, the Company's policy for the payment of
suppliers will be as follows:
o payment terms will be agreed at the start of the relationship
with the supplier and will only be changed by agreement;
o standard payment terms to suppliers of goods and services
will be 30 days from receipt of a correct invoice for
satisfactory goods or services which the Company has ordered
and received unless other terms are agreed in a contract;
o payment will be made in accordance with the agreed terms or in
accordance with the law if no agreement has been made; and
o suppliers will be advised when an invoice is contested
without delay and the Company will settle disputes as quickly
as possible.
The Company owed no amounts to trade creditors at 31 December 2002.
PERMANENT FINANCING (NO 1) PLC
DIRECTORS' REPORT (CONT'D)
FINANCIAL INSTRUMENTS
The Company's financial instruments, other than derivatives, comprise
loans to group undertakings, borrowings, cash and liquid resources,
and various items such as debtors and creditors that arise directly
from its operations. The main purpose of these financial instruments
is to raise finance for the Company's operations.
The Company also enters into derivatives transactions (principally
cross currency swaps). The purpose of such transactions is to manage
the currency risks arising from the Company's operations and its
sources of finance.
It is, and has been throughout the period under review, the Company's
policy that no trading in financial instruments shall be undertaken.
The main risk arising from the Company's financial instruments is
currency risk. The Board reviews and agrees policies for managing this
risk and they are summarised below.
Currency Risk
The Company has debt securities in issue denominated in US Dollars and
Euros. The Company's policy is to eliminate all exposures arising from
movements in exchange rates by the use of cross currency swaps to
hedge payments of interest and principal on the securities. All other
assets, liabilities and transactions are denominated in Sterling.
Interest Rate Risk
Interest rate risk exists where assets and liabilities have interest
rates set under different basis or which reset at different times. The
Company minimises its exposure to interest rate risk by ensuring that
the interest rate characteristics of its assets and liabilities are
similar - where this is not possible the Company considers the use of
derivative financial instruments to mitigate any residual interest
rate risk.
Credit Risk
The principal credit risk to the Company is that repayments on
intercompany loans will not be met as they fall due. Such loans are
ultimately secured against a beneficial interest in a mortgage
portfolio held in trust on behalf of the Permanent Holdings Limited
Group.
Liquidity Risk
A facility provided by JP Morgan Chase Bank has been established which
will be available subject to certain criteria and circumstances in the
event of the Company being unable, on a temporary basis, to meet its
financial commitments.
PERMANENT FINANCING (NO 1) PLC
DIRECTORS' REPORT (CONT'D)
DIRECTORS AND DIRECTORS' INTERESTS
The directors who served during the period were as follows:
David Balai (Appointed 15 April 2001)
SFM Directors Limited (Appointed 15 April 2001)
SFM Directors (No. 2) Limited (Appointed 15 April 2001)
Permanent Holdings Limited hold 49,998, �1 ordinary shares partly paid
to �0.25 and two �1 ordinary shares fully paid in Permanent Financing
(No 1) plc. These shares comprise the entire issued share capital of
Permanent Financing (No 1) plc. David Balai, SFM Directors Limited and
SFM Directors (No 2) Limited are also directors of Permanent Holdings
Limited.
AUDITORS
The auditors, KPMG Audit plc, were appointed on 1st July 2002. A
resolution to reappoint KPMG Audit Plc as auditors will be put to the
members at the forthcoming Annual General Meeting.
By Order of the Board
SFM CORPORATE SERVICES LIMITED
SECRETARY
Blackwell House
Guildhall Yard
LONDON
EC2V 5AE
4 March 2003
PERMANENT FINANCING (NO 1) PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for
each financial period which 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 those financial statements, the directors
are required to:
o select suitable accounting policies and then apply them consistently;
o make judgements and estimates that are reasonable and prudent;
o state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
o prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the
financial statements comply with the Companies Act 1985. They have a
general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF PERMANENT FINANCING (NO 1) PLC
We have audited the financial statements on pages 9 to 21.
This report is made solely to the Company's members, as a body, in
accordance with section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the Company's members
those matters we are required to state to them in an auditor's report
and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the
Company and the Company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The directors are responsible for preparing the financial statements.
As described on page 6 this includes preparing the financial
statements in accordance with applicable United Kingdom law and
accounting standards. Our responsibilities, as independent auditors,
are established in the United Kingdom by statute, the Auditing
Practices Board, the Listing Rules of the Financial Services
Authority, and by our profession's ethical guidance.
We report to you our opinion as to whether the financial statements
give a true and fair view and whether the financial statements have
been properly prepared in accordance with the Companies Act 1985. We
also report to you if, in our opinion, the directors' report is not
consistent with the financial statements, if the Company has not kept
proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information specified
by law regarding directors' remuneration and transactions with the
Company is not disclosed.
We read the other information contained in the Directors' Report and
consider whether it is consistent with the audited financial
statements. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with
the financial statements.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by
the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the Company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation of
information in the financial statements.
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF PERMANENT FINANCING (NO 1) PLC (CONT'D)
OPINION
In our opinion the financial statements give a true and fair view of
the state of the Company's affairs as at 31 December 2002 and of its
profit for the period then ended and have been properly prepared in
accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
4 March 2003
1 The Embankment
Neville Street
LEEDS
LS1 4DW
PERMANENT FINANCING (NO 1) PLC
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2002
Note 2002
�
Interest receivable and similar income 2 81,594,775
Interest payable and similar charges 3 (81,594,486)
NET INTEREST INCOME 289
Income from group company 15,159
Operating expenses (7,000)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4 8,448
Tax on profit on ordinary activities 5 (1,570)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 6, 15 6,878
========================================================================================================
A statement of the movement on reserves is shown in note 6 to the
financial statements on page 15.
The Company had no recognised gains or losses in the period other than
the profit for the financial period shown above.
The profit shown above is derived from continuing operations.
The notes on pages 11 to 21 form part of these financial statements.
PERMANENT FINANCING (No 1) PLC
BALANCE SHEET AS AT 31 DECEMBER 2002
2002
Note �
FIXED ASSETS
Loans to group undertaking 7 2,968,961,579
CURRENT ASSETS
Debtors - due within one year 8 518,405,123
Cash at bank and in hand 12,790
518,417,913
CREDITORS: amounts falling due 9 (518,398,534)
within one year
NET CURRENT ASSETS
19,379
TOTAL ASSETS LESS CURRENT LIABILITIES 2,968,980,958
CREDITORS: amounts falling due after more than 10 (2,968,961,579)
one year
NET ASSETS 19,379
CAPITAL AND RESERVES
Called up share capital 14 12,501
Profit and loss account 6,878
EQUITY SHAREHOLDER FUNDS 15 19,379
========================================================================================================
These financial statements were approved by the Board of Directors on
4 March 2003 and were signed on its behalf by:
JAMES MACDONALD per pro
SFM Directors Limited
as Director
The notes on pages 11 to 21 form part of these financial statements.
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002
1. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in
dealing with items which are considered material in relation to the
Company's financial statements.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with
applicable accounting standards and have been drawn up under the
historical cost convention and on a going concern basis.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amount of assets
and liabilities and disclosure of contingencies at the balance sheet
date and the reported amounts of revenues and expenses in the
reporting period. Actual results may differ from the estimates used in
the financial statements.
INTEREST
Receipts and payments are accounted for on an accruals basis.
FIXED ASSET INVESTMENTS
Loans to group undertakings held as fixed assets are stated at cost,
less provisions to the extent that the directors consider these
amounts may not be recoverable.
DERIVATIVES
Transactions are undertaken in derivative financial instruments,
"derivatives", which include interest rate swaps. Derivatives are
entered into for the purpose of eliminating risk from potential
movements in interest rates inherent in the Company's non-trading
assets and liabilities. Non-trading assets and liabilities are those
intended for use on a continuing basis in the activities of the
Company.
A derivative is designed as non-trading where there is an offset
between the effects of potential movements in market rates of the
derivative and the designated asset or liability being hedged.
Non-trading derivatives are reviewed regularly for their effectiveness
as hedges. Non-trading derivatives are accounted for on an accruals
basis, consistent with the asset or liability being hedged. Income and
expense on non-trading derivatives are recognised as they accrue over
the life of the instruments as an adjustment to interest receivable or
payable.
The cost of interest rate swaps, which are used to hedge on balance
sheet assets and liabilities, are included in the interest payable on
debt securities.
FOREIGN CURRENCIES
Assets and liabilities are translated at the rates of exchange ruling
on the balance sheet date or at the forward exchange rate as
appropriate.
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002 (CONT'D)
DEFERRED CONSIDERATION
Under the terms of the securitisation the Company retains the right to
0.01% of interest receivable on the beneficial interest in the
mortgage portfolio. Profits in excess of 0.01% accrue to Halifax plc,
the originator of the underlying mortgages, and accordingly a creditor
(deferred consideration) for amounts payable to Halifax plc has been
recognised at the period end. The payments of deferred consideration
are strictly governed by the priority of payments which set out how
cash can be utilised.
VALUE ADDED TAX
This is not recoverable by the Company and is included with its
related cost.
TAXATION
The charge for taxation takes into account all timing differences in
the accounting and taxation treatment of certain items.
DEFERRED TAXATION
In the current year, the Company implemented FRS 19, "Deferred Tax".
Deferred Tax is recognised, without discounting, in respect of all
timing differences between the treatment of certain items for taxation
and accounting purposes which have arisen but not reversed out by the
balance sheet date, except as otherwise required by FRS 19. Deferred
tax assets are only recognised when it is more likely than not that
the asset will be recoverable in the foreseeable future out of
suitable taxable profits from which the timing differences and tax
losses can be deducted.
CASH FLOW STATEMENT
The Company is a wholly owned subsidiary of Permanent Holdings
Limited, a company incorporated in Great Britain. Accordingly the
Company is not required to produce a cash flow statement as prescribed
in paragraph 5 (a) of FRS 1 (revised 1996), "Cash flow statements".
TRANSACTIONS WITH RELATED PARTIES
Permanent Financing (No 1) plc, as a wholly owned subsidiary
undertaking of Permanent Holdings Limited, has prepared its financial
statements in accordance with an exemption contained in FRS 8,
"Related Party Disclosures". Under this exemption the Company has not
disclosed details of transactions with other group companies or
undertakings of the group qualifying as related parties, as the
consolidated financial statements in which Permanent Financing (No 1)
plc is included are publicly available.
2. INTEREST RECEIVABLE AND SIMILAR INCOME
2002
�
Interest on inter-company term loans 81,594,486
Bank interest 289
81,594,775
PERMANENT FINANCING (No 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002 (CONT'D)
3. INTEREST PAYABLE AND SIMILAR CHARGES
2002
�
On Debt Securities:
Series 1 Class A Fixed Rate Notes 2003 (11,340,037)
Series 2 Class A Fixed Rate Notes 2007 (11,925,559)
Series 4 Class A1 Fixed Rate Notes 2009 (11,463,835)
Series 1 Class B Floating Rate Notes 2042 (425,022)
Series 1 Class C Floating Rate Notes 2042 (425,664)
Series 2 Class B Floating Rate Notes 2042 (507,035)
Series 2 Class C Floating Rate Notes 2042 (520,451)
Series 3 Class A Floating Rate Notes 2007 (17,345,227)
Series 3 Class C Floating Rate Notes 2042 (773,132)
Series 3 Class B Floating Rate Notes 2042 (636,347)
Series 4 Class A2 Floating Rate Notes 2042 (23,465,336)
Series 4 Class B Floating Rate Notes 2042 (1,254,560)
Series 4 Class C Floating Rate Notes 2042 (1,512,281)
(81,594,486)
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2002
�
Profit on ordinary activities before taxation is stated after
charging/(crediting):
Auditors' remuneration including expenses for audit work 7,000
Deferred consideration (15,159)
========================================================================================================
The Company has no employees. Structured Finance Management Limited
provides corporate services pursuant to a corporate services agreement
with the Company. Structured Finance Management Limited was paid
�14,200 for services provided in the period.
PERMANENT FINANCING (No 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 december 2002 (cont'd)
5. TAX ON PROFIT ON ORDINARY ACTIVITIES
2002
�
The movement on deferred tax was as follows:
Balance brought forward -
Current year charge -
Balance carried forward -
Deferred taxation comprises
General provisions -
-
Tax on profit on ordinary activities
The charge for the period based
on a corporation tax rate of 19% comprises:
UK corporation tax 1,570
Deferred tax -
1,570
Factors affecting the current tax charge for the period:
The tax assessed for the period is lower than the standard
rate of corporation tax in the UK of 30%
The differences are explained below
Profit on ordinary activities before taxation 8,448
Profit on ordinary activities multiplied by the 2,534
standard rate of corporation tax in the UK
Effects of:
Small companies' rate (964)
1,570
PERMANENT FINANCING (No 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002 (CONT'D)
6. PROFIT AND LOSS ACCOUNT
2002
�
At incorporation -
Transfer to reserves 6,878
At 31 December 6,878
7. LOANS TO GROUP UNDERTAKING 2002
Opening Additions Disposals Closing
� � � �
Repayable:
In more than one year but not more 1,257,914,051 - - 1,257,914,051
than five years
In more than five years 1,711,047,528 - - 1,711,047,528
2,968,961,579 - - 2,968,961,579
The loans are all denominated in Sterling and are at variable rates of
interest, based on LIBOR for three-month sterling deposits. The fair
value of these assets is not considered materially different to the
book value. Such loans have ultimately been secured against a
beneficial interest in a mortgage portfolio held in trust on behalf of
the Permanent Holdings Limited Group.
8. DEBTORS
2002
�
Amounts due from group undertaking 509,614,731
Accrued interest receivable on loans to group undertaking 8,775,233
Other debtors 15,159
518,405,123
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002 (CONT'D)
9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2002
�
Interest payable on debt securities 8,775,233
Debt securities in issue (note 11) 509,614,731
Taxation 1,570
Audit fee accrual 7,000
518,398,534
10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2002
�
Debt securities in issue (note 11) 2,968,961,579
11. DEBT SECURITIES IN ISSUE
2002
�
Series 1 Class A Floating Rate Notes 2003 509,614,731
Series 2 Class A Fixed Rate Notes 2007 509,614,731
Series 4 Class A1 Fixed Rate Notes 2009 484,000,000
Series 1 Class B Floating Rate Notes 2042 17,666,644
Series 1 Class C Floating Rate Notes 2042 17,666,644
Series 2 Class B Floating Rate Notes 2042 17,666,644
Series 2 Class C Floating Rate Notes 2042 17,666,644
Series 3 Class A Floating Rate Notes 2007 748,299,320
Series 3 Class C Floating Rate Notes 2042 26,190,476
Series 3 Class B Floating Rate Notes 2042 26,190,476
Series 4 Class A2 Floating Rate Notes 2042 1,000,000,000
Series 4 Class B Floating Rate Notes 2042 52,000,000
Series 4 Class C Floating Rate Notes 2042 52,000,000
3,478,576,310
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE financial statements
FOR THE PERIOD ENDED 31 december 2002 (cont'd)
11. DEBT SECURITIES IN ISSUE (CONT'D)
The debt securities are denominated in the following currencies:
2002
�
US Dollars 1,890,576,310
Euros 484,000,000
Sterling 1,104,000,000
3,478,576,310
Subject to their scheduled redemption dates, the Class A issuer notes
rank, irrespective of series, without preference or priority among
themselves. Subject to the relevant scheduled and/or, as applicable,
permitted redemption dates or other payment conditions of the issuer
notes, payments of principal and interest due and payable on the Class
A issuer notes will rank ahead of payments of principal and interest
due and payable on the Class B issuer notes and the Class C issuer
notes subject to the terms and conditions of the issuer notes, the
issuer cash management agreement, the issuer deed of charge, the
Funding 1 deed of charge and the other issuer transaction documents.
Similarly, payments of principal and interest due and payable on the
Class B issuer notes will rank ahead of payments of principal and
interest due and payable on the Class C issuer notes.
Interest is payable on the Series 1 Class A notes at a variable rate
based on one month US Dollar - LIBOR. Interest is payable on the
Series 3 Class A, Series 4 Class A2, all Class B issuer notes and all
Class C issuer notes at variable rates based upon either three-month
US Dollar - LIBOR or three-month Sterling - LIBOR. Interest is payable
on the Series 2 Class A notes and the Series 4 Class A1 notes at fixed
rates of interest.
The Company's obligations to noteholders and to other secured
creditors, are secured under a deed of charge which grants security
over all of its assets in favour of the security trustee. The
principal assets of the Company are loans made by it to Permanent
Funding (No1) Limited, a group company, whose obligations in respect
of these loans are secured pursuant to a deed of charge which grants
security over all its assets, primarily consisting of its beneficial
interest in a portfolio of residential mortgage loans, in favour of
the security trustee. The security trustee holds this security for the
benefit of all secured creditors of Permanent Funding (No 1) Limited,
including the Company.
The Company has a currency swap in place with Credit Suisse First
Boston International (CSFB). CSFB has been subject to a ratings
downgrade and in consequence has posted collateral of �53.5m in
respect of its obligations under the related swap agreement. This
amount is held by HBOS Treasury Services plc on behalf of Permanent
Financing (No 1) plc as a contingency against a default on the swap
agreement. At the present time it is unlikely that a default will
occur. CSFB earns interest on the collateral deposit.
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE financial statements
FOR THE period ENDED 31 december 2002 (cont'd)
11. DEBT SECURITIES IN ISSUE (CONT'D)
The estimated fair values of the debt securities, based on the
mid-market price on 31 December 2002, are as follows:
2002
�
Series 1 Class A Floating Rate Notes 2003 465,376,024
Series 2 Class A Fixed Rate Notes 2007 465,376,024
Series 4 Class A1 Fixed Rate Notes 2009 487,782,670
Series 1 Class B Floating Rate Notes 2042 16,133,035
Series 1 Class C Floating Rate Notes 2042 16,133,035
Series 2 Class B Floating Rate Notes 2042 16,133,035
Series 2 Class C Floating Rate Notes 2042 16,133,035
Series 3 Class A Floating Rate Notes 2007 682,551,502
Series 3 Class C Floating Rate Notes 2042 23,889,303
Series 3 Class B Floating Rate Notes 2042 23,889,303
Series 4 Class A2 Floating Rate Notes 2042 1,000,000,000
Series 4 Class B Floating Rate Notes 2042 52,000,000
Series 4 Class C Floating Rate Notes 2042 52,000,000
3,317,396,966
12. FINANCIAL INSTRUMENTS
The Company's policies as regards derivatives and financial
instruments are set out in the Report of the Directors on page 3 and
the accounting policies on page 11. The Company does not trade in
financial instruments. The following disclosures are made in respect
of financial instruments. Short term debtors and creditors are
excluded from the following disclosures, except for note 13(A).
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2002 (CONT'D)
13(a). MATURITY PROFILE OF FINANCIAL LIABILITIES
2002 Debt Securities in Other liabilities Total liabilities
Issue
� � �
Within one year or
less or on demand 509,614,731 8,783,803 518,398,534
More than one year
but not more than
two years
509,614,731 - 509,614,731
More than two years
but not more than
five years
484,000,000 - 484,000,000
More than five years 1,975,346,848 - 1,975,346,848
3,478,576,310 8,783,803 3,487,360,113
There is a liquidity facility of �60m provided by JP Morgan Chase Bank
in the event that the Company is unable to meet its financial
commitments, on a temporary basis, in certain circumstances and
subject to certain criteria. At 31 December 2002 this facility was not
required.
13(b). INTEREST RATE PROFILE OF FINANCIAL ASSETS AND LIABILITIES
After taking into account the cross currency and interest rate swaps
entered into by Credit Suisse First Boston International, JP Morgan
Chase Bank and Banque AIG on behalf of the Company the interest rate
profile of the Company's financial assets and liabilities at 31
December 2002 was:
Total Floating Rate Non interest Fixed Weighted average
bearing period until maturity*
Years
Assets � � � �
Loans from group
Undertaking
3,478,576,310 3,478,576,310 - - -
Cash at bank and
in hand 12,790 - - - -
3,478,589,100 3,478,576,310 - - -
========================================================================================
LIABILITIES
Debt securities 3,478,576,310 3,478,576,310 - - -
*for non-interest bearing assets/liabilities only.
--------------------------------------------------------------------------------------------------------
Benchmark rates for determining interest payments for the floating
rate assets and liabilities are given in the note to the financial
statements relevant to the financial instrument type.
This analysis excludes short term debtors and creditors. All
instruments are denominated in sterling, after taking into account
cross currency swaps.
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE financial statements
FOR THE PERIOD ENDED 31 december 2002 (cont'd)
13(c). GAINS AND LOSSES ON HEDGES
2002 Gains Losses Total net
gains/(losses)
� � �
Unrecognised gains and losses on hedges at incorporation - - -
Gains and losses arising in 2002 that were not
recognised in 2002 73,283,336 (1,845,539) 71,437,797
----------- ----------- ------------
Unrecognised gains and losses on hedges at 31 December 73,283,336 (1,845,539) 71,437,797
2002
----------- ----------- ------------
Gains and losses expected to be recognised in 2003 19,285,487 (46,138) 19,239,349
Gains and losses expected to be recognised in 2004, or
later 53,997,849 (1,799,401) 52,198,448
Interest accruals and prepayments - at 31 December 2002 accrued
interest receivable and accrued interest payable amounted to �10.0m,
accordingly the fair value of derivative financial instruments at 31
December 2002 is �65.5m.
Unrecognised gains and losses are principally in respect of cross
currency swaps.
14. SHARE CAPITAL
2002
�
AUTHORISED
50,000 ordinary shares of �1 each 50,000
50,000
===============
ISSUED SHARE CAPITAL
2 ordinary shares of �1 each (fully called and paid) 2
49,998 ordinary shares each (one quarter called and paid) 12,499
12,501
PERMANENT FINANCING (NO 1) PLC
NOTES TO THE financial statements
FOR THE PERIOD ENDED 31 december 2002 (cont'd)
15. RECONCILIATION OF MOVEMENTS IN SHAREHOLDER FUNDS
2002
�
Opening shareholder funds -
Share capital called up in the period 12,501
Transfer to reserves 6,878
Closing shareholder funds 19,379
16. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption covered by paragraph
3 (c) of FRS 8, "Related party disclosures", not to disclose
transactions with entities that are part of the Permanent Holdings
Limited Group.
17. ULTIMATE PARENT UNDERTAKING
The Company's immediate parent undertaking is Permanent Holdings
Limited, a company registered in England and Wales and incorporated in
Great Britain. Copies of the consolidated financial statements of
Permanent Holdings Limited may be obtained from The Company Secretary,
Blackwell House, Guildhall Yard, London, EC2V 5AE.
The ultimate parent undertaking is SFM Corporate Services Limited on a
discretionary trust basis for the benefit of certain charities.
The management, operations, accounting and financial reporting
functions of the Company are performed by Halifax plc. Copies of the
financial statements of Halifax plc may be obtained from The Mound,
Edinburgh, EH1 1YZ.
Short Name: Permanent Fin(No.1)
Category Code: FR
Sequence Number: 00002926
Time of Receipt (offset from UTC): 20030314T165643+0000
--30--ne/uk*
CONTACT: Permanent Financing (No.1) PLC
KEYWORD: UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD:
SOURCE: Permanent Fin(No.1)
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