RNS Number : 4240L
Wellcome Trust Finance plc
09 January 2009
The Wellcome Trust and Wellcome Trust Finance plc each announce that their Annual Report and Financial Statements for the year ended 30
September 2008 have now been published. A copy of each document is available on the Wellcome Trust website at:
http://www.wellcome.ac.uk
Wellcome Trust Finance plc further announces that two copies of its Annual Report and Financial Statements for the year ended 30
September 2008 have been submitted to the UK Listing Authority, and will shortly be available for inspection at the UK Listing Authority's
Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone: 020 7066 1000
In accordance with the Disclosure and Transparency Rules, the following information is taken from the Annual Report and Financial
Statements for Wellcome Trust Finance plc for the year ended 30 September 2008:
Directors' report
Report of the Directors
The Directors of Wellcome Trust Finance plc (the "Company") present their report and the audited Financial Statements for the year ended
30 September 2008.
Activities
The principal activity of the Company is to issue and invest in financial instruments e.g. shares, bonds, debentures, loans,
certificates of deposit and other financial obligations.
During the year the Company invested in a subsidiary which remained dormant throughout the year.
Review of the business
On 25 July 2006 the Company issued �550 million of 4.625% Guaranteed Bonds due July 2036 (the "Bonds"). The Bonds are listed on the
London Stock Exchange. The obligations of the Company on the Bonds are governed by a Trust Deed dated 25 July 2006 between the Company, The
Wellcome Trust Limited, as trustee of the Wellcome Trust, and Citicorp Trustee Company Limited, as the trustee for the holders of the Bond
(the "Trust Deed"). The payment of all amounts due in respect of the Bonds is unconditionally and irrevocably guaranteed pursuant to the
terms of a guarantee given by The Wellcome Trust Limited, as trustee of the Wellcome Trust; the guarantee is part of the Trust Deed.
Results for the year
The Company made a profit of �nil (2007: �nil) during the year ended 30 September 2008, after recognising a Gift Aid donation of
�6,127,001 (2007: �6,502,048) to the Wellcome Trust, a charity registered in England under the UK Charities Act 1993 (registered charity
number 210183). As at the 30 September 2008 the Company had net assets of �137,500,000 (2007: �137,500,000). The Directors do not propose
the payment of a dividend (2007: nil).
Political and charitable donations
The Company made no political contributions during the year (2007: nil). The Company made charitable contributions of �6,127,001 (2007:
�6,502,048) to the Wellcome Trust under Gift Aid.
Financial risk management
The Directors of the Company implement policies to manage the inherent risks relating to the financial assets and liabilities of the
Company; however, the Company does not undertake any hedging transactions.
The Directors have assessed for each financial asset and liability: the market risk, interest rate risk, liquidity risk, and credit risk
exposure. The Company is not exposed to significant market risk or interest rate risk because the Company's main financial assets and
liabilities have fixed redemption values, fixed interest rates and fixed maturity dates. The liquidity risk of the Company is mitigated by
the matching of the cash flows from the Company's financial assets and liabilities. Credit risk exposure of the Company's loans is reduced
by the Company advancing loans to Group entities only. Credit risk exposure of the Company's remaining financial assets is reduced by
stringent selection procedures for any external counter parties with which the Company transacts.
Key performance indicators
Due to the nature of the Company's operations the key performance measures are: that the Company meets all its legal obligations to the
Bond holders and that the Company achieves sufficient return on its assets to be profitable, before any donations to the Wellcome Trust
under Gift Aid. During the year the Company met all its legal obligations to the Bond holders and had profits before donations to the
Wellcome Trust under Gift Aid.
Environment
Due to the nature of its activities the Company has a minimal environmental impact.
Employees
There are no employees of the Company.
The management and administration of the Company is undertaken by staff from the Wellcome Trust. The Wellcome Trust has not incurred any
incremental costs due to the management of this Company and therefore no management fee has been charged to the Company by the Wellcome
Trust.
Corporate governance
The Company is limited by shares. Its governing documents are its Memorandum of Association and its Articles of Association. The
shareholders of the company are: The Wellcome Trust Limited, as trustee of the Wellcome Trust, and Wellcome Trust Nominees Limited, as
nominee for the Wellcome Trust.
The Company is considered to be a wholly owned subsidiary of The Wellcome Trust Limited, as trustee of the Wellcome Trust. The Company
is not subject to the requirements of the Combined Code because it does not have any equity shares listed on the London Stock Exchange. A
statement on corporate governance policies of the Group and the report of the audit, nominations and remuneration committees of the Wellcome
Trust are included in the Wellcome Trust's Annual Report and Financial Statements for the year ended 30 September 2008.
The Company complies with all appropriate filing and information requirements of the Financial Services Authority.
Creditor payment terms
The Company pays suppliers in accordance with contractual terms or within 30 days of invoice date.
Directors and their interests
The Directors of the Company who served during the year and to the date of this report are set out below:
David Phillipps
Danny Truell
Suzy Jacques (resigned 14 April 2008)
Genny Kiff (resigned 14 April 2008)
Joanna Peart (resigned 14 April 2008)
Peter Pereira Gray (appointed 14 April 2008)
Nicholas Moakes (appointed 14 April 2008)
None of the Directors held any beneficial interest in the shares of the Company or any interest in its parent company, The Wellcome
Trust Limited, as trustee of the Wellcome Trust, or Wellcome Trust Nominees Limited, as nominee for the Wellcome Trust.
Each of the Directors is an employee of the Wellcome Trust and receives remuneration from the Wellcome Trust as an employee. No
remuneration is paid to any Director for his or her services as a Director.
Statement of Directors' responsibilities in respect of the Financial Statements
The Directors are responsible for preparing 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 elected to
prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). The Financial Statements are required by law to 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:
(1) select suitable accounting policies and then apply them consistently;
(2) make judgements and estimates that are reasonable and prudent;
(3) state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained
in the financial statements; and
(4) prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue
in business, in which case there should be supporting assumptions or qualifications as necessary.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
The Directors are responsible for keeping proper accounting records that 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 1985. 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.
Each Director in office at the date of approving this report confirms that: so far as each Director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and each Director has taken all the steps that ought to have been taken as a
Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that
information.
This report was approved by the Board of Directors and signed on its behalf on 15 December 2008.
Auditors
A resolution was passed by the Board of Directors on 15 December 2008 appointing PricewaterhouseCoopers LLP as auditor until such time
as the Company decides otherwise.
Independent auditors' report
for the year ended 30 September 2008
Independent Auditors' Report to the shareholders of Wellcome Trust Finance plc
We have audited the Financial Statements of Wellcome Trust Finance plc for the year ended 30 September 2008 which comprise the Profit
and Loss Account, the Balance Sheet, the Cash Flow Statement and the related notes. These Financial Statements have been prepared under the
accounting policies set out therein.
Respective responsibilities of Directors and auditors
The Directors' responsibilities for preparing the Financial Statements in accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the Financial Statements in accordance with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the company's shareholders as
a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the Financial Statements give a true and fair view and are properly prepared in accordance
with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors' Report is consistent with
the Financial Statements.
In addition we report to you if, in our opinion, 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 other
transactions is not disclosed.
We read the Directors' Report and consider the implications for our report if we become aware of any apparent misstatements within it.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) 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 judgments 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.
Opinion
In our opinion:
* the Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of
the state of the Company's affairs as at 30 September 2008 and of its result and cash flows for the year then ended;
* the Financial Statements have been properly prepared in accordance with the Companies Act 1985; and
* the information given in the Directors' Report is consistent with the Financial Statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
16 December 2008
PROFIT AND LOSS ACCOUNT
for the year ended 30 September 2008
Note Year ended Year ended
30 September 2008 30 September 2007
� �
Turnover
Interest receivable and similar 2 32,111,993 32,160,189
income
Administrative expenses 3 (311,592) (62,990)
31,800,401 32,097,199
Interest payable and similar (25,673,400) (25,595,151)
charges
Give Aid donation (6,127,001) (6,502,048)
Profit on ordinary activities - -
before taxation
Taxation on ordinary activities 6 - -
Profit on ordinary activities - -
after taxation
All income is derived from continuing activities.
There were no recognised gains or losses other than those shown above.
The notes below form part of these Financial Statements.
BALANCE SHEET
as at 30 September 2008
Note As at As at
30 September 2008 30 September 2007
� �
Fixed assets
Investment in subsidiaries 7 1 -
Current assets
Loans to Group undertaking 8 676,000,000 676,000,000
Amounts due from Group 985,000 -
undertakings
Accrued interest on loans 4,867,124 4,867,123
Prepayments 34,448 15,422
Cash at bank and in hand 9,472 663,496
Creditors: amounts falling due 9 (5,100,478) (4,986,374)
within on year
Net current liabilities 676,795,566 676,559,667
Creditors: amounts falling due 9 (539,295,567) (539,059,667)
after more than one year
Net assets 137,500,000 137,500,000
Capital reserves
Called up share capital 11 137,500,000 137,500,000
Profit and loss account - -
Total shareholders' funds 137,500,000 137,500,000
The Financial Statements were approved by the Board of Directors on 15 December 2008.
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
(a) Basis of preparation of the Financial Statements
The Financial Statements of the Company, an entity in the Wellcome Trust Group (the "Group"), have been prepared on a going concern
basis in accordance with Schedule 4 of the Companies Act 1985 and applicable accounting standards in the United Kingdom.
All income and expenditure is recognised in the Financial Statements on an accruals basis. A summary of the more important accounting
policies, which have been consistently applied, is set out below:
(b) Accounting policies
Accounting policies have been reviewed in accordance with FRS 18 - "Accounting Policies".
(c) Interest receivable
Interest income is interest derived from loans to Wellcome Trust Investment Limited Partnership (the "Limited Partnership"), an
undertaking in the Group. Interest income is calculated using the effective interest rate method and is recognised on an accruals basis.
(d) Interest payable
Interest payable is the effective interest on the Bond liability (as described in note 1(f)) and is recognised on an accruals basis.
(e) Loans to Group undertaking
The investment loans are to Wellcome Trust Investment Limited Partnership, with fixed redemption value and fixed interest payments. The
loans are not quoted in an active market. The loans were recognised initially at fair value and after initial recognition are measured at
amortised cost using the effective interest method.
(f) Bond liability
The Bond liability relates to the 30-year corporate bonds issued by the Company in July 2006, listed on the London Stock Exchange (the
"Bonds"). The initial measurement of the liability is equal to the proceeds of issue less all transaction costs directly attributable to the
issue. After initial recognition the liability is measured at amortised cost using the effective interest method. The fair value of the Bond
liability disclosed within the notes to the Financial Statements is the market value of the Bonds at the year end date. The Company is not
required to, and therefore does not, recognise any adjustment to fair value in the Balance Sheet and Profit and Loss Account.
(g) Foreign currencies
Transactions in currencies other than Sterling are recorded at the rate of exchange prevailing on the dates of the transactions. At each
balance sheet date, recorded monetary assets and liabilities and balances carried at fair value that are denominated in foreign currencies
are retranslated at the rates prevailing on the balance sheet date. All realised and unrealised profits and losses arising on exchange are
included in net profit or loss for the period.
2. INTEREST RECEIVABLE
Year ended Year ended
30 September 2008 30 September 2007
� �
Interest receivable on Loans to Group 32,110,000 32,110,000
undertaking
Interest receivable on cash deposits 1,993 50,189
32,111,993 32,160,189
Interest receivable on "Loans to Group undertaking" (see note 8) is the effective interest on Loans A and B and is at a fixed rate of
4.75%.
3. ADMINISTRATIVE EXPENSES
Year ended Year ended
30 September 2008 30 September 2007
� �
Legal fees 137,309 40,432
Taxation advice 82,250 -
Auditors' remuneration 7,403 7,050
Rating agency fees 49,419 13,134
Other 35,211 2,374
311,592 62,990
Auditors' remuneration is solely in relation to the statutory audit of the Financial Statements.
4. EMPLOYEE INFORMATION
The Company has no employees. Personnel from the Wellcome Trust undertake the management and administration of the Company at no
incremental cost to the Wellcome Trust.
5. REMUNERATION OF DIRECTORS
The Directors of the Company received no remuneration from the Company for their services. There were no Directors for whom retirement
benefits are accruing under a money purchase or defined benefit scheme. The Company does not issue share options or offer any long-term
incentive schemes, so there were no Directors who exercised share options during the year or became entitled to shares under a long-term
incentive scheme.
6. TAXATION
The profits of the Company for the year will be paid under Gift Aid to the Wellcome Trust, a charity registered in England under the UK
Charities Act 1993 (registered charity number 210183).
There is no difference between accounting and taxable profits, so there is no provision required for deferred tax.
7. INVESTMENTS IN SUBSIDIARIES
During the year the Company invested �1 in a subsidiary, Wellcome Trust Finance No. 2 Limited. The subsidiary
has remained dormant during the year and has net assets of �1 (comprising the unpaid share capital debtor) as at
30 September 2008.
The Company has not prepared consolidated financial statements because the subsidiary is not material, and so meets
the exemption requirements of FRS 2 - "Accounting for Subsidiary Undertakings".
8. LOANS TO GROUP UNDERTAKING
Principal amount Interest rate per Loan Amortised cost Amortised cost
annum anniversary Year ended 30 Year ended 30
date September 2008 September 2007
� % � �
Loan A 550,000,000 4.75 25 July 550,000,000 550,000,000
Loan B 126,000,000 4.75 25 September 126,000,000 126,000,000
676,000,000 676,000,000
Loans to Group undertaking are loans (the "Loans") to Wellcome Trust Investment Limited Partnership (the "Limited Partnership"). The
principal under each Loan is repayable by the Limited Partnership on demand by the Company, but the Loans are expected to be outstanding for
28 years. The Loans have fixed redemption value of the principal amount and fixed interest rates. Interest accrued up to the Loan
anniversary date is paid five days prior to the Loan anniversary date.
9. CREDITORS
Year ended Year ended
30 September 2008 30 September 2007
� �
Accruals and deferred income 29,063 44,965
Amounts due to Group undertakings 33,325 320
Gift Aid due to the Wellcome Trust 299,049 202,048
Accrued interest on Bond liability 4,739,041 4,739,041
Total creditors: amounts falling due 5,100,478 4,986,374
within one year
Falling due between one and five years - -
Bond liability 539,295,567 539,059,667
Falling due after five years 539,295,567 539,059,667
Total creditors: amounts falling due 539,295,567 539,059,667
after one year
The Bond liability is the amortised cost using the effective interest method of the �550 million 4.625% Guaranteed Bonds due July 2036,
issued by the Company on 25 July 2006. The Bond liability falling due within one year is the unpaid coupon interest accrued for the year to
30 September 2008. The interest payment to the Bondholders is at a fixed rate of 4.625% per annum and is paid in arrears on 25 July each
year until repayment of the Bond principal. No amounts fall due between one and five years because the remainder of the Bond liability at
the balance sheet date is the amortised cost of the amount due to be repaid upon expiry of the 30-year term on 25 July 2036 and therefore
falls due after five years.
The obligation of the Company on the Bonds is governed by a Trust Deed dated 25 July 2006 between the Company, The Wellcome Trust
Limited, as trustee of the Wellcome Trust, and Citicorp Trustee Company Limited, as the trustee for the holders of the Bond (the "Trust
Deed"). The payment of all amounts due in respect of the Bonds is unconditionally and irrevocably guaranteed pursuant to the terms of a
guarantee given by The Wellcome Trust Limited, as trustee of the Wellcome Trust; the guarantee is part of the Trust Deed.
10. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Year ended Year ended
30 September 2008 30 September 2007
� �
At 1 October 2007 137,500,000 137,500,000
At 30 September 2008 137,500,000 137,500,000
11. SHARE CAPITAL
Number Year ended Year ended
30 September 2008 30 September 2007
� �
Authorised ordinary shares of 137,500,000 137,500,000 137,500,000
�1 each
Issued and fully paid ordinary 137,500,000 137,500,000 137,500,000
shares of �1 each
12. RELATED PARTY TRANSACTIONS
The Company, a wholly owned subsidiary undertaking of the Wellcome Trust, has taken the exemption available from related party
disclosure requirements of FRS 8 - "Related Party Disclosures", because the Financial Statements of the parent company are available to the
public (note 14).
13. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise the Loans to Group undertaking and the liability arising from the issue of
the Bonds. The Company's loans are non-derivative financial assets with fixed payments which are not available for sale. The Bond liability
is a non-derivative financial liability with a fixed redemption value, fixed interest rate and fixed maturity date. The Company has not
undertaken any trading in financial instruments during the year.
The financial instruments issued by, or held by, the Company are Sterling denominated and carry no foreign exchange risk.
The financial instruments issued by, or held by, the Company are at fixed interest rates and therefore do not have any related interest
rate risk.
The key risks relating to the financial instruments held by the Company are the credit risk and liquidity risk of the counter party -
Wellcome Trust Investment Limited Partnership (the "Limited Partnership") under the Loans to Group undertaking. These risks are in respect
of the Limited Partnership's ability to meet the interest and principal payments as they fall due. The total value exposed to credit risk as
at 30 September 2008 is �681.8 million (2007: �681.5 million), the value of the Loans to Group undertaking, amounts due from Group
undertakings, accrued interest on loans and cash at bank and in hand.
The following tables detail the maturity of the Company's undiscounted contractual payments as at 30 September 2008:
Contractual payments falling due within one year
Year ended Year
ended
30 September 2008 30 September
2007
Three months or less Between three months Three months or less Between three months
� and one year � and one year
� �
Total Total
� �
Accruals and deferred income 29,063 - 29,063 44,965 - 44,965
Amounts due to Group 33,325 - 33,325 320 - 320
undertakings
Gift Aid due to the Wellcome - 299,049 299,049 - 202,048
202,048
Trust
Accrued interest on Bond - 4,739,041 4,739,041 - 4,739,041
4,739,041
Liability
Contractual payments falling
due within one year 62,388 5,038,090 5,100,478 42,285 4,941,089
4,986,374
Contractual payments falling due after one year
Year ended Year ended
30 September 2008 30 September 2007
Between two and five Between two and five
years After five years After five years
� years � �
� Total Total
� �
Bond liability - 539,295,567 539,295,567 - 539,059,667 539,059,667
Contractual payments falling
due after one year - 539,295,567 539,295,567 - 539,059,667 539,059,667
Fair value of financial assets and financial liabilities
The following table is a comparison of fair values and book values of all financial assets and liabilities as at the end of
the year:
Fair value Book value
Year ended Year ended
30 September 2008 30 September 2008
� �
Financial assets
Loans to Group undertaking 593,011,536 676,000,000
Amounts due from Group 985,000 985,000
undertakings
Accrued interest 4,867,123 4,867,123
Investment in subsidiaries 1 1
Cash at bank and in hand 9,472 9,472
Financial liabilities
Accrued interest on Bond (4,739,041) (4,739,041)
liability
Bond liability (482,479,800) (539,295,567)
The fair value of the Bond liability as at 30 September 2008 was �482.5 million (2007: �491.5 million) and is based on the market value
of the Bonds at that date. The fair value of the Loans to Group undertaking as at 30 September 2008 was �593.0 million (2007: �604.1
million); this is based on the market value of the Bonds, an instrument that is substantially the same as the Loans in term, interest rate
and magnitude. The book value of cash at bank and in hand represents its fair value.
14. CONTROLLING ENTITY
The Company's shares are held by The Wellcome Trust Limited, as trustee of the Wellcome Trust, and by Wellcome Trust Nominees Limited,
as nominee for the Wellcome Trust. The Company is a wholly owned subsidiary undertaking of the Wellcome Trust for accounting purposes, and
its assets, liabilities and results have been consolidated with those of the Wellcome Trust as required by FRS 2 - "Accounting for
Subsidiary Undertakings".
Copies of the Wellcome Trust Annual Report and Financial Statements 2008 are available from the Trust's website
(www.wellcome.ac.uk) or, without charge, from:
Wellcome Trust
FREEPOST
RLYJ-UJHU-EKHJ
Slough
SL3 0EN
This information is provided by RNS
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