TIDM57MC
RNS Number : 9661X
Wellcome Trust Finance plc
15 December 2010
Wellcome Trust Finance plc
Annual Financial Report
Wellcome Trust and Wellcome Trust Finance plc (a wholly owned
subsidiary of Wellcome Trust) announce that they have each
published their Annual Report and Financial Statements for the year
to 30 September 2010 today. A copy of each document is available on
the Wellcome Trust website at:
http://www.wellcome.ac.uk/About-us/Publications .
Wellcome Trust has today issued the following press release in
connection with the publication of its Annual Report and Financial
Statements:
"2009/10 was another challenging year for economies and
financial markets. Governments and central banks around the world
were forced to continue intervening in markets in response to the
deep-seated problems in the banking system and the high levels of
leverage in the developed world.
In these circumstances, we were pleased that the Wellcome
Trust's investment portfolio recorded a return of 11.1%, equating
to GBP1,450 million on a portfolio value of GBP13.0 billion at the
start of the year. We note that the 16% total return generated over
the past two years has more than offset the decline in 2007/8, with
returns now at a record high.
We have returned a total of 3.8% over three years and 37.4% over
five years. Since the inception of the investment portfolio in
1985, it has provided a total return averaging 14.3% a year, a real
return of over 11% per annum which is above our long term target of
6.0% real.
These returns enabled us to spend GBP678 million this year in
support of our mission and also supported our AAA rating, with our
investment asset base ending the year at GBP13.9 billion.
Over the three years of the economic crisis the portfolio has
performed well. Growth and venture returns have been strongest at
25% over the period, with direct knowledge assets contributing over
70%. Our absolute return and buyout assets have been 20%, propelled
by distressed debt returns of 44%. Equities and equity long/short
returns have been 10%. This was helped by the 12% out-performance
against global equities of our equity portfolio in the past two
years, since the inception of direct management.
Our liquidity position continues to be strong and we have
enjoyed positive returns over 5 years in all asset classes and
positive returns over 3 years in all asset classes except in
Property and Infrastructure, which lost only 7% overall. Our
directly managed UK property assets made money at a time when the
benchmark went down some 20%.
Over the past year, equity exposure has increased steadily from
38% to 45% as equity markets have continued to move higher, cash
levels have been allowed to decline and commercial property and
buyout interests have been reduced. Through the year, we continued
to increase our direct holdings in private companies.
Sir William Castell, Chairman of the Trust, said: 'We are
pleased that the consistency of our investment performance across
the different asset classes enabled us to achieve an 11% return in
the past year. The deep partnerships with outstanding investment
managers, which we have built over a long period, have enabled us,
in recent difficult years, to manage liquidity comfortably and to
deliver the excellent investment returns which have supported our
extensive charitable spend. We continue to increase our direct
investment, both in public and private assets, across the world, as
opportunities occur.'
Danny Truell, CIO of the Trust, added: 'At a time when different
regions of the world face diverse challenges and opportunities, it
is more than ever necessary to invest in a range of global assets
and strategies that collectively provide sufficient protection
against adverse outcomes and sufficient exposure to positive
returns, especially should inflationary pressures continue to rise.
We attempt to do so in a flexible and proactive manner but would
not underestimate the fact that new challenges are likely to
arise.'
Wellcome Trust Finance plc further announces that a copy of its
Annual Report and Financial Statements for the year ended 30
September 2010 has been submitted to the National Storage
Mechanism, and will shortly be available for inspection at
www.Hemscott.com/nsm.do .
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 2010:
Wellcome Trust Finance plc
Annual Report and Financial Statements
Year ended 30 September 2010
Wellcome Trust Finance plc
Directors' Report
For the year ended 30 September 2010
Report of the Directors
The Directors of Wellcome Trust Finance plc present their report
and the audited Financial Statements for the year ended 30
September 2010.
Activities
The principal activity of Wellcome Trust Finance plc (the
"Company") is to issue and invest in financial instruments e.g.
shares, bonds, debentures, loans, certificates of deposit and other
financial obligations.
Review of the Business
The Company issued two tranches of bonds, GBP550 million on 25
July 2006 of 4.625% Guaranteed Bonds due July 2036 and GBP275
million on 28 May 2009 of 4.750% Guaranteed Bonds due May 2021 (the
Bonds). The Bonds are listed on the London Stock Exchange. The
obligations of the Company on the Bonds are governed by Trust Deeds
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 Bonds. 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 Deeds.
The Company loaned the proceeds from the Bonds issued to
Wellcome Trust Group (the "Group") undertakings and receives
interest on these loans.
Results for the Year
The Company made a profit of GBPnil (2009: GBPnil)during the
year ended 30 September 2010, after recognising a Gift Aid donation
of GBP6,559,405 (2009: GBP6,494,914) to the Wellcome Trust, a
charity registered in England under the UK Charities Act 1993 (as
amended by the Charities Act 2006) (registered charity number
210183). As at the 30 September 2010 the Company had net assets of
GBP137,500,000 (2009: GBP137,500,000). The Directors do not propose
the payment of a dividend (2009: GBPnil).
Political and Charitable Donations
The Company made no political donations during the year (2009:
GBPnil). The Company made charitable donations of GBP6,559,405
(2009: GBP6,494 914) 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 only
advancing loans to entities within the Group. 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.
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 2010.
The Company complies with all appropriate filing and information
requirements of the Financial Services Authority.
Internal Control and Risk Management
The Company's internal control and risk management is undertaken
as part of the Wellcome Trust's processes. The key elements of this
specifically applicable to the Company are:
-- Delegation: there is a clear organisational structure with
documented lines of authority and responsibility for control and
documented procedures for reporting decisions, actions and
issues.
-- Review: the Audit Committee reviews the effectiveness of the
Company's internal control, its financial reporting process, the
independence of its statutory auditor and its compliance with
relevant statutory and finance regulations and advises the
Directors of any relevant matters. The Audit Committee members are
listed on page 15.
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:
Mr Simon Jeffreys
Mr Nicholas Moakes
Mr Peter Pereira Gray
Mr Daniel Truell
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 their services as a
Director.
Directors Indemnity Policy
There are no qualifying indemnity provisions (as defined in the
Companies Act 2006) that benefit the directors of the Company.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual 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 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 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, whose names are listed in the Directors'
report 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 contained in this section of the Annual
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.
Statement of disclosure of information to auditors
Each Director in office at the date of approving this report
confirms that: so far as the 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.
Auditors
A resolution was passed by the Board of Directors on 14 December
2010 appointing PricewaterhouseCoopers LLP as auditor until such
time as the Company decides otherwise.
This report was approved by the Board of Directors and signed on
its behalf on 14 December 2010 by:
Mr Daniel Truell
Director
Wellcome Trust Finance plc
Independent Auditors' Report
For the year ended 30 September 2010
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLCOME TRUST
FINANCE PLC
We have audited the financial statements of Wellcome Trust
Finance plc for the year ended 30 September 2010 which comprise the
Profit and Loss Account, the Balance Sheet, the Cash Flow Statement
and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice).
Respective responsibilities of Directors and auditors
As explained more fully in the Directors' Responsibilities
Statement set out on page 3, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, 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.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the
overall presentation of the financial statements.
Opinion on financial statements In our opinion the financial
statements:
-- give a true and fair view of the state of the company's
affairs as at 30 September 2010 and of its result and cash flows
for the year then ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Clare Thompson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
14 December 2010
The Financial Statements are published on the Wellcome Trust
website, www.wellcome.ac.uk The maintenance and integrity of the
Wellcome Trust website is the responsibility of the Directors; the
work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
financial statements since they were initially presented on the
website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Wellcome Trust Finance plc
Profit and Loss Account
For the year ended 30 September 2010
Year ended Year ended
30 September 30 September
Note 2010 2009*
GBP GBP
-------------------------------------- ----- ------------- -------------
Turnover 2 45,594,967 36,767,632
Cost of sales (38,972,088) (30,184,080)
Gross profit 6,622,879 6,583,552
Administrative expenses 3 (63,474) (88,638)
Operating profit 6,559,405 6,494,914
Gift Aid donation (6,559,405) (6,494,914)
Profit on ordinary activities before - -
taxation
Taxation on ordinary activities 6 - -
Profit on ordinary activities after - -
taxation
-------------------------------------- ----- ------------- -------------
All income is derived from continuing activities.
The Company has no other gains or losses other than the results
for the financial year as set out above, and therefore no separate
statement of recognised gains and losses has been presented.
* Interest payable was reclassified as cost of sales within the
Profit and Loss Account to better reflect the operations of the
Company.
The notes on pages 10 to 15 form part of these Financial
Statements.
Wellcome Trust Finance plc
Balance Sheet
As at 30 September 2010
As at As at
30 September 30 September
Note 2010 2009
GBP GBP
--------------------------------------- ----- -------------- --------------
Fixed assets
Investment in subsidiaries 7 1 1
Loans to Group undertakings 8 270,780,921 270,400,000
Current assets
Loans to Group undertakings 8 676,000,000 676,000,000
Amounts due from Group undertakings 1,351,821 1,646,734
Accrued interest on loans 9,387,671 9,483,625
Prepayments 37,929 36,704
Cash at bank and in hand 105,575 9,272
Creditors: amounts falling due within
one year 9 (9,746,779) (10,131,285)
--------------------------------------- ----- -------------- --------------
Net current assets 677,136,217 677,045,050
Creditors: amounts falling due after
more than one year 9 (810,417,139) (809,945,051)
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 on pages 7 to 15 were approved by the
Board of Directors on 14 December 2010 and signed on its behalf
by:
Mr Daniel Truell
Director
Wellcome Trust Finance plc
Cash Flow Statement
For the year ended 30 September 2010
Year ended Year ended
30 September 30 September
2010 2009*
GBP GBP
------------------------------------------- ------------- --------------
Net cash inflow from operating activities 6,931,216 6,022,487
Financial investments
Issue of loan to Group undertakings - (270,400,000)
Financing
Issue of corporate Bonds - 270,376,363
Gift aid donations paid (6,834,913) (5,999,049)
Net increase/(decrease) in cash 96,303 (200)
------------------------------------------- ------------- --------------
Cash at beginning of year 9,272 9,472
------------------------------------------- ------------- --------------
Cash at end of year 105,575 9,272
------------------------------------------- ------------- --------------
Reconciliation of operating profit to net cash outflow from
operating activities
Operating Profit 6,622,879 6,583,552
(Increase) in loans to Group undertakings (380,921) -
Increase in Bond liabilities 472,088 4,746,580
Decrease/(increase) in prepayments
and accrued income 94,729 (4,618,757)
(Decrease)/increase in accruals and
deferred income (21,867) 7,677
Increase/(decrease) in amounts owed
to Group undertakings 207,782 (607,926)
Net cash inflow from operating activities 6,994,690 6,111,126
------------------------------------------- ---------- ------------
Reconciliation to net debt
Net debt at 1 October 819,148,278 544,025,136
(Increase)/decrease in cash (96,303) 200
Issue of corporate Bonds - 270,376,363
Non cash changes - increase in accrued
Bond interest 472,088 4,746,581
Net debt at 30 September 819,524,064 819,148,278
---------------------------------------- ------------ ------------
* Interest payable was reclassified as cost of sales within the
Profit and Loss Account to better reflect the operations of the
Company.
Wellcome Trust Finance plc
Notes to the Financial Statements
For the year ended 30 September 2010
1. ACCOUNTING POLICIES
(a) Basis of preparation of the Financial Statements
The Financial Statements have been prepared on a going concern
basis in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law). The Company has adopted fair value accounting
rules and applies the related suite of Financial Reporting
Standards (FRS):
-- FRS 23: The effects of changes in foreign exchange rates;
-- FRS 25: Financial instruments presentation;
-- FRS 26: Financial instruments measurement; and
-- FRS 29: Financial instruments disclosures, including the
amendment issued by the Accounting Standards Board May 2009.
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:
Accounting policies have been reviewed in accordance with FRS 18
Accounting Policies.
(b) Turnover
Turnover is interest derived from loans to Wellcome Trust
Investment Limited Partnership, an undertaking in the Group, and
Wellcome Trust. Turnover is calculated using the effective interest
rate method and is recognised on an accruals basis.
(c) Cost of sales
Cost of sales is the effective interest on the Bond liabilities
(as described in note 1(f)) and is recognised on an accruals
basis.
(d) Gift Aid donation
Gift Aid donation recognised is equal to estimated taxable
profits of the Company at the time of the approval of the Financial
Statements. The Gift Aid paid within 9 months of the balance sheet
date is equal to the estimated taxable profits of the Company at
time of payment. Any difference between the Gift Aid donation
accrued and the Gift Aid donation paid is recognised at the time of
payment.
(e) Loans to Group undertaking
The loans to group undertakings are to Wellcome Trust Investment
Limited Partnership and Wellcome Trust, 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 Liabilities
The Bond liabilities relate to the 30-year corporate bonds
issued by the Company in July 2006 and the 12-year corporate bonds
issued by the Company in May 2009, 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 for each Bond. After initial recognition
the liability is measured at amortised cost using the effective
interest method. The fair value of the Bond liabilities 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. TURNOVER
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Interest receivable on Loans to Group
undertakings 45,594,967 36,726,501
Interest receivable on cash
deposits - 41,131
45,594,967 36,767,632
--------------------------------------- ------------- -------------
Interest receivable on "Loans to Group undertakings" (see note
8) is the effective interest on:
-- Loans A and B to Wellcome Trust Investment Limited
Partnership at a fixed rate of 4.75%; and
-- Loan to Wellcome Trust at fixed rate of 4.80%.
3. ADMINISTRATIVE EXPENSES
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Legal fees (205) 15,709
Taxation advice - 2,990
Auditors' remuneration 7,873 9,545
UK Listing Authority
fees (2,900) -
Rating agency
fees 57,921 54,915
Other 785 5,479
63,474 88,638
------------------------ ------------- -------------
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 (as amended by the Charities Act 2006)
(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
The Company has an investment in a subsidiary, Wellcome Trust
Finance No. 2 Limited. The subsidiary has remained dormant during
the year and has net assets of GBP1 (comprising the unpaid share
capital debtor) as at 30 September 2010.
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 UNDERTAKINGS
Amortised Amortised
Interest cost Year cost Year
rate Loan ended 30 ended 30
Principal per anniversary September September
amount annum date 2010 2009
GBP % GBP GBP
Loan
A 550,000,000 4.75 25 July 550,000,000 550,000,000
Loan 25
B 126,000,000 4.75 September 126,000,000 126,000,000
Loan
(new
bond) 275,000,000 4.80 28 May 270,780,921 270,400,000
946,780,921 946,400,000
-------- ------------ --------- ------------ ------------ ------------
Loans to Group undertakings are loans (the "Loans") to Wellcome
Trust Investment Limited Partnership (Loan A and Loan B) and
Wellcome Trust (Loan (new bond)). The principal under Loan A and
Loan B is repayable on demand by the Company and the principal
under Loan (new bond) is repayable on agreement between the Company
and Wellcome Trust, but the Loans are expected to be outstanding
for 28 years (Loan A and Loan B) and 12 years (Loan (new bond)).
Each Loan has a fixed redemption value equal to the principal
amount and a fixed interest rate.
9. CREDITORS
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
Accruals and deferred
income 14,873 36,740
Amounts due to Group undertakings 1 87,132
Gift Aid due to the
Wellcome Trust 519,405 794,913
Accrued interest on
Bond liabilities 9,212,500 9,212,500
Total creditors: amounts falling due
within one year 9,746,779 10,131,285
--------------------------------------- ------------- -------------
Falling due between one and
five years - -
--------------------------------------- ------------- -------------
Bond liabilities 810,417,139 809,945,051
Falling due after five
years 810,417,139 809,945,051
--------------------------------------- ------------- -------------
Total creditors: amounts falling due
after one year 810,417,139 809,945,051
--------------------------------------- ------------- -------------
The Bond liabilities are stated at the amortised cost using the
effective interest method for the GBP550 million 4.625% Guaranteed
Bonds due July 2036 ("GBP550 million Bonds"), issued by the Company
on 25 July 2006, and the GBP275 million 4.750% Guaranteed Bonds due
May 2021 ("GBP275 million Bonds"), issued by the Company on 28 May
2009. The Bond liabilities falling due within one year are the
unpaid coupon interest accrued for the year to 30 September 2010
for each Bond. The interest payment to the Bond holders is at a
fixed rate of 4.625% per annum (GBP550 million Bonds) and 4.750%
per annum (GBP275 million Bonds), and is paid in arrears on 25 July
or 28 May respectively each year until repayment of the Bond
principals. No amounts fall due between one and five years because
the remainder of the Bond liabilities 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 (GBP550 million Bonds) or upon the
expiry of the 12-year term on 28 May 2021 (GBP275 million Bonds)
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 (GBP550 million Bonds) or 28 May 2009
(GBP275 million Bonds) 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 Bonds (the
"Trust Deed" and the "new 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 and the new Trust Deed.
10. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Year ended Year ended
30 September 30 September
2010 2009
GBP GBP
As at 1 October 137,500,000 137,500,000
As at 30 September 137,500,000 137,500,000
--------------------- ------------- -------------
11. SHARE CAPITAL
Year ended Year ended
30 September 30 September
2010 2009
Number GBP GBP
Authorised ordinary shares
of GBP1 each 137,500,000 137,500,000 137,500,000
-------------------------------- ------------ ------------- -------------
Issued and fully paid ordinary
shares of GBP1 each 137,500,000 137,500,000 137,500,000
-------------------------------- ------------ ------------- -------------
12. RELATED PARTY TRANSACTIONS
The Company, a wholly owned subsidiary undertaking of the
Wellcome Trust has taken the exemption available from the related
party disclosure requirements of FRS 8 Related Party Disclosures,
because the Financial Statements of the parent company are
available to the public (note 15).
13. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise the Loans to Group
undertakings 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
parties Wellcome Trust Investment Limited Partnershipand the
Wellcome Trust in relation to the Loans to Group undertakings.
These risks are in respect of the Wellcome Trust Investment Limited
Partnership's and Wellcome Trust's ability to meet the interest and
principal payments as they fall due. The total value exposed to
credit risk as at 30 September 2010 is GBP957.6 million (2009:
GBP957.5 million), which comprises the value of the Loans to Group
undertakings, 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:
Contractual payments falling due within one year
Year ended Year ended
30-Sep-2010 30-Sep-2009
Between
Three three Three Between
months months months three
or and one or months and
less year Total less one year Total
GBP GBP GBP GBP GBP GBP
-------------- ------- ---------- ---------- -------- ----------- -----------
Accruals and
deferred
income 14,873 - 14,873 36,740 - 36,740
Amounts due to
Group
undertakings 1 - 1 87,132 - 87,132
Gift Aid due
to the
Wellcome
Trust - 519,405 519,405 - 794,913 794,913
Accrued
interest on
Bond
liabilities - 9,212,500 9,212,500 - 9,212,500 9,212,500
Contractual
payments
falling due
within one
year 14,874 9,731,905 9,746,779 123,872 10,007,413 10,131,285
--------------- ------- ---------- ---------- -------- ----------- -----------
Contractual payments falling due after one year
Year ended Year ended
30-Sep-2010 30-Sep-2009
Between
Between two
two and and
five After five five After five
years years Total years years Total
GBP GBP GBP GBP GBP GBP
------------- --------- ------------ ------------ -------- ------------ ------------
Bond
liabilities - 810,417,139 810,417,139 - 809,945,051 809,945,051
Contractual
payments
falling due
after one
year - 810,417,139 810,417,139 - 809,945,051 809,945,051
-------------- --------- ------------ ------------ -------- ------------ ------------
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 30 September
2010 2010
GBP GBP
Financial
assets
Loans to Group undertakings 976,609,630 946,780,921
Amounts due from Group undertakings 1,351,821 1,351,821
Accrued interest 9,387,671 9,387,671
Investment in subsidiaries 1 1
Cash at bank and in
hand 105,575 105,575
Financial
liabilities
Accrued interest on
Bond liabilities (9,212,500) (9,212,500)
Bond liabilities (850,286,500) (810,417,139)
The fair value of the Bond liabilities as at 30 September 2010
was GBP850.3 million (2009: GBP813.2 million) and is based on the
market value of the Bonds at that date. The fair value of the Loans
to Group undertakings as at 30 September 2010 was GBP976.6 million
(2009: GBP924.7 million); this is calculated using a valuation
model for which the key input is the market value of the Bonds,
instruments that are 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. COMMITMENTS
The Company has no outstanding commitments at 30 September
2010.
15. ULTIMATE PARENT UNDERTAKING & CONTROLLING PARTY
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".
The ultimate parent undertaking and controlling party is the
Wellcome Trust, which is the parent undertaking of the smallest and
largest group to consolidate these Financial Statements.
Copies of the Wellcome Trust Annual Report and Financial
Statements 2010 are available from the Trust's website
(www.wellcome.ac.uk) or, without charge, from:
Publishing Department
Wellcome Trust
FREEPOST
RLYJ-UJHU-EKHJ
Slough
SL3 0EN
Wellcome Trust Finance plc
Administrative Details
Directors
Mr Simon Jeffreys
Mr Nicholas Moakes
Mr Peter Pereira Gray
Mr Daniel Truell
Company Secretary
Mr John Stewart
Audit Committee
Mr Edward Walker-Arnott (Chairman to 30 September 2010)
Mr Roderick Kent (Chairman from 1 October 2010)
Mr Philip Johnson
Mr Simon Leathes (resigned 31 December 2009)
Baroness Manningham-Buller
Professor Peter Smith
Mr Nicholas Temple (resigned 31 December 2009)
Registered Company Number
5857955
Registered Office
215 Euston Road
London
NW1 2BE
Auditors
PricewaterhouseCoopers LLP
Hay's Galleria
1 Hays Lane
London
SE1 2RD
Bankers
HSBC Bank plc
31 Holborn Circus
Holborn
London
EC1N 2HR
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USVBRRWAUAAA
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