The Winterbotham Trust Company Limited

Transcription

1 The Winterbotham Trust Company Limited 1996 Report & Accounts

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3 To our customers Your faith in our professionalism and ability to contribute to the profitability of your business has assured Winterbotham its first five years of successful development. First and foremost I wish to thank you, our customers. As a result, I am proud to introduce you to The Winterbotham Trust Company Limited, incorporating The Winterbotham Merchant Bank, which, as at 30th June 1996, raised its subscribed and fully paid share capital to US$1 million. I am pleased to report that this was possible given a 100% increase in fee and commission income over the preceding twelve month period, producing a gross revenue of US$1.8 million and a return of 23% on total income. We embark on our second five year plan with confidence and ambitious targets. We look forward to growing together by providing services that make a tangible impact on achieving your objectives. To our potential customers, I challenge you to give Winterbotham the opportunity to provide creative solutions, professionally structured and administered and personally delivered. Finally, I would like to take this opportunity to thank our directors and staff, advisers and partners in business, all of whom have contributed to the success of the original project....creativity, professionalism, flexibility, efficiency, value, integrity, we deliver the result... We are partners to our customers. This is our philosophy, to provide services which consistently contribute to their achievements.

4 Winterbotham: creativity and experience in partnership international expertise in an era of globalisation Winterbotham provides financial engineering in international financial markets, principally, though not exclusively, through the major [offshore] jurisdictions, for bank and corporate customers, and their shareholders. The Winterbotham Trust Company Limited, incorporating The Winterbotham Merchant Bank, is a licensed Bank and Trust Company and Fund Administrator, domiciled in the Bahamas under the supervision of the Central Banking Authority and the Securities Board. The Winterbotham Insurance Company Limited, incorporating Winterbotham - Re, is licensed to write cover for insurance and reinsurance risks, and is supervised by the Registrar of Insurance in the Bahamas. Winterbotham Asset Management Limited, The Winterbotham Investment Fund Limited and its sub-fund, Winterbotham Latin Liquidity Fund, are domiciled in the Bahamas under the supervision of the Securities Board. Other affiliated companies in the Group are Winterbotham Trading Company Limited and Winterbotham Agencies Limited. Winterbotham: a flexible and intelligent resource to meet the demands of a changing and challenging world; motivated and reliable, Winterbotham works in partnership with its customers and their advisers to achieve their objectives, providing value and viable solutions.

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6 Winterbotham: providing the instruments to successful structuring of international business Company incorporation and administration Winterbotham undertakes the incorporation and establishment, representation and administration of companies in the principal [offshore] jurisdictions as well as in a number of onshore locations. Winterbotham provides qualified accounting and administrative back-up services for operating and holding companies Bank licensing, incorporation, administration and compliance Winterbotham specialises in consultancy with respect to the establishment of [offshore] banks, subsidiaries and branches, and offshore investment funds. Our services include the preparation and processing of licence applications to the appropriate authority, implementation of start-up and operational procedures, as well as the provision of comprehensive back-office accounting systems and administrative services. Winterbotham fulfils the requirements of domiciliary agent and advises on compliance. Fund licensing, incorporation, administration and compliance Winterbotham is also experienced in the establishment of [offshore] investment funds and provides comprehensive administration services to funds. Winterbotham is a licensed Fund Administrator, and Registrar and Transfer Agent. Custody Winterbotham is custodian to corporations and banks, providing custodial structures and services in respect of assets in excess of US$200 million. Trust Winterbotham is trustee on behalf of corporate and individual customers and provides consultancy and structuring for trusts which resolve commercial objectives, the continuity of asset ownership and estate planning. Banking Winterbotham makes fiduciary loans and deposits and acts as Fiduciary Agent in securities transactions. The company has gained experience in structuring financial transactions both as principal, and as arranger and co-ordinator. Winterbotham has developed excellent relationships with international and regional banks [onshore and offshore] for the purpose of providing creative and viable solutions. Insurance Winterbotham may accept insurance and re-insurance risks and provides the structure, technical input and administration to assist our customers in the design of efficient captive solutions to their insurance needs. Working together with Insurance Managers and Consultants, Winterbotham is developing the use of risk management techniques to improve financial performance. Asset Management Through The Winterbotham Investment Fund Limited, Winterbotham offers selective investment opportunities in Latin American Bank placements and in German real estate. Winterbotham has developed close ties with selected asset managers in the major financial centres.

7 THE WINTERBOTHAM TRUST COMPANY LIMITED INDEPENDENT AUDITORS REPORT To the Shareholders and Directors of The Winterbotham Trust Company Limited: We have audited the accompanying consolidated balance sheet of The Winterbotham Trust Company Limited as of June 30, 1996 and the related consolidated statements of income and retained earnings and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 1996, and the results of its operations and its cash flows for the year then ended in accordance with International Accounting Standards. July 29, 1996

8 THE WINTERBOTHAM TRUST COMPANY LIMITED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 (Expressed in United States dollars) ASSETS CURRENT ASSETS Cash and banks 570, ,453 Accounts receivable Net (Note 3) 412, ,232 Other 78,310 57,062 Total current assets 1,061, ,747 FIXED ASSETS (Note 4) 332, ,091 TOTAL 1,393, ,838 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities 208,415 $ 130,295 Advances from clients 101,911 93,533 Fees received in advance 33,658 11,292 Total current liabilities 343, ,120 SHAREHOLDERS EQUITY Share capital: Authorized, issued and fully paid: 1,000,000 (1995: 525,000) shares of $1.00 each (Note 5) 1,000, ,000 Contributed capital (Note 6) - 73,580 Retained earnings 49,916 32,138 Total shareholders equity 1,049, ,718 TOTAL 1,393, ,838 See notes to consolidated financial statements.

9 THE WINTERBOTHAM TRUST COMPANY LIMITED CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS YEAR ENDED JUNE 30, 1996 (Comparatives for the eight month period ended June 30, 1995) (Expressed in United States dollars) Year Ended Period Ended (12 months) (8 months) INCOME Fees for administration services 945, ,636 Commissions 351,648 60,431 Fees for company incorporation services 318,367 93,320 Other 137,923 92,727 Financial income 56,732 21,117 TOTAL INCOME 1,809, ,230 EXPENSES Salaries and benefits 767, ,417 Administrative and general expenses 452, ,933 Depreciation 59,968 64,773 Costs related to company incorporation services 39,260 6,080 Other 44,717 60,185 Financial expenses 26,483 44,704 TOTAL EXPENSES 1,390, ,092 NET INCOME 419,198 32,138 RETAINED EARNINGS, BEGINNING OF YEAR 32,138 - CAPITALIZATION OF EARNINGS (NOTE 5) (401,420) - RETAINED EARNINGS, END OF YEAR 49,916 32,138 See notes to consolidated financial statements.

10 THE WINTERBOTHAM TRUST COMPANY LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 1996 (Comparatives for the eight month period ended June 30, 1995) (Expressed in United States dollars) Year Ended Period Ended (12 months) (8 months) CASH FLOWS FROM OPERATING ACTIVITIES Net income 419,198 32,138 Adjustments for : Depreciation 59,968 64,773 Loss on disposal of fixed assets 31,207 - Net changes in non-cash working capital: 510,373 96,911 Accounts receivable Net (222,613) (190,232) Others receivables (21,248) (57,062) Accounts payable and accrued liabilities 78, ,295 Advances from clients 8,378 93,533 Fees collected in advance 22,366 11,292 Net cash provided by operating activities 375,376 84,737 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (108,560) (379,864) Net cash used in investing activities (108,560) (379,864) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from insurance of shares - 525,000 Contributed capital in excess of par - 73,580 Net cash provided by financing activities - 598,580 NET INCREASE IN CASH 266, ,453 CASH, BEGINNING OF YEAR 303,453 - CASH, END OF YEAR 570, ,453 See notes to consolidated financial statements.

11 THE WINTERBOTHAM TRUST COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED JUNE 30, GENERAL The Winterbotham Trust Company Limited (the Company ) is incorporated in the Commonwealth of The Bahamas under the Bank & Trust Companies Regulation Act of 1965 (as amended). The principal lines of business are the provision of consultancy, structuring and implementation in respect of financial and commercial transactions including the provision of financial and fiduciary services, bank, investment fund and insurance company licensing, company incorporation and administration for corporate and individual customers world-wide with a strong presence in Latin American markets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, The Winterbotham Trust Company (Uruguay) S.A., a company incorporated in Uruguay. Assets and liabilities under administration on behalf of clients are not included in the consolidated balance sheet. b. Fixed assets Fixed assets are stated at cost less accumulated depreciation. Depreciation is being provided by the straight line method at the following rates: Building improvements 25% Vehicles 25% Software 25% Office equipment 20% Furniture and Fittings 10% c. Foreign currency translation These financial statements are expressed in United States dollars. Foreign currency transactions are translated at the exchange rate prevailing at the date of the transactions. Assets and liabilities denominated in currencies other than the United States are translated into United States dollars at the applicable exchange rates prevailing at the balance sheet date. d. Affiliates Affiliates include companies controlled by the majority shareholders. e. Bad debts It is the Company s policy to provide fully for fees and expenses invoiced but unpaid for any period in excess of 120 days. 3. ACCOUNTS RECEIVABLE NET Accounts receivable are recorded net of a provision for doubtful debts of $64,638 (1995: $14,532).

12 THE WINTERBOTHAM TRUST COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, FIXED ASSETS Fixed assets consist of the following: 1996 Beginning Ending Balance Additions Disposals Balance COST: Building improvements 24, ,187 Vehicles 63, ,081 Software 29,313 13,892 13,892 29,313 Office equipment 151,013 82,000 33, ,573 Furniture and fittings 165,375 12,668 1, ,075 TOTAL 432, ,560 49, , Beginning Depreciation Ending Balance Expense Disposals Balance ACCUMULATED DEPRECIATION: Building improvements 13,057 3, ,628 Vehicles 37,182 5,174-42,356 Software 3,664 9,204 2,610 10,258 Office equipment 34,888 30,718 15,291 50,315 Furniture and fittings 29,102 11, ,196 TOTAL 117,893 59,968 18, , NET MOVEMENT 315,091 48,592 31, , NET MOVEMENT - 315, ,091

13 THE WINTERBOTHAM TRUST COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, SHARE CAPITAL By resolution at a directors meeting held on June 30, 1996 the authorized share capital of the Company was increased by $475,000 from $525,000 to $1,000,000 by the creation of 475,000 shares of par value $1.00 each. The resolution authorized the capitalization of $475,000 out of retained earnings and contributed capital amounting to $401,420 and $73,580 respectively. 6. CONTRIBUTED CAPITAL Balance at beginning of year 73,580 - Share premium - 73,580 Capitalization during the year (see Note 5) (73,580) - Balance at end of year - 73, AFFILIATES Assets and liabilities with affiliates are as follows: Assets Liabilities Assets Liabilities Affiliates 4,471 34, ,624 23,367 Other 1,389, , , ,753 TOTAL 1,393, , , , FIDUCIARY OPERATIONS At June 30, 1996, The Winterbotham Merchant Bank, a division of The Winterbotham Trust Company Limited had entered into fiduciary agreements for an aggregate amount of $36,094,807 (1995: $9,582,922). Under these agreements the Company acts on behalf of its clients at their sole risk and responsibility. The depositors agree to indemnify and hold harmless The Winterbotham Trust Company Limited, its directors, employees, agents and representatives against all liability, losses or damages arising out of or in connection with the fiduciary agreement. The major portion of the fiduciary transactions comprise funds received by The Winterbotham Trust Company Limited from corporate depositors which are subsequently lent on to corporate borrowers or deposited with banks in time deposit accounts. Fiduciary services yield fees equivalent to the difference between the lending and deposit rates and are recognized as income upon collection at the time of maturity, or flat commissions paid on implementation of the transactions. 9. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the presentation adopted for the year ended June 30, 1996.

14 The Senior Management Team David Thain, ACIB Senior Manager, The Winterbotham Trust Company Limited. Carmen Forcella Vice President, The Winterbotham Trust Company (Uruguay) S.A. Gerardo Benedetto Financial Controller, The Winterbotham Trust Company Limited. Claudia Prato Manager, The Winterbotham Trust Company (Uruguay) S.A. The Board of Directors Geoffrey Hooper President and Managing Director Prior to establishing Winterbotham in 1991, Mr Hooper was Vice President & Senior Area Representative for Lloyds International Private Banking, a part of Lloyds Bank Plc,. and a director of Lloyds (IPB) Americas S.A. Mr Hooper has more than 20 years experience in international banking and financial services gained in the UK, Spain and Latin America with Lloyds Bank Plc, Natwest International Trust Corporation (previously RoyWest Trust Corporation and now Coutts & Co.), the Arab Latin American Bank (Arlabank) and Tradition International S.A. Gerald Mulrine Director Resident in the Bahamas since 1969, Mr Mulrine retired from his post as Vice Chairman, Coutts & Co. Trust Holdings Limited, in Previously he had occupied various senior management posts including those of Managing Director and Deputy Chairman Trust Corporation Bahamas and RoyWest Trust Corporation, and Vice President and CEO, and President of Coutts & Co. (Americas) Limited. David Hudson Director A Director of MacArthur & Co. Limited, an investment banking advisory firm in London, and Chairman of David Hudson & Co. Limited, Mr Hudson is a corporate finance professional who also specialises in forensic work, giving expert evidence on merchant and commercial banking procedures and on company valuations. John Morgan Director After a distinguished career in the offshore financial services industry with several major international banks, Mr Morgan retired as Director and Senior Trust Manager, Lloyds Bank International (Bahamas) Limited in June He is now working as an independent financial consultant in the U.K Khalif David Director For twelve years N.M. Rothschild s Representative in Brazil, Mr David is now the Representative of the Torrey Foundation, a substantial investment fund with significant holdings in Brazil, and an independent consultant specialising on Brazilian capital markets.

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16 Winterbotham: born of pioneering history, tradition and character Great-grandfather to the founder of The Winterbotham Group, James Batten Winterbotham (1855 to 1912) was a poet, lawyer and magistrate and played a significant role in public life in Cheltenham. His eldest daughter, Clara, was mayoress of Cheltenham between 1920 and 1923; Cicely, the younger daughter, was a pioneering missionary in East Africa alongside her husband Handly Hooper; and his brother, George Washington Winterbotham, was a railway engineer in Argentina. One hundred years on the pioneering spirit, the values upheld in tradition and the perseverance of character are the foundation of The Winterbotham Group. The Winterbotham Trust Company Limited (incorporating The Winterbotham Merchant Bank) Bolam House King & George Streets P.O. Box CB Nassau - Bahamas Tel: (809) /6345/9148 Fax: (809) winterbm@bahamas.net.bs (As from Bahamas area code changes to 242) The Winterbotham Trust Company (Uruguay) S.A. Blanes Viale 5910 P.O. Box Montevideo Uruguay Tel: (598-2) /5/6/7 Fax: (598-2) winterbo@adinet.com.uy