KwAcKy's Konfessional |
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Nothing of interest; just mindless links to bikes Birmingham City Football Club and useless junk  
  
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09 March 2006
NEC facts… (Thanks to Southy and others from Small Heath Alliance for the following) The company has two equal shareholders: Birmingham City Council and Birmingham Chamber of Commerce & Industry, each with four directors on the board. The chairman is a business representative from the Chamber. Birmingham City Council owns the land and buildings associated with each of the venues. http://www.necgroup.co.uk/media/pdfs/facts1.pdf NEC Profile... The NEC Group is one of Europe’s leading venue management companies, at which more than 1,000 national and international events take place every year across The NEC, The NEC Arena, The ICC, The NIA and Symphony Hall. Jointly owned by Birmingham City Council and the Birmingham Chamber of Commerce and Industry, The NEC Group generates over £700 million of economic spend in the West Midlands region, with an average turnover in excess of £130m. Profile The NEC: • Birmingham City Council raised loan stock capital, based on NEC Ltd. business plans to build the original complex and the 1989 three-hall expansion. • The initial complex of seven halls (opened in 1976) cost £40 million. • The 1989 expansion (three halls) cost £56 million, including a grant of £12 million from the European Regional Development Fund (ERDF). • The 1993 expansion (four new halls, plus other infrastructure development) cost £90 million, and was funded by a loan raised by NEC Ltd. from private-sector venture capital with Birmingham City Council guaranteeing loan repayments. The ERDF contributed a grant of £18.5 million. • The 1998 expansion of four new halls cost £62 million and was funded through the National Exhibition Centre (Developments) Plc, a partnership between Birmingham City Council, Birmingham Chamber of Commerce and Industry and EMAP Business Communications - a unique partnership between public and private sectors. http://www.necgroup.co.uk/corporate/story/Home.asp?p=8 “Roger Dickens is to be the new chairman of The NEC Group. He will be taking over from Roger Burman, who retires from the board in January 2005 after 20 years. A prominent business leader, Dickens plays a very active role in the West Midlands business community. He was formerly president of the Birmingham Chamber of Commerce and Industry and chairman and founder of Birmingham Forward. In addition, he is a former chairman of the West Midlands Regional Industrial Development Board and the West Midlands Regional Group of Chambers.” http://www.emeca.com/newsletter/download/nl_04dec.pdf Page 53 Council Accounts i. The City Council is guaranteeing repayment of the full amount on the principal of and interest accruing on the NEC Ltd loan stocks raised for the construction of the International Convention Centre, the National Indoor Arena and Hall 10 at the National Exhibition Centre. At 31st March 2005 the amount of the loans guaranteed was £215M (2004:£215M). At 31st March 2005, the City Council had a provision of £65.9M (2004: £56.0M) in respect of the repayment of principal on loans raised for the construction of the International Convention Centre, National Indoor Arena and additional halls at the National Exhibition Centre (see note 14). Since 1 April 2005, the City Council has acquired the £215 million loan stocks in exchange for new £215 million City Council bonds maturing in 2030. This transaction is described in detail in Note 28. ii. The City Council is guaranteeing payment of the full amount on the principal of and interest accruing on the National Exhibition Centre (Developments) PLC loan stock raised in May 1997 for the construction of the four new halls at the National Exhibition Centre. The amount of the loan guaranteed is £73m (2004: £73M), due in 2027. Page 57 THE NATIONAL EXHIBITION CENTRE LIMITED – DRAFT COMPANY ACCOUNTS The City Council holds 5,000 £1 shares (50%) in the company, the purpose of which is to promote and operate the National Exhibition Centre, the International Convention Centre and the National Indoor Arena. At 31st March 2005, the City Council was guaranteeing loans of £215M (2004: £215M) to the company (see notes 19 (i) ). The Company did not make any profit or loss before or after tax during the year to 31st March 2005 (2004: £0). The Company’s net assets at 31st March 2005 amounted to £11,000 (2004: £11,000). The National Exhibition Centre limited is a regulated influenced company under the Local Authorities (Companies) Order 1995 (S.I. 849). This means that a number of finance and propriety controls apply in relation to NEC Ltd activities. In Agreements dated 17th March 1986 and 17th December 1987, as amended by an agreement dated 4th April 1996. Birmingham City Council has agreed to ensure that finance will be available in such a way and of such amount, as will make certain that the company will remain solvent within the meaning of Section 123 of the Insolvency Act 1986 (that is that it will be able to meet its debts as they fall due). During such time as all or any part of the loan stock referred to in note 19 of the financial statements, in issue at the date of the agreements, or any interest costs or expenses payable in respect thereof remain to be repaid or paid. During 2004/05, the City Council made reimbursements totalling £20.313m to the Company NEC Ltd, (2003/04, £21.512m). There was no qualification to the audit opinion on the latest audited accounts of this company. Page 57 THE NATIONAL EXHIBITION CENTRE (DEVELOPMENTS) PLC – DRAFT COMPANY ACCOUNTS The Company was set up to provide an additional 30,000 square metres of exhibition space in four new halls. The new building has been financed by a loan stock issue of £73million to the company which is guaranteed by the City Council. The City Council was allotted 450 of 1,000 ordinary shares of £1 each and 50,000 of 100,000 preference shares of £1 each in the company. The City Council has loan notes totalling £1.6 million in the company and has agreed to make available additional loans of £3.1 million should the Company require further funds. The loss before and after tax for the year to 31st March 2005 amounted to £14,000 (2004: £14,000). The net liabilities at 31st March 2005 amounted to £1,142,000 (2004: £1,128,000). There was no qualification to the audit opinion on the latest audited accounts of this company. Page 61 28. Post Balance Sheet Events i. On 21st April 2005 the City Council acquired all £215m of NEC Finance plc bonds described in note 19 above, in exchange for the issue of new City Council bonds of £214,971,000 (a few small holdings were acquired for cash). As a result of the transaction the City Council will receive interest at an average rate of 12.26% to September 2016 and will pay interest on the new bonds at 9.675% to April 2030. The provision in the City Council’s accounts to fund the repayment of the NEC Ltd bonds will no longer be required but £30m of the provision will be retained to fund the repayment of the NEC Developments plc bonds. By a separate agreement dated 4th August 2005, NEC Finance plc agreed to purchase from the City Council £14,925,718 of its own bonds for cancellation. NEC Ltd in turn purchased an equal value of its own bonds from NEC Finance for cancellation. The nominal value of NEC Ltd stocks outstanding and guaranteed by the City Council is therefore £200,074,28. Page 66 Group Accounts The City Council has a 50% interest in the companies making up the National Exhibition Centre Ltd. Group. In addition, the council acts as guarantor of the company’s borrowing and underwrites its operating losses. The company made no profit in the year ended 31st March 2005, (Nil: 2004). The group balance sheet has been produced by consolidating the assets and liabilities of the City Council with those of the NEC Ltd. Group on a line by line basis. The major effect of this is an increase in long term borrowing from £2,259 million (2004: £1,284 million) to £2,519 million (2004: £ 1,549 million) and in fixed assets from £4,846 million (2004: £4,042 million)to £5,095 million (£4,295 million). Additionally the Council holds a 45% stake in NEC (Developments) Ltd. The group revenue account shows the Council’s share of the Company’s loss in 2004-05 while the Group Balance Sheet includes the Council’s share of the Company’s accumulated deficit consolidated on a net equity basis. The accounts of the NEC Ltd. Group have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP) and the provisions of company law. The accounts of the City Council have been prepared in accordance with the Statement of Recommended Practice for local Authorities (SORP) produced by the Charted Institute of Public Finance and Accountancy and endorsed by the Accounting Standards Board. Legislation relating to local authorities does not currently permit full compliance with UK GAAP.There are, therefore, a number of differences of accounting treatment between the Council and the NEC Ltd. Group. The major difference is that the Council’s accounts reflect the full implementation of FRS17 (Retirement Benefits), compliance with which is not required for Public Limited Companies until financial periods beginning on or after 1st January 2005. The effect of such compliance by the NEC Ltd. Group is disclosed in Note One below. Further details on the Council’s relationship to NEC Ltd. may be found in Notes 19 and 24 to the Council’s Balance sheet. Group Financial Statements Accounts |
