ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 | 139


20. Related party transactions The Company has taken exemption from the requirement to disclose related party transactions with wholly-owned members of the F&C Asset Management plc Group on the basis that these companies are included within the Consolidated Financial Statements of F&C Asset Management plc.


(a) Related party transactions with Sherborne Sherborne owns approximately 20% of the Ordinary Share capital of F&C and is represented on the Board by the Executive Chairman, Edward Bramson, who is a partner in Sherborne. Sherborne is entitled to ordinary dividends, and a fee in respect of the Chairman’s services to F&C. The Company’s transactions with Sherborne are disclosed below:


Total


expensed Outstanding at and accrued 31 December during 2011 £m


2011 £m


Ordinary dividends paid to Sherborne* Other expenses payable to Sherborne*


*With effect from Mr Bramson’s appointment as Chairman on 3 February 2011.


(b) Transactions with entities which are not wholly owned F&C REIT Asset Management LLP F&C Asset Management plc owns 70% of F&C REIT Asset Management LLP. The other partners in the Partnership, all of whom have significant influence over the management of the Partnership or a significant economic interest in the Partnership, are:


Kendray Properties Limited Leo Noé Ivor Smith


30.00% ownership interest in “B” units 22.50% ownership interest in “A” units 7.50% ownership interest in “A” units


These parties are considered to be related parties.


Interest on Secured Loan Notes The remaining £10.0m of Secured Loan Notes issued as part consideration for the acquisition of the REIT Group were repaid to Kendray Properties Limited on 29 June 2010.


Charged Outstanding at and accrued 31 December during 2011 £m


2011 £m


Interest payable to Kendray Properties Limited n/a n/a


and accrued during 2010 £m


Charged Outstanding at 31 December 2010 £m


0.2


Shared services and administrative services The Company has a shared services agreement with F&C REIT Asset Management LLP whereby it provides certain administrative and professional services to F&C REIT Asset Management LLP. Amounts charged under this agreement are set out below:


Total


invoiced Outstanding at and accrued 31 December during 2011 £m


2011 £m


Administration service fees 0.8 0.1 £13.5m of profit distributions were paid to the Company by F&C REIT Asset Management LLP in 2011 (2010: £10.6m).


F&C Asset Management plc recognises a share-based payment credit or expense in respect of the variable minority interest enhancement in ownership interest which could be achieved by Kendray Properties Limited, Leo Noé and Ivor Smith. Full details are disclosed in note 26(c) to the Consolidated Financial Statements on page 94.


The F&C REIT minority partners each have a put option, requiring the Company to purchase their minority stake in F&C REIT after a minimum number of years, at fair value. The fair value of the option is nil, as the potential amount payable is the same as the fair value of the interests to be acquired.


In the Consolidated Financial Statements the gross amount payable under the option is dealt with as a liability, in accordance with IAS 32 as an obligation for purchase of own equity. As at 31 December 2011, the value of this commitment is estimated at £45.3m (31 December 2010: £54.0m). Further details are provided in note 28 to the Consolidated Financial Statements on page 99. The option liabilities are split in the ownership proportions of Kendray Properties Limited, Leo Noé and Ivor Smith.


During 2011, F&C Asset Management plc made a carried interest investment in F&C REIT Carry LP, an associated entity. This investment will entitle the Company to future carried interest profits from the management of F&C REIT Club Deals LP.


Total


and accrued during 2010 £m


0.8


invoiced Outstanding at 31 December 2010 £m


0.1 –


3.0 0.2


– –


Total


and accrued during 2010 £m


n/a n/a


expensed Outstanding at 31 December 2010 £m


n/a n/a


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